I'm reiterating my Buy rating for medical device supplier Covidien Ltd. (NYSE: COV), first recommended on June 4, 2009, at a price of $35.65. If you purchased Covidien then, you're up about 15%.

An aging U.S. population and the likelihood that U.S. public policy to universalize health care will lead to least 3-5 million more citizens per year for the next eight to ten years receiving regular health care services means one thing: it's a good time to be a medical supplier.

Analyst upgrades:

• Citigroup upgraded Talbots (NYSE: TLB) to Buy from Hold on expectations the company's sales and margins are at an inflection point. The firm expects comps to turn positive in the next six months and raised its target on shares to $9.50 from $5.
• JMP Securities believes that Apple's (NASDAQ: AAPL) incoming iPod product cycle, geographic expansion of iPhones, and market expansion led by new products will result in "significant" outperformance. The firm upgraded shares to Outperform from Market Perform and has a $200 target on the stock.
• Credit Suisse upgraded Tiffany (NYSE: TIF) to Outperform from Neutral citing productivity comps and gross margin upside, leading to potential upside to 2010 Street estimates. The firm raised its target to $45 from $20.
• Brady (NYSE: BRC) was upgraded to Buy from Hold at KeyBanc.
• Time Warner (NYSE: TWX) was upgraded to Conviction Buy from Neutral at Goldman.
• RadioShack (NYSE: RSH) was upgraded to Overweight from Equal Weight at Morgan Stanley.

Analyst upgrades

• Baird upgraded Con-Way (NYSE: CNW) and Old Dominion (NASDAQ: ODFL) to Outperform from Neutral due to the benefits of a likely bankruptcy of YRC Worldwide (NASDAQ: YRCW). Old Dominion's target was raised to $40 from $26 and Con-Way's was raised to $42 from $22.
• Citigroup upgraded Pride International (NYSE: PDE) to Hold from Sell as it believes higher valuation levels are warranted with the upcoming spin-off of Seahawk Drilling. Citi raised its target on shares to $25 from $18.
• Jesup & Lamont upgraded FedEx (NYSE: FDX) to Buy from Hold with a $63 target as it believes the worst is largely behind the company.
• Hewitt Associates (NYSE: HEW) was upgraded to Neutral from Underweight at JPMorgan.
• ArvinMeritor (NYSE: ARM) was upgraded to Buy from Neutral at Goldman.
• Abercrombie & Fitch (NYSE: ANF) was upgraded to Buy from Neutral at SunTrust.

An aging U.S. population, and the likelihood that U.S. public policy will be to universalize health care, will lead to at least 3-5 million more citizens per year over the next 8-10 years receiving regular health care services. That means one thing: it's a good time to be a medical supplier. And that means it's a good time to review Covidien, Ltd. (NYSE: COV).

In general, analysts see moderate-to-good earnings growth for COV in FY2009/FY2010, aided by a focus on medical/surgical devices and imaging solutions.

Analyst upgrades:

• FBR Capital upgraded KBW, Inc (NYSE: KBW) to Market Perform from Underperform as it sees increased capital-raising opportunities for small and mid-sized banks and believes the company's quarter is off to a strong start. The firm raised its target price to $23 from $18.
• Pali Capital upgraded Morgan Stanley (NYSE: MS) to Buy from Neutral on expectations the company's strategic shift towards advisory, distribution and retail will be monetized sooner than expected and its capital markets business is gaining traction. The firm set a $33 target on the stock.
• Baird upgraded Stericycle (NASDAQ: SRCL) to Outperform from Neutral and raised its target to $58 from $55 based on valuation predictable earnings, and its market leading platform.
• Apollo Investment (NYSE: AINV) was raised to Outperform from Market Perform at Keefe Bruyette.
• HSBC Holdings (NYSE: HBC) was lifted at Goldman to Buy from Neutral.
• Dow Chemical (NYSE: DOW) was upgraded to Outperform from Neutral at Credit Suisse.

Analyst upgrades:

• Banc of America/Merrill upgraded Lincoln National (NYSE: LNC) to Buy from Underperform and raised its target to $17 from $10 citing expectations that the company will "qualify for and accept TARP funding."
  
• Credit Suisse upgraded AU Optronics (NYSE: AUO) to Outperform from Neutral as it believes inventory levels are low end demand is better than expected.
  
• JP Morgan upgraded Shaw Group (NYSE: SGR) to Overweight from Neutral. The firm views the recent pullback in shares as a buying opportunity given the company's attractive nuke position and expected ramp in government spending.
• Patterson-UTI Energy (NASDAQ: PTEN) was upgraded to Buy from Neutral at Goldman.
  
• Barrick Gold (NYSE: ABX) was raised to Overweight from Market Weight at Thomas Weisel.
  
• Stryker (NYSE: SYK) was lifted to Sector Perform from Underperform at RBC Capital.

It's one of those unfortunate facts of life, everyone is going to get sick at some time in their lives. It could be something as simple as the common cold or a complex series of symptoms that takes years to diagnose. The upside of all of this is that the medical business is a relatively safe bet when it comes to investments. If you see the benefit of this and want to put some money into a health care related investment, look into an Exchange Traded Fund (ETF) that will give you the opportunity to hold shares in several different companies rather than trying to guess who's going to come up with the next miracle cure.

There are a couple different companies that let you get your feet wet in the medical field. You could invest in medical devices, which covers everything from stethoscopes to complicated surgical tools. iShares Dow Jones US Medical Devices ETF (NYSE: IHI) lets you in on an investment that includes leaders in the field such as Boston Scientific Corporation (NYSE: BSX), Medtronic, Inc. (NYSE: MDT), and Covidien, Ltd. (NYSE: COV). Each of these companies provides medical devices that hospitals simply cannot do without.

IHI looks to achieve results that correspond to the Dow Jones US Select Medical Equipment index and through a computer aided system, rather than by using money managers, they're able to charge only a 0.48% fee to maintain your stock.

Another great way to invest in the healthcare business is to buy shares in the companies who work tirelessly to provide lifesaving drugs. The Exchange Traded Fund SPDR S&P Pharmaceuticals (XPH) lets you in on several of the top pharmaceutical companies in the world by following a passive management strategy that tracks the total return performance of the S&P Pharmaceutical Select Industry index.

Medtronic (NYSE: MDT) closed at $39.93. MDT is scheduled to report Q2 EPS on November 18. MDT November 40 straddle is priced at $3.50, December 40 is at $5.50. MDT December option implied volatility of 54 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

Covidien (NYSE: COV), a medical solutions device provider, closed at $37.07. COV is scheduled to report Q4 EPS on November 17. COV November 40 straddle is priced at $4.40, December 40 straddle is priced at $6.40. COV December option implied volatility of 58 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

Abbott Lab (NYSE: ABT) closed at $57.14. ABT December option implied volatility of 42 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

Stryker (NYSE: SYK), a medical technology company, closed at $47.70. SYK December option implied volatility of 60 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Analyst upgrades:

• Oppenheimer upgraded Inter Parfums (NASDAQ: IPAR) to Outperform from Perform on valuation and increased comfort with the company's outlook after meeting with management.
  
• Deutsche Bank raised Covidien (NYSE: COV) to Buy from Hold on the company's solid execution and ongoing restructuring, which they believe will drive EPS higher. The firm raised its target to $63 from $51.
• Regions Financial (NYSE: RF) was upgraded to Outperform from Market Perform at Keefe Bruyette.
• American Eagle (NYSE: AEO) was lifted to Buy from Neutral at Banc of America.
  
• Goldman raised Healthways (NASDAQ: HWAY) to Neutral from Sell.

Analyst downgrades:

Tyco International Ltd. (NYSE:TYC) shares have performed dismally since it completed its spin-off of Tyco Electronics Ltd. (NYSE:TEL) and Covidien Ltd. (NYSE:COV). In fact, those have been poor performers as well. It isn't easy being one of the few naysayers ahead of a major event like this, but there are frequently too many conflicted reports out there. Does anyone expect that the large investment banking firms facilitating that deal or near-term financing would actually post a 'HIGH CAUTION" alert on any of the companies? Exactly.

Before the spin-off was implemented, I noted a "phantom premium" in Tyco's stock because the investing world was just too much in love with spin-offs, mergers, and private equity at the time. Interestingly enough, this shakeout may be going a bit too far as far as the overall values of the three units now. There is more data that needs to be crunched to verify this, but next week subscribers of the Special Situation Investing Newsletter will receive a newsletter with a tie of a company to one of the remaining ex-Tyco Newco stocks.

We ran a basket analysis this morning and showed that the ex-Tyco group as a whole was down twice as much as the general markets off of the July highs. That was also before the drop in all three stocks this morning. Mergers and special situations are not dead by any means. But now the funny-money deals are going to be a thing of the past. Deals might even have to make sense other than the greater fool theory from here on out. The good news is that the stupidity in mergers and special situations has been flushed out of the market and analysis doesn't have to worry about irrational conditions clouding up the picture.

Jon Ogg is a partner in 24/7 Wall St., LLC; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.

MOST NOTEWORTHY: Comcast (CMCSA), Time Warner Cable (TWC), CNet Networks (CNET), Coviden (COV) and I.D. Systems (IDSY) were today's noteworthy initiations:

• Banc of America resumed coverage of Comcast (NADAQ: CMCSA) and Time Warner Cable (NYSE: TWC) with Buy ratings and $32 and $43 targets, respectively.

• Stanford started CNet (NASDAQ: CNET) with a Buy rating and $10 target, as the company is well positioned to benefit from its developing web properties.

• Bear Stearns expects shares of Covidien (NYSE: COV) to move up, starting shares with an Outperform rating, as the management transforms the company from a cash flow focused conglomerate division into a faster-growing, nimble competitor.

• Merriman said I.D. Systems (NASDAQ: IDSY) is uniquely positioned in the wireless asset tracking market given its focus on industrial machinery and material handling equipment, starting shares with a Buy rating...

OTHER INITIATIONS:

• Comverse (OTC: CMVT) was initiated with a Neutral rating at Merriman.

• Lehman started Getty Images (NYSE: GYI) with a Equal Weight rating and ShoreTel (NASDAQ: SHOR) with an Overweight rating.

• Jefferies initiated Harmonic (NYSE: HLIT) with a Buy rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Tyco International Ltd. (NYSE: TYC) hosts its analyst meetings Tuesday to showcase its new spin-off companies. Late last week we saw trading begin in the two spin-offs on a when issued basis:

The Tyco Healthcare unit is named Covidien Ltd. and is trading under a when-issued ticker (NYSE: COV) or on most symbols as "COV-WI"; Covidien traded down 0.5% to $46.25 yesterday.

The Tyco Electronics"unit is appropriately named Tyco Electronics and trades as (NYSE: TEL) or "TEL-WI"; Tyco Electronics closed down 4.25% yesterday at $37.15.

The remaining company for all of the security and fire company is remaining Tyco International Ltd. and keeping the "(NYSE: TYC)" ticker; shares traded down 0.67% to $34.09 yesterday.