"Foreign corporations have been on a mini buying spree in 2010. Not surprising, merger and acquisition activity has heated up a bit in the drug sector," says Chuck Carlson, editor of The DRIP Investor.

The dividend expert explains, " Global merger and acquisition activity topped $1 trillion in the first half of 2010, a 9.4% increase over the previous year. And Bristol-Myers Squibb (BMY), recommend stock in our Editor's Portfolio, has been one of the more active participants.

"Two of our long-standing buy recommendations are involved in selling products and services for the genetic research market: Affymetrix (AFFX) and Illumina (ILMN)," notes biotech and growth stock specialist Nate Pile.

The editor of Nate's Notes explains, "In a nutshell, both of these companies have developed technologies that allow researchers to do what is known as 'high-throughput genetic screening'.

"And, while the two companies are direct competitors in many of the markets in which they compete, we believe that both stocks should be bought at the current time.

"President Obama's push into digital medical records could lead to a profit surge for Quality Systems (QSII)," says Andy Obermueller, an adviser who specializes in analyzing the investment opportunities related to new government programs and legislation.

The editor of Government-Driven Investing explains, "Better access to records will show doctors a more complete view of their patients, reduce error and prevent redundant tests.

"In my view, it is not a question of if medical service providers are going to buy these system, it's a question of when. And the cost savings of digital medical records could be significant.

"For years the health care sector had a well-deserved reputation for consistent returns and profitability regardless of broader economic conditions," observes Elliott Gue.

The contributing editor to Personal Finance explains, "But the past two years have challenged this reputation, and these stocks are out of favor. Some favorites, such as Novartis (NVS) are trading at their most attractive valuation in years.

"Although the sector faces undeniable challenges, markets often overreact to new regulation, providing attractive entry points for savvy investors and a low bar of expectations.

"Pharmacy benefits managers (PBMs) are the main distributors of drugs to retail pharmacies and directly to consumers; in our view, the PBM sector is a must-have health care area for investors," says Stephen Leeb.

The editor of The Complete Investor explains, "Express Scripts (ESRX) is a leading and fast-growing pure-play PBM that has been generating impressive results and is undervalued relative to the industry.

"One striking health care trend in recent years has been a dramatic rise in prescriptions. For the 10 years ended in 2009, according to a government study, the number of prescription drugs dispensed in the U.S. rose 39 percent, while U.S. population growth was just 9 percent.

"New products are the life-blood of any pharmaceutical company. Unfortunately, blockbuster drug breakthroughs have been fairly rare in recent years, lowering valuations for pharmaceutical stocks," says Chuck Carlson.

The editor of The DRIP Investor, which focuses on dividend reinvestment strategies, explains, "The good news is that the lone drug stock in the Editor's Portfolio, Bristol-Myers Squibb (BMY), has had a spate of good news recently on the drug-development front.

"The company recently announced that a mid-stage trial of an experimental arthritis drug had met its goal, supporting further development of the drug.

"With a sprawling portfolio of 409 different remedies, Teva Pharmaceuticals (TEVA) is easily the world's largest generic drug maker -- and unless people suddenly stop getting sick, Teva is one of the surest picks around for long-term investors," says Nathan Slaughter.

The editor of Street Authority Market Advisor explains, "Teva is more than double the size of its closest rival in terms of both product breadth and market share.

"But even for a company of Teva's size, product No. 410 is a biggie. The firm recently introduced Venlafaxine, a generic version of Pfizer's anti-depressant Effexor.

"Sanofi-Aventis (SNY) is a pharmaceutical group engaged in the research, development, manufacture and marketing of health care products; the stock gets a 100% score in meeting the criteria for our investment screen based on d value investing criteria used by the legendary Benjamin Graham," says John Reese.

The editor of Validea newsletter explains, "The company's business includes two main activities: pharmaceuticals and human vaccines. The company is also present in animal health products.

"In its pharmaceutical activity, the Company specializes in six therapeutic areas: diabetes, oncology, thrombosis and cardiovascular, central nervous system), and internal medicine.

"Since 2001, I've avoided big-name stocks because I thought they were too expensive. But now, for the first time in my career, I'm finding value in some big U.S. stocks... particularly in one sector: pharmaceuticals," says Dr. Steve Sjuggerud.

The editor of Daily Wealth explains, "Big drug companies are record cheap, investors have given up on them, and we might be seeing a glimmer of an uptrend. Below, we consider the case of Johnson & Johnson (JNJ).

"The share price is in the $50s today, like it was at its highs in 1999. But since then, the business has grown dramatically. Now, you get a whole lot more business for your investment buck.

"Modern drugs are expensive to develop; but after just 20 years, a drug can be duplicated by generic drug manufacturers and sold to those who need it for far less money," says Paul Goodwin.

The editor of Cabot China & Emerging Markets Report explains, "That's where Dr. Reddy's Laboratories (RDY) comes in. Founded in 1984 by Dr. Anji Reddy, Dr. Reddy's Labs is the main reason India has gone from a net drug importer to a net drug exporter.

"Dr. Reddy's is a growing global power in the pharmaceutical business, with a lineup of more than 50 products offered in the U.S., more than 160 products marketed in Europe, and more than 200 branded formulations available in India, Russia and other emerging markets.

"There are also people who avoid the doctor's office, not because they're afraid of needles, but because they can't afford it," says growth stock specialist Marc Lichtenfeld.

The contributing editor to Investment U explains, "However, times are changing. The new health care bill will enable millions more people to get their various conditions checked out. As a result, the diagnostics industry should boom.

"The stocks on our Validea Hot List are chosen because they meet the investment criteria of numerous "legendary" investors, such as Ben Graham, Warrenn Buffett and Peter Lynch," explains John Reese.

The editor of Validea says, "Sanofi-Aventis (SNY) has been added to our buy list based on our Growth/Value Investor screen which assesses stock based on the strategy used by James P. O'Shaughnessy. The stock passes this screen with a 100% score."

"Core Laboratories (CLB) is being added to our portfolio; this move is in line with our ongoing strategy of adding one new stock each month to our model portfolio," says Neil Macneale.

He continues, "As the name of our 2-for-1 Stock Split Newsletter suggests, the stocks within our model portfolio are exclusively chosen from among those companies that have just recently announced 2 for 1 stock splits.

"Isis Pharmaceuticals (ISIS) stock is down over the last month on the continued controversy and misinformation surrounding the safety and potential market size for mipomersen;Wall Street has focused on some perceived safety issues from the release of Phase 3 data for mipomersen in heterozygous familial hypercholesterolemia (heFH) patients.," says John McCamant.

The editor of The Medical Technology Stock Letter explains, "The trial met its primary endpoint with a highly statistically significant 28% reduction in LDL-cholesterol after 26 weeks of treatment, compared with an increase of 5% for placebo."

"It's time for income investors to come back to what's historically been a mainstay of diversified portfolios: big pharmaceutical companies. We're adding one of the sector's most durable members to the Income Portfolio, Bristol-Myers Squibb (BMY)," says Roger Conrad.

In Personal Finance newsletter, he explains, "The stock has been a lackluster performer since the 1990s, when it was last a Portfolio recommendation. The company's underlying business, however, has become ever-more valuable.