"We are seeing quality names at fire-sale prices, and I think you must take advantage of that," says income expert Nilus Mattive in Dividend Superstars. Here's a trio of favorites.
"Pfizer (NYSE: PFE) recently reported great third-quarter results. The company tripled its profits from the same period a year ago. While last year's results were hurt by a one-time charge, Pfizer is obviously seeing continued demand for most of its drugs.
"I consider the stock dirt cheap, and while there is a slim chance of a dividend reduction, the shares absolutely belong in your long-term income portfolio at this level.
"I feel the same way about General Electric (NYSE: GE). While profits were down 22% this quarter, the company still boasts a AAA credit rating and a very attractive yield. It is a solid long-term income holding.
"Huaneng Power (NYSE: HNP) has been punished along with the rest of China's stocks. But things are going well on the fundamental front. The company increased its power generation 12.7% in the first three quarters of 2008, and revenues gained 36.8% over the same period a year earlier.
"It may post a loss because coal prices remain elevated, but I remain bullish on the company's long-term prospects, and consider it the best dividend-paying Chinese stock to own."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
"Johnson & Johnson as well as FPL Group are two strong positions in companies that have suffered a few 'hiccups' during this historic panic selling, but are likely to survive and prosper in the next year.
"First, Johnson & Johnson, the health care and pharmaceutical giant, beat expectations in its most recent earnings report. The company's earnings jumped 30% to $3.3 billion on revenues of $15.9 billion. It currently is selling for only 15 times forward earnings -- a bargain price.
"Second,, FPL Group -- known as Florida Power & Light -- is a large Florida utility company that is holding up well. It, too, is a solid company that now is on sale because of the financial crisis.
"Revenues are down slightly to $15 billion, and earnings dropped 40% during the past year. But Florida Power is still profitable, and at 10 times next year's earnings, it should continue to recover.
"We think it is wise at this time to limit our exposure to the markets, and to keep our powder dry by focusing strictly on a few well-financed utilities and consumer product firms.
"Overall, we consider both Johnson & Johnson and FPL Group to be solid companies selling at a substantial discount to their real value."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
"Abbott has been acting strong depite market weakness, indicating that money moving into ABT, perhaps as a defensive play.
"ABT has a low beta of 0.14 versus the S&P 500's 1.00. That would indicate that ABT is a low risk play. In any case, the stock is set up nicely for a breakout from an eight-week flat base. With good earnings coming this year, we suggest accumulation of the shares.
"Abbott's products include prescription drugs, coronary and carotid stents, and nutritional liquids for infants and adults.
"The stock's long-term chart shows ABT 'knocking on the door' of a new high. It just needs to get over 61.09. If it can do that it could well draw in more buying.
"ABT is acting strong and is a good spot for institutional money to move into in a difficult market. We suggest accumulation of a partial stake in ABT with further buying to be done on a move over 60.
"Overall, we see ABT as a conservative play with low downside risk. We are targeting the stock for a move to 70 within the next few months."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
In Invest With an Edge, the advisors look at the 123-company, which he selects as " a solid healthcare pick in a strong long-term uptrend."
"This New Jersey-based company has come a long way since corner drugstores sold their baby powder. Beginning as a pioneer in sterile medical supplies, they expanded into pharmaceuticals and related consumer products.
"Over the years, they've released ubiquitous brands such as Band-Aid, Rogaine, Listerine, Tylenol, even Splenda. Johnson and Johnson has become a household name.
"However, Johnson & Johnson is a healthcare company with deeper product lines; it is ivided into three segments: Consumer, Pharmaceutical and Medical Devices & Diagnostics.
"The pipelines of most Big Pharmas are bone dry; last year, the FDA approved the lowest number of new drugs (19) since 1983," notes Louis Basenese, editor of The Oxford Club.
"But opportunity always lurks in the wreckage, and one Big Pharma, in particular, is being unfairly punished." Here's his bullish outlook on Novartis (NYSE: NVS).
"Unlike others in the sector, Novartis doesn't suffer from an empty pipeline. It's launched more drugs globally than any other firm in the past seven years. It has more than 100 projects in phase II (or later) trials. And it expects to file at least six new drug applications this year alone.
"Plus, its products cover all bases, from vaccines to specialized drugs to generics to eye-care products, even animal health items. And most are enjoying rapidly expanding sales.
"Moreover, the company maintains a fortress-like financial position that includes a $10.8 billion cash horde. Management keeps raising the dividend, for 11 years and counting. And it recently announced a massive $9 billion stock-repurchase plan, too. Hardly the hallmarks of a sickly stock.
"Our portfolio has been notably light on pharmaceuticals and consumer products; we're rectifying that by buying Johnson & Johnson (JNJ)," says Gregory Dorsey in Leeb's Income Performance Letter.
"Getting a handle on exactly what the 122 year-old company markets is no easy task, given the broad scope of its product line-up. And to say that J&J has been a resounding success on the corporate stage would be an understatement.
"Through its more than 250 operating businesses, the parent company lays claim to being, among other things: the world's premier consumer health company, the largest medical devices and diagnostics company, the third-largest biologics company and the sixth-largest pharmaceuticals company.
"While acquisitions have played an important role in making the company what it is today, J&J has also achieved these milestones through internal growth. It boasts 75 consecutive years of rising sales.
"You can invest for all the right reasons and still get the wrong result," notes long-standing turnaround stock expert George Putnam, referring to the poor performance of the pharmaceutical sector in recent years.
Here, in his industry-leading The Turnaround Letter, he offers a fascinating review of 10 leading drug stocks which he now believes offer a combination of growth potential at "pretty cheap" valuations. Here is his overview.
"In 2000 and 2001, when the Internet boom was becoming a bust, many smart investors turned away from technology stocks and put their money into drug stocks. How could you go wrong with the big pharmaceutical companies?
"Demand for their products was growing as the population aged. These companies had huge research and development programs that seemed to keep cranking out new blockbuster drugs. And most of them had great balance sheets, with many paying handsome dividends.
"Much of this reasoning has been borne out in the intervening years. Many large drug manufacturers have rung up substantial revenue gains over the last decade. So what's happened to the big drug stocks? With few exceptions they have gone sideways or down – in some cases down a lot.
A graph from the May 2008 issue of Harvard Business Review tells a story about the dumbing down of the global economy.
From an article, Rebuilding the R&D Engine in Big Pharma [subscription required] the graph shows the total shareholder returns for various industries in two time periods: from 1985 to 2000 and from 2001 to 2007. Here are three of the leading sectors from 1985 to 2000 (average annual shareholder returns are in parentheses):
Pharmaceuticals (20.0%)
Financials (18.8%)
IT (17.4%)
Between 2001 and 2007, three of the leading sectors were:
"Although Pfizer (NYSE: PFE) recently posted an 18% drop in its first-quarter earnings, I remain a long-term bull on the shares," notes Nilus Mattive in the income and growth oriented Dividend Superstars.
"Results were hurt by tougher generic competition for the company's blood-pressure drug Norvasc and allergy treatment Zyrtec. Pfizer pulled in $0.41 a share in the quarter, but would have earned $0.61 excluding costs associated with two acquisitions.
"A lot of investors are treating the poor earnings as a death knell for the company, especially since Lipitor - PFE's biggest product - will also lose patent protection in 2010. However, I've watched countless drug stocks go through these cycles before, and I continue to believe it's smarter to buy when things look the worst.
"This is still the world's largest drug company ... it still delivers big, fat dividend checks ... and it is making strong moves to reorganize its operations and focus on new drug development. For all those reasons, I remain positive on the shares."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Vivian Lewis, who holds GSK in her Global Investing portfolio, explains, "GlaxoSmithKline is off 22% since our purchase late in 2006, so how nice that the Oracle of Omaha sprung for it now. Why did he?
1) The stock has a a 4.5% yield, always nice. Buffett is a value player, not a growth man, especially in the current economy. Drugs are refuges in a downturn;
2) A recently defused scandal over its lead drug, diabetes treatment Avandia, whose nasty side-effects (heart trouble) surprised doctors and researchers. The heart trouble also affects competing diabetes drugs, result of too-rigorous attempts to 'normalize' blood sugar levels. There will be lawsuits but they ignore the fact that the side-effect was unanticipated;
"Irish corporate tax rates are among the lowest in the world because the government tends to tax consumption rather than production," explains Dave Dyer, who poins ouot, "Irish corporations enjoy tax rates as low as 10%, and that has to be a competitive advantage in the global market."
In his The Dave Dyer Newsletter, he looks to one favorite Irish firm, Icon (NASDAQ: ICLR), a contract research organization (CROs) which conducts research required for clinical trials for pharmaceutical products.
Dyers notes, "The market for CROs is very strong right now because many extremely profitable drugs will be losing patent protection in the next few years and there is lots of pressure to find some replacements.
"ICON is one of the few CROs capable of providing services on a global basis. This gives them the advantage is of running clinical trials in multiple countries at once. Also, regulators actually prefer worldwide trials because they normally provide more ethnic diversity in the subject population."
"The stock that I think may put up the best performance in 2008 is Bristol-Myers Squibb (NYSE: BMY)," says Chuck Carlson, the industry's leading authority on dividend reinvestment plans and editor of The DRIP Investor.
Here, the advisor looks at the stock's role in the defensive pharmaceutical sector, its increasing dividend yield, and its takeover potential.
"I know this may strike some of you as an odd choice, especially given the fairly mediocre performance these shares have turned in over the last several years. However, some of the uncertainty hanging over these shares has been lifted.
"The firm has won its patent suit with Apotex over its important Plavix medication. Also, Bristol-Myers has finalized a civil settlement agreement with the U.S. Department of Justice.
"I like that the firm is cutting costs as well restructuring its operations. The company plans to reduce total headcount by approximately 10% by the end of 2010. Bristol-Myers recently announced the sale of its medical-imaging business.
"And Wall Street anticipates additional asset sales, possibly the company's woundcare supplies company, ConvaTec, and its Mead Johnson nutritional business. These moves would be consistent with the company's plan to become more of a player in the BioPharma sector.
"Two additional reasons Bristol- Myers may get some play in 2008 is that 1) health-care stocks traditionally perform well during rocky market periods; and 2) high dividend yielders usually provide a buffer during tough markets.
For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My favorite speculative stock for 2008 is Toronto-based Biovail (NYSE: BVF)," says Nilus Mattive, editor of Dividend Superstars.
"The company makes branded and generic drugs that are delivered orally. It used to concentrate on research & development for other companies, but lately it's become more of a fully integrated pharmaceutical concern.
"Some of its products are marketed and sold by other companies -- a good example is its pain medication Ultram ER, which is marketed by Johnson & Johnson.
"Investors have punished Biovail because of development setbacks in BVF-033, one of the company's most promising compounds. The FDA issued a non-approval letter, and more recently said it would not be examining newly submitted data until April. Biovail is also dealing with intensifying generic competition in other product lines.
For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My favorite conservative stock for 2008 is Pfizer (NYSE: PFE)," says Nilus Mattive, editor of Dividend Superstars. "Everyone's heard of this company -- it's the largest pharmaceutical company in the world.
"The company boasts a stable of well-known drugs, including Viagra, Celebrex and its current best-seller, cholesterol-lowering agent Lipitor.
"Despite its bellwether status, investors haven't been too keen on Pfizer recently. They're concerned about generic competition for the company's Zoloft and Norvasc. And although Lipitor's patent expires in 2011, there are also worries about increasing competition in the cholesterol market. I can see why -- $12.9 billion worth of Lipitor was sold in 2006, more than any other single drug in the world!
For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My favorite conservative idea for 2008, Abbott Laboratories (NYSE: ABT), is a leading player in several growing health care markets, offering a wide range of prescription pharmaceuticals, nutritional and diagnostic products, and medical devices," says Jim Stack, money manager and editor of InvesTech Market Analyst.
"The company has a long history of stable sales and earnings growth fostered by its strong research and development program, acquisitions and global expansion. As a defensive health care play, we particularly like the diversification this company provides.
"It derives nearly 30% of profits from overseas markets, while pharmaceuticals account for 44% of sales, hospital products 20%, nutritional products 18% and diagnostics 15%.
"Currently, Abbott is enjoying double-digit sales growth in three of these four major divisions, and we expect this strength to continue at least through 2008. The company is a bright spot in the drug industry, which has been plagued in recent years by patent expirations and meager product pipelines.
A graph from the May 2008 issue of Harvard Business Review tells a story about the dumbing down of the global economy.
For 25 years, Steven Halpern, editor of 
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