"Long-time health-care investors can be forgiven their confusion; drug stocks are supposed to be defensive, but many of the largest drugmakers have been pounded," observes Richard Moroney.

Nevertheless, in the blue chip Dow Theory Forecasts, the advisor sees two favorite health care issues as long-term opportunities: AstraZeneca (NYSE: AZN) and Johnson & Johnson (NYSE: JNJ). Here's his review.

"Health-care companies’ profits are supposed to remain fairly steady regardless of the economic situation. But hospitals’ capital spending fell in the December quarter, and many consumers are putting off medical care because they cannot afford it. 

"In addition, the specter of health-care reform has investors worried about future profits. Fortunately, the news is not all bad. The wind may have shifted, but the boat remains seaworthy.

"On the surface, the numbers are ugly — five of the six industry indexes within the S&P 1500 health-care sector have declined over the past 12 months.

"But all six indexes outperformed the broader S&P 1500. Defensive is a relative term. And relative to the 44% decline in the S&P 1500 Index over the last year, most health-care stocks were fairly defensive.

"The Obama health-care plan promises to cut insurance costs for consumers and make coverage available for those who cannot afford it.

"The plan calls for limiting the profits of managed-care providers and making it more difficult for drug companies to defend patents. The final version of any legislation is likely to be more business-friendly than the current proposal, but the risks are real.

"Reform concerns aside, many health-care companies seem capable of continued growth.