We all know the sharp increase in revenues that generic companies will see in the next five years, but how else will generics benefit? Obama’s healthcare plans and aspirations favor generics significantly. With the push for universal healthcare coverage as well as cheaper medicine, this sector is where you need to be. Also, going forward, much M&A activity will continue as large-cap companies look to expand their product portfolio and add another source of revenue. Aside from Novartis and Teva (TEVA: 41.82, 0.00 (0.00%)), most players are small-cap, and in this market, and I am still steering away from those companies. In addition, find a company that is globally positioned to capitalize on the already international biologics market and also one that has infiltrated the emerging markets and niche countries to steal market share away from possible competitors.

• Firm to look into: Teva because of their overall global presence, pending Barr acquisition, and strong balance sheet

3. Continuous speculation will drive down much of the Med Tech & Supplies sub-sector

Unfortunately for many of you who have been overweight in Med Tech & Supplies because of the steady and consistent historical growth have lost quite a bit in your portfolio. You cannot fore-go a hip, knee, or shoulder replacement, right? That is/was the thought of many who stayed in holdings like Stryker (SYK: 39.91, 0.00 (0.00%)), Zimmer (ZMH: 39.56, 0.00 (0.00%)), and Smith & Nephew (SNN: 31.04, 0.00 (0.00%)) and saw their portfolio value diminish. The market has reacted like those firms are not recessionary and the procedures that they perform will simply not be as prevalent in this current market environment. With pending legal concerns regarding advertisements and doctor kickbacks, Medicare cuts, and high unemployment rates, this sub-sector is one that you should continue to stay away from.

• Firm to look into: Becton, Dickinson & Co.