Bristol-Myers Squibb (BMY)

Growth of mega-blockbuster Plavix is helping Bristol drive EPS growth up near 16% in 2008. Patent expirations loom very large in Bristol's future starting in 2011 when the Plavix patent expires.

That being said, the company does have an attractive mid-to-late-stage pipeline, and the company has been dramatically working to reduce costs and shed less profitable and non-core businesses.

We believe the company is an attractive take-over candiate at this level for a larger pharma name such as Sanofi or Pfizer. EPS growth at rates near the top of big pharma and a very attractive valuation prompted our recent upgrade from Hold to Buy. We expect the shares to trade up near $26.