Health Care Stocks: Whose Rx is Best?


The health care sector's vital signs are strong. But which stocks have the healthiest prospects?

Paul Alan Davis' Schwab Health Care Fund is up an average of 18.37 percent per year over the last five years -- and he offered some promising profit prescriptions.

"We're looking for stocks that will benefit from an economic slowdown," Davis told CNBC.

  • Video: Watch the entire analyst interview (2 mins, 11 secs)

"Also, this is an election year, so we're looking for companies that are going to help with cost containment. I think that's going to be a priority for a lot of companies and also from the government." His recommendations begin with Express Scripts.

"Express Scripts helps with the pharmacy benefit management program for a lot of large firms, utilities and government organizations," he explained.

"They've been able to top analysts' expectations for 11 of the last 12 quarters...this has been one of our favorites for about three years."

Invitrogen is another of Davis' favorites.

"Invitrogen is a firm that helps supply research kits and tools to the pharmaceutical research area," he said. "Has a little bit of downside risk in terms of whether it can keep up with analysts' expectations, but...we really like this firm."