At $33.50, Medtronic stock is trading at a 10-year low, and a cheap multiple. It could rally into the mid-40's if the company offers encouraging guidance about fiscal 2010-and delivers.

Hospitals are slashing costs, but the coming switch to electronic records should boost Cerner shares. One analyst sees 40% upside over 12 months.

Everyone expects Wal-Mart to do well in a recession -- it was one of only two Dow stocks with gains to behold in 2008 -- but investors may have underestimated its prospects in a recovery. The company reported flat earnings last week, a reflection of weak overseas revenue and a strong dollar, although U.S. sales rose 3.7%. New customers drove 17% of increased visits, and spent 40% more than veterans, so it's logical to question the loyalty of these more affluent Americans currently slumming at Wal-Mart. A second quarter swelled last year by rebate checks also sets up a daunting comparison ahead. So, even as Wal-Mart's free cash flow and book value climb to their highest levels in at least a decade, the shares have retreated to trade at just 13.4 times forward earnings, the lowest valuation in decades. The stock is a bargain at these levels, and a management that knows bargains has been buying.

Stick with defensives. They've got nice dividend yields, steady cash flows, and, having lagged so much, they'll outperform if this is the real deal. And if it's not, they'll fend off the bears better than the stocks that have gone up wildly since March. Van Quaethem lobbies for food-maker Groupe Danone (DANOY) and personal-care specialist Beiersdorf.

Analyst Thomas Eagan of Collins Stewart says the mechanics of the transaction provide some bullish influences for DirecTV shares. Traders have flocked to set up an arbitrage by buying Liberty Entertainment (which sells at a steep discount to its asset value) while shorting DirecTV to lock in a spread. Eagan points out that DirecTV shares, now around 24, have become measurably harder to borrow, possibly ushering in a short squeeze down the road. Furthermore, DirecTV, in part for technical tax reasons, is believed to be considering a Dutch-tender offer for its shares in coming months at a premium to market prices. Eagan suggests DirecTV could buy back 14% of its shares without a worrisome addition of new debt. DirecTV still sees positive earnings growth this year, even after tempering its forecast recently, and its subscriber additions last quarter exceeded expectations. It would be more comforting if Street analysts weren't so enthusiastic about the stock, and if a couple of insiders hadn't sold shares recently. But the weight of the tactical and fundamental evidence lines up on the favorable side.

If Redbox wins -and he thinks it will, citing a copyright-law principle called the First Sale doctrine, which basically says rights holders can't stop people from reselling things they have bought -- Helfstein expects Universal and other studios to revert to a rental-only exclusivity period for new DVD releases in an effort to lift initial prices for rentals. That outcome, he figures, could be bad news for Blockbuster and Netflix, forcing them either to raise prices or accept smaller margins. Helfstein last week launched coverage of Netflix with a "Perform" rating and a $35 price target, a few bucks below recent levels. The bottom line: Content is king. And as the studios get better control of their wares, Helfstein contends, the changing dynamics of DVD consumption will eventually cut into margins at Netflix.

Blockbuster (BBI) has taken two steps in response. To get a kick-start in the segment, the retailer is partnering with NCR Corp. (NCR), which has acquired the 2,200 kiosks operated under the brands MovieCube and The New Release and plans to rechristen them with the Blockbuster name. Blockbuster also has started offering customers the option to rent movies at the same dollar-a-day rate the kiosks offer. As Blockbuster conceded in reporting weak first-quarter results last week, the move has consequences at the top line.

The product categories that continue to be most susceptible to penny-pinching are personal computers, servers, new software licenses and information-tech services companies, such as Accenture (ACN).