One that Douglas Cliggott's been adding in the downdraft is the country's biggest pharmacy benefits manager, Medco Health Solutions (MHS), down a third from its highs to 37.32. Medco stock dropped roughly as much as the broad market did from mid-September to the end of October. That suggests indiscriminate selling of Medco, which has been beaten down to a relatively low P/E, almost 14 times forward earnings, lower than its growth rate. It's rare to get Medco at a discount to its growth, says Cliggott. For the first nine months, Medco sales rose 17% to $38.3 billion and profits 25% to $829 million, or $1.74 a share. Medco expects 2008 earnings of $2.30-$2.33 a share, up 20% from 2007, and $2.67-$2.77 next year, up 15%. And it plans to buy back some $3 billion of shares. Tough economic times could play to Medco's strength. Fast-rising heath-care costs are one of Corporate America's biggest problems, so the cost benefits of mail-order drug fulfillment and generics, for example, have wide appeal to companies and consumers. Medco attributed part of its 38% third-quarter profit jump to a rise in clients and their desire to cut drug-benefit costs.

But there also could be some winners in health care. Cliggott thinks generic drug maker Teva Pharmaceutical Industries (TEVA) could benefit from any assault on drug pricing. And the CEO of managed-care company Humana (HUM), Michael McAllister, has said that his company can benefit by bringing technology systems and other efficiencies to the insurance market. Medco Health Solutions (MHS) and Express Scripts (ESRX) also could benefit, as each offers pharmacy-benefits services.

Entered long on 9/8/08 at 48.75

From a recent Mad Money show: "This is one of the great healthcare stocks. I think they can beat the competition; they are really well run."

You can see MedcoHealth (MHS), Cardinal Health (CAH) and Quest Diagnostics (DGX) rallying, another cohort that's struggling to put in a recession bottom.

pharmacy support

Finally, Cramer revisited Medco Health (MHS), a stock which is up just 0.7% since the November mention. Cramer said that while Medco makes its money whether or not the economy does well, it has more competition that he originally thought and perhaps the traditional defensive stock wasn't right for this portfolio. He told viewers "if it rallies, I'd sell it."

In fact, the only real defenser that is higher is Medco (MHS), and that's because UnitedHealth (UNH) blew it again. Oops, hate to write this, but UNH really is a bunch of clowns.

Medco Health (MHS) was upgraded from Hold to Buy, Citigroup said. $57 price target. Company renewed its contract with UNH, a major customer, through 2012.

MedcoHealth Solutions (MHS) was upgraded at Credit Suisse. Upgraded to Outperform from Neutral. 2008 EPS estimates raised to $2.33 from $2.30. Maintains $58 price target.

Too Long to Play out

GROWTH