Here's to Health! 5 Medical Stocks for Long-Term Investors

To steal a line from Martin Landeau s colorful old codger from the hit HBO series, Entourage: would stocks that have historically outperformed their peers by more than 58% a year later be something you would be interested in?

At PowerRatings.net, we call these stocks 10 s . Our research, going back to 1995, shows that 81% of the stocks with PowerRatings (for Investors) ratings of 10 will be higher one year later. How much higher?

Better than 20%.

While investors have spent much of 2007 plowing their money into technology and oil service names and not without good reason tech and oil are far from the only places where good stocks can be found. Advances in medical technology are helping create tremendous opportunities in the field of health care. For investors looking to diversify their portfolios, there are a number of different ways to add exposure to these industries.

Cytyc Corporation (Nasdaq: - ) and Hillenbrand Industries (NYSE: - ) are a pair of 10 s from the medical instruments and supplies industry. Cytyc Corporation recently made headlines due to its merger with Hologic Incorporated, an initiative that is expected to strengthen Cytyc Corporation s position as a leader in applying advanced medical technology to the field of women s health, in particular.

Hillenbrand Industries (HB), in contrast, is a holding company operating successful businesses in both health care and funeral services.

Drug development is how Covance Incorporated (NYSE: - ) makes its money. Another 10 , Covance is one of the larger companies of its kind in the research services field. Shares of Covance recently pulled back from all-time highs in the wake of a strong third quarter earnings report.

Idexx Laboratories (NasdaqGS: - ) is another health care company with a PowerRatings (for Investors) rating of 10 . Idexx is a major player in the veterinary services market. The company also has a strong business in developing and manufacturing products for food and water testing. Idexx Laboratories recently announced a 2-1 stock split.

Saving the best for last? Medco Health Services (NYSE: - ) is not only a 10 stock, but also hails from an industry group with a strong PowerRating (for Industries) rating of 8 . Sitting atop of a group that includes well-known drug store stocks such as CVS Corporation (NYSE: - ), Rite Aid (NYSE: - ) and Walgreens (NYSE: - ), Medco Health Services has impressed investors of late with its improved earnings outlook for the balance of 2007 going into 2008.

David Penn is Senior Editor of PowerRatings.net.