Healthcare is an attractive field for investment. Demographic trends will inevitably lead to increased healthcare spending, which should benefit companies in this sector. The most promising prospects within healthcare are pharmaceutical and biotechnology firms with large drig pipelines, research and marketing budgets, and providers of medical equipment that is used in specialized clinical procedures instead of general use. It is not unusual to find attractive healthcare investments in the other industries, but more examination is needed to determine if a competitive edge exists to protect recent high returns on capital.

Big Pharma has already fallen for some of the most attractive biotech names. And as some more choice companies begin to get snapped up, you might see a rush into the sector by other Big Pharma firms to grab the existing quality companies before someone else does.

Mix in this momentum with some speculation and that could kick prices higher, causing Big Pharma executives to pull the trigger before valuations get too expensive.

The economy is still bleeding, but these recent acquisitions indicate that the patient is no longer spurting blood all over the emergency room floor. Eventually, it will stabilize and walk on its own again.

When it does, the strongest drug companies will be the ones that took advantage of this unique opportunity to fill their pipelines with products from inexpensive biotech companies.