Merck

Ever since the Vioxx scare caused Merck's stock to collapse, one of America's pre-eminent pharmaceutical giants has been on a tear. The companies legal strategy - to fight thousands of individual lawsuits instead of settling - has proven to be a stunning success. New product development in the pharma sphere is notoriously fraught with risk, yet Merck's history of aggressive internal research and development combined with a willingness to join in strategic partnerships puts the company on sure footing.

With a company of Merck's size, the ability of any single product to significantly shift the bottom line is minimized. Yet, some risks to the company's long-run growth do have that potential. In particular, any universal health care proposal put forward in the coming election cycle is likely to put a big brake on earnings growth. It's easy to underestimate health care costs in a society where nearly 50 million people forgo any form of health insurance. No more people will get sick or injured as a result of changed payment mechanisms, but sticker shock is going to set in quickly when many people move to take advantage of mid-tier services for the first time.