"I'm boosting my stake in Pfizer (NYSE: PFE); its merger with Wyeth created a firm with one of the broadest and deepest portfolios in the drug industry," says Ian Wyatt in The Recovery Portfolio.

"Like many of its peers, Pfizer faces massive patent losses on key drugs in coming years. Most notably, Lipitor, which is the largest selling anti-cholesterol drug in the world, loses U.S. patent exclusivity in 2011.

"But the addition of Wyeth's drug portfolio, coupled with an estimated $4 billion in merger synergies, should help Pfizer offset this loss. 

"And Pfizer's current share price already reflects the major risks faced by the company. Trading at only 8x estimated 2010 earnings, Pfizer's valuation is among the lowest in the entire pharmaceuticals universe. 

"The company's generous 3.6% dividend yield should also provide support for the stock, especially if 2010 turns out to be a listless, sideways-trending market.

"Finally, much has been made about the possible effects of healthcare reform on the business of companies like Pfizer. In my view, there's little doubt that reform will pressure drug prices lower over the long term. 

"At the same time, reform will likely be a net positive for the industry, as million of currently underinsured Americans gain coverage. Plus, nearly 60% of Pfizer's revenues come from international operations, which will be unaffected by the U.S. reform debate."