"Being contrarians, we are always looking for laggard stocks with the potential to rebound," says turnaround expert George Putnam.

In his The Turnaround Letter, the advisor reviews four medical and pharmaceutical stocks that have been among the worst performers in the S&P 100 since the market bottom. Despite their poor showing, he thinks they may be due for a rebound.

"We think that investors who got left behind by the first leg of the market rally are struggling to catch up. 

"Investors who were still bearish (or perhaps just paralyzed) throughout the spring suddenly realized that they were significantly underperforming the market, and they rushed to get more fully invested. 

"Now that these nervous investors are back in the market, they are probably worried that many stocks have gotten ahead of themselves. They are probably looking for other stocks that have been left behind by the frenetic rally of the last seven months.

"With this in mind, we looked at the worst performing stocks in the S&P 100 (the largest 100 stocks by market capitalization) since the market bottomed on March 6. It is also interesting to note that four of the worst performers are in the pharmaceutical/medical products sector.

"That sector also performed badly during the early years of the Clinton administration – the last time major healthcare reform was proposed – and then recovered nicely shortly thereafter. Maybe history will repeat itself.

"The largest business segment at Abbott Laboratories (NYSE: ABT) is pharmaceuticals; it also markets diagnostic materials, medical devices and nutritional products.

"Operating gains have been crimped by generic competition, but Abbott is still reporting solid profitability. And it recently bolstered its drug pipeline with the acquisition of Solvay’s drug unit for $6.6 billion.

"Baxter International (NYSE: BAX) markets a range of drugs, IV solutions and dialysis equipment. Baxter should get a short-term bump from international demand for its swine flu vaccine.

"The company has reported sturdy quarterly operating gains and raised guidance for the balance of 2009. 

"Bristol-Myers Squibb (NYSE: BMY) is building new strategic alignments to help see it past the patent expirations for its leading blockbusters Plavix and Abilify in 2011 and 2014, respectively.

"In May, Bristol purchased Medarex, a biotechnology company that has a late-stage cancer drug in development. 

"Biotechnology products from Gilead Sciences (NASDAQ: GILD) are used to treat viral, bacterial and fungal infections with a majority of sales derived from HIV treatments.

"The company has generally reported consistent operating gains complimented by a strong balance sheet and cash flow. In April, the company purchased CV Therapeutics in a move that should help expand its cardiovascular product line."