If you have not read part one of this three part article, please find the link here.

As I have already highlighted, the health care industry is subject to many swings that are caused by macroeconomic variables, regulation, trends, and beliefs.  These changes can be hard to pick up on, especially if you are new to the health care industry or if you are not as familiar with it as with more experienced investors.  In the first part of this article, I explained how the Obama Administration and the FDA are shaping the environment for health care companies.  It is very important to understand the relationship between companies and their stakeholders and the major forces in the industry in order to properly evaluate a health care company.

Major M&A Activity

Recently, there has been some major consolidation within the industry as companies

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Biotech companies are a great investment right now, says Laura Cadden. And support from the Obama administration will ensure this trend continues. Laura picks four small cap biotech firms set to soar.

This from Today’s Financial News:

We’ve already taken double-digit gains on Aastrom Biosciences, Inc. (NASDAQ:ASTM),  Cerus Corporation (NASDAQ:CERS), and Geron Corporation (NASDAQ:GERN).

But these stocks are by no means done with their upward momentum.

Biotech companies continue to be a great investment – and these three are some of the best out there.

As the market takes another hit and these stocks artificially deflate, I recommend that TFN investors should again pick up shares.

And I’ve found another company that I believe is on the verge of a breakout.

But first, what’s so great about the three companies I selected in November? Let’s review… Aastrom Biosciences, Inc. (NASDAQ:ASTM) develops products for the repair or regeneration of human tissue. It’s

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iShare NASDAQ Biotechnology Index (IBB) A recent run-up in biotechnology shares has led to new highs for the iShares NASDAQ Biotechnology Index (IBB) Exchange Traded Fund (ETF). 52 ...

In a note received just now from Zacks senior biotechnology analyst Jason Napodano, CFA, the Food & Drug Administration [FDA] just issued a warning on Amylin's (AMLN) diabetes drug, Byetta, on a potential risk for pancreatitis.

According to the report, there have been six reported cases, with two deaths in a recent-enough time frame that the FDA believes warnings doctors and patients is necessary.  The stock is already down 10% on the news.

From the analyst: "We have a SELL on Amylin and continue to recommend investors avoid the name."

Read the full analyst report on AMLN

"AMLN" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Green Plains Renewable Energy Inc. (GPRE) engages in the construction and operation of dry-mill, fuel-grade ethanol production facilities in the United States. Trading on NASDAQ as part of the Specialty Chemicals industry in the Basic Materials sector, the company has their corporate headquarters in Omaha, Nebraska. They are working towards their goal of becoming a vertically integrated, low-cost ethanol producer.

The company operates two plants in Iowa. These two have a combined operating capacity of 110 million gallons of ethanol per year. The processing of corn and/or other biomass produces ethanol. Green Plains is operating one ethanol plant, located in Shenandoah, Iowa. This Shenandoah Plant started producing ethanol on August 23, 2007. They also have another plant in northwestern Iowa near the town of Superior.

Green Plains Renewable Energy also has plans to build other plants at other sites. Their corporate strategy is to further expand their Shenandoah and Superior sites

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We have several tier-1 firms out positive on Monsanto (NYSE:MON) this AM:- Merrill Lynch is raising their tgt to $165 from $155 (Reit Buy) noting that at its recent investor field event Monsanto indicated that fiscal 2009 biotech trait price increases will be above earlier expectations, particularly for triple stacked corn up 33% on average from 2008 versus June guidance of a 20% increase. MLCO's proprietary review of Monsanto’s just-issued price lists indicate that the trait increase approaches 50% for the premium product (VT triple) in the high-yield, high-rootworm pressure areas, but is roughly flat in lower-yielding, low rootworm pressure areas, which they believe will drive penetration rates. Second generation Roundup-tolerant soybeans will be priced $20/acre above first generation versus original expectations of $15. The first generation product will see a seed and trait increase of ~$12/acre, which will be largely offset by higher production costs.Firm ...

Enzon Pharmaceuticals’ (ENZN) key product Abelcet, a treatment for fungal infections, sales continued to deteriorate in 2008. Further, another major source of revenue, Royalty, is also under pressure from competition. However, sales in two other products, Oncaspar (for acute lymphoblastic leukemia) and Adagen (for severe combined immunodeficiency disease) are picking up momentum and offsetting the sales decline from Abelcet and Royalty.

We are impressed with strong sales growth of Oncaspar. We expect total revenue to remain stable or experience modest growth in the coming years while the company is progressing well with its clinical developments. Enzon is also advancing its pipeline to drive long-term growth. We maintain our Hold rating on the shares. We see a balanced risk/reward profile for Enzon. In our view, there are limited near-term catalysts to drive the shares higher.

We believe the company’s pipeline is in a show me mode, and we do not

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Particularly in medicine, the market process is one that takes its cues from no man or government. People and governments may work to influence the markets but capital will always flow to places where it will most likely multiply fastest. Stem cells - and associated therapies/equipment/processes -are one such market. Research and application testing are progressing at such a rapid pace that this new market is inevitable, regardless of moral or political position. An investor can become involved or not, but profit is going to be made and capital will flow as it does.

CellCyte Genetics Corp., a development stage biotechnology company, works to develop and market stem cell therapeutic products and medical devises. The company is currently in the pre-clinical phase of approvals for its stem cell therapy products and clinical trials where its medical tumor identification products are concerned. Acceptable financing has been secured for the company’s clinical

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FLIR Systems, Inc. (FLIR) announced second-quarter results on July 24th after being featured as a growth stock in March. The thermal imaging and stabilized camera company surprised the street with second-quarter earnings of 29 cents per share, one penny higher than analyst expectations of 28 cents. FLIR Systems recorded second-quarter revenue of $261 million, a 42% year-over-year increase.

On July 30th the company announced a finalized $30 million dollar contract with the US Army to deliver thermal imaging systems, Star SAFIRE III's, over the next 12 months.

Shares of FLIR climbed steadily since the being featured as a Zacks Rank Buy. The stock set its 52-week high of $45.49 in mid July and have since retraced to form a nice level of support near $39. Take a look at the chart below. 1218909269

Last Week's Aggressive Growth Zacks Rank

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Size doesn’t necessarily matter when it comes to five-star investing. Just ask Frank Sustersic, portfolio manager for Turner Investment Partners.

His small-cap Turner Emerging Growth Fund is up an average of 16.40 percent per year over the last five years. It’s currently closed to new investors, but Sustersic is willing to share some of his favorite names.

Recommendations:

Some of his favorite stocks are clinical-research organizations, or CROs.

“They help pharmaceutical companies conduct clinical-research trials,” he told CNBC. “All of the companies right now have an amazing tailwind…and currently, there is a pretty significant outsourcing trend that’s occurring; pharmaceutical and biotech companies are trying to change their cost structure to be more flexible.”

Two of those CROs are Parexel and Icon

“Over the next three to six months, the stocks could need to consolidate a bit,” he cautioned, but added, “Over the long-term period of

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