Already looking for some new stock trading ideas after the wild start for the stock market in 2008? Don't worry - if it's stock picks you want, we've got 'em. We think biomedical testing equipment company Beckman Coulter (BEC) and medical equipment maker PSS World Medical (PSSI) could add some extra 'umph' to your investment portfolio over the next few months. Both look like undervalued stocks, and both seem to be the 'best of breed' for their sector.

Just to set the stage...right off the bat, odds are many of you are looking for some new stocks for your portfolio. Your old ones may be unimpressive - or underwater - following the big pullback from early January. The good news is, we think the worst is over. The even better news is, the pullback looks like it's left behind some undervalued companies...particularly in the healthcare arena.

We'll look at Beckman Coulter and PSS World Medical in a moment. First, we wanted to catch you up on our previous open positions.

As of our last Trader's Corner update, we still owned Cogent (COGT) and Radiant Systems (RADS), and had decided to buy healthcare information technology stock Eclipsys Corp. (ECLP), and SkillSoft PLC (SKIL)...a computer gaming software company.

Between then and now, both Cogent and Radiant would have been carried under our suggested stop levels, caught up in all the volatility we've been through over the last couple of months. As such, we're effectively stopping those two names out of the portfolio at a realistic exit price.

We didn't issue suggested stops or targets for our Eclipsys and SkillSoft recommendations at the time we published our last Trader's Corner, opting to wait until we were actually in a position before drawing any lines in the sand. As it turns out, that ended up being a wise move...the market got shaken and stirred, yet both of those positions are right back to where we began with them. More importantly, we still like them both for the same reasons we did before.

That said, we do want to go ahead and apply some parameters now that the new year is here and stability is starting to resurface. We think ECLP could reach $30.00 before it's all over, but we'd make a defensive exit at $22.00. As for SKIL, we're looking for a move to $11.25. We suggest a stop of $8.74.

And what about our two newest stock picks - Beckman Coulter and PSS World Medical? Though we have to confess we're now fans of healthcare, the fact that both of today's picks are from the same sector - and close to being in the same industry - is a complete coincidence. The system we used to find these stocks is based on a detailed combination of fundamental, technical, and competitive criteria...and that's it. So, though sectors and industries tend to move in unison (which isn't a bad thing), the fact that these two are related isn't by design.

Do you pick one or the other, or both? That's up to you, though we'll say this...as much of the 'diversify' sermon we've all probably heard, we've seen an unwillingness to go heavily into a hot industry be just as limiting to a portfolio's growth as being fully diversified can be.

With that in mind, let's detail today's two stock picks.

Beckman Coulter designs and manufactures biomedical testing instrument systems, tests, and supplies for clinical laboratories. They're a mid cap company (last year's big winners) with better-than-average gross margins of 46.95%, and a better-than-average price/sales ratio of 1.7. Not bad, but the real attraction to Beckman Coulter lies in its chart.

In simplest terms, Beckman Coulter is in a long-term uptrend. The October/November pullback cooled off the rally for a few weeks, but BEC shares have displayed an impressive amount of relative strength since early December (much more so than the rest of the market). The late-November brush with the 200 day average seems to have been just enough to wash all the sellers out and inspire any potential buyers. Though the current entry level is still advantageous thanks to the October selling, the low-price opportunity may not last much longer.

Let's go ahead and establish a suggested target of $95.50, with a suggested stop of $69.75.

PSS World Medical's chart looks quite a bit like Beckman Coulter's in the short run. However, PSSI's big 2007 dip makes its recovery potential really attractive. It's only recently crossed back above its 200 day moving averages line, or all of its key moving average lines for that matter. So, the uptrend here is very young relative to Beckman's. (On the other hand, 'young' could also mean less proven.)

Fundamentally, PSS World Medical's gross margins of 29.11% is better than that of the average medical equipment maker. The ROE of 13.5% and quarterly earnings growth of 13.4% is also on the upper end of medical equipment world's numbers. But again, the chart's recent recovery move is where we think the real opportunity is.

For PSSI, we suggest a target of $26.30, and a stop of $19.11.

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