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Johnson & Johnson (NYSE:JNJ) isn't on our Buy List, but I like the stock a lot. I'm amazed at how poorly health care stock have been doing.

One of the best ways to find great stocks is to pick the best names out of the weakest sector. Studies have shown that much of a stock's movement is due to whatever industry it's in.

As the health care sector has stumbled, the good and the bad have fallen. One year ago, the stock was closing in on $70 a share. Today, shares of J&J are hovering just above its 52-week low of $56.70.

If J&J beats earnings and fails to rally, we'll really have an example of poor investor confidence. Here's an earnings preview:

OVERVIEW: The company started the quarter losing out to Boston Scientific Corp. in a bidding war for heart device maker Guidant Corp. In February, the company's Ortho Evra birth control patch was in the spotlight after the Food and Drug Administration released a study reporting double the risk of blood clots in women compared with those using the pill.
Flush with cash, the company's board approved the repurchase of up to $5 billion of common stock in March, roughly 85.1 million shares of J&J's 3 billion shares outstanding. Toward the end of the quarter, an arbitration panel ruled against the company after J&J alleged that medical device maker Medtronic Inc.'s Driver brand stents infringed patents owned by the company's Cordis Corp. unit.

EXPECTATIONS: Analysts surveyed by Thomson Financial estimate earnings per share of 98 cents on sales of $13.21 billion.

ANALYST TAKE: Merrill Lynch analyst Katherine Martinelli estimates earnings per share of 98 cents on revenue of $12.99 billion, slightly less than consensus due to generic competition. Martinelli expects pharmaceuticals sales to drop 3 percent to $5.57 billion, but medical device sales to rise 5 percent to $5.03 billion, resulting in a 1 percent rise in total sales. Banc of America analyst Glenn J. Novarro forecast earnings per share of $1 on $13.2 billion in sales.

WHATS AHEAD: Despite an expected rise in medical device sales due to captured market share from Boston Scientific in the drug-coated stent market, Johnson & Johnson could face sales challenges along with the rest of the sector following recently proposed Medicare rules that would cut reimbursements to hospitals for heart-related devices.

STOCK PERFORMANCE: Shares of Johnson & Johnson fell about 3 percent over the quarter to close at $59.22 on the New York Stock Exchange on March 31. The stock traded between $56.70 and $69.99 over the past 52 weeks.

Source: Johnson & Johnson - Best Name in a Weak Sector (JNJ)