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Forest Laboratories Inc. (FRX): Today's Featured Drugs Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Forest Laboratories ( FRX) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day up 0.6%. By the end of trading, Forest Laboratories fell $1.17 (-3.2%) to $35.43 on heavy volume. Throughout the day, 4.7 million shares of Forest Laboratories exchanged hands as compared to its average daily volume of 2.1 million shares. The stock ranged in price between $34.61-$36.20 after having opened the day at $35.93 as compared to the previous trading day's close of $36.60. Other companies within the Drugs industry that declined today were: Isis Pharmaceuticals ( ISIS), down 21.9%, Somaxon Pharmaceuticals ( SOMX), down 11.6%, Prima Biomed ( PBMD), down 10.9%, and Idera Pharmaceuticals ( IDRA), down 9%.

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Forest Laboratories, Inc. develops, manufactures, and sells branded forms of ethical drug products primarily in the United States and Europe. Forest Laboratories has a market cap of $9.64 billion and is part of the health care sector. The company has a P/E ratio of 12.6, equal to the average drugs industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 21% year to date as of the close of trading on Monday. Currently there are seven analysts that rate Forest Laboratories a buy, two analysts rate it a sell, and 13 rate it a hold.

TheStreet Ratings rates Forest Laboratories as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the positive front, Ampio Pharmaceuticals ( AMPE), up 11.5%, Aegerion Pharmaceuticals ( AEGR), up 9.7%, KYTHERA Biopharmaceuticals ( KYTH), up 8.4%, and Seattle Genetics ( SGEN), up 7.6%, were all gainers within the drugs industry with Johnson & Johnson ( JNJ) being today's featured drugs industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the drugs industry could consider SPDR S&P Pharmaceuticals ETF ( XPH) while those bearish on the drugs industry could consider ProShares UltraShort Nasdaq Biotech ( BIS).

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