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Strong Performance Today In Drugs From Merck & Co Inc (MRK)

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.

Merck ( MRK) pushed the Drugs industry higher today making it today's featured drugs winner. The industry as a whole closed the day up 0.5%. By the end of trading, Merck rose 56 cents (1.3%) to $44.91 on average volume. Throughout the day, 12.7 million shares of Merck exchanged hands as compared to its average daily volume of 16.6 million shares. The stock ranged in a price between $44.42-$45 after having opened the day at $44.51 as compared to the previous trading day's close of $44.35. Other companies within the Drugs industry that increased today were: Optimer Pharmaceuticals ( OPTR), up 19.2%, Obagi Medical Products ( OMPI), up 16.1%, Idera Pharmaceuticals ( IDRA), up 11.4%, and Astex Pharmaceuticals ( ASTX), up 10.5%.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. Merck has a market cap of $133.59 billion and is part of the health care sector. The company has a P/E ratio of 22.1, above the S&P 500 P/E ratio of 17.7. Shares are up 8.3% year to date as of the close of trading on Monday. Currently there are 10 analysts that rate Merck a buy, one analyst rates it a sell, and four rate it a hold.

TheStreet Ratings rates Merck 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, expanding profit margins, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the negative front, Star Scientific ( STSI), down 10.7%, Affymax ( AFFY), down 8.1%, Inovio Pharmaceuticals ( INO), down 8%, and Tranzyme ( TZYM), down 6.9%, were all laggards within the drugs industry with Incyte ( INCY) being today's drugs industry laggard.

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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