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3 Stocks Pushing The Health Services Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

The Health Services industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.8%. Laggards within the Health Services industry included American Caresource Holdings ( ANCI), down 3.5%, Pro-Dex ( PDEX), down 2.8%, American Shared Hospital Services ( AMS), down 3.7%, Lakeland Industries ( LAKE), down 2.2% and Escalon Medical ( ESMC), down 3.9%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Conmed ( CNMD) is one of the companies that pushed the Health Services industry lower today. Conmed was down $1.46 (3.1%) to $45.63 on heavy volume. Throughout the day, 723,491 shares of Conmed exchanged hands as compared to its average daily volume of 209,000 shares. The stock ranged in price between $45.30-$47.28 after having opened the day at $47.28 as compared to the previous trading day's close of $47.09.

CONMED Corporation provides surgical devices and equipment for minimally invasive procedures and monitoring. Conmed has a market cap of $1.3 billion and is part of the health care sector. Shares are up 10.8% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Conmed a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Conmed 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on CNMD go as follows:

  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, CNMD has a quick ratio of 1.87, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 211.12% to $17.03 million when compared to the same quarter last year. In addition, CONMED CORP has also vastly surpassed the industry average cash flow growth rate of 5.14%.
  • The gross profit margin for CONMED CORP is rather high; currently it is at 60.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.74% trails the industry average.
  • Compared to its closing price of one year ago, CNMD's share price has jumped by 49.33%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • CONMED CORP's earnings per share declined by 16.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CONMED CORP reported lower earnings of $1.27 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.27).

You can view the full analysis from the report here: Conmed Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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