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 down 1.7% versus the S&P 500, which was down 1.8%. Laggards within the Health Services industry included

SunLink Health Systems

(

SSY

), down 1.8%,

Escalon Medical

(

ESMC

), down 3.1%,

Pro-Dex

(

PDEX

), down 1.8%,

Vision-Sciences

(

VSCI

), down 1.9% and

VirtualScopics

(

VSCP

), down 4.3%.

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

Smith & Nephew

(

SNN

) is one of the companies that pushed the Health Services industry lower today. Smith & Nephew was down $1.76 (2.0%) to $86.26 on light volume. Throughout the day, 95,336 shares of Smith & Nephew exchanged hands as compared to its average daily volume of 259,700 shares. The stock ranged in price between $86.07-$86.95 after having opened the day at $86.16 as compared to the previous trading day's close of $88.02.

Smith & Nephew plc develops, manufactures, markets, and sells medical devices in the advanced surgical devices and advanced wound management sectors worldwide. Smith & Nephew has a market cap of $15.8 billion and is part of the health care sector. Shares are up 22.7% year-to-date as of the close of trading on Wednesday. Currently there are 5 analysts who rate Smith & Nephew a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates

Smith & Nephew

as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on SNN go as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 49.06% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Equipment & Supplies industry average. The net income increased by 4.9% when compared to the same quarter one year prior, going from $143.00 million to $150.00 million.
  • SNN's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for SMITH & NEPHEW PLC is currently very high, coming in at 83.88%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.97% is above that of the industry average.
  • SMITH & NEPHEW PLC has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SMITH & NEPHEW PLC reported lower earnings of $3.08 versus $4.02 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $3.08).

You can view the full analysis from the report here:

Smith & Nephew 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.

At the close,

VirtualScopics

(

VSCP

) was down $0.17 (4.3%) to $3.91 on light volume. Throughout the day, 3,423 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,800 shares. The stock ranged in price between $3.90-$4.12 after having opened the day at $4.08 as compared to the previous trading day's close of $4.08.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.5 million and is part of the health care sector. Shares are up 18.0% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates

VirtualScopics

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 32.24%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -27.44% significantly underperformed when compared to the industry average.
  • VSCP has underperformed the S&P 500 Index, declining 13.98% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • VSCP, with its decline in revenue, underperformed when compared the industry average of 21.6%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • VIRTUALSCOPICS INC has improved earnings per share by 42.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, VIRTUALSCOPICS INC continued to lose money by earning -$1.02 versus -$1.10 in the prior year.

You can view the full analysis from the report here:

VirtualScopics 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.

Vision-Sciences

(

VSCI

) was another company that pushed the Health Services industry lower today. Vision-Sciences was down $0.02 (1.9%) to $1.01 on average volume. Throughout the day, 23,640 shares of Vision-Sciences exchanged hands as compared to its average daily volume of 25,100 shares. The stock ranged in price between $1.00-$1.04 after having opened the day at $1.04 as compared to the previous trading day's close of $1.03.

Vision-Sciences, Inc., through its subsidiaries, designs, develops, manufactures, and markets endoscopy products. It operates through Medical and Industrial segments. Vision-Sciences has a market cap of $49.9 million and is part of the health care sector. Shares are up 3.0% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates

Vision-Sciences

as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and unimpressive growth in net income.

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

Highlights from TheStreet Ratings analysis on VSCI go as follows:

  • The gross profit margin for VISION-SCIENCES INC is currently lower than what is desirable, coming in at 31.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -48.08% is significantly below that of the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 15.8% when compared to the same quarter one year ago, dropping from -$2.07 million to -$2.40 million.
  • VISION-SCIENCES INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, VISION-SCIENCES INC continued to lose money by earning -$0.16 versus -$0.22 in the prior year.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Net operating cash flow has increased to -$1.37 million or 44.79% when compared to the same quarter last year. In addition, VISION-SCIENCES INC has also vastly surpassed the industry average cash flow growth rate of -17.69%.

You can view the full analysis from the report here:

Vision-Sciences 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.