Salix Pharmaceuticals Ltd. (SLXP): Today's Featured Health Care 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.

Salix Pharmaceuticals ( SLXP) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day up 0.1%. By the end of trading, Salix Pharmaceuticals fell 68 cents (-1.5%) to $44.22 on light volume. Throughout the day, 632,479 shares of Salix Pharmaceuticals exchanged hands as compared to its average daily volume of 870,800 shares. The stock ranged in price between $44.09-$45 after having opened the day at $45 as compared to the previous trading day's close of $44.90. Other companies within the Health Care sector that declined today were: Peregrine Pharmaceuticals ( PPHM), down 15%, Cormedix ( CRMD), down 10%, Cyclacel Pharmaceuticals ( CYCC), down 9.5%, and Tesaro ( TSRO), down 8.7%.

Salix Pharmaceuticals, Ltd. acquires, develops, and markets prescription drugs and medical devices used in the treatment of various gastrointestinal diseases in the United States. Salix Pharmaceuticals has a market cap of $2.61 billion and is part of the drugs industry. The company has a P/E ratio of 23.6, below the average drugs industry P/E ratio of 28.7 and above the S&P 500 P/E ratio of 17.7. Shares are down 6.2% year to date as of the close of trading on Friday. Currently there are nine analysts that rate Salix Pharmaceuticals a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Salix Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, 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 generally high debt management risk by most measures that we evaluated.

On the positive front, Sarepta Therapeutics ( SRPT), up 13.8%, Opexa Therapeutics ( OPXA), up 12.9%, Cell Therapeutics ( CTIC), up 11.3%, and Zalicus ( ZLCS), up 9.5%, were all gainers within the health care sector with Centene Corporation ( CNC) being today's featured health care sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the health care sector could consider Health Care Select Sector SPDR ( XLV) while those bearish on the health care sector could consider ProShares Ultra Short Health Care ( RXD).
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