Watson Pharmaceuticals Inc. (WPI): Today's Featured Health Care Winner

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.

Watson Pharmaceuticals ( WPI) pushed the Health Care sector higher today making it today's featured health care winner. The sector as a whole closed the day up 1.2%. By the end of trading, Watson Pharmaceuticals rose $1.54 (1.9%) to $82.93 on light volume. Throughout the day, 777,904 shares of Watson Pharmaceuticals exchanged hands as compared to its average daily volume of 1.3 million shares. The stock ranged in a price between $81.23-$82.99 after having opened the day at $81.50 as compared to the previous trading day's close of $81.39. Other companies within the Health Care sector that increased today were: OxiGene ( OXGN), up 30.2%, Catalyst Pharmaceutical Partners ( CPRX), up 28.4%, Cormedix ( CRMD), up 26.3%, and Spherix ( SPEX), up 25.5%.
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Watson Pharmaceuticals, Inc., a specialty pharmaceutical company, engages in the development, manufacture, marketing, sale, and distribution of generic and brand pharmaceutical products in the United States, western Europe, Canada, Australasia, Asia, South America, and South Africa. Watson Pharmaceuticals has a market cap of $10.45 billion and is part of the drugs industry. The company has a P/E ratio of 25.4, below the average drugs industry P/E ratio of 66.6 and above the S&P 500 P/E ratio of 17.7. Shares are up 34.9% year to date as of the close of trading on Monday. Currently there are 15 analysts that rate Watson Pharmaceuticals a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Watson Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins 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, Kips Bay Medical ( KIPS), down 13.3%, RBS Oil Trendpilot Exchange Traded Notes ( TWTI), down 9.9%, Columbia Laboratories ( CBRX), down 8.9%, and IsoRay ( ISR), down 7.2%, were all laggards within the health care sector with Pharmacyclics Incorporated ( PCYC) being today's health care sector laggard.

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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