Forest Laboratories Inc. (FRX): 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.

Forest Laboratories ( FRX) pushed the Health Care sector higher today making it today's featured health care winner. The sector as a whole closed the day up 0.3%. By the end of trading, Forest Laboratories rose 47 cents (1.4%) to $35.37 on average volume. Throughout the day, 1.7 million shares of Forest Laboratories exchanged hands as compared to its average daily volume of 1.9 million shares. The stock ranged in a price between $34.83-$35.51 after having opened the day at $34.84 as compared to the previous trading day's close of $34.90. Other companies within the Health Care sector that increased today were: Cormedix ( CRMD), up 25%, AEterna Zentaris ( AEZS), up 23.1%, Cleveland BioLabs ( CBLI), up 17.8%, and Codexis ( CDXS), up 15.4%.
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Forest Laboratories, Inc. develops, manufactures, and sells branded forms of ethical drug products primarily in the United States and Europe. Forest Laboratories has a market cap of $9.39 billion and is part of the drugs industry. The company has a P/E ratio of 12.3, equal to the average drugs industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 16.9% year to date as of the close of trading on Wednesday. Currently there are seven analysts that rate Forest Laboratories a buy, two analysts rate it a sell, and 14 rate it a hold.

TheStreet Ratings rates Forest Laboratories 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, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the negative front, Horizon Pharma ( HZNP), down 24%, Dehaier Medical Systems ( DHRM), down 14.4%, Aoxing Pharmaceutical Company ( AXN), down 10%, and Biosante Pharmaceuticals ( BPAX), down 9.2%, were all laggards within the health care sector with Warner Chilcott ( WCRX) 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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