Shire PLC (SHPG): Today's Featured Drugs 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.

Shire ( SHPG) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day down 0.1%. By the end of trading, Shire fell $1.05 (-1.2%) to $87.68 on heavy volume. Throughout the day, 1.6 million shares of Shire exchanged hands as compared to its average daily volume of 413,800 shares. The stock ranged in price between $87.50-$89.05 after having opened the day at $88.96 as compared to the previous trading day's close of $88.73. Other companies within the Drugs industry that declined today were: Arqule ( ARQL), down 56.3%, AspenBio Pharma ( APPY), down 10.8%, Sarepta Therapeutics ( SRPT), down 9.3%, and Prima Biomed Ltd. ADR ( PBMD), down 7.7%.
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Shire plc, a specialty biopharmaceutical company, engages in the research and development, manufacture, sale, and distribution of pharmaceutical products. It operates in three segments: Specialty Pharmaceuticals, Human Genetic Therapies, and Regenerative Medicine. Shire has a market cap of $16.63 billion and is part of the health care sector. The company has a P/E ratio of 18.4, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Shares are down 14.6% year to date as of the close of trading on Monday. Currently there are 14 analysts that rate Shire a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Shire as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the positive front, MEI Pharma ( MEIP), up 14.3%, Cell Therapeutics ( CTIC), up 13%, Tianyin Pharmaceutical ( TPI), up 11.5%, and Insmed ( INSM), up 7%, were all gainers within the drugs industry with Celgene Corporation ( CELG) being today's featured drugs industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the drugs industry could consider SPDR S&P Pharmaceuticals ETF ( XPH) while those bearish on the drugs industry could consider ProShares UltraShort Nasdaq Biotech ( BIS).

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