Merck & Co Inc (MRK): 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.

Merck ( MRK) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day down 0.7%. By the end of trading, Merck fell 55 cents (-1.2%) to $46.48 on average volume. Throughout the day, 13.4 million shares of Merck exchanged hands as compared to its average daily volume of 11.2 million shares. The stock ranged in price between $46.19-$47.03 after having opened the day at $46.66 as compared to the previous trading day's close of $47.03. Other companies within the Drugs industry that declined today were: Amyris ( AMRS), down 9.7%, BioDelivery Sciences International ( BDSI), down 8.9%, Savient Pharmaceuticals ( SVNT), down 8.4%, and Idera Pharmaceuticals ( IDRA), down 8.1%.
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Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Merck has a market cap of $146.07 billion and is part of the health care sector. The company has a P/E ratio of 21.9, below the average drugs industry P/E ratio of 22 and above the S&P 500 P/E ratio of 17.7. Shares are up 24.7% year to date as of the close of trading on Friday. Currently there are 10 analysts that rate Merck a buy, no analysts rate it a sell, and seven rate it a hold.

TheStreet Ratings rates Merck 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, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, ZIOPHARM Oncology ( ZIOP), up 15.4%, Lpath ( LPTN), up 15.4%, Cormedix ( CRMD), up 14.9%, and Cyclacel Pharmaceuticals ( CYCC), up 10.3%, were all gainers within the drugs industry with Herbalife ( HLF) 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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