Novo Nordisk A/S (NVO): 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.

Novo Nordisk A/S ( NVO) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day up 0.4%. By the end of trading, Novo Nordisk A/S fell $9.68 (-5.8%) to $157.74 on heavy volume. Throughout the day, 1.7 million shares of Novo Nordisk A/S exchanged hands as compared to its average daily volume of 292,000 shares. The stock ranged in price between $156.68-$168.74 after having opened the day at $168.31 as compared to the previous trading day's close of $167.42. Other companies within the Drugs industry that declined today were: Cormedix ( CRMD), down 15.7%, XenoPort ( XNPT), down 11.9%, Transition Therapeutics ( TTHI), down 10%, and Savient Pharmaceuticals ( SVNT), down 9.6%.
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Novo Nordisk A/S, a healthcare company, engages in the discovery, development, manufacture, and marketing of pharmaceutical products in Denmark and internationally. The company operates in two segments, Diabetes Care and Biopharmaceuticals. Novo Nordisk A/S has a market cap of $96.98 billion and is part of the health care sector. The company has a P/E ratio of four, below the average drugs industry P/E ratio of 28.8 and below the S&P 500 P/E ratio of 17.7. Shares are up 45.1% year to date as of the close of trading on Wednesday. Currently there are two analysts that rate Novo Nordisk A/S a buy, one analyst rates it a sell, and two rate it a hold.

TheStreet Ratings rates Novo Nordisk A/S as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, Chelsea Therapeutics International ( CHTP), up 28%, Nymox Pharmaceutical Corporation ( NYMX), up 15.3%, Cempra ( CEMP), up 10.8%, and MEI Pharma ( MEIP), up 10.8%, were all gainers within the drugs industry with Bristol-Myers Squibb Company ( BMY) 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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