Merck & Co Inc (MRK): Today's Featured Health Care 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 Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day down 0.6%. By the end of trading, Merck fell 52 cents (-1.1%) to $45.63 on average volume. Throughout the day, 13.3 million shares of Merck exchanged hands as compared to its average daily volume of 10.7 million shares. The stock ranged in price between $45.44-$46.71 after having opened the day at $46.42 as compared to the previous trading day's close of $46.15. Other companies within the Health Care sector that declined today were: Biocryst Pharmaceuticals ( BCRX), down 28.7%, Novogen ( NVGN), down 20.6%, ARCA biopharma ( ABIO), down 17.9%, and Theratechnologies ( THER), down 16.8%.
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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 $140.56 billion and is part of the drugs industry. The company has a P/E ratio of 13.2, below the average drugs industry P/E ratio of 21.2 and below the S&P 500 P/E ratio of 17.7. Shares are up 22.4% year to date as of the close of trading on Tuesday. 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, Hemispherx Biopharma ( HEB), up 30%, Hansen Medical ( HNSN), up 25.4%, Peregrine Pharmaceuticals ( PPHM), up 24.3%, and Arrowhead Research Corporation ( ARWR), up 16.1%, were all gainers within the health care sector with DaVita ( DVA) being today's featured health care sector leader.

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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