Watson Pharmaceuticals Inc. (WPI): Today's Featured Drugs 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.

Watson Pharmaceuticals ( WPI) pushed the Drugs industry higher today making it today's featured drugs winner. The industry as a whole closed the day up 0.6%. By the end of trading, Watson Pharmaceuticals rose $1.04 (1.2%) to $87.53 on average volume. Throughout the day, 952,521 shares of Watson Pharmaceuticals exchanged hands as compared to its average daily volume of 841,300 shares. The stock ranged in a price between $86.35-$87.70 after having opened the day at $86.54 as compared to the previous trading day's close of $86.49. Other companies within the Drugs industry that increased today were: ACADIA Pharmaceuticals ( ACAD), up 136.1%, Peregrine Pharmaceuticals ( PPHM), up 26.8%, Zalicus ( ZLCS), up 19.4%, and Cormedix ( CRMD), up 14%.
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Watson Pharmaceuticals, Inc., a specialty pharmaceutical company, engages in the development, manufacture, marketing, sale, and distribution of generic and brand pharmaceutical products in the United States, western Europe, Canada, Australasia, Asia, South America, and South Africa. Watson Pharmaceuticals has a market cap of $11 billion and is part of the health care sector. The company has a P/E ratio of 66.7, above the S&P 500 P/E ratio of 17.7. Shares are up 42.7% year to date as of the close of trading on Monday. Currently there are 16 analysts that rate Watson Pharmaceuticals a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Watson Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the negative front, Neptune Technologies & Bioressources ( NEPT), down 24.5%, Aoxing Pharmaceutical Company ( AXN), down 19.2%, EntreMed ( ENMD), down 9.3%, and Rosetta Genomics ( ROSG), down 7%, were all laggards within the drugs industry with Sarepta Therapeutics ( SRPT) being today's drugs industry laggard.

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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