Perrigo Company (PRGO): 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.

Perrigo Company ( PRGO) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day up 0.2%. By the end of trading, Perrigo Company fell $1.96 (-1.9%) to $101.61 on heavy volume. Throughout the day, 2.4 million shares of Perrigo Company exchanged hands as compared to its average daily volume of 716,000 shares. The stock ranged in price between $100.47-$103.62 after having opened the day at $103.60 as compared to the previous trading day's close of $103.57. Other companies within the Health Care sector that declined today were: NeuroMetrix ( NUROD), down 7.8%, Opko Health ( OPK), down 6.8%, Uroplasty ( UPI), down 6.4%, and Rockwell Medical ( RMTI), down 6.3%.
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Perrigo Company, through its subsidiaries, develops, manufactures, and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, infant formulas, nutritional products, and active pharmaceutical ingredients (API) worldwide. Perrigo Company has a market cap of $9.78 billion and is part of the drugs industry. The company has a P/E ratio of 22.9, above the S&P 500 P/E ratio of 17.7. Shares are up 0.2% year to date as of the close of trading on Wednesday. Currently there are seven analysts that rate Perrigo Company a buy, one analyst rates it a sell, and seven rate it a hold.

TheStreet Ratings rates Perrigo Company 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, reasonable valuation levels, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Kips Bay Medical ( KIPS), up 15.9%, Aoxing Pharmaceutical Company ( AXN), up 14.3%, Synthetic Biologics ( SYN), up 13.9%, and Biodel ( BIOD), up 13.6%, were all gainers within the health care sector with Baxter International ( BAX) 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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