Zimmer Holdings Inc (ZMH): Today's Featured Health Services 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.

Zimmer Holdings ( ZMH) pushed the Health Services industry lower today making it today's featured Health Services laggard. The industry as a whole closed the day up 0.9%. By the end of trading, Zimmer Holdings fell $1.13 (-1.5%) to $73.47 on heavy volume. Throughout the day, 1.7 million shares of Zimmer Holdings exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $73.36-$74.94 after having opened the day at $74.66 as compared to the previous trading day's close of $74.60. Other companies within the Health Services industry that declined today were: CombiMatrix Corporation ( CBMX), down 11.8%, Cardica ( CRDC), down 7.8%, EnteroMedics ( ETRM), down 6.8%, and Span-America Medical ( SPAN), down 6.3%.
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Zimmer Holdings, Inc., through its subsidiaries, engages in the design, development, manufacture, and marketing of orthopedic reconstructive devices, spinal and trauma devices, dental implants, and related surgical products in the Americas, Europe, and the Asia Pacific. Zimmer Holdings has a market cap of $12.91 billion and is part of the health care sector. The company has a P/E ratio of 17.3, below the S&P 500 P/E ratio of 17.7. Shares are up 11.7% year to date as of the close of trading on Thursday. Currently there are 11 analysts that rate Zimmer Holdings a buy, no analysts rate it a sell, and 16 rate it a hold.

TheStreet Ratings rates Zimmer Holdings as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, growth in earnings per share 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, Edap TMS ( EDAP), up 17.8%, SunLink Health Systems ( SSY), up 8.8%, Sunshine Heart ( SSH), up 8.2%, and Unilife Corporation ( UNIS), up 7.7%, were all gainers within the health services industry with Express Scripts ( ESRX) being today's featured health services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the health services industry could consider Health Care Select Sector SPDR ( XLV) while those bearish on the health services industry could consider ProShares Ultra Short Health Care ( RXD).

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