Declines From Community Health Systems Inc (CYH) Drive Down Health Care Sector

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.

Community Health Systems ( CYH) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day up 0.3%. By the end of trading, Community Health Systems fell 55 cents (-1.1%) to $47.48 on average volume. Throughout the day, 1.5 million shares of Community Health Systems exchanged hands as compared to its average daily volume of 1.2 million shares. The stock ranged in price between $47.23-$48.59 after having opened the day at $48.19 as compared to the previous trading day's close of $48.03. Other companies within the Health Care sector that declined today were: Spherix ( SPEX), down 13.2%, Star Scientific ( STSI), down 10.7%, LCA-Vision ( LCAV), down 8.6%, and Affymax ( AFFY), down 8.1%.
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Community Health Systems, Inc., together with its subsidiaries, provides general and specialized hospital healthcare services to patients in the United States. Community Health Systems has a market cap of $4.37 billion and is part of the health services industry. The company has a P/E ratio of 16, below the S&P 500 P/E ratio of 17.7. Shares are up 56.3% year to date as of the close of trading on Monday. Currently there are nine analysts that rate Community Health Systems a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Community Health Systems as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, compelling growth in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Optimer Pharmaceuticals ( OPTR), up 19.2%, Obagi Medical Products ( OMPI), up 16.1%, Idera Pharmaceuticals ( IDRA), up 11.4%, and Astex Pharmaceuticals ( ASTX), up 10.5%, were all gainers within the health care sector with Express Scripts ( ESRX) 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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