Novartis AG (NVS): Today's Featured Drugs 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

Novartis ( NVS) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day down 0.1%. By the end of trading, Novartis fell $0.75 (-1.0%) to $74.22 on light volume. Throughout the day, 1,027,423 shares of Novartis exchanged hands as compared to its average daily volume of 1,619,000 shares. The stock ranged in price between $74.01-$74.81 after having opened the day at $74.46 as compared to the previous trading day's close of $74.97. Other companies within the Drugs industry that declined today were: MediciNova ( MNOV), down 26.8%, Dendreon ( DNDN), down 15.0%, Transcept Pharmaceuticals ( TSPT), down 13.9% and Delcath Systems ( DCTH), down 13.3%.
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Novartis AG engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. Novartis has a market cap of $180.2 billion and is part of the health care sector. The company has a P/E ratio of 18.9, above the S&P 500 P/E ratio of 17.7. Shares are up 18.4% year to date as of the close of trading on Wednesday. Currently there are 7 analysts that rate Novartis a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Ratings rates Novartis 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, increase in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Vermillion ( VRML), down 30.1%, Affymax ( AFFY), down 25.7%, XOMA ( XOMA), down 22.4% and Cormedix ( CRMD), down 14.3% , were all gainers within the drugs industry with Merck ( MRK) being today's featured drugs industry leader.

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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