Merck & Co Inc (MRK): 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

Merck ( MRK) pushed the Drugs industry lower today making it today's featured Drugs laggard. The industry as a whole closed the day down 0.7%. By the end of trading, Merck fell $0.62 (-1.3%) to $46.71 on heavy volume. Throughout the day, 42,453,447 shares of Merck exchanged hands as compared to its average daily volume of 16,401,000 shares. The stock ranged in price between $46.49-$48.30 after having opened the day at $47.62 as compared to the previous trading day's close of $47.33. Other companies within the Drugs industry that declined today were: AMAG Pharmaceuticals ( AMAG), down 10.7%, Neptune Technologies & Bioressources ( NEPT), down 9.6%, AVEO Pharmaceuticals ( AVEO), down 8.3% and Omeros Corporation ( OMER), down 8.2%.
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Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. Merck has a market cap of $136.5 billion and is part of the health care sector. The company has a P/E ratio of 23.1, above the S&P 500 P/E ratio of 17.7. Shares are up 15.6% year to date as of the close of trading on Tuesday. Currently there are 9 analysts that rate Merck a buy, 1 analyst rates it a sell, and 4 rate it a hold.

TheStreet Ratings rates Merck as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year 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, MannKind Corporation ( MNKD), down 16.2%, AcelRx Pharmaceuticals ( ACRX), down 13.4%, iBio ( IBIO), down 10.8% and Rexahn Pharmaceuticals ( RNN), down 10.8% , were all gainers within the drugs industry with Ariad Pharmaceuticals ( ARIA) 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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