Covidien PLC (COV): 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

Covidien ( COV) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day down 0.3%. By the end of trading, Covidien fell $0.94 (-1.4%) to $63.89 on average volume. Throughout the day, 2,082,221 shares of Covidien exchanged hands as compared to its average daily volume of 2,636,600 shares. The stock ranged in price between $63.87-$64.95 after having opened the day at $64.32 as compared to the previous trading day's close of $64.83. Other companies within the Health Care sector that declined today were: Biota Pharmaceuticals ( BOTA), down 67.6%, Symmetry Medical ( SMA), down 14.9%, GenMark Diagnostics ( GNMK), down 12.9% and Cardium Therapeutics ( CXM), down 12.2%.
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Covidien plc develops, manufactures, and sells healthcare products for use in clinical and home settings worldwide. Covidien has a market cap of $30.5 billion and is part of the health services industry. The company has a P/E ratio of 16.8, below the S&P 500 P/E ratio of 17.7. Shares are up 12.2% year to date as of the close of trading on Monday. Currently there are 14 analysts that rate Covidien a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Ratings rates Covidien as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance 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, CardioNet ( BEAT), down 55.5%, Progenics Pharmaceuticals ( PGNX), down 31.0%, Vanda Pharmaceuticals ( VNDA), down 25.0% and Rexahn Pharmaceuticals ( RNN), down 19.1% , were all gainers within the health care sector with Biomarin Pharmaceutical ( BMRN) 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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