Novartis AG (NVS): 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

Novartis ( NVS) pushed the Health Care sector lower today making it today's featured Health Care laggard. The sector as a whole closed the day down 1.1%. By the end of trading, Novartis fell $1.18 (-1.7%) to $68.42 on heavy volume. Throughout the day, 3,914,483 shares of Novartis exchanged hands as compared to its average daily volume of 1,473,400 shares. The stock ranged in price between $67.67-$68.72 after having opened the day at $67.87 as compared to the previous trading day's close of $69.60. Other companies within the Health Care sector that declined today were: Pingtan Marine Enterprise ( PME), down 64.2%, Biostar Pharmaceuticals ( BSPM), down 12.2%, Allergan ( AGN), down 11.6% and Cell Therapeutics ( CTIC), down 10.7%.
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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 $172.0 billion and is part of the drugs industry. The company has a P/E ratio of 18.0, above the S&P 500 P/E ratio of 17.7. Shares are up 10.0% year to date as of the close of trading on Friday. Currently there are 6 analysts that rate Novartis a buy, no analysts rate it a sell, and 4 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 shows weak operating cash flow.

On the positive front, Vanguard Health Systems ( VHS), down 67.3%, Isis Pharmaceuticals ( ISIS), down 29.2%, USMD Holdings ( USMD), down 17.9% and Mela ( MELA), down 9.1% , were all gainers within the health care sector with Arena Pharmaceuticals ( ARNA) 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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