3 Drugs Stocks Dragging The Industry Down

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Two out of the three major indices are trading up today with the Dow Jones Industrial Average ( ^DJI) trading up 91 points (0.6%) at 16,492 as of Wednesday, May 7, 2014, 12:55 PM ET. The NYSE advances/declines ratio sits at 1,744 issues advancing vs. 1,239 declining with 163 unchanged.

The Drugs industry currently sits down 1.7% versus the S&P 500, which is up 0.3%. On the negative front, top decliners within the industry include Perrigo ( PRGO), down 8.4%, Vertex Pharmaceuticals ( VRTX), down 2.5%, Mylan ( MYL), down 2.1%, Alexion Pharmaceuticals ( ALXN), down 1.9% and Regeneron Pharmaceuticals ( REGN), down 1.7%.

TheStreet would like to highlight 3 stocks pushing the industry lower today:

3. Actavis ( ACT) is one of the companies pushing the Drugs industry lower today. As of noon trading, Actavis is down $3.25 (-1.6%) to $199.94 on average volume. Thus far, 1.1 million shares of Actavis exchanged hands as compared to its average daily volume of 3.0 million shares. The stock has ranged in price between $199.20-$203.88 after having opened the day at $203.42 as compared to the previous trading day's close of $203.19.

Actavis plc, an integrated specialty pharmaceutical company, is engaged in the development, manufacture, marketing, sale, and distribution of pharmaceutical products in the Americas, Europe, the Middle East, Africa, Australia, and the Asia Pacific. Actavis has a market cap of $36.3 billion and is part of the health care sector. Shares are up 20.9% year-to-date as of the close of trading on Tuesday. Currently there are 14 analysts that rate Actavis a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Actavis as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk. Get the full Actavis Ratings Report now.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

2. As of noon trading, Merck ( MRK) is down $0.67 (-1.2%) to $56.44 on heavy volume. Thus far, 10.3 million shares of Merck exchanged hands as compared to its average daily volume of 11.1 million shares. The stock has ranged in price between $55.52-$56.85 after having opened the day at $56.19 as compared to the previous trading day's close of $57.11.

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 $171.8 billion and is part of the health care sector. Shares are up 14.1% year-to-date as of the close of trading on Tuesday. Currently there are 7 analysts that rate Merck a buy, no analysts rate it a sell, and 7 rate it a hold.

TheStreet Ratings rates Merck 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, expanding profit margins and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Get the full Merck Ratings Report now.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

1. As of noon trading, Allergan ( AGN) is down $1.24 (-0.8%) to $165.08 on light volume. Thus far, 1.4 million shares of Allergan exchanged hands as compared to its average daily volume of 4.0 million shares. The stock has ranged in price between $163.18-$167.98 after having opened the day at $166.55 as compared to the previous trading day's close of $166.32.

Allergan, Inc. operates as a multi-specialty health care company primarily in the United States, Europe, Latin America, and the Asia Pacific. Allergan has a market cap of $50.5 billion and is part of the health care sector. Shares are up 49.7% year-to-date as of the close of trading on Tuesday. Currently there are 7 analysts that rate Allergan a buy, 1 analyst rates it a sell, and 5 rate it a hold.

TheStreet Ratings rates Allergan as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Get the full Allergan Ratings Report now.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

If you are interested in one of these 3 stocks, 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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