3 Stocks Pushing The Health Services Industry Lower

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.

The Health Services industry as a whole closed the day down 0.2% versus the S&P 500, which was unchanged. Laggards within the Health Services industry included Dynatronics ( DYNT), down 7.2%, Electromed ( ELMD), down 2.6%, Pro-Dex ( PDEX), down 6.1%, AxoGen ( AXGN), down 3.0% and Retractable Technologies ( RVP), down 3.2%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

West Pharmaceutical Services ( WST) is one of the companies that pushed the Health Services industry lower today. West Pharmaceutical Services was down $1.12 (2.5%) to $42.95 on light volume. Throughout the day, 204,969 shares of West Pharmaceutical Services exchanged hands as compared to its average daily volume of 287,000 shares. The stock ranged in price between $42.93-$44.14 after having opened the day at $44.10 as compared to the previous trading day's close of $44.07.

West Pharmaceutical Services, Inc. develops, manufactures, and sells components and systems for the packaging and delivery of injectable drugs, as well as delivery system components for the pharmaceutical, healthcare, and consumer products industries. West Pharmaceutical Services has a market cap of $3.0 billion and is part of the health care sector. Shares are down 10.2% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates West Pharmaceutical Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates West Pharmaceutical Services as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on WST go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, WST's share price has jumped by 30.41%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • WEST PHARMACEUTICAL SVSC INC's earnings per share declined by 15.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WEST PHARMACEUTICAL SVSC INC increased its bottom line by earning $1.58 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $1.58).
  • 36.97% is the gross profit margin for WEST PHARMACEUTICAL SVSC INC which we consider to be strong. Regardless of WST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.81% trails the industry average.
  • The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 14.5% when compared to the same quarter one year ago, dropping from $31.70 million to $27.10 million.

You can view the full analysis from the report here: West Pharmaceutical Services Ratings Report

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

At the close, AxoGen ( AXGN) was down $0.08 (3.0%) to $2.60 on heavy volume. Throughout the day, 74,841 shares of AxoGen exchanged hands as compared to its average daily volume of 36,100 shares. The stock ranged in price between $2.57-$3.00 after having opened the day at $2.99 as compared to the previous trading day's close of $2.68.

AxoGen has a market cap of $48.0 million and is part of the health care sector. Shares are down 40.3% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate AxoGen a buy, no analysts rate it a sell, and none rate it a hold.

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Highlights from TheStreet Ratings analysis on AXGN go as follows:

You can view the full analysis from the report here: AxoGen Ratings Report

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

Electromed ( ELMD) was another company that pushed the Health Services industry lower today. Electromed was down $0.03 (2.6%) to $1.13 on heavy volume. Throughout the day, 42,158 shares of Electromed exchanged hands as compared to its average daily volume of 27,900 shares. The stock ranged in price between $1.10-$1.15 after having opened the day at $1.12 as compared to the previous trading day's close of $1.16.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy products. Electromed has a market cap of $9.1 million and is part of the health care sector. Shares are down 67.1% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Electromed a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Electromed as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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

Highlights from TheStreet Ratings analysis on ELMD go as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ELECTROMED INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $0.39 million or 64.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, ELMD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ELMD, with its decline in revenue, underperformed when compared the industry average of 2.9%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ELECTROMED INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ELECTROMED INC swung to a loss, reporting -$0.16 versus $0.02 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$0.16).

You can view the full analysis from the report here: Electromed Ratings Report

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

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