3 Health Care Stocks Moving The Sector Upward

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 40 points (0.2%) at 16,487 as of Friday, May 16, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,578 issues advancing vs. 1,383 declining with 164 unchanged.

The Health Care sector as a whole was unchanged today versus the S&P 500, which was up 0.3%. Top gainers within the Health Care sector included VirtualScopics ( VSCP), up 1.9%, Electromed ( ELMD), up 2.8%, American Shared Hospital Services ( AMS), up 2.0%, Pro-Dex ( PDEX), up 7.9% and EntreMed ( ENMD), up 1.7%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

EntreMed ( ENMD) is one of the companies that pushed the Health Care sector higher today. EntreMed was up $0.03 (1.7%) to $1.80 on light volume. Throughout the day, 10,168 shares of EntreMed exchanged hands as compared to its average daily volume of 21,600 shares. The stock ranged in a price between $1.74-$1.87 after having opened the day at $1.74 as compared to the previous trading day's close of $1.77.

EntreMed has a market cap of $47.6 million and is part of the drugs industry. Shares are up 5.3% year-to-date as of the close of trading on Thursday.

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Highlights from TheStreet Ratings analysis on ENMD go as follows:

You can view the full analysis from the report here: EntreMed 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, Electromed ( ELMD) was up $0.03 (2.8%) to $1.10 on average volume. Throughout the day, 23,755 shares of Electromed exchanged hands as compared to its average daily volume of 27,500 shares. The stock ranged in a price between $1.03-$1.10 after having opened the day at $1.05 as compared to the previous trading day's close of $1.07.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy products. Electromed has a market cap of $8.6 million and is part of the drugs industry. Shares are down 68.8% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Electromed a buy, no analysts rate it a sell, and none rate it a hold.

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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.

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.

VirtualScopics ( VSCP) was another company that pushed the Health Care sector higher today. VirtualScopics was up $0.07 (1.9%) to $3.95 on light volume. Throughout the day, 2,034 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,000 shares. The stock ranged in a price between $3.86-$3.95 after having opened the day at $3.91 as compared to the previous trading day's close of $3.88.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $11.0 million and is part of the drugs industry. Shares are up 12.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry. The net income has significantly decreased by 31.3% when compared to the same quarter one year ago, falling from -$0.77 million to -$1.02 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $0.39 million or 25.00% when compared to the same quarter last year. Despite a decrease in cash flow VIRTUALSCOPICS INC is still fairing well by exceeding its industry average cash flow growth rate of -52.42%.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, VSCP has underperformed the S&P 500 Index, declining 21.43% from its price level of one year ago. 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.
  • VIRTUALSCOPICS INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, VIRTUALSCOPICS INC continued to lose money by earning -$1.02 versus -$1.10 in the prior year.

You can view the full analysis from the report here: VirtualScopics 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.

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.

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