3 Stocks Driving The Health Care Sector Higher

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 66 points (0.4%) at 16,609 as of Friday, May 23, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,917 issues advancing vs. 1,047 declining with 178 unchanged.

The Health Care sector as a whole closed the day up 0.7% versus the S&P 500, which was up 0.4%. Top gainers within the Health Care sector included Dynatronics ( DYNT), up 1.7%, Merus Labs International ( MSLI), up 3.3%, Electromed ( ELMD), up 7.6%, American Shared Hospital Services ( AMS), up 1.6% and Lakeland Industries ( LAKE), up 1.6%.

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

Lakeland Industries ( LAKE) is one of the companies that pushed the Health Care sector higher today. Lakeland Industries was up $0.11 (1.6%) to $7.12 on light volume. Throughout the day, 2,911 shares of Lakeland Industries exchanged hands as compared to its average daily volume of 7,000 shares. The stock ranged in a price between $7.11-$7.12 after having opened the day at $7.11 as compared to the previous trading day's close of $7.01.

Lakeland Industries, Inc., together with its subsidiaries, manufactures and sells safety garments and accessories for the industrial protective clothing market worldwide. Lakeland Industries has a market cap of $37.8 million and is part of the drugs industry. Shares are up 33.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Lakeland Industries a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Lakeland Industries as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from TheStreet Ratings analysis on LAKE go as follows:

  • LAKELAND INDUSTRIES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, LAKELAND INDUSTRIES INC swung to a loss, reporting -$4.88 versus $0.21 in the prior year.
  • 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 Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 748.8% when compared to the same quarter one year ago, falling from $0.28 million to -$1.84 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, LAKELAND INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LAKELAND INDUSTRIES INC is rather low; currently it is at 24.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.05% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$3.40 million or 671.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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

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At the close, Electromed ( ELMD) was up $0.08 (7.6%) to $1.13 on light volume. Throughout the day, 6,479 shares of Electromed exchanged hands as compared to its average daily volume of 27,200 shares. The stock ranged in a price between $1.05-$1.13 after having opened the day at $1.06 as compared to the previous trading day's close of $1.05.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy products. Electromed has a market cap of $8.4 million and is part of the drugs industry. Shares are down 69.1% 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 deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from TheStreet Ratings analysis on ELMD 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 132.9% when compared to the same quarter one year ago, falling from -$0.43 million to -$1.00 million.
  • 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.
  • The share price of ELECTROMED INC has not done very well: it is down 13.71% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • ELECTROMED INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse 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).
  • The gross profit margin for ELECTROMED INC is rather high; currently it is at 68.31%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ELMD's net profit margin of -25.37% significantly underperformed when compared to the industry average.

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.

Merus Labs International ( MSLI) was another company that pushed the Health Care sector higher today. Merus Labs International was up $0.05 (3.3%) to $1.55 on light volume. Throughout the day, 2,804 shares of Merus Labs International exchanged hands as compared to its average daily volume of 12,400 shares. The stock ranged in a price between $1.50-$1.56 after having opened the day at $1.50 as compared to the previous trading day's close of $1.50.

Merus Labs International Inc., a specialty pharmaceutical company, is engaged in the acquisition and licensing of branded prescription medicines in the United States, Canada, and Europe. Merus Labs International has a market cap of $78.4 million and is part of the drugs industry. Shares are up 5.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Merus Labs International a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Merus Labs International as a sell. The area that we feel has been the company's primary weakness has been its poor profit margins.

Highlights from TheStreet Ratings analysis on MSLI go as follows:

  • The gross profit margin for MERUS LABS INTERNATIONAL INC is currently very high, coming in at 81.88%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MSLI's net profit margin of -21.74% significantly underperformed when compared to the industry average.
  • MERUS LABS INTERNATIONAL INC has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, MERUS LABS INTERNATIONAL INC continued to lose money by earning -$0.06 versus -$0.70 in the prior year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income increased by 36.7% when compared to the same quarter one year prior, rising from -$2.30 million to -$1.46 million.
  • This stock has increased by 201.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in MSLI do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 14.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

You can view the full analysis from the report here: Merus Labs International 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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