3 Stocks Advancing The Health Care Sector

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 61 points (0.4%) at 16,694 as of Thursday, May 29, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,757 issues advancing vs. 1,207 declining with 183 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 Merus Labs International ( MSLI), up 7.6%, VirtualScopics ( VSCP), up 2.8%, American Caresource Holdings ( ANCI), up 7.8%, Cyanotech ( CYAN), up 7.1% and Lakeland Industries ( LAKE), up 2.3%.

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

American Caresource Holdings ( ANCI) is one of the companies that pushed the Health Care sector higher today. American Caresource Holdings was up $0.22 (7.8%) to $3.05 on heavy volume. Throughout the day, 12,140 shares of American Caresource Holdings exchanged hands as compared to its average daily volume of 7,900 shares. The stock ranged in a price between $2.83-$3.05 after having opened the day at $2.83 as compared to the previous trading day's close of $2.83.

American CareSource Holdings, Inc. provides access to a network of ancillary healthcare service providers in the United States. American Caresource Holdings has a market cap of $18.0 million and is part of the health services industry. Shares are up 63.0% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate American Caresource Holdings a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates American Caresource Holdings 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 and poor profit margins.

Highlights from TheStreet Ratings analysis on ANCI go as follows:

  • AMERICAN CARESOURCE HLDGS's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, AMERICAN CARESOURCE HLDGS reported poor results of -$0.66 versus -$0.54 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 Health Care Providers & Services industry. The net income has decreased by 24.7% when compared to the same quarter one year ago, dropping from -$1.15 million to -$1.44 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 Health Care Providers & Services industry and the overall market, AMERICAN CARESOURCE HLDGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AMERICAN CARESOURCE HLDGS is currently extremely low, coming in at 1.28%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -28.65% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 16.7%. Since the same quarter one year prior, revenues fell by 34.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: American Caresource Holdings 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, VirtualScopics ( VSCP) was up $0.11 (2.8%) to $4.06 on heavy volume. Throughout the day, 18,005 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,300 shares. The stock ranged in a price between $3.95-$4.06 after having opened the day at $3.97 as compared to the previous trading day's close of $3.95.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $11.8 million and is part of the health services industry. Shares are up 14.2% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 32.24%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -27.44% significantly underperformed when compared to the industry average.
  • VSCP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.38%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
  • VSCP, with its decline in revenue, underperformed when compared the industry average of 19.3%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Life Sciences Tools & Services industry average. The net income increased by 42.0% when compared to the same quarter one year prior, rising from -$1.11 million to -$0.65 million.

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.

Merus Labs International ( MSLI) was another company that pushed the Health Care sector higher today. Merus Labs International was up $0.11 (7.6%) to $1.56 on average volume. Throughout the day, 10,735 shares of Merus Labs International exchanged hands as compared to its average daily volume of 8,100 shares. The stock ranged in a price between $1.42-$1.56 after having opened the day at $1.45 as compared to the previous trading day's close of $1.45.

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 $79.4 million and is part of the health services industry. Shares are up 1.5% year-to-date as of the close of trading on Wednesday. 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 121.86% 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 5.3%. 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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