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 up 0.3% versus the S&P 500, which was up 0.4%. Laggards within the Health Services industry included Dynatronics ( DYNT), down 2.5%, Neovasc ( NVCN), down 7.6%, Electromed ( ELMD), down 3.6%, Allied Healthcare Products ( AHPI), down 7.6% and SunLink Health Systems ( SSY), down 7.4%. TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today: Spectranetics ( SPNC) is one of the companies that pushed the Health Services industry lower today. Spectranetics was down $0.63 (2.8%) to $21.76 on heavy volume. Throughout the day, 1,868,770 shares of Spectranetics exchanged hands as compared to its average daily volume of 497,500 shares. The stock ranged in price between $21.69-$22.80 after having opened the day at $22.48 as compared to the previous trading day's close of $22.39. The Spectranetics Corporation, together with its subsidiaries, develops, manufactures, markets, and distributes single-use medical devices used in minimally invasive procedures in the cardiovascular system. Spectranetics has a market cap of $1.0 billion and is part of the health care sector. Shares are down 10.4% year-to-date as of the close of trading on Wednesday. Currently there are 7 analysts who rate Spectranetics a buy, 1 analyst rates 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 Spectranetics as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from TheStreet Ratings analysis on SPNC go as follows:
- SPNC's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 5.1%. 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.
- SPNC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.50, which clearly demonstrates the ability to cover short-term cash needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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 Health Care Equipment & Supplies industry and the overall market, SPECTRANETICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$8.36 million or 31.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- ALLIED HEALTHCARE PRODS 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, ALLIED HEALTHCARE PRODS INC reported poor results of -$0.15 versus -$0.06 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 Equipment & Supplies industry. The net income has significantly decreased by 91.5% when compared to the same quarter one year ago, falling from -$0.47 million to -$0.90 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 Health Care Equipment & Supplies industry and the overall market, ALLIED HEALTHCARE PRODS 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 -$0.73 million or 300.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for ALLIED HEALTHCARE PRODS INC is currently lower than what is desirable, coming in at 25.77%. Regardless of AHPI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AHPI's net profit margin of -10.26% significantly underperformed when compared to the industry average.
- 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. Earnings per share have declined over the last two years. We anticipate that this should continue 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. For the next year, the market is expecting a contraction of 18.8% in earnings (-$0.19 versus -$0.16).
- 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 140.00% compared to the year-earlier 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.
- 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.
