3 Stocks Pushing The Drugs 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 Drugs industry as a whole closed the day down 0.6% versus the S&P 500, which was up 0.1%. Laggards within the Drugs industry included Merus Labs International ( MSLI), down 1.9%, XTL Biopharmaceuticals ( XTLB), down 2.3%, Reliv' International ( RELV), down 3.6%, EntreMed ( ENMD), down 2.8% and Celsus Therapeutics ( CLTX), down 6.9%.

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

Reliv' International ( RELV) is one of the companies that pushed the Drugs industry lower today. Reliv' International was down $0.07 (3.6%) to $1.80 on light volume. Throughout the day, 6,900 shares of Reliv' International exchanged hands as compared to its average daily volume of 15,700 shares. The stock ranged in price between $1.80-$1.91 after having opened the day at $1.91 as compared to the previous trading day's close of $1.87.

Reliv' International, Inc. develops, manufactures, and markets nutritional supplements that promote basic nutrition, weight loss, athletic performance, digestive health, women's health, anti-aging, and healthy energy. Reliv' International has a market cap of $24.4 million and is part of the health care sector. Shares are down 33.5% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Reliv' International as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. 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 RELV go as follows:

  • RELV's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
  • The gross profit margin for RELIV INTERNATIONAL INC is currently very high, coming in at 80.04%. Regardless of RELV'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 -1.04% trails the industry average.
  • RELV, with its decline in revenue, underperformed when compared the industry average of 0.1%. Since the same quarter one year prior, revenues fell by 23.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Personal Products industry. The net income has significantly decreased by 177.4% when compared to the same quarter one year ago, falling from $0.20 million to -$0.15 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 Personal Products industry and the overall market, RELIV INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Reliv' International Ratings Report

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At the close, XTL Biopharmaceuticals ( XTLB) was down $0.06 (2.3%) to $2.80 on light volume. Throughout the day, 300 shares of XTL Biopharmaceuticals exchanged hands as compared to its average daily volume of 9,600 shares. The stock ranged in price between $2.56-$2.90 after having opened the day at $2.56 as compared to the previous trading day's close of $2.86.

XTL Biopharmaceuticals Ltd., a biopharmaceutical company, is engaged in the acquisition and development of pharmaceutical products for the treatment of unmet medical needs. XTL Biopharmaceuticals has a market cap of $33.8 million and is part of the health care sector. Shares are down 1.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate XTL Biopharmaceuticals a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates XTL Biopharmaceuticals 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on XTLB go as follows:

  • XTL BIOPHARMACEUTICALS 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, XTL BIOPHARMACEUTICALS reported poor results of -$0.22 versus -$0.13 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 Biotechnology industry. The net income has significantly decreased by 288.5% when compared to the same quarter one year ago, falling from -$0.30 million to -$1.15 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 Biotechnology industry and the overall market, XTL BIOPHARMACEUTICALS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$0.52 million or 27.45% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.43%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 233.33% 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.

You can view the full analysis from the report here: XTL Biopharmaceuticals 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 Drugs industry lower today. Merus Labs International was down $0.03 (1.9%) to $1.53 on light volume. Throughout the day, 740 shares of Merus Labs International exchanged hands as compared to its average daily volume of 8,100 shares. The stock ranged in price between $1.53-$1.55 after having opened the day at $1.55 as compared to the previous trading day's close of $1.56.

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 $75.3 million and is part of the health care sector. Shares are up 9.2% year-to-date as of the close of trading on Thursday.

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.

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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.

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