3 Stocks Pushing The Health Care Sector 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 Health Care sector as a whole closed the day up 1.7% versus the S&P 500, which was unchanged. Laggards within the Health Care sector included Aoxing Pharmaceutical ( AXN), down 2.4%, VirtualScopics ( VSCP), down 3.1%, Neovasc ( NVCN), down 6.5%, Daxor ( DXR), down 2.3% and Semler Scientific ( SMLR), down 3.3%.

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

Daxor ( DXR) is one of the companies that pushed the Health Care sector lower today. Daxor was down $0.17 (2.3%) to $7.33 on light volume. Throughout the day, 150 shares of Daxor exchanged hands as compared to its average daily volume of 4,500 shares. The stock ranged in price between $7.33-$7.33 after having opened the day at $7.33 as compared to the previous trading day's close of $7.50.

Daxor Corporation, a medical device manufacturing company, offers biotech services in the United States. The company develops and markets BVA-100 Blood Volume Analyzer, an instrument that measures human blood volume. Daxor has a market cap of $31.3 million and is part of the health services industry. Shares are up 12.6% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Daxor 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 and disappointing return on equity.

Highlights from TheStreet Ratings analysis on DXR go as follows:

  • DAXOR CORP 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, DAXOR CORP swung to a loss, reporting -$1.69 versus $1.17 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 165.8% when compared to the same quarter one year ago, falling from $2.27 million to -$1.49 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 Equipment & Supplies industry and the overall market, DAXOR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The gross profit margin for DAXOR CORP is currently very high, coming in at 71.27%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -404.33% is in-line with the industry average.

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

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At the close, VirtualScopics ( VSCP) was down $0.13 (3.1%) to $4.10 on heavy volume. Throughout the day, 21,648 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in price between $4.08-$4.27 after having opened the day at $4.14 as compared to the previous trading day's close of $4.23.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.4 million and is part of the health services industry. Shares are up 19.9% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

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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 25.91%, 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 19.1%. 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

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Aoxing Pharmaceutical ( AXN) was another company that pushed the Health Care sector lower today. Aoxing Pharmaceutical was down $0.01 (2.4%) to $0.32 on heavy volume. Throughout the day, 84,313 shares of Aoxing Pharmaceutical exchanged hands as compared to its average daily volume of 40,200 shares. The stock ranged in price between $0.32-$0.39 after having opened the day at $0.35 as compared to the previous trading day's close of $0.33.

Aoxing Pharmaceutical Company, Inc., a specialty pharmaceutical company, researches, develops, manufactures, and distributes various narcotic, pain-management, and addiction treatment pharmaceutical products primarily in the People's Republic of China. Aoxing Pharmaceutical has a market cap of $14.0 million and is part of the health services industry. Shares are up 12.2% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Aoxing Pharmaceutical as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

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Highlights from TheStreet Ratings analysis on AXN go as follows:

  • Net operating cash flow has decreased to -$4.35 million or 41.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • AOXING PHARMACEUTICAL CO INC has improved earnings per share by 20.0% 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, AOXING PHARMACEUTICAL CO INC reported poor results of -$0.34 versus -$0.32 in the prior year.
  • 43.50% is the gross profit margin for AOXING PHARMACEUTICAL CO INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AXN's net profit margin of -74.48% significantly underperformed when compared to the industry average.
  • The stock price has risen over the past year, but it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 29.8% when compared to the same quarter one year prior, rising from -$2.60 million to -$1.82 million.

You can view the full analysis from the report here: Aoxing Pharmaceutical Ratings Report

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