3 Stocks Pushing The Health Care Sector Lower

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The Health Care sector as a whole closed the day down 2.5% versus the S&P 500, which was down 0.7%. Laggards within the Health Care sector included Allied Healthcare Products ( AHPI), down 1.9%, Reliv' International ( RELV), down 5.7%, Pro-Dex ( PDEX), down 1.9%, American Shared Hospital Services ( AMS), down 4.9% and Cyanotech ( CYAN), down 5.7%.

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

Smith & Nephew ( SNN) is one of the companies that pushed the Health Care sector lower today. Smith & Nephew was down $2.10 (2.4%) to $87.30 on light volume. Throughout the day, 158,331 shares of Smith & Nephew exchanged hands as compared to its average daily volume of 247,500 shares. The stock ranged in price between $87.20-$88.66 after having opened the day at $88.64 as compared to the previous trading day's close of $89.40.

Smith & Nephew plc develops, manufactures, markets, and sells medical devices in the advanced surgical devices and advanced wound management sectors worldwide. Smith & Nephew has a market cap of $16.0 billion and is part of the health services industry. Shares are up 24.6% year-to-date as of the close of trading on Monday. Currently there are 5 analysts who rate Smith & Nephew a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Smith & Nephew as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on SNN go as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 60.59% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income increased by 4.9% when compared to the same quarter one year prior, going from $143.00 million to $150.00 million.
  • SNN's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for SMITH & NEPHEW PLC is currently very high, coming in at 83.88%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.97% is above that of the industry average.
  • SMITH & NEPHEW PLC has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SMITH & NEPHEW PLC reported lower earnings of $3.08 versus $4.02 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $3.08).

You can view the full analysis from the report here: Smith & Nephew Ratings Report

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At the close, Reliv' International ( RELV) was down $0.09 (5.7%) to $1.49 on heavy volume. Throughout the day, 51,796 shares of Reliv' International exchanged hands as compared to its average daily volume of 11,100 shares. The stock ranged in price between $1.36-$1.55 after having opened the day at $1.51 as compared to the previous trading day's close of $1.58.

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 $21.5 million and is part of the health services industry. Shares are down 43.8% year-to-date as of the close of trading on Monday.

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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 expanding profit margins, largely solid financial position with reasonable debt levels by most measures 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:

  • The gross profit margin for RELIV INTERNATIONAL INC is currently very high, coming in at 81.71%. 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 -1.04% trails the industry average.
  • RELV's debt-to-equity ratio is very low at 0.27 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.
  • RELV, with its decline in revenue, underperformed when compared the industry average of 0.2%. 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'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.
  • Net operating cash flow has significantly decreased to -$1.36 million or 324.34% 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: Reliv' International Ratings Report

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Allied Healthcare Products ( AHPI) was another company that pushed the Health Care sector lower today. Allied Healthcare Products was down $0.05 (1.9%) to $2.31 on light volume. Throughout the day, 1,610 shares of Allied Healthcare Products exchanged hands as compared to its average daily volume of 4,500 shares. The stock ranged in price between $2.31-$2.45 after having opened the day at $2.45 as compared to the previous trading day's close of $2.36.

Allied Healthcare Products, Inc. manufactures, markets, and distributes respiratory care products, medical gas equipment, and emergency medical products in Canada, Mexico, Central and South America, Europe, the Middle East, and the Far East. Allied Healthcare Products has a market cap of $18.4 million and is part of the health services industry. Shares are up 0.4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Allied Healthcare Products 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 generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on AHPI go as follows:

  • 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 247.3% when compared to the same quarter one year ago, falling from -$0.28 million to -$0.97 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, ALLIED HEALTHCARE PRODS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ALLIED HEALTHCARE PRODS INC is rather low; currently it is at 22.80%. 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 -10.63% significantly underperformed when compared to the industry average.
  • The share price of ALLIED HEALTHCARE PRODS INC has not done very well: it is down 6.96% 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.

You can view the full analysis from the report here: Allied Healthcare Products Ratings Report

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