3 Stocks Pushing The Health Care Sector Lower

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The Health Care sector as a whole closed the day up 0.4% versus the S&P 500, which was unchanged. Laggards within the Health Care sector included Semler Scientific ( SMLR), down 19.7%, ImmuCell ( ICCC), down 3.8%, SunLink Health Systems ( SSY), down 3.4%, CAS Medical Systems ( CASM), down 2.7% and VirtualScopics ( VSCP), down 2.5%.

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 $1.67 (1.9%) to $88.17 on light volume. Throughout the day, 132,601 shares of Smith & Nephew exchanged hands as compared to its average daily volume of 255,400 shares. The stock ranged in price between $87.79-$88.63 after having opened the day at $88.63 as compared to the previous trading day's close of $89.84.

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 $16.2 billion and is part of the health services industry. Shares are up 25.2% year-to-date as of the close of trading on Friday. 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 shows weak operating cash flow.

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 49.06% 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 exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Equipment & Supplies industry average. 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, VirtualScopics ( VSCP) was down $0.10 (2.5%) to $4.07 on light volume. Throughout the day, 2,908 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,600 shares. The stock ranged in price between $4.06-$4.14 after having opened the day at $4.06 as compared to the previous trading day's close of $4.17.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.5 million and is part of the health services industry. Shares are up 20.6% 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 has underperformed the S&P 500 Index, declining 13.98% from its price level of one year ago. 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.
  • 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 21.6%. 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.
  • VIRTUALSCOPICS INC has improved earnings per share by 42.5% 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, VIRTUALSCOPICS INC continued to lose money by earning -$1.02 versus -$1.10 in the prior year.

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

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CAS Medical Systems ( CASM) was another company that pushed the Health Care sector lower today. CAS Medical Systems was down $0.05 (2.7%) to $1.80 on average volume. Throughout the day, 10,413 shares of CAS Medical Systems exchanged hands as compared to its average daily volume of 13,500 shares. The stock ranged in price between $1.78-$1.82 after having opened the day at $1.82 as compared to the previous trading day's close of $1.85.

CAS Medical Systems, Inc., a medical technology company, develops, manufactures, and markets medical devices for non-invasive patient monitoring in the United States and internationally. CAS Medical Systems has a market cap of $36.3 million and is part of the health services industry. Shares are up 8.8% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates CAS Medical Systems a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates CAS Medical Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and deteriorating net income.

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Highlights from TheStreet Ratings analysis on CASM go as follows:

  • 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, CAS MEDICAL SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 16.5% when compared to the same quarter one year ago, dropping from -$1.59 million to -$1.85 million.
  • CAS MEDICAL SYSTEMS INC has improved earnings per share by 21.4% 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, CAS MEDICAL SYSTEMS INC reported poor results of -$0.74 versus -$0.64 in the prior year. This year, the market expects an improvement in earnings (-$0.44 versus -$0.74).
  • CASM's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CASM's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.74 is high and demonstrates strong liquidity.
  • 48.40% is the gross profit margin for CAS MEDICAL SYSTEMS INC which we consider to be strong. 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 -32.37% is in-line with the industry average.

You can view the full analysis from the report here: CAS Medical Systems 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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