3 Health Care Stocks Pushing The Sector Higher

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 18 points (0.1%) at 16,572 as of Monday, Aug. 11, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,374 issues advancing vs. 630 declining with 131 unchanged.

The Health Care sector as a whole closed the day up 1.0% versus the S&P 500, which was up 0.3%. Top gainers within the Health Care sector included Semler Scientific ( SMLR), up 5.1%, Allied Healthcare Products ( AHPI), up 2.0%, CAS Medical Systems ( CASM), up 1.9%, VirtualScopics ( VSCP), up 5.0% and EntreMed ( ENMD), up 6.3%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the sector higher today:

VirtualScopics ( VSCP) is one of the companies that pushed the Health Care sector higher today. VirtualScopics was up $0.20 (5.0%) to $4.20 on light volume. Throughout the day, 1,100 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,500 shares. The stock ranged in a price between $4.20-$4.37 after having opened the day at $4.20 as compared to the previous trading day's close of $4.00.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.2 million and is part of the health services industry. Shares are up 15.6% 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 10.41% 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 21.8%. 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.
  • Net operating cash flow has significantly increased by 66.23% to -$0.42 million when compared to the same quarter last year. Despite an increase in cash flow, VIRTUALSCOPICS INC's average is still marginally south of the industry average growth rate of 71.19%.

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

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At the close, CAS Medical Systems ( CASM) was up $0.03 (1.9%) to $1.58 on heavy volume. Throughout the day, 30,885 shares of CAS Medical Systems exchanged hands as compared to its average daily volume of 16,300 shares. The stock ranged in a price between $1.53-$1.63 after having opened the day at $1.60 as compared to the previous trading day's close of $1.55.

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 $30.5 million and is part of the health services industry. Shares are down 7.7% 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.

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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 generally high debt management risk.

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 debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.78, which shows the ability to cover short-term cash needs.
  • 40.80% is the gross profit margin for CAS MEDICAL SYSTEMS INC which we consider to be strong. Regardless of CASM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CASM's net profit margin of -38.91% significantly underperformed when compared to the industry average.
  • CAS MEDICAL SYSTEMS INC has improved earnings per share by 40.9% 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 (-$0.48 versus -$0.74).
  • 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 13.7% when compared to the same quarter one year prior, going from -$2.63 million to -$2.27 million.

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

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Allied Healthcare Products ( AHPI) was another company that pushed the Health Care sector higher today. Allied Healthcare Products was up $0.04 (2.0%) to $2.05 on heavy volume. Throughout the day, 25,310 shares of Allied Healthcare Products exchanged hands as compared to its average daily volume of 8,800 shares. The stock ranged in a price between $1.99-$2.07 after having opened the day at $1.99 as compared to the previous trading day's close of $2.01.

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 $15.7 million and is part of the health services industry. Shares are down 14.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Allied Healthcare Products a buy, no analysts rate it a sell, and none rate it a hold.

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.

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 24.91% 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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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.