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 1.0% versus the S&P 500, which was up 0.3%. Laggards within the Health Care sector included XTL Biopharmaceuticals ( XTLB), down 10.8%, ImmuCell ( ICCC), down 2.8%, Vision-Sciences ( VSCI), down 4.2%, Electromed ( ELMD), down 2.9% and Neovasc ( NVCN), down 5.7%.

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

Electromed ( ELMD) is one of the companies that pushed the Health Care sector lower today. Electromed was down $0.04 (2.9%) to $1.41 on average volume. Throughout the day, 23,310 shares of Electromed exchanged hands as compared to its average daily volume of 25,200 shares. The stock ranged in price between $1.37-$1.48 after having opened the day at $1.46 as compared to the previous trading day's close of $1.45.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy products. Electromed has a market cap of $12.4 million and is part of the drugs industry. Shares are down 55.0% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Electromed a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Electromed 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 ELMD go as follows:

  • ELECTROMED 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ELECTROMED INC swung to a loss, reporting -$0.16 versus $0.02 in the prior year. For the next year, the market is expecting a contraction of 18.8% in earnings (-$0.19 versus -$0.16).
  • 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 132.9% when compared to the same quarter one year ago, falling from -$0.43 million to -$1.00 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, ELECTROMED INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ELECTROMED INC is rather high; currently it is at 68.31%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ELMD's net profit margin of -25.37% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to -$0.11 million or 47.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.26%.

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

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At the close, Vision-Sciences ( VSCI) was down $0.04 (4.2%) to $0.92 on heavy volume. Throughout the day, 53,494 shares of Vision-Sciences exchanged hands as compared to its average daily volume of 27,300 shares. The stock ranged in price between $0.91-$0.97 after having opened the day at $0.97 as compared to the previous trading day's close of $0.96.

Vision-Sciences, Inc., through its subsidiaries, designs, develops, manufactures, and markets endoscopy products. It operates through Medical and Industrial segments. Vision-Sciences has a market cap of $45.2 million and is part of the drugs industry. Shares are down 5.0% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Vision-Sciences as a sell. The area that we feel has been the company's primary weakness has been its relatively poor performance when compared with the S&P 500 during the past year.

Highlights from TheStreet Ratings analysis on VSCI go as follows:

  • In its most recent trading session, VSCI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • 35.05% is the gross profit margin for VISION-SCIENCES 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 -52.69% is in-line with the industry average.
  • Net operating cash flow has increased to -$0.95 million or 33.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.26%.
  • VISION-SCIENCES INC has improved earnings per share by 20.0% 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 two years. During the past fiscal year, VISION-SCIENCES INC continued to lose money by earning -$0.16 versus -$0.22 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 Health Care Equipment & Supplies industry average. The net income increased by 18.8% when compared to the same quarter one year prior, going from -$2.43 million to -$1.98 million.

You can view the full analysis from the report here: Vision-Sciences Ratings Report

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XTL Biopharmaceuticals ( XTLB) was another company that pushed the Health Care sector lower today. XTL Biopharmaceuticals was down $0.31 (10.8%) to $2.58 on heavy volume. Throughout the day, 16,140 shares of XTL Biopharmaceuticals exchanged hands as compared to its average daily volume of 4,400 shares. The stock ranged in price between $2.47-$2.63 after having opened the day at $2.49 as compared to the previous trading day's close of $2.89.

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 $33.7 million and is part of the drugs industry. Shares are down 0.3% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate XTL Biopharmaceuticals a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Ratings rates XTL Biopharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on XTLB go as follows:

  • 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 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 -$0.80 million or 44.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • XTLB'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 57.67%, 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 21.3% when compared to the same quarter one year prior, going from -$0.87 million to -$0.69 million.
  • The revenue fell significantly faster than the industry average of 41.0%. Since the same quarter one year prior, revenues fell by 12.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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.

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