3 Drugs Stocks Pushing The Industry 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 55 points (0.3%) at 16,707 as of Thursday, Aug. 14, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,989 issues advancing vs. 996 declining with 174 unchanged.

The Drugs industry as a whole closed the day up 0.8% versus the S&P 500, which was up 0.4%. Top gainers within the Drugs industry included China Pharma ( CPHI), up 4.5%, Oragenics ( OGEN), up 1.8%, Natural Alternatives International ( NAII), up 2.5%, Prima Biomed ( PBMD), up 2.5% and Aradigm ( ARDM), up 2.0%.

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

Aradigm ( ARDM) is one of the companies that pushed the Drugs industry higher today. Aradigm was up $0.17 (2.0%) to $8.49 on average volume. Throughout the day, 6,607 shares of Aradigm exchanged hands as compared to its average daily volume of 7,100 shares. The stock ranged in a price between $8.32-$8.50 after having opened the day at $8.32 as compared to the previous trading day's close of $8.32.

Aradigm Corporation, a specialty pharmaceutical company, focuses on the development and commercialization of drugs delivered by inhalation for the treatment and prevention of respiratory diseases by pulmonologists. Aradigm has a market cap of $122.1 million and is part of the health care sector. Shares are up 18.9% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Aradigm a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on ARDM go as follows:

  • Net operating cash flow has significantly decreased to -$6.26 million or 109.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, ARDM 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.
  • ARADIGM CORP reported significant earnings per share improvement 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, ARADIGM CORP reported poor results of -$2.40 versus -$1.60 in the prior year. This year, the market expects an improvement in earnings ($0.24 versus -$2.40).
  • Compared to other companies in the Pharmaceuticals industry and the overall market, ARADIGM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ARDM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 9.92, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: Aradigm 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.

At the close, Oragenics ( OGEN) was up $0.03 (1.8%) to $1.70 on light volume. Throughout the day, 2,924 shares of Oragenics exchanged hands as compared to its average daily volume of 20,500 shares. The stock ranged in a price between $1.70-$1.75 after having opened the day at $1.74 as compared to the previous trading day's close of $1.67.

Oragenics, Inc. focuses on the discovery, development, and commercialization of various technologies associated with oral health, antibiotics, and other general health benefits. Oragenics has a market cap of $63.3 million and is part of the health care sector. Shares are down 40.6% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Oragenics a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Oragenics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OGEN go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 3.2% when compared to the same quarter one year ago, dropping from -$1.59 million to -$1.64 million.
  • Net operating cash flow has declined marginally to -$1.58 million or 0.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • OGEN'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 46.81%, 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's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ORAGENICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ORAGENICS INC is rather high; currently it is at 65.58%. Regardless of OGEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OGEN's net profit margin of -763.25% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Oragenics 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.

China Pharma ( CPHI) was another company that pushed the Drugs industry higher today. China Pharma was up $0.01 (4.5%) to $0.32 on light volume. Throughout the day, 62,700 shares of China Pharma exchanged hands as compared to its average daily volume of 84,600 shares. The stock ranged in a price between $0.31-$0.33 after having opened the day at $0.33 as compared to the previous trading day's close of $0.31.

China Pharma Holdings, Inc. develops, manufactures, and markets generic and branded pharmaceutical, and biochemical products to hospitals and private retailers in the People's Republic of China. China Pharma has a market cap of $14.2 million and is part of the health care sector. Shares are down 10.1% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China Pharma a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates China Pharma as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on CPHI 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 Pharmaceuticals industry and the overall market, CHINA PHARMA HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CHINA PHARMA HOLDINGS INC has improved earnings per share by 16.7% 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, CHINA PHARMA HOLDINGS INC swung to a loss, reporting -$0.45 versus $0.10 in the prior year.
  • CPHI, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues fell by 14.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 41.65% is the gross profit margin for CHINA PHARMA HOLDINGS INC which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -33.63% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 124.81% to $2.49 million when compared to the same quarter last year. In addition, CHINA PHARMA HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -18.54%.

You can view the full analysis from the report here: China Pharma 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.

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