3 Drugs Stocks Pushing The Industry Higher

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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

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