3 Stocks Improving Performance Of The Health Care Sector

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 81 points (0.5%) at 16,920 as of Tuesday, Aug. 19, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,954 issues advancing vs. 1,082 declining with 162 unchanged.

The Health Care sector as a whole was unchanged today versus the S&P 500, which was up 0.5%. Top gainers within the Health Care sector included Cellectar Biosciences ( CLRB), up 1.6%, Escalon Medical ( ESMC), up 2.1%, China Pharma ( CPHI), up 2.7%, VirtualScopics ( VSCP), up 4.7% and Semler Scientific ( SMLR), up 2.9%.

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 $0.19 (4.7%) to $4.20 on light volume. Throughout the day, 200 shares of VirtualScopics exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in a price between $4.20-$4.20 after having opened the day at $4.20 as compared to the previous trading day's close of $4.01.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $12.3 million and is part of the drugs industry. Shares are up 15.9% year-to-date as of the close of trading on Monday. 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 24.13% 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 22.1%. 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 67.73%.

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

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At the close, China Pharma ( CPHI) was up $0.01 (2.7%) to $0.27 on light volume. Throughout the day, 22,245 shares of China Pharma exchanged hands as compared to its average daily volume of 85,500 shares. The stock ranged in a price between $0.25-$0.27 after having opened the day at $0.27 as compared to the previous trading day's close of $0.26.

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 $11.9 million and is part of the drugs industry. Shares are down 24.6% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate China Pharma 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 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 4.5%. 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 -3.89%.

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.

Cellectar Biosciences ( CLRB) was another company that pushed the Health Care sector higher today. Cellectar Biosciences was up $0.05 (1.6%) to $3.13 on heavy volume. Throughout the day, 182,790 shares of Cellectar Biosciences exchanged hands as compared to its average daily volume of 4,200 shares. The stock ranged in a price between $3.00-$3.23 after having opened the day at $3.23 as compared to the previous trading day's close of $3.08.

Cellectar Biosciences has a market cap of $9.2 million and is part of the drugs industry. Shares are unchanged year-to-date as of the close of trading on Monday.

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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