3 Drugs Stocks Nudging 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 154 points (0.9%) at 17,210 as of Wednesday, Sept. 24, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,794 issues advancing vs. 1,244 declining with 169 unchanged.

The Drugs industry as a whole closed the day up 1.3% versus the S&P 500, which was up 0.8%. Top gainers within the Drugs industry included China Pharma ( CPHI), up 3.9%, Oragenics ( OGEN), up 2.3%, ImmuCell ( ICCC), up 2.1%, Celsus Therapeutics ( CLTX), up 5.7% and Merus Labs International ( MSLI), up 6.9%.

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

Merus Labs International ( MSLI) is one of the companies that pushed the Drugs industry higher today. Merus Labs International was up $0.10 (6.9%) to $1.54 on heavy volume. Throughout the day, 45,052 shares of Merus Labs International exchanged hands as compared to its average daily volume of 22,700 shares. The stock ranged in a price between $1.44-$1.57 after having opened the day at $1.46 as compared to the previous trading day's close of $1.44.

Merus Labs International Inc., a specialty pharmaceutical company, is engaged in the acquisition and licensing of branded prescription medicines in the United States, Canada, and Europe. Merus Labs International has a market cap of $139.4 million and is part of the health care sector. Shares are up 26.8% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Merus Labs International a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Merus Labs International as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on MSLI go as follows:

  • This stock has managed to rise its share value by 76.92% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 83.6% when compared to the same quarter one year prior, rising from -$1.05 million to -$0.17 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.7%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The gross profit margin for MERUS LABS INTERNATIONAL INC is currently very high, coming in at 80.97%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MSLI's net profit margin of -2.39% significantly underperformed when compared to the industry average.
  • 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 Pharmaceuticals industry and the overall market, MERUS LABS INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Merus Labs International 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 (2.3%) to $1.34 on average volume. Throughout the day, 15,044 shares of Oragenics exchanged hands as compared to its average daily volume of 16,200 shares. The stock ranged in a price between $1.27-$1.44 after having opened the day at $1.34 as compared to the previous trading day's close of $1.31.

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 $45.9 million and is part of the health care sector. Shares are down 54.8% year-to-date as of the close of trading on Tuesday. 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on OGEN go as follows:

  • 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 58.95%, 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 8.6% when compared to the same quarter one year prior, going from -$2.07 million to -$1.90 million.
  • 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.
  • Net operating cash flow has increased to -$1.70 million or 15.15% when compared to the same quarter last year. Despite an increase in cash flow of 15.15%, ORAGENICS INC is still growing at a significantly lower rate than the industry average of 100.84%.
  • The gross profit margin for ORAGENICS INC is rather high; currently it is at 61.06%. 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 -625.41% is in-line with 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 (3.9%) to $0.26 on light volume. Throughout the day, 41,672 shares of China Pharma exchanged hands as compared to its average daily volume of 77,800 shares. The stock ranged in a price between $0.25-$0.27 after having opened the day at $0.26 as compared to the previous trading day's close of $0.25.

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 $11.0 million and is part of the health care sector. Shares are down 26.8% year-to-date as of the close of trading on Tuesday. 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. 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CPHI go as follows:

  • CHINA PHARMA HOLDINGS 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, CHINA PHARMA HOLDINGS INC swung to a loss, reporting -$0.45 versus $0.10 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 Pharmaceuticals industry. The net income has significantly decreased by 93.6% when compared to the same quarter one year ago, falling from -$4.46 million to -$8.64 million.
  • 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.
  • Net operating cash flow has significantly decreased to -$0.08 million or 103.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of CHINA PHARMA HOLDINGS INC has not done very well: it is down 19.36% 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: 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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