3 Stocks Moving The Health Services Industry Upward

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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 41.93 points (-0.2%) at 17,071 as of Monday, Sept. 29, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,274 issues advancing vs. 1,814 declining with 136 unchanged.

The Health Services industry as a whole closed the day up 0.3% versus the S&P 500, which was down 0.3%. Top gainers within the Health Services industry included VirtualScopics ( VSCP), up 2.2%, Electromed ( ELMD), up 4.6%, BSD Medical ( BSDM), up 9.5%, Hooper Holmes ( HH), up 6.8% and Bovie Medical ( BVX), up 3.5%.

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

Hooper Holmes ( HH) is one of the companies that pushed the Health Services industry higher today. Hooper Holmes was up $0.04 (6.8%) to $0.63 on light volume. Throughout the day, 73,739 shares of Hooper Holmes exchanged hands as compared to its average daily volume of 119,000 shares. The stock ranged in a price between $0.58-$0.63 after having opened the day at $0.59 as compared to the previous trading day's close of $0.59.

Hooper Holmes, Inc., together with its subsidiaries, provides health risk assessment services to the life insurance and health industries in the United States. The company operates through three segments: Health and Wellness, Heritage Labs, and Hooper Holmes Services. Hooper Holmes has a market cap of $43.2 million and is part of the health care sector. Shares are up 11.3% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Hooper Holmes a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Hooper Holmes 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 HH 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 Health Care Providers & Services industry and the overall market, HOOPER HOLMES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 36.56% is the gross profit margin for HOOPER HOLMES INC which we consider to be strong. Regardless of HH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HH's net profit margin of -42.11% significantly underperformed when compared to the industry average.
  • HOOPER HOLMES INC has improved earnings per share by 40.0% 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, HOOPER HOLMES INC reported poor results of -$0.17 versus -$0.11 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 43.8% when compared to the same quarter one year prior, rising from -$5.00 million to -$2.81 million.
  • This stock has increased by 27.08% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in HH do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

You can view the full analysis from the report here: Hooper Holmes 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, Electromed ( ELMD) was up $0.08 (4.6%) to $1.90 on light volume. Throughout the day, 19,115 shares of Electromed exchanged hands as compared to its average daily volume of 26,100 shares. The stock ranged in a price between $1.76-$1.93 after having opened the day at $1.82 as compared to the previous trading day's close of $1.82.

Electromed, Inc. develops, manufactures, markets, and sells airway clearance therapy products. Electromed has a market cap of $14.0 million and is part of the health care sector. Shares are down 46.6% 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.

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 Electromed as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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 ELMD go as follows:

  • ELMD's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 14.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ELMD's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.39, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ELECTROMED INC is currently very high, coming in at 74.26%. 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 6.28% trails the industry average.
  • ELECTROMED INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, ELECTROMED INC continued to lose money by earning -$0.15 versus -$0.16 in the prior year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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.

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

VirtualScopics ( VSCP) was another company that pushed the Health Services industry higher today. VirtualScopics was up $0.10 (2.2%) to $4.54 on average volume. Throughout the day, 4,326 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,800 shares. The stock ranged in a price between $4.40-$4.69 after having opened the day at $4.44 as compared to the previous trading day's close of $4.44.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $13.4 million and is part of the health care sector. Shares are up 28.3% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • 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 Life Sciences Tools & Services industry. The net income has significantly decreased by 646.3% when compared to the same quarter one year ago, falling from $0.13 million to -$0.73 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 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.
  • Net operating cash flow has significantly decreased to -$1.16 million or 716.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • This stock's share value has moved by only 6.11% over the past year. 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.
  • The revenue fell significantly faster than the industry average of 22.2%. Since the same quarter one year prior, revenues fell by 28.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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