3 Health Services Stocks Moving The 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 traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 209 points (1.2%) at 17,010 as of Friday, Oct. 3, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,086 issues advancing vs. 991 declining with 139 unchanged.

The Health Services industry as a whole closed the day up 1.1% versus the S&P 500, which was up 1.1%. Top gainers within the Health Services industry included VirtualScopics ( VSCP), up 2.9%, Biocept ( BIOC), up 24.4%, Response Genetics ( RGDX), up 3.1%, Electromed ( ELMD), up 1.8% and Huttig Building Products ( HBP), up 5.6%.

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

Response Genetics ( RGDX) is one of the companies that pushed the Health Services industry higher today. Response Genetics was up $0.02 (3.1%) to $0.64 on heavy volume. Throughout the day, 127,767 shares of Response Genetics exchanged hands as compared to its average daily volume of 69,800 shares. The stock ranged in a price between $0.61-$0.70 after having opened the day at $0.61 as compared to the previous trading day's close of $0.62.

Response Genetics, Inc., a life science company, is engaged in the research, development, marketing, and sale of pharmacogenomic tests for use in the treatment of cancer primarily in the United States, Asia, and Europe. Response Genetics has a market cap of $26.0 million and is part of the health care sector. Shares are down 46.5% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Response Genetics a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Response Genetics as a sell. The company's weaknesses can be seen in multiple areas, such as its 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 RGDX 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 142.0% when compared to the same quarter one year ago, falling from -$1.30 million to -$3.14 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, RESPONSE GENETICS 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 -$3.18 million or 63.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 70.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier 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.
  • RESPONSE GENETICS 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. 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, RESPONSE GENETICS INC continued to lose money by earning -$0.24 versus -$0.31 in the prior year.

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

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At the close, Biocept ( BIOC) was up $0.65 (24.4%) to $3.30 on average volume. Throughout the day, 18,335 shares of Biocept exchanged hands as compared to its average daily volume of 13,400 shares. The stock ranged in a price between $2.73-$3.30 after having opened the day at $2.73 as compared to the previous trading day's close of $2.65.

Biocept has a market cap of $10.9 million and is part of the health care sector. Shares are unchanged year-to-date as of the close of trading on Thursday.

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 $0.13 (2.9%) to $4.58 on average volume. Throughout the day, 2,957 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,900 shares. The stock ranged in a price between $4.35-$4.58 after having opened the day at $4.37 as compared to the previous trading day's close of $4.45.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $13.8 million and is part of the health care sector. Shares are up 28.6% year-to-date as of the close of trading on Thursday. 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.