3 Health Services 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 275 points (1.6%) at 16,994 as of Wednesday, Oct. 8, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,500 issues advancing vs. 612 declining with 106 unchanged.

The Health Services industry as a whole closed the day up 1.3% versus the S&P 500, which was up 1.7%. Top gainers within the Health Services industry included SunLink Health Systems ( SSY), up 2.9%, Semler Scientific ( SMLR), up 8.2%, American Caresource Holdings ( ANCI), up 2.0%, Electromed ( ELMD), up 1.9% and IMRIS ( IMRS), up 6.8%.

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

IMRIS ( IMRS) is one of the companies that pushed the Health Services industry higher today. IMRIS was up $0.04 (6.8%) to $0.58 on average volume. Throughout the day, 61,312 shares of IMRIS exchanged hands as compared to its average daily volume of 77,900 shares. The stock ranged in a price between $0.54-$0.60 after having opened the day at $0.57 as compared to the previous trading day's close of $0.54.

IMRIS Inc. designs, manufactures, and sells image-guided therapy solutions that enable surgeons to obtain information and make decisions during the course of procedures. IMRIS has a market cap of $29.0 million and is part of the health care sector. Shares are down 66.0% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates IMRIS a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates IMRIS as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IMRS go as follows:

  • The debt-to-equity ratio of 1.12 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, IMRS maintains a poor quick ratio of 0.96, which illustrates the inability to avoid short-term cash problems.
  • 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 Equipment & Supplies industry and the overall market, IMRIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • IMRS'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 62.03%, 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.
  • IMRIS INC has improved earnings per share by 12.5% 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, IMRIS INC reported poor results of -$0.83 versus -$0.60 in the prior year.
  • IMRS, with its very weak revenue results, has greatly underperformed against the industry average of 7.9%. Since the same quarter one year prior, revenues plummeted by 58.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: IMRIS 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 $0.03 (1.9%) to $1.64 on average volume. Throughout the day, 28,201 shares of Electromed exchanged hands as compared to its average daily volume of 23,900 shares. The stock ranged in a price between $1.51-$1.71 after having opened the day at $1.68 as compared to the previous trading day's close of $1.61.

Electromed, Inc. designs, develops, manufactures, markets, and sells airway clearance products in the United States and internationally. Electromed has a market cap of $14.0 million and is part of the health care sector. Shares are down 52.6% year-to-date as of the close of trading on Tuesday. 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 7.9%. 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.
  • 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. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, ELECTROMED INC continued to lose money by earning -$0.15 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($0.03 versus -$0.15).
  • 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.
  • 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.

American Caresource Holdings ( ANCI) was another company that pushed the Health Services industry higher today. American Caresource Holdings was up $0.06 (2.0%) to $3.00 on heavy volume. Throughout the day, 185,914 shares of American Caresource Holdings exchanged hands as compared to its average daily volume of 9,400 shares. The stock ranged in a price between $2.95-$3.03 after having opened the day at $3.00 as compared to the previous trading day's close of $2.94.

American CareSource Holdings, Inc. provides access to a network of ancillary healthcare service providers in the United States. American Caresource Holdings has a market cap of $19.5 million and is part of the health care sector. Shares are up 77.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate American Caresource Holdings a buy, no analysts rate it a sell, and none rate it a hold.

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

Highlights from TheStreet Ratings analysis on ANCI go as follows:

  • 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 Providers & Services industry and the overall market, AMERICAN CARESOURCE HLDGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$1.24 million or 24.57% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • AMERICAN CARESOURCE HLDGS has improved earnings per share by 19.2% 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, AMERICAN CARESOURCE HLDGS reported poor results of -$0.66 versus -$0.54 in the prior year.
  • ANCI, with its decline in revenue, underperformed when compared the industry average of 20.7%. Since the same quarter one year prior, revenues slightly dropped by 7.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ANCI's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ANCI has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.

You can view the full analysis from the report here: American Caresource Holdings 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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