3 Stocks Raising The Drugs 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 78 points (0.4%) at 17,726 as of Tuesday, Nov. 18, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 2,060 issues advancing vs. 970 declining with 148 unchanged.

The Drugs industry as a whole closed the day up 0.8% versus the S&P 500, which was up 0.7%. Top gainers within the Drugs industry included Novogen ( NVGN), up 6.9%, Tianyin Pharmaceutical ( TPI), up 5.3%, Merus Labs International ( MSLI), up 3.4%, Can Fite Biofarma ( CANF), up 35.9% and Vermillion ( VRML), up 12.9%.

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

Vermillion ( VRML) is one of the companies that pushed the Drugs industry higher today. Vermillion was up $0.17 (12.9%) to $1.49 on heavy volume. Throughout the day, 62,636 shares of Vermillion exchanged hands as compared to its average daily volume of 25,200 shares. The stock ranged in a price between $1.27-$1.54 after having opened the day at $1.34 as compared to the previous trading day's close of $1.32.

Vermillion, Inc., together with its subsidiaries, is engaged in the discovery, development, and commercialization of diagnostic tests that help physicians diagnose, treat, and enhance outcomes for patients. It develops diagnostic tests in the fields of oncology and women's health. Vermillion has a market cap of $52.6 million and is part of the health care sector. Shares are down 44.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Vermillion 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 Vermillion 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 VRML 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 162.4% when compared to the same quarter one year ago, falling from -$2.12 million to -$5.56 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 Health Care Equipment & Supplies industry and the overall market, VERMILLION 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 -$3.75 million or 117.58% 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 31.91%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 36.36% 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.
  • VERMILLION INC's earnings per share declined by 36.4% 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, VERMILLION INC continued to lose money by earning -$0.45 versus -$0.47 in the prior year.

You can view the full analysis from the report here: Vermillion 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, Can Fite Biofarma ( CANF) was up $0.87 (35.9%) to $3.30 on heavy volume. Throughout the day, 1,214,691 shares of Can Fite Biofarma exchanged hands as compared to its average daily volume of 13,400 shares. The stock ranged in a price between $2.51-$4.30 after having opened the day at $2.51 as compared to the previous trading day's close of $2.43.

Can Fite Biofarma has a market cap of $21.9 million and is part of the health care sector. Shares are down 59.9% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Merus Labs International ( MSLI) was another company that pushed the Drugs industry higher today. Merus Labs International was up $0.05 (3.4%) to $1.54 on light volume. Throughout the day, 6,850 shares of Merus Labs International exchanged hands as compared to its average daily volume of 20,500 shares. The stock ranged in a price between $1.46-$1.54 after having opened the day at $1.46 as compared to the previous trading day's close of $1.49.

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 $110.9 million and is part of the health care sector. Shares are up 0.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Merus Labs International a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Merus Labs International 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 MSLI go as follows:

  • This stock has managed to decline in share value by 0.68% over the past twelve months. 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 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.
  • 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.
  • MERUS LABS INTERNATIONAL INC has shown no change in earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, MERUS LABS INTERNATIONAL INC continued to lose money by earning -$0.05 versus -$0.70 in the prior year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.7%. 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.

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.

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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