3 Stocks Pushing The Health Care Sector Lower

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.

The Health Care sector as a whole closed the day up 0.6% versus the S&P 500, which was up 0.1%. Laggards within the Health Care sector included CymaBay Therapeutics ( CYMA), down 2.2%, Aoxing Pharmaceutical ( AXN), down 7.0%, Semler Scientific ( SMLR), down 5.8%, Vision-Sciences ( VSCI), down 4.8% and BSD Medical ( BSDM), down 4.4%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the sector lower today:

Sanofi ( SNY) is one of the companies that pushed the Health Care sector lower today. Sanofi was down $1.48 (3.1%) to $46.61 on heavy volume. Throughout the day, 4,297,105 shares of Sanofi exchanged hands as compared to its average daily volume of 2,091,100 shares. The stock ranged in price between $46.37-$47.19 after having opened the day at $46.65 as compared to the previous trading day's close of $48.09.

Sanofi researches, develops, manufactures, and markets healthcare products. The company operates in three segments: Pharmaceuticals, Human Vaccines, and Animal Health. Sanofi has a market cap of $127.7 billion and is part of the drugs industry. Shares are down 10.3% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Sanofi a buy, no analysts rate it a sell, and 4 rate it a hold.

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TheStreet Ratings rates Sanofi as a buy. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on SNY go as follows:

  • The gross profit margin for SANOFI is rather high; currently it is at 61.62%. 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 13.74% trails the industry average.
  • SANOFI's earnings per share declined by 24.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SANOFI reported lower earnings of $1.90 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($3.21 versus $1.90).
  • SNY, with its decline in revenue, underperformed when compared the industry average of 8.7%. Since the same quarter one year prior, revenues fell by 23.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SNY has underperformed the S&P 500 Index, declining 12.20% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • 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 decreased by 24.4% when compared to the same quarter one year ago, dropping from $1,725.36 million to $1,305.09 million.

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

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At the close, Vision-Sciences ( VSCI) was down $0.05 (4.8%) to $1.00 on light volume. Throughout the day, 3,100 shares of Vision-Sciences exchanged hands as compared to its average daily volume of 28,200 shares. The stock ranged in price between $1.00-$1.03 after having opened the day at $1.03 as compared to the previous trading day's close of $1.05.

Vision-Sciences, Inc., through its subsidiaries, designs, develops, manufactures, and markets endoscopy products. It operates through Medical and Industrial segments. Vision-Sciences has a market cap of $50.2 million and is part of the drugs industry. Shares are up 5.0% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Vision-Sciences as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and poor profit margins.

Highlights from TheStreet Ratings analysis on VSCI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Health Care Equipment & Supplies industry. The net income has decreased by 16.6% when compared to the same quarter one year ago, dropping from -$1.32 million to -$1.54 million.
  • The gross profit margin for VISION-SCIENCES INC is currently lower than what is desirable, coming in at 34.31%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -37.54% is significantly below that of the industry average.
  • VISION-SCIENCES INC reported flat earnings per share in the most recent quarter. 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, VISION-SCIENCES INC continued to lose money by earning -$0.16 versus -$0.22 in the prior year.
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.

You can view the full analysis from the report here: Vision-Sciences Ratings Report

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Aoxing Pharmaceutical ( AXN) was another company that pushed the Health Care sector lower today. Aoxing Pharmaceutical was down $0.02 (7.0%) to $0.20 on light volume. Throughout the day, 21,017 shares of Aoxing Pharmaceutical exchanged hands as compared to its average daily volume of 70,800 shares. The stock ranged in price between $0.20-$0.22 after having opened the day at $0.22 as compared to the previous trading day's close of $0.22.

Aoxing Pharmaceutical Company, Inc., a specialty pharmaceutical company, researches, develops, manufactures, and distributes various narcotic, pain-management, and addiction treatment pharmaceutical products primarily in the People's Republic of China. Aoxing Pharmaceutical has a market cap of $13.5 million and is part of the drugs industry. Shares are down 18.3% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates Aoxing Pharmaceutical 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.

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Highlights from TheStreet Ratings analysis on AXN go as follows:

  • AXN has underperformed the S&P 500 Index, declining 10.72% from its price level of one year ago. 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 gross profit margin for AOXING PHARMACEUTICAL CO INC is rather high; currently it is at 58.33%. 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 -71.80% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 68.38% to -$0.56 million when compared to the same quarter last year. In addition, AOXING PHARMACEUTICAL CO INC has also vastly surpassed the industry average cash flow growth rate of -19.99%.
  • AOXING PHARMACEUTICAL CO INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, AOXING PHARMACEUTICAL CO INC continued to lose money by earning -$0.16 versus -$0.34 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 Pharmaceuticals industry. The net income increased by 78.4% when compared to the same quarter one year prior, rising from -$10.78 million to -$2.33 million.

You can view the full analysis from the report here: Aoxing Pharmaceutical 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.

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