3 Stocks Pushing The Drugs Industry 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 Drugs industry as a whole closed the day up 1.7% versus the S&P 500, which was down 0.2%. Laggards within the Drugs industry included Tianyin Pharmaceutical ( TPI), down 2.9%, EntreMed ( ENMD), down 2.6%, Celsus Therapeutics ( CLTX), down 4.2%, ProPhase Labs ( PRPH), down 2.0% and Cleveland BioLabs ( CBLI), down 4.0%.

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

Novartis ( NVS) is one of the companies that pushed the Drugs industry lower today. Novartis was down $1.72 (1.8%) to $94.05 on average volume. Throughout the day, 1,222,512 shares of Novartis exchanged hands as compared to its average daily volume of 1,311,800 shares. The stock ranged in price between $93.68-$95.17 after having opened the day at $95.01 as compared to the previous trading day's close of $95.77.

Its Pharmaceuticals division offers patented prescription medicines in various therapeutic areas, including oncology; primary care and established medicines; specialty care, such as ophthalmology, neuroscience, integrated hospital care, and critical care; and cardiovascular and metabolism. Novartis has a market cap of $231.8 billion and is part of the health care sector. Shares are up 19.1% year-to-date as of the close of trading on Monday. Currently there are 4 analysts who rate Novartis a buy, 1 analyst rates it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Novartis as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, compelling growth in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on NVS go as follows:

  • The revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 2.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past 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 44.4% when compared to the same quarter one year prior, rising from $2,232.00 million to $3,223.00 million.
  • NOVARTIS AG has improved earnings per share by 45.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NOVARTIS AG reported lower earnings of $3.73 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($5.22 versus $3.73).

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

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At the close, Cleveland BioLabs ( CBLI) was down $0.01 (4.0%) to $0.35 on heavy volume. Throughout the day, 323,825 shares of Cleveland BioLabs exchanged hands as compared to its average daily volume of 161,800 shares. The stock ranged in price between $0.33-$0.35 after having opened the day at $0.35 as compared to the previous trading day's close of $0.36.

Cleveland BioLabs, Inc., a biopharmaceutical company, focuses on developing pharmaceuticals designed to address diseases with significant medical need. Cleveland BioLabs has a market cap of $22.2 million and is part of the health care sector. Shares are down 66.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Cleveland BioLabs a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Cleveland BioLabs as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CBLI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 0.1% when compared to the same quarter one year ago, dropping from -$4.09 million to -$4.10 million.
  • CBLI'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 69.36%, 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.
  • CBLI, with its very weak revenue results, has greatly underperformed against the industry average of 40.7%. Since the same quarter one year prior, revenues plummeted by 74.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has increased to -$3.59 million or 25.19% when compared to the same quarter last year. Despite an increase in cash flow of 25.19%, CLEVELAND BIOLABS INC is still growing at a significantly lower rate than the industry average of 116.43%.
  • CLEVELAND BIOLABS INC has improved earnings per share by 22.2% 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 year. During the past fiscal year, CLEVELAND BIOLABS INC continued to lose money by earning -$0.39 versus -$0.52 in the prior year.

You can view the full analysis from the report here: Cleveland BioLabs 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.

EntreMed ( ENMD) was another company that pushed the Drugs industry lower today. EntreMed was down $0.04 (2.6%) to $1.50 on average volume. Throughout the day, 21,885 shares of EntreMed exchanged hands as compared to its average daily volume of 20,800 shares. The stock ranged in price between $1.50-$1.53 after having opened the day at $1.52 as compared to the previous trading day's close of $1.54.

EntreMed has a market cap of $47.1 million and is part of the health care sector. Shares are down 6.0% 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.

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