3 Stocks Moving The Health Services 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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 251.90 points (-1.4%) at 17,165 as of Friday, Jan. 30, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,001 issues advancing vs. 2,121 declining with 101 unchanged.

The Health Services industry as a whole closed the day down 1.8% versus the S&P 500, which was down 1.3%. Top gainers within the Health Services industry included Dynatronics ( DYNT), up 3.8%, Response Genetics ( RGDX), up 2.5%, Oculus Innovative ( OCLS), up 2.6%, Iridex ( IRIX), up 1.6% and Bacterin International Holdings ( BONE), up 2.2%.

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

Iridex ( IRIX) is one of the companies that pushed the Health Services industry higher today. Iridex was up $0.14 (1.6%) to $9.05 on average volume. Throughout the day, 21,011 shares of Iridex exchanged hands as compared to its average daily volume of 14,300 shares. The stock ranged in a price between $8.75-$9.19 after having opened the day at $8.75 as compared to the previous trading day's close of $8.91.

IRIDEX Corporation develops, manufactures, markets, sells, and services medical laser systems and associated instrumentation for the treatment of the sight-threatening eye diseases worldwide. Iridex has a market cap of $88.9 million and is part of the health care sector. Shares are up 5.0% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Iridex a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Iridex as a buy. 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on IRIX go as follows:

  • IRIX's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • IRIX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.17, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 79.01% to $1.24 million when compared to the same quarter last year. In addition, IRIDEX CORP has also vastly surpassed the industry average cash flow growth rate of -18.13%.
  • The gross profit margin for IRIDEX CORP is rather high; currently it is at 51.92%. 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 4.84% trails the industry average.
  • IRIDEX CORP 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, IRIDEX CORP turned its bottom line around by earning $0.22 versus -$0.02 in the prior year.

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

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At the close, Oculus Innovative ( OCLS) was up $0.02 (2.6%) to $0.79 on light volume. Throughout the day, 101,761 shares of Oculus Innovative exchanged hands as compared to its average daily volume of 142,200 shares. The stock ranged in a price between $0.76-$0.82 after having opened the day at $0.77 as compared to the previous trading day's close of $0.77.

Oculus Innovative Sciences, Inc. Oculus Innovative has a market cap of $7.0 million and is part of the health care sector. Shares are down 46.1% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Oculus Innovative 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 Oculus Innovative as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from TheStreet Ratings analysis on OCLS go as follows:

  • 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 48.7% when compared to the same quarter one year prior, rising from -$1.40 million to -$0.72 million.
  • OCLS's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for OCULUS INNOVATIVE SCIENCES is rather high; currently it is at 54.20%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OCLS's net profit margin of -21.99% significantly underperformed when compared to the industry average.
  • OCLS'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 77.47%, 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.
  • Net operating cash flow has decreased to -$1.66 million or 19.04% when compared to the same quarter last year. Despite a decrease in cash flow OCULUS INNOVATIVE SCIENCES is still fairing well by exceeding its industry average cash flow growth rate of -40.76%.

You can view the full analysis from the report here: Oculus Innovative 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.

Response Genetics ( RGDX) was another company that pushed the Health Services industry higher today. Response Genetics was up $0.01 (2.5%) to $0.43 on average volume. Throughout the day, 234,289 shares of Response Genetics exchanged hands as compared to its average daily volume of 167,800 shares. The stock ranged in a price between $0.42-$0.48 after having opened the day at $0.44 as compared to the previous trading day's close of $0.42.

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 $17.4 million and is part of the health care sector. Shares are up 41.5% 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.

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, generally high debt management risk 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 34.0% when compared to the same quarter one year ago, falling from -$2.72 million to -$3.64 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 -$4.30 million or 63.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 4.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.74, which shows the ability to cover short-term cash needs.
  • Looking at the price performance of RGDX's shares over the past 12 months, there is not much good news to report: the stock is down 74.53%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.

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