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 down 0.8% versus the S&P 500, which was down 0.4%. Laggards within the Health Care sector included Bio-Rad Laboratories ( BIO.B), down 2.4%, Signal Genetics ( SGNL), down 15.0%, China Pharma ( CPHI), down 2.9%, SunLink Health Systems ( SSY), down 2.8% and Oragenics ( OGEN), down 3.7%.

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

Novo Nordisk A/S ( NVO) is one of the companies that pushed the Health Care sector lower today. Novo Nordisk A/S was down $1.52 (3.4%) to $43.22 on average volume. Throughout the day, 1,484,746 shares of Novo Nordisk A/S exchanged hands as compared to its average daily volume of 1,348,300 shares. The stock ranged in price between $43.15-$43.69 after having opened the day at $43.44 as compared to the previous trading day's close of $44.74.

Novo Nordisk A/S engages in the discovery, development, manufacture, and marketing of pharmaceutical products primarily in Denmark. It operates in two segments, Diabetes Care and Biopharmaceuticals. Novo Nordisk A/S has a market cap of $123.0 billion and is part of the drugs industry. Shares are up 5.7% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Novo Nordisk A/S a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Novo Nordisk A/S as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on NVO go as follows:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, NOVO NORDISK A/S's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for NOVO NORDISK A/S is currently very high, coming in at 84.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.69% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 54.50% to $1,898.67 million when compared to the same quarter last year. In addition, NOVO NORDISK A/S has also vastly surpassed the industry average cash flow growth rate of -42.07%.
  • 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, despite the company's weak earnings results. 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.
  • NVO's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.

You can view the full analysis from the report here: Novo Nordisk A/S Ratings Report

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At the close, Oragenics ( OGEN) was down $0.03 (3.7%) to $0.76 on light volume. Throughout the day, 7,645 shares of Oragenics exchanged hands as compared to its average daily volume of 36,700 shares. The stock ranged in price between $0.76-$0.79 after having opened the day at $0.79 as compared to the previous trading day's close of $0.79.

Oragenics, Inc. focuses on the discovery, development, and commercialization of various technologies associated with oral health, antibiotics, and other general health benefits. Oragenics has a market cap of $27.9 million and is part of the drugs industry. Shares are down 13.4% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Oragenics a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Oragenics 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 OGEN go as follows:

  • OGEN'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 77.75%, 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 89.0% when compared to the same quarter one year prior, rising from -$9.33 million to -$1.03 million.
  • 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 Biotechnology industry and the overall market, ORAGENICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 41.2%. Since the same quarter one year prior, revenues fell by 20.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has increased to -$1.10 million or 44.14% when compared to the same quarter last year. Despite an increase in cash flow, ORAGENICS INC's average is still marginally south of the industry average growth rate of 46.28%.

You can view the full analysis from the report here: Oragenics 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.

China Pharma ( CPHI) was another company that pushed the Health Care sector lower today. China Pharma was down $0.01 (2.9%) to $0.27 on light volume. Throughout the day, 21,060 shares of China Pharma exchanged hands as compared to its average daily volume of 69,800 shares. The stock ranged in price between $0.27-$0.29 after having opened the day at $0.28 as compared to the previous trading day's close of $0.28.

China Pharma Holdings, Inc. develops, manufactures, and markets generic and branded pharmaceutical, and biochemical products to hospitals and private retailers in the People's Republic of China. China Pharma has a market cap of $13.1 million and is part of the drugs industry. Shares are down 6.7% year-to-date as of the close of trading on Tuesday.

TheStreet Ratings rates China Pharma as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins.

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Highlights from TheStreet Ratings analysis on CPHI go as follows:

  • CHINA PHARMA HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA PHARMA HOLDINGS INC swung to a loss, reporting -$0.45 versus $0.10 in the prior year.
  • 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 significantly decreased by 174.9% when compared to the same quarter one year ago, falling from -$2.30 million to -$6.33 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 Pharmaceuticals industry and the overall market, CHINA PHARMA HOLDINGS 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 $0.18 million or 71.56% 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.
  • The gross profit margin for CHINA PHARMA HOLDINGS INC is currently lower than what is desirable, coming in at 34.60%. Regardless of CPHI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CPHI's net profit margin of -113.66% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: China Pharma 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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