3 Stocks Improving Performance Of The Health Services Industry

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All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 140 points (0.8%) at 17,869 as of Tuesday, Feb. 10, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,747 issues advancing vs. 1,330 declining with 126 unchanged.

The Health Services industry as a whole closed the day up 0.5% versus the S&P 500, which was up 1.1%. Top gainers within the Health Services industry included VirtualScopics ( VSCP), up 8.0%, Great Basin Scientific ( GBSN), up 10.1%, Allied Healthcare Products ( AHPI), up 3.9%, CAS Medical Systems ( CASM), up 4.7% and USMD Holdings ( USMD), up 7.8%.

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

CAS Medical Systems ( CASM) is one of the companies that pushed the Health Services industry higher today. CAS Medical Systems was up $0.06 (4.7%) to $1.35 on average volume. Throughout the day, 39,600 shares of CAS Medical Systems exchanged hands as compared to its average daily volume of 27,300 shares. The stock ranged in a price between $1.25-$1.35 after having opened the day at $1.26 as compared to the previous trading day's close of $1.29.

CAS Medical Systems, Inc., a medical technology company, develops, manufactures, and markets medical devices for non-invasive patient monitoring in the United States and internationally. CAS Medical Systems has a market cap of $26.3 million and is part of the health care sector. Shares are down 18.2% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates CAS Medical Systems a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates CAS Medical Systems as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from TheStreet Ratings analysis on CASM go as follows:

  • 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, CAS MEDICAL SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.60 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, CASM has managed to keep a strong quick ratio of 2.00, which demonstrates the ability to cover short-term cash needs.
  • CASM'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 33.66%, 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.
  • CAS MEDICAL SYSTEMS INC has improved earnings per share by 47.4% 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, CAS MEDICAL SYSTEMS INC reported poor results of -$0.74 versus -$0.64 in the prior year. This year, the market expects an improvement in earnings (-$0.46 versus -$0.74).
  • The gross profit margin for CAS MEDICAL SYSTEMS INC is rather high; currently it is at 51.76%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -30.50% is in-line with the industry average.

You can view the full analysis from the report here: CAS Medical Systems Ratings Report

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At the close, Allied Healthcare Products ( AHPI) was up $0.06 (3.9%) to $1.61 on light volume. Throughout the day, 201 shares of Allied Healthcare Products exchanged hands as compared to its average daily volume of 17,400 shares. The stock ranged in a price between $1.53-$1.61 after having opened the day at $1.53 as compared to the previous trading day's close of $1.55.

Allied Healthcare Products, Inc. manufactures, markets, and distributes respiratory care products, medical gas equipment, and emergency medical products in Canada, Mexico, Central and South America, Europe, the Middle East, and the Far East. Allied Healthcare Products has a market cap of $12.3 million and is part of the health care sector. Shares are down 16.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Allied Healthcare Products 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 Allied Healthcare Products 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, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on AHPI go as follows:

  • ALLIED HEALTHCARE PRODS INC's earnings per share declined by 28.6% in the most recent quarter compared to 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, ALLIED HEALTHCARE PRODS INC reported poor results of -$0.34 versus -$0.15 in the prior year.
  • 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 19.8% when compared to the same quarter one year ago, dropping from -$0.59 million to -$0.71 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ALLIED HEALTHCARE PRODS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ALLIED HEALTHCARE PRODS INC is rather low; currently it is at 21.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.00% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.66%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 28.57% 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.

You can view the full analysis from the report here: Allied Healthcare Products 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.

VirtualScopics ( VSCP) was another company that pushed the Health Services industry higher today. VirtualScopics was up $0.23 (8.0%) to $3.10 on average volume. Throughout the day, 5,828 shares of VirtualScopics exchanged hands as compared to its average daily volume of 4,100 shares. The stock ranged in a price between $2.70-$3.10 after having opened the day at $2.74 as compared to the previous trading day's close of $2.87.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $8.6 million and is part of the health care sector. Shares are down 9.5% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates VirtualScopics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates VirtualScopics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on VSCP 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 27.3% when compared to the same quarter one year ago, falling from -$0.75 million to -$0.96 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, VIRTUALSCOPICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 33.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -34.87% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.42 million or 200.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, VSCP has underperformed the S&P 500 Index, declining 13.20% 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.

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