3 Stocks Pushing The Health Services 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.

The Health Services industry as a whole closed the day down 1.5% versus the S&P 500, which was down 1.7%. Laggards within the Health Services industry included Dynatronics ( DYNT), down 3.5%, SunLink Health Systems ( SSY), down 3.6%, VirtualScopics ( VSCP), down 1.9%, USMD Holdings ( USMD), down 6.9% and Vision-Sciences ( VSCI), down 6.5%.

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

Agilent Technologies ( A) is one of the companies that pushed the Health Services industry lower today. Agilent Technologies was down $1.11 (2.7%) to $40.63 on average volume. Throughout the day, 1,956,175 shares of Agilent Technologies exchanged hands as compared to its average daily volume of 2,474,600 shares. The stock ranged in price between $40.63-$41.27 after having opened the day at $41.15 as compared to the previous trading day's close of $41.74.

Agilent Technologies, Inc. provides bio-analytical solutions and services to the life sciences, diagnostics and genomics, chemical analysis, communications, and electronics industries worldwide. Agilent Technologies has a market cap of $14.0 billion and is part of the health care sector. Shares are up 1.4% year-to-date as of the close of trading on Monday. Currently there are 5 analysts who rate Agilent Technologies a buy, no analysts rate it a sell, and 6 rate it a hold.

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TheStreet Ratings rates Agilent Technologies 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, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on A go as follows:

  • A's revenue growth trails the industry average of 16.5%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.95, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for AGILENT TECHNOLOGIES INC is rather high; currently it is at 56.82%. Regardless of A's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.01% trails the industry average.
  • AGILENT TECHNOLOGIES INC's earnings per share declined by 16.7% 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, AGILENT TECHNOLOGIES INC reported lower earnings of $1.27 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.27).

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

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At the close, Vision-Sciences ( VSCI) was down $0.03 (6.5%) to $0.43 on average volume. Throughout the day, 82,344 shares of Vision-Sciences exchanged hands as compared to its average daily volume of 84,400 shares. The stock ranged in price between $0.41-$0.46 after having opened the day at $0.44 as compared to the previous trading day's close of $0.46.

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 $22.2 million and is part of the health care sector. Shares are down 35.2% year-to-date as of the close of trading on Monday.

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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 weak operating cash flow, generally disappointing historical performance in the stock itself and deteriorating net income.

Highlights from TheStreet Ratings analysis on VSCI go as follows:

  • Net operating cash flow has decreased to -$1.85 million or 41.09% 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.
  • VSCI'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 70.33%, which is also worse than the performance of the S&P 500 Index. 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 underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income has remained constant at -$1.56 million when compared to the same quarter one year ago.
  • 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.
  • 41.69% is the gross profit margin for VISION-SCIENCES INC which we consider to be strong. 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 -31.74% is in-line with the industry average.

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

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VirtualScopics ( VSCP) was another company that pushed the Health Services industry lower today. VirtualScopics was down $0.06 (1.9%) to $3.13 on heavy volume. Throughout the day, 39,635 shares of VirtualScopics exchanged hands as compared to its average daily volume of 10,200 shares. The stock ranged in price between $2.86-$4.20 after having opened the day at $3.02 as compared to the previous trading day's close of $3.19.

VirtualScopics, Inc. provides imaging solutions for the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $10.0 million and is part of the health care sector. Shares are up 5.3% 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 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.

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Highlights from TheStreet Ratings analysis on VSCP go as follows:

  • VIRTUALSCOPICS INC's earnings per share declined by 8.6% 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, VIRTUALSCOPICS INC reported poor results of -$1.20 versus -$1.02 in the prior year.
  • 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 Life Sciences Tools & Services industry average. The net income has decreased by 7.2% when compared to the same quarter one year ago, dropping from -$1.02 million to -$1.09 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 27.17%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -40.16% is significantly below that of the industry average.
  • 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 17.01% 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.

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