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.

The Health Care sector as a whole closed the day down 0.7% versus the S&P 500, which was up 0.7%. Laggards within the Health Care sector included Tianyin Pharmaceutical ( TPI), down 6.8%, VirtualScopics ( VSCP), down 12.3%, Allied Healthcare Products ( AHPI), down 2.5%, MGC Diagnostics ( MGCD), down 2.6% and Perseon ( PRSN), down 10.7%.

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

MGC Diagnostics ( MGCD) is one of the companies that pushed the Health Care sector lower today. MGC Diagnostics was down $0.14 (2.6%) to $5.25 on light volume. Throughout the day, 1,515 shares of MGC Diagnostics exchanged hands as compared to its average daily volume of 3,600 shares. The stock ranged in price between $5.25-$5.38 after having opened the day at $5.30 as compared to the previous trading day's close of $5.39.

MGC Diagnostics Corporation researches, develops, manufactures, and markets non-invasive cardiorespiratory diagnostic products under the MGC Diagnostics and MediSoft brand and trade names in the United States and internationally. MGC Diagnostics has a market cap of $23.0 million and is part of the drugs industry. Shares are down 15.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates MGC Diagnostics 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 generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on MGCD go as follows:

  • MGC DIAGNOSTICS CORP 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MGC DIAGNOSTICS CORP swung to a loss, reporting -$0.27 versus $0.32 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 73.4% when compared to the same quarter one year ago, falling from $0.31 million to $0.08 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 Health Care Equipment & Supplies industry and the overall market, MGC DIAGNOSTICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $0.33 million or 38.44% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 71.42% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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

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At the close, Allied Healthcare Products ( AHPI) was down $0.04 (2.5%) to $1.57 on light volume. Throughout the day, 4,504 shares of Allied Healthcare Products exchanged hands as compared to its average daily volume of 9,900 shares. The stock ranged in price between $1.57-$1.66 after having opened the day at $1.65 as compared to the previous trading day's close of $1.61.

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 $12.7 million and is part of the drugs industry. Shares are down 12.5% year-to-date as of the close of trading on Tuesday.

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TheStreet Ratings rates Allied Healthcare Products as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on AHPI go as follows:

  • The gross profit margin for ALLIED HEALTHCARE PRODS INC is rather low; currently it is at 23.78%. Regardless of AHPI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AHPI's net profit margin of -5.91% significantly underperformed when compared to the industry average.
  • AHPI'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 27.24%, 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
  • ALLIED HEALTHCARE PRODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, ALLIED HEALTHCARE PRODS INC reported poor results of -$0.34 versus -$0.15 in the prior year.
  • The revenue fell significantly faster than the industry average of 26.3%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

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VirtualScopics ( VSCP) was another company that pushed the Health Care sector lower today. VirtualScopics was down $0.32 (12.3%) to $2.28 on average volume. Throughout the day, 4,642 shares of VirtualScopics exchanged hands as compared to its average daily volume of 5,400 shares. The stock ranged in price between $2.20-$2.50 after having opened the day at $2.20 as compared to the previous trading day's close of $2.60.

VirtualScopics, Inc. provides imaging solutions to the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $7.6 million and is part of the drugs industry. Shares are down 18.0% year-to-date as of the close of trading on Tuesday. 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 disappointing return on equity, weak operating cash flow, 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:

  • 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.
  • Net operating cash flow has significantly decreased to -$1.55 million or 273.31% 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 gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 34.61%. Regardless of VSCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VSCP's net profit margin of -19.65% significantly underperformed when compared to the industry average.
  • VSCP'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 37.92%, 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 Life Sciences Tools & Services industry average, but is greater than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from -$0.65 million to -$0.55 million.

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

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