3 Stocks Pushing The Drugs 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 Drugs industry as a whole closed the day down 0.4% versus the S&P 500, which was down 0.3%. Laggards within the Drugs industry included Eyegate Pharmaceuticals ( EYEG), down 6.3%, Celsus Therapeutics ( CLTX), down 5.2%, Skystar Bio-Pharmaceutical ( SKBI), down 13.6%, Echo Therapeutics ( ECTE), down 4.3% and ProPhase Labs ( PRPH), down 2.7%.

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

Tekmira Pharmaceuticals ( TKMR) is one of the companies that pushed the Drugs industry lower today. Tekmira Pharmaceuticals was down $0.33 (3.0%) to $10.50 on light volume. Throughout the day, 193,043 shares of Tekmira Pharmaceuticals exchanged hands as compared to its average daily volume of 681,400 shares. The stock ranged in price between $10.22-$11.20 after having opened the day at $10.78 as compared to the previous trading day's close of $10.83.

Tekmira Pharmaceuticals Corporation, a biopharmaceutical company, focuses on the research and development of RNA interference therapeutics; and provides lipid nanoparticle delivery technology to pharmaceutical partners in Canada. Tekmira Pharmaceuticals has a market cap of $555.8 million and is part of the health care sector. Shares are down 28.5% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate Tekmira Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Tekmira Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on TKMR go as follows:

  • Net operating cash flow has significantly decreased to -$17.84 million or 294.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • TKMR has underperformed the S&P 500 Index, declining 19.49% 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.
  • 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, TEKMIRA PHARMACEUTICALS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • TEKMIRA PHARMACEUTICALS CORP 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, TEKMIRA PHARMACEUTICALS CORP reported poor results of -$1.85 versus -$0.96 in the prior year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 33.3% when compared to the same quarter one year prior, rising from -$17.98 million to -$11.99 million.

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

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At the close, Echo Therapeutics ( ECTE) was down $0.07 (4.3%) to $1.55 on light volume. Throughout the day, 20,515 shares of Echo Therapeutics exchanged hands as compared to its average daily volume of 33,200 shares. The stock ranged in price between $1.51-$1.70 after having opened the day at $1.62 as compared to the previous trading day's close of $1.62.

Echo Therapeutics has a market cap of $18.1 million and is part of the health care sector. Shares are up 20.0% year-to-date as of the close of trading on Friday.

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Skystar Bio-Pharmaceutical ( SKBI) was another company that pushed the Drugs industry lower today. Skystar Bio-Pharmaceutical was down $0.27 (13.6%) to $1.71 on average volume. Throughout the day, 28,221 shares of Skystar Bio-Pharmaceutical exchanged hands as compared to its average daily volume of 23,600 shares. The stock ranged in price between $1.69-$2.09 after having opened the day at $1.95 as compared to the previous trading day's close of $1.98.

Skystar Bio-Pharmaceutical Company researches, develops, produces, markets, and sells veterinary healthcare and medical care products in the People's Republic of China. Skystar Bio-Pharmaceutical has a market cap of $16.9 million and is part of the health care sector. Shares are down 53.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Skystar Bio-Pharmaceutical as a hold. 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 and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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Highlights from TheStreet Ratings analysis on SKBI go as follows:

  • The revenue growth came in higher than the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 14.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SKBI's debt-to-equity ratio is very low at 0.16 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 1.20, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for SKYSTAR BIO-PHARMACEUTICAL is rather high; currently it is at 50.16%. Regardless of SKBI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SKBI's net profit margin of 26.75% compares favorably to the industry average.
  • 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. When compared to other companies in the Pharmaceuticals industry and the overall market, SKYSTAR BIO-PHARMACEUTICAL's return on equity is below that of both the industry average and the S&P 500.
  • SKBI'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 62.41%, 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.

You can view the full analysis from the report here: Skystar Bio-Pharmaceutical Ratings Report

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