3 Stocks Improving Performance Of The Health Care Sector

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.

One out of the three major indices traded up today Two out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 10.22 points (-0.1%) at 17,540 as of Wednesday, Aug. 5, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,528 issues advancing vs. 1,554 declining with 135 unchanged.

The Health Care sector as a whole closed the day up 0.2% versus the S&P 500, which was up 0.3%. Top gainers within the Health Care sector included American Shared Hospital Services ( AMS), up 1.9%, VirtualScopics ( VSCP), up 1.7%, MGC Diagnostics ( MGCD), up 3.4%, Perseon ( PRSN), up 3.6% and CAS Medical Systems ( CASM), up 1.9%.

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

CAS Medical Systems ( CASM) is one of the companies that pushed the Health Care sector higher today. CAS Medical Systems was up $0.02 (1.9%) to $1.06 on heavy volume. Throughout the day, 134,047 shares of CAS Medical Systems exchanged hands as compared to its average daily volume of 33,100 shares. The stock ranged in a price between $1.03-$1.28 after having opened the day at $1.07 as compared to the previous trading day's close of $1.04.

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 $27.2 million and is part of the drugs industry. Shares are down 38.4% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate 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. 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 CASM go as follows:

  • 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 43.39%, 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'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 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.
  • The gross profit margin for CAS MEDICAL SYSTEMS INC is rather high; currently it is at 52.47%. 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 -26.14% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 58.00% to -$0.74 million when compared to the same quarter last year. In addition, CAS MEDICAL SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -3.54%.
  • CAS MEDICAL SYSTEMS INC has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CAS MEDICAL SYSTEMS INC continued to lose money by earning -$0.45 versus -$0.74 in the prior year. This year, the market expects an improvement in earnings (-$0.35 versus -$0.45).

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

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At the close, MGC Diagnostics ( MGCD) was up $0.17 (3.4%) to $5.21 on light volume. Throughout the day, 305 shares of MGC Diagnostics exchanged hands as compared to its average daily volume of 3,600 shares. The stock ranged in a price between $5.21-$5.28 after having opened the day at $5.28 as compared to the previous trading day's close of $5.04.

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 $21.6 million and is part of the drugs industry. Shares are down 21.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate MGC Diagnostics a buy, no analysts rate it a sell, and none rate it a hold.

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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 35.59%, 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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VirtualScopics ( VSCP) was another company that pushed the Health Care sector higher today. VirtualScopics was up $0.04 (1.7%) to $2.37 on average volume. Throughout the day, 5,346 shares of VirtualScopics exchanged hands as compared to its average daily volume of 5,400 shares. The stock ranged in a price between $2.21-$2.58 after having opened the day at $2.58 as compared to the previous trading day's close of $2.33.

VirtualScopics, Inc. provides imaging solutions to the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $7.1 million and is part of the drugs industry. Shares are down 26.5% 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.

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 43.63%, 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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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.

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