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 up 0.2% versus the S&P 500, which was up 0.3%. Laggards within the Drugs industry included VBI Vaccines ( VBIV), down 6.2%, Celsus Therapeutics ( CLTX), down 2.5%, Skystar Bio-Pharmaceutical ( SKBI), down 4.3%, BioPharmX ( BPMX), down 4.1% and ProPhase Labs ( PRPH), down 2.8%.

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

Portola Pharmaceuticals ( PTLA) is one of the companies that pushed the Drugs industry lower today. Portola Pharmaceuticals was down $1.03 (2.0%) to $50.27 on average volume. Throughout the day, 372,072 shares of Portola Pharmaceuticals exchanged hands as compared to its average daily volume of 374,800 shares. The stock ranged in price between $49.80-$53.23 after having opened the day at $52.07 as compared to the previous trading day's close of $51.30.

Portola Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes therapeutics for patients in the areas of thrombosis, other hematologic disorders, and inflammation. Portola Pharmaceuticals has a market cap of $2.7 billion and is part of the health care sector. Shares are up 81.1% year-to-date as of the close of trading on Tuesday. Currently there are 3 analysts who rate Portola Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Portola Pharmaceuticals 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 and weak operating cash flow.

Highlights from TheStreet Ratings analysis on PTLA go as follows:

  • PORTOLA PHARMACEUTICALS INC's earnings per share declined by 26.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PORTOLA PHARMACEUTICALS INC reported poor results of -$3.19 versus -$1.80 in the prior year. For the next year, the market is expecting a contraction of 38.5% in earnings (-$4.42 versus -$3.19).
  • 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 Biotechnology industry. The net income has significantly decreased by 52.7% when compared to the same quarter one year ago, falling from -$30.73 million to -$46.91 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, PORTOLA PHARMACEUTICALS 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 -$47.15 million or 256.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PTLA, with its decline in revenue, underperformed when compared the industry average of 12.4%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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

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At the close, Skystar Bio-Pharmaceutical ( SKBI) was down $0.08 (4.3%) to $1.75 on light volume. Throughout the day, 3,885 shares of Skystar Bio-Pharmaceutical exchanged hands as compared to its average daily volume of 22,500 shares. The stock ranged in price between $1.75-$1.86 after having opened the day at $1.85 as compared to the previous trading day's close of $1.83.

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 $14.8 million and is part of the health care sector. Shares are down 56.6% year-to-date as of the close of trading on Tuesday.

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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.

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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VBI Vaccines ( VBIV) was another company that pushed the Drugs industry lower today. VBI Vaccines was down $0.16 (6.2%) to $2.44 on average volume. Throughout the day, 4,968 shares of VBI Vaccines exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in price between $2.43-$2.54 after having opened the day at $2.54 as compared to the previous trading day's close of $2.60.

VBI Vaccines has a market cap of $52.0 million and is part of the health care sector. Shares are down 21.9% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates VBI Vaccines a buy, no analysts rate it a sell, and none rate it a hold.

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