3 Stocks Pushing The Health Services Industry Lower

The Health Services industry as a whole closed the day down 2.3% versus the S&P 500, which was down 1.3%. Laggards within the Health Services industry included Escalon Medical ( ESMC), down 1.5%, VirtualScopics ( VSCP), down 1.8%, American Shared Hospital Services ( AMS), down 6.2%, Allied Healthcare Products ( AHPI), down 2.0% and Pro-Dex ( PDEX), down 1.7%.

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

Fresenius Medical Care AG & Co. KGaA ( FMS) is one of the companies that pushed the Health Services industry lower today. Fresenius Medical Care AG & Co. KGaA was down $1.41 (3.5%) to $39.50 on average volume. Throughout the day, 236,202 shares of Fresenius Medical Care AG & Co. KGaA exchanged hands as compared to its average daily volume of 182,200 shares. The stock ranged in price between $39.49-$40.33 after having opened the day at $40.23 as compared to the previous trading day's close of $40.91.

Fresenius Medical Care AG & Co. KGaA, a kidney dialysis company, provides dialysis care services related to the dialysis treatment a patient receives with end stage renal disease (ESRD); and other health care services. Fresenius Medical Care AG & Co. KGaA has a market cap of $25.5 billion and is part of the health care sector. Shares are up 10.2% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Fresenius Medical Care AG & Co. KGaA a buy, 1 analyst rates it a sell, and 7 rate it a hold.

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TheStreet Ratings rates Fresenius Medical Care AG & Co. KGaA as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on FMS go as follows:

  • FMS's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 9.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 35.21% is the gross profit margin for FRESENIUS MEDICAL CARE AG&CO which we consider to be strong. Regardless of FMS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FMS's net profit margin of 5.73% compares favorably to the industry average.
  • FRESENIUS MEDICAL CARE AG&CO's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FRESENIUS MEDICAL CARE AG&CO reported lower earnings of $1.73 versus $1.83 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.73).
  • FMS's debt-to-equity ratio of 0.97 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.06 is sturdy.

You can view the full analysis from the report here: Fresenius Medical Care AG & Co. KGaA Ratings Report

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At the close, Allied Healthcare Products ( AHPI) was down $0.03 (2.0%) to $1.44 on light volume. Throughout the day, 3,543 shares of Allied Healthcare Products exchanged hands as compared to its average daily volume of 8,400 shares. The stock ranged in price between $1.44-$1.45 after having opened the day at $1.45 as compared to the previous trading day's close of $1.47.

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 $11.6 million and is part of the health care sector. Shares are down 20.1% year-to-date as of the close of trading on Wednesday.

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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 31.61%, 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 30.3%. 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 Services industry lower today. VirtualScopics was down $0.04 (1.8%) to $2.15 on light volume. Throughout the day, 2,170 shares of VirtualScopics exchanged hands as compared to its average daily volume of 3,300 shares. The stock ranged in price between $2.14-$2.19 after having opened the day at $2.14 as compared to the previous trading day's close of $2.19.

VirtualScopics, Inc. provides imaging solutions to the pharmaceutical, biotechnology, and medical device industries. VirtualScopics has a market cap of $6.8 million and is part of the health care sector. Shares are down 30.9% year-to-date as of the close of trading on Wednesday. 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, 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.
  • The gross profit margin for VIRTUALSCOPICS INC is currently lower than what is desirable, coming in at 33.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -18.11% is significantly below that of 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 33.69%, 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 25.3% when compared to the same quarter one year prior, rising from -$0.73 million to -$0.55 million.
  • VIRTUALSCOPICS INC has improved earnings per share by 23.1% 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, VIRTUALSCOPICS INC reported poor results of -$1.20 versus -$1.02 in the prior year.

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

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