3 Stocks Boosting The Health Care Sector Higher

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 324.80 points (-1.9%) at 16,666 as of Friday, Aug. 21, 2015, 12:55 PM ET. The NYSE advances/declines ratio sits at 525 issues advancing vs. 2,498 declining with 133 unchanged.

The Health Care sector as a whole closed the day down 0.9% versus the S&P 500, which was down 1.7%. Top gainers within the Health Care sector included MGC Diagnostics ( MGCD), up 5.5%, Skystar Bio-Pharmaceutical ( SKBI), up 3.6%, Cellectar Biosciences ( CLRB), up 1.7%, Check-Cap ( CHEK), up 5.7% and BioPharmX ( BPMX), up 5.9%.

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

Cellectar Biosciences ( CLRB) is one of the companies that pushed the Health Care sector higher today. Cellectar Biosciences was up $0.05 (1.7%) to $3.05 on light volume. Throughout the day, 5,504 shares of Cellectar Biosciences exchanged hands as compared to its average daily volume of 12,300 shares. The stock ranged in a price between $3.00-$3.14 after having opened the day at $3.01 as compared to the previous trading day's close of $3.00.

Cellectar Biosciences has a market cap of $23.6 million and is part of the health services industry. Shares are down 2.9% year-to-date as of the close of trading on Thursday.

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At the close, Skystar Bio-Pharmaceutical ( SKBI) was up $0.05 (3.6%) to $1.43 on light volume. Throughout the day, 13,664 shares of Skystar Bio-Pharmaceutical exchanged hands as compared to its average daily volume of 20,900 shares. The stock ranged in a price between $1.38-$1.43 after having opened the day at $1.38 as compared to the previous trading day's close of $1.38.

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 $12.4 million and is part of the health services industry. Shares are down 67.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Skystar Bio-Pharmaceutical a buy, no analysts rate it a sell, and none rate it a hold.

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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 6.8%. 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% significantly outperformed against the industry.
  • 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 72.98%, 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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MGC Diagnostics ( MGCD) was another company that pushed the Health Care sector higher today. MGC Diagnostics was up $0.28 (5.5%) to $5.33 on heavy volume. Throughout the day, 4,733 shares of MGC Diagnostics exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in a price between $5.01-$5.33 after having opened the day at $5.01 as compared to the previous trading day's close of $5.05.

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 $22.0 million and is part of the health services industry. Shares are down 21.1% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate MGC Diagnostics a buy, no analysts rate it a sell, and none rate it a hold.

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 to the industry average, the firm's growth rate is much 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 36.78%, 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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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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