We expect health benefits provider
HCA Holdings, Inc.
) to beat expectations when it reports fourth-quarter 2013
results on Feb 4, 2014.
Why a Likely Positive Surprise?
Our proven model shows that HCA Holdings is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or Earnings ESP , which represents
the difference between the Most Accurate estimate and the Zacks
Consensus Estimate, is +4.76%. This is noteworthy and is
indicative of a likely positive earnings surprise.
Zacks Rank #3 (Hold):
Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3
(Hold) have a significantly higher chance of beating earnings.
The Sell-rated stocks (carrying a Zacks Rank #4 or 5) going into
an earnings announcement should never be considered, especially
when the company is seeing negative estimate revisions.
The combination of a Zacks Rank #3 and an ESP of +4.76% makes us
confident of a positive earnings beat by HCA Holdings on Feb 4.
What is Driving the Better-than-Expected
HCA Holdings has been consistent in providing high quality yet
affordable patient care to individuals across the nation. This
has helped the company gain patient count over time. The
contract signed with Florida's Blue Cross and Blue Shield last
month is a testimony to its strategy. We expect this deal to
increase patient outcomes, hence aiding solid operational
Moreover, HCA Holdings has also been intent in returning more
value to its shareholders. In Nov 2013, the company repurchased
shares worth $500 million, which will boost its bottom line.
The company'sinvestment in ventures would expand its capabilities
as a hospital service provider. To expand its operations and
enhance core efficiencies, HCA Holdings inked a deal with IASIS
Healthcare LLC to purchase three Tampa Bay hospitals. This deal
should enhance company operations in the Tampa Bay and St.
Petersburg area. HCA Holdings also expects to benefit from the
Affordable Care Act going forward.
HCA Holdings delivered positive surprises in two of the last four
quarters with an average beat of 2.74%, with the highest surprise
coming in at +9.64% in the fourth quarter of 2012.
Other Stocks to Consider
HCA Holdings is not the only firm expecting to outperform this
earnings season. We also see likely earnings beats coming from
these 3 peers in the medical industry:
), earnings ESP of +1.33% and a Zacks Rank #2.
Tenet Healthcare Corp.
), earnings ESP of +17.65% and a Zacks Rank #3.
), earnings ESP of +2.90% and a Zacks Rank #3.
AETNA INC-NEW (AET): Free Stock Analysis
HCA HOLDINGS (HCA): Free Stock Analysis
MEDNAX INC (MD): Free Stock Analysis Report
TENET HEALTH (THC): Free Stock Analysis
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