On Dec 7, Zacks Investment Research upgraded
HCA Holdings Inc.
) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold).
Why the Upgrade?
HCA has been experiencing rising earnings estimates on the
back of improved core fundamentals in third-quarter 2013 and a
raised guidance. Moreover, the company's modest clinical
initiatives, hospital coverage and strong capital position have
Additionally, this healthcare service provider delivered
positive earnings surprises in 3 of the last 4 quarters with an
average beat of 2.7%. HCA also outperformed the one-year S&P
500, which posted an increase of 27.5% against the modest return
of 39.2% clocked by the company.
On Nov 5, HCA reported third-quarter operating earnings of 79
cents per share, which came in line with the Zacks Consensus
Estimate but beat the year-ago quarter number by 2 cents.
Although expenses were higher, the top line increased 4.9%
over the prior-year quarter, driven by growth in volume and
higher revenue per equivalent admission. The quarter also
witnessed improvement in same facility equivalent admissions and
same facility admissions. Consequently, EBITDA and operating cash
flow appreciated, in turn boosting the balance sheet
Concurrently, management also projected EBITDA to be in the
higher-end of the prior range of $6.25 to $6.50 billion in
HCA's growth strategy of enhancing core operating leverage is
showing results. The company is also expected to benefit from the
healthcare reforms that are to be implemented in 2014, as more
citizens will fall under the medical insurance coverage.
Moreover, the company's consistent capital deployment activities
continue to boost investors' confidence in the stock.
Based on HCA's improved performance, the Zacks Consensus
Estimate for 2013 rose 2.5% to $3.31 per share in the last 60
days. The estimate for 2014 is pegged at $3.85, up 1.6% over the
Meanwhile, the Most Accurate Estimate for HCA's 2014 earnings
stands at $3.94 a share, resulting in an
Other Insurers Worth a Look
Investors interested in the financial sector may also consider
HCI Group Inc.
Endurance Specialty Holdings Ltd.
CNA Financial Corp.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
CNA FINL CORP (CNA): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
HCA HOLDINGS (HCA): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
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