HCA

HCA Healthcare Inc

Healthcare


Presented:09/26/2019
Price:$118.13
Cap:$40.28B
Current Price:$401.26
Cap:$103.55B

Presented

Date09/26/2019
Price$118.13
Market Cap$40.28B
Ent Value$84.67B
P/E Ratio11.37x
Book ValueN/A
Div Yield1.09%
Shares O/S340.98M
Ave Daily Vol1,579,651
Short Int1.36%

Current

Price$401.26
Market Cap$103.55B
HCA Healthcare, Inc. is a health care services company, which engages in operating hospitals, freestanding surgery centers and emergency rooms, and urgent care centers. It offers a full range of services to accommodate such medical specialties as internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics and obstetrics, as well as diagnostic and emergency services. The company was founded on November 22, 2010 and is headquartered in Nashville, TN.

Publicly traded companies mentioned herein: Acadia Healthcare Co Inc (ACHC), Compass Group PLC (CPG LN), HCA Healthcare Inc (HCA), Ramsay Health Care Ltd (RHC AU).

Highlights

The presenter is long shares of HCA Healthcare Inc (HCA), which he considers the best services company out there with the highest quality assets, a great management team, and a CEO that “gets it” from both an organic growth and a capital deployment perspective. Yet, shares are trading at ~10.5x 2020 earnings and ~9x 2021 earnings (~$117 per share), a discount to its historical norm of 13x – 14x forward earnings. Even this historical P/E multiple seems low to the presenter, as he believes HCA should trade closer to S&P 500 levels due to its superior growth, dividend, management team, and healthy balance sheet. He reasons that the multiple has been held down by overstated “perpetual noise” (e.g., the threat of Medicare for All) and views the risk/reward opportunity as attractive; his price target is ~$195 per share (15x 2021 earnings) with downside to ~$114.

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Idea Discussion

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