HMA Takes a Hammering

Meanwhile, Skolnick has raised questions about even HMA's seemingly strong cash flow.

"As we examined the 2Q07 results, we noted extensive use of the balance sheet to create cash flow from operations -- something we have been very concerned about in the past," wrote Skolnick, whose firm also makes a market in HMA's securities. "The 'delta' of balance sheet items this year versus last year was a cash inflow of $62 million.

"As liabilities can be used to create cash flows ONLY in the short term, we deem the reported CFFO for 2Q07 of poor and unsustainable quality."

Skolnick has slashed her price target on HMA's stock to $7.20 in the meantime. Even after Tuesday's plunge, the stock still sits above that level at $8.32 a share.

Skolnick, for one, feels that HMA is finally getting the treatment that it deserves.

"We believe ... that HMA has now shown itself not to be immune from any of the industry's ills," she concluded in her downgrade. "There is nothing magic about HMA. Nor is there anything special that we can see relating to the company's turnaround plans."