Heavy Debt Could Sicken HMA

The stock, which closed at $5.56 on Wednesday, hovers near the bottom of its wide 52-week range.

Plan B

This week, HMA reportedly mentioned a new option. Under this plan, HMA would pay off half of its upcoming bill and then refinance the rest.

But Skolnick, for one, wonders how HMA will come up with the cash.

"The news thus far doesn't resolve a critical question," she stressed in a note on Tuesday. "Are the asset sales happening? If not, then the stock goes down SOON."

Without proceeds from asset sales, HMA would have to make due with its available cash and credit line. All told, the company has about $125 million in cash and $500 million in credit at its disposal.

However, experts say, HMA can use only a portion of that credit to cover the put option. Moreover, they add, the company would probably think twice about exhausting all of its resources even if it could.

"We hardly expect HMA to use all of the credit available on its revolver, so that means it could issue a sizable chunk of additional debt," Bryan wrote on Monday. "The incremental interest cost could put a serious dent in already weak cash flow ... Given our assumptions for weaker cash flow, higher debt costs and higher leverage, we continue to believe risk is increasing" at the company.

Bryan predicts that HMA's bonds will continue to lose value as a result.

Although Skolnick stops short of telling investors to sell the shares, due to her new faith in company management, she does urge them to pay attention.

"While we think HMA has lots of options that would prevent a really dire outcome, life has a funny way of taking unexpected and sharp turns," she observed this week. Ultimately, "being prepared is never a bad thing."