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Health Care Stocks Hit 52-Week Highs: Community Health, DaVita

Stocks in this article: CYH DVA TMH

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The kidney dialysis company's stock hit a 52-week high Thursday of $96.04. The stock's 52-week low of $59.14 was set on Oct. 4.

"Our rating reflects that dialysis is a stable, recurring business with minimal exposure to the economy which makes it the most defensive area within the health care facilities sector," Bank of America Merrill Lynch analysts wrote in a June 13 report. "Meanwhile, a solid balance sheet and strong free cash flow provide flexibility for acquisitions and share repurchase."

DaVita's forward P/E is 16.84; the average among its peers is 12.1. For comparison, HealthSouth (HLS) has a lower forward P/E of 13.33.

Ten of the 15 analysts who cover DaVita rated it buy; five analysts gave the stock a hold rating.

The stock has risen 26.42% year to date.

Team Health Holdings

The outsourced healthcare staffing company's stock hit a 52-week high on Thursday of $25.50. The stock's 52-week low of $15.08 was set on Oct. 4.

"Following investor meetings with TMH management, we remain fairly optimistic about TMH's long-term growth prospects due to continued hospital outsourcing, acquisition opportunities, and healthcare reform," Piper Jaffray analysts wrote in a June 12 report. "While the Supreme Court's upcoming ruling on the individual mandate and healthcare reform should be a catalyst for not only TMH, but all healthcare stocks, we believe resolution will remain an overhang and we expect TMH to trade higher following the decision. While our outlook for TMH is improving, we remain on the sidelines at Neutral with a $23 PT as we believe shares are fairly valued trading at ~14x our FY13E EPS."

Nine of the 13 analysts who cover Team Health Holdings rated it buy. Three analysts gave the stock a buy rating and one rated it sell.

The stock has risen 15.27% year to date.

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-- Written by Alexandra Zendrian

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