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Why HCA Holdings (HCA) Stock Is Up Today

NEW YORK (TheStreet) -- HCA Holdings (HCA) was gaining 0.5% to $51.76 Tuesday after pricing a 15 million spot secondary offering for certain shareholders.

HCA priced the secondary offering of 15 million shares of common stock at $51.75 a share. The common shares in the offering were sold by Bain Capital Partners and Kohlberg Kravis Roberts & Co. HCA will receive no proceeds from the offering

Citigroup (C) acted as the book running manager for the offering.

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TheStreet Ratings team rates HCA HOLDINGS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HCA HOLDINGS INC (HCA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and growth in earnings per share. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.60% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • HCA's revenue growth trails the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HCA HOLDINGS INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HCA HOLDINGS INC reported lower earnings of $3.36 versus $3.49 in the prior year. This year, the market expects an improvement in earnings ($3.67 versus $3.36).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Health Care Providers & Services industry. The net income increased by 0.9% when compared to the same quarter one year prior, going from $344.00 million to $347.00 million.
  • Net operating cash flow has decreased to $443.00 million or 40.13% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: HCA Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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