NEW YORK (TheStreet) -- Shares of HCA Holdings (HCA) - Get Report were gaining 5.4% to $72.33 on heavy tracing volume ahead of the company's addition to the S&P 500 after the closing bell on Monday.

HCA Holdings will replace Safeway (SWY) in the S&P 500 as the grocery store chain is set to be acquired by private equity firm Cerberus Capital Management, which owns the Albertsons chain of grocery stores.

More than 13.5 million shares of HCA Holdings were traded ahead of its inclusion in the S&P 500, well above its average trading volume of about 3.9 million shares a day.

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HCA Holdings is based in Nashville, TN, and owns, operate, and manages hospitals, and freestanding surgery centers.

TheStreet Ratings team rates HCA HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HCA HOLDINGS INC (HCA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins."

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

  • Powered by its strong earnings growth of 46.83% and other important driving factors, this stock has surged by 41.30% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HCA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 41.9% when compared to the same quarter one year prior, rising from $365.00 million to $518.00 million.
  • HCA's revenue growth trails the industry average of 20.6%. Since the same quarter one year prior, revenues slightly increased by 9.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $1,128.00 million or 25.33% when compared to the same quarter last year. In addition, HCA HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of 17.04%.
  • HCA HOLDINGS INC has improved earnings per share by 46.8% in the most recent quarter compared to the same quarter a year ago. 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 ($4.56 versus $3.36).
  • You can view the full analysis from the report here: HCA Ratings Report

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