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

NEW YORK ( TheStreet) -- These health care stocks hit 52-week highs on Thursday following the U.S. Supreme Court's upholding of Obamacare: Community Health Systems ( CYH), DaVita ( DVA) and Team Health Holdings ( TMH).

Community Health Systems

The hospital health care services company's stock hit a 52-week high on Thursday of $28.79. The stock's 52-week low of $14.61 was set on Oct. 5.

"The company remains focused on controlling supply expenses and the growth of employed physicians helps this," Wells Fargo analysts wrote in a June 20 report. "It believes that margins will be favorably impacted by improvements at acquired hospitals and increases in case mix. Acquisitions should be about 45 per year and CYH turns down more than in prior years due to more supply. The company is hopeful that it has the opportunity to continue the good admission trends which it had in 1Q12. Last year admissions were negatively hurt by a rapid transition to Interqual, but this issue abated in 1Q12."

Community Health Systems trades at an estimated price-to-earnings ratio for next year of 5.38 times; the average among its peers is 12.1. For comparison, Tenet Healthcare ( THC) has a higher forward P/E of 13.83.

Fourteen of the 23 analysts who cover Community Health Systems rated it hold. Eight analysts gave the stock a buy rating and one rated it sell.

The stock has risen 58.05% year to date.

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DaVita

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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