New Lifetime High Reached: Community Health Systems (CYH)

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.

Trade-Ideas LLC identified Community Health Systems ( CYH) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Community Health Systems as such a stock due to the following factors:

  • CYH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.3 million.
  • CYH has traded 7,359 shares today.
  • CYH is trading at a new lifetime high.

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More details on CYH:

Community Health Systems, Inc., together with its subsidiaries, provides general and specialized hospital healthcare services to patients in the United States. Currently there are 13 analysts that rate Community Health Systems a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Community Health Systems has been 1.8 million shares per day over the past 30 days. Community Health Systems has a market cap of $6.0 billion and is part of the health care sector and health services industry. The stock has a beta of 1.76 and a short float of 5.9% with 4.09 days to cover. Shares are up 31.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Community Health Systems as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 49.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • COMMUNITY HEALTH SYSTEMS INC has improved earnings per share by 7.7% 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, COMMUNITY HEALTH SYSTEMS INC reported lower earnings of $1.62 versus $2.96 in the prior year. This year, the market expects an improvement in earnings ($3.02 versus $1.62).
  • The debt-to-equity ratio is very high at 4.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, CYH's quick ratio is somewhat strong at 1.11, demonstrating the ability to handle short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, COMMUNITY HEALTH SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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