NEW YORK (TheStreet) -- Universal Health Services (UHS) shares are up 7.46% to $140.43 in trading on Thursday after the U.S. Supreme Court upheld a key portion of the Affordable Care Act today.
The Supreme Court ruled that the subsidies at the heart of the law were in fact legal because they are being offered in the form of tax credits available to people in every state.
The decision was made on a 6-3 split with conservative Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissenting against the majority opinion.
Chief Justice John Roberts wrote the majority opinion of the court.
The legality of of the law has been argued by Republicans and Democrats even before it was first signed into law by the Obama administration in 2010.
Other healthcare industry stocks such as Tenet Healthcare (THC) and Community Health Systems (CYH) are also gaining today following the ruling.
TheStreet Ratings team rates UNIVERSAL HEALTH SVCS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNIVERSAL HEALTH SVCS INC (UHS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins."