Summary:
- The stock is cheaply priced for its strong fundamentals.
- The company’s business is recession proof with a moat.
- If the company continues on its current path, then shareholders will be rewarded with significantly above-average returns.
HCA Holdings (HCA) is a long position that I hold in my personal portfolio. This article discusses the reasons I like the stock.
The stock appeared in my value model which ranks it in the cheapest 5% and frankly I wish I noticed it earlier. As the chart shows, the stock could have been bought at even better prices for the last two years and only just recently made a new two-year high. Longer-term investors will like the fundamentals, price, and uptrend, while shorter-term investors will like the potential support (red dotted line) which may present a setup for them.
The Beauty of HCA
HCA operates 179 hospitals and 120 freestanding surgery centers. The Frist family owns around 17% of HCA and started the company from one hospital in 1968.
As shown in the tables below from Bloomberg, the company controls the most hospitals and beds from the groups listed. It is estimated that roughly 5% of U.S. healthcare patients are serviced by HCA. The company accounts for 5% of total hospital spending, according to Morningstar.
