This Stock Soared in August. Is It Still a Buy?
Healthcare stocks are generally considered a safe haven for investors during a difficult market, because sick people can't wait for an upbeat economy before getting the treatment they need. Despite this, the markets have been down on hospital stocks, as difficult operating conditions have hurt their bottom lines and caused several major companies to lower guidance for the year.
Even hospital service provider HCA Healthcare (NYSE: HCA), which owns the largest hospital network in the U.S, hasn't been immune. The company's stock has seen some significant ups and downs this year. After rallying from its summer slump in late July following a second-quarter earnings beat, HCA's stock is now trading more than 20% above last month's (and 52-week) lows. A closer look at the company's fundamentals suggests which direction the stock will take in the long term.
COVID-19 threw a curve ball at hospitals, disrupting typical patterns and causing overcrowded emergency rooms. Many people with less critical conditions chose to delay their elective procedures, and non-COVID-19 admissions dropped well below typical levels. Non-COVID-19 admissions hit a low 63% of typical levels in April 2020, while during the later outbreaks, such admissions were just 80% of usual levels.
Source Fool.com
