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Management, Leadership, Acquisition Equals Success
Posted by: Donald R. Berger (IP Logged)
Date: February 13, 2013 10:53AM
Community Health Systems (CYH), founded in 1985, is a leader in the hospital healthcare sector. It is at its 52-week high. As of Dec. 31, 2012, it owns or leases 135 hospitals in 29 states. These provide general and specialized healthcare services to patients.
Since 1997 Wayne Smith has been Community Health Services' president and CEO. Before that he worked for Humana Inc. (HUM) for 23 years. The executive vice president and chief financial officer W. Larry Cash has been with Community Health Services since 1997. Previously he worked for 23 years in the financial department at Columbia/HCA Healthcare Corporation, Humana Inc. David L. Miller serves as president of Division I Operations of Community Health Systems. He joined in 1997. Michael T. Portacci joined Community Health Systems in 1987, and serves as president of division II operations. In June 2001 William Hussey joined the company, and serves as president of Division IV Operations. Leadership and management strive to increase revenues at the facilities and improve profitability and maintain a high level of excellence.
Due to its number of facilities and net operating revenues, it is the largest publicly traded operator of hospitals in the U.S. This enables it to deliver general acute care services, emergency care services, general and specialty surgery, critical care, internal medicine, obstetrics and diagnostic services to the clients that use the 20,000 licensed beds. It also owns physician practices, imaging centers and ambulatory surgical centers.
Management’s goals are to improve quality of care, improve and expand service facilities, standardize and centralize business operations and recruit physicians where their hospitals are located,
It also partners with non-for-profit providers and physicians in ownership of the facilities. Quorum Health Resources LLC is a subsidy which provides management and consulting services to 150 non-affiliated general acute care hospitals and health systems throughout the U.S. Four home care agencies are owned and operated by Community Health Services.
The company grows by acquiring hospitals in non-urban areas. Growth and demographics are used to find smaller populated locations. This results in less direct competition, and the hospital becomes part of the community.
GuruFocus considers Community Health Services a 4.5 Star Undervalued Predictable Company. Revenue growth for the last 10 years was 26.4%. EBITDA growth for the last 10 years was 23.4%. Free cash flow growth was 0% for the last 10 years. Book value growth for the last 10 years was 8.5%. Revenue growth was -2% for the last 12 months. EBITDA was 9.7% for the least 12 months. Free cash flow was 0% for the last 12 months. Book value growth was 13.3% for the last 12 months. Its EPS ranks number 5 within the hospital healthcare sector.
Due to the number of uninsured people, many hospitals are not being reimbursed for services provided. The positive for healthcare is the aging U.S. population, and 30 million people will have health care. The decrease in unpaid bills will overshadow the possible government reduction in fees and the impact of employees switching to the exchanges.
I have a position in the company and I will continue to acquire a 3% position in stock for each $100,000.00 of capital. I will buy 1% at $37.35, 1% at $33.69 and 1% at $29.91
Donald R. Berger, D.D.S., F.A.A.P. I attended the University of Bridgeport for 3 years, and was accepted to Temple University School of Dentistry and graduated in 1972. I served in the United States Army for two years. I did a Pediatric Dental residency for two years at Temple University School of Dentistry and St. Christopher’s Hospital for Children. In 1983 I became a Diplomate, American Board of Pediatric Dentistry. Starting in 2000 I mentored with a professional a trader for numerous years. I became a Registered Investment Advisor in Pennsylvania; I provide advisory services to individuals, corporations and institutions. Website: http://www.Dberger.org. Email: [url=mailto:donald@Dberger.org]donald@Dberger.org[/url]
Stocks Discussed: CYH, HUM,