Guru David Tepper (Trades, Portfolio) sold his remaining 6,270,130 shares of Community Health Systems (CYH, Financial) during the third quarter. The trade had a -1.99% impact on Tepper’s portfolio.
Community Health Systems has a market cap of $589.32 million, an enterprise value of $15.88 billion, a price-book ratio of 0.33, a quick ratio of 1.49 and a current ratio of 1.69.
Community Health Systems was originally founded in 1986 and was reincorporated in 1996.
Community Health Systems is one of the largest publicly traded hospital companies in the United States. As of Dec. 31, 2015, the company owned or leased 190 general acute care hospitals and four standalone rehabilitation or psychiatric hospitals.
The company generates revenue by providing services through its hospitals and affiliated businesses.These services include: general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services.
Community Health Systems employs 3,400 physicians and an additional 1,000 licensed health care practitioners as of Dec. 31, 2015.
According to GuruFocus, Community Health Systems has a 3 of 10 financial strength rating. It has a cash-debt ratio of 0.01, an equity to asset ratio of 0.08 and a Piotroski F-Score of 4. The Altman Z-Score of 0.71 indicates the company is in financial distress and in danger of filing for bankruptcy within the next two years.
Community Health Systems also has a 6 of 10 profitability and growth rating. It has an operating margin of -4.20%, a net margin of -8.44%, a return on equity (ROE) of -49.53%, a retun on assets (ROA) of -6.32% and three-year EPS growth of -17.20%.
According to GuruFocus, Community Health Systems has three severe warning signs, which likely had an impact on Tepper’s decision to exit the position in the third quarter.
- The company’s operating margin has been in long-term decline. Over the past five years, Community Health Systems' average rate of decline has been -6.7% per year.
- The company’s short percentage of float is high at 26.68%.
- The company’s asset growth is faster than revenue growth. If a company builds assets at 14.7% a year, faster than its revenue growth rate of 5.1% over the previous five years, it means that the company may be becoming less efficient.
Guru David Tepper (Trades, Portfolio) is one of the most successful hedge fund managers of all time. Since he founded Appaloosa Management in 1993, the hedge fund has returned an incredible 25.7% per year.
Disclosure:Ă‚ Author does not own any shares of this company.
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