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The 2014 All-America Research Team: Health Care Facilities, No. 3: Kevin Fischbeck
Total appearances: 4
Team debut: 2011
Bank of America Merrill Lynch’sKevin Fischbeckrepeats in third place on this roster and as a runner-up in Managed Care. His “research reports provide the most detailed analysis of the metrics behind those reports,” one investor observes. “Additionally, his analysis of the potential impact of the [Patient Protection and] Affordable Care Act was very thorough and timely.” Fischbeck is upbeat on the U.S. health care facilities space, predicting an average rise of 8 percent for the share prices over the next 12 months. “We are more bullish on the hospitals subsector,” he adds, “with the average price objective forecasting 18 percent upside.” His favorite names are two Tennessee-based operators: Community Health Systems in Franklin and Nashville’s HCA Holdings. “We like Community Health because we believe that it is most levered to the improvements that we see from health care reform, as the uninsured gain coverage and bad debt drops,” he explains. The stock was trading at $56.06 in mid-September, and he projects a rise to $63. HCA is similarly positioned to benefit from health care reform, Fischbeck says, “but has an underappreciated capital deployment story. We estimate that it could buy back 10 percent of its stock every six months through 2016.” His $75 target price for HCA represents a 5.1 percent premium to the shares’ mid-September value. “Kevin always asks the hard questions of managements that provide the insights investors need,” remarks another backer.