You are asked to determine which public firm classified within the industry you

Question

You are asked to determine which public firm classified within the industry you have selected as the most promising is itself the most promising investment within that industry. (These are the 4 companies I want to address: LifePoint Healthcare, Genesis Healthcare, Tenet Healthcare and Select Medical Holdings. Out of the 4 companies, one must be a good choice to invest in and the rest will be the ones that I’m not going to invest in. I must support my claims as to why I chose one over the rest. What’s wrong with the other 3 companies that stopped me from investing in for the next year.

Write a paragraph for each providing your analysis of the companies in the selected industry group and your justification of your choice of the best company to invest in within that group.

In conducting your analysis you are strongly encouraged to draw on the material in the textbook’s Chapter 3, specifically 3.1 Financial Statement Analysis, as well as Chapter 6, Stock Valuation; EPS, P/E ratio, forward P/E, growth rate and dividends.

Explanation / Answer

GENESIS HEALTHCARE :

The company usually posts poor financials for mid or long term investments.

STRENGTH

WEAKNESS

LIFEPOINT HEALTHCARE:

TENET HEALTHCARE:

SELECT MEDICAL HOLDING:

For the first quarter ended March 31, 2018, net operating revenues increased 14.8% to $1,253.0 million, compared to $1,091.5 million for the same quarter, prior year. Income from operations increased 18.3% to $108.6 million for the first quarter ended March 31, 2018, compared to $91.8 million for the same quarter, prior year. Net income increased 87.5% to $44.0 million for the first quarter ended March 31, 2018, compared to $23.5 million for the same quarter, prior year. Net income for the first quarter ended March 31, 2018 included a pre-tax loss on early retirement of debt of $10.3 million. Net income for the first quarter ended March 31, 2017 included a pre-tax loss on early retirement of debt of $19.7 million. Adjusted EBITDA increased 17.5% to $163.2 million for the first quarter ended March 31, 2018, compared to $138.9 millionfor the same quarter, prior year. Income per common share increased to $0.25 on a fully diluted basis for the first quarter ended March 31, 2018, compared to $0.12 for the same quarter, prior year. Adjusted income per common share was $0.29 per diluted share for the first quarter ended March 31, 2018, compared to $0.21 for the same quarter, prior year. Adjusted income per common share excludes the loss on early retirement of debt and U.S. HealthWorks acquisition costs and their related tax effects for the first quarter ended March 31, 2018. Adjusted income per common share excludes the loss on early retirement of debt and its related tax effects for the first quarter ended March 3.

A s per financial analysis of all of the above companies we recommend select medical holding is good for investor for investment purpose.

GENESIS HEALTHCARE :

The company usually posts poor financials for mid or long term investments.

• The company has poor fundamentals for a short-term investment strategy.

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