WE ALREADY KNOW THIS -- NOW THE MARKET KNOWS
Healthsouthis buy at low price-BusinessWeek
Reuters Story - November 13, 1998 00:33
NEW YORK, Nov 12 (Reuters) - Healthsouth, a leading outpatient surgery and rehab services company, is a very compelling buy at its current depressed price, said an analyst in the November 23 issue of Business Week.
"This is the time to buy," said David Talbot, managing director of Health/Vest Advisors, in the article.
Six months ago, shares of Healthsouth were at 30 a share. By October 7, they tumbled to 7-11/16. On November 12, shares of Healthsouth closed at 11-15/16, down 3/8, on the New York Stock Exchange.
In September, many big stake-holders, including Fidelity Investments, dumped a big chunck of their stakes.
Talbot says that, at its price-earnings ratio of about 9, based on 1999 estimated earnings of $1.10, the stock is "definitely cheap."
Joseph Chiarelli, an analyst at J.P. Morgan Securities, who rates the stock a buy, believes that Healthsouth will generate 1999 cash flow of $1.4 billion. After funding internal growth and capital expenses, the company should have free cash flow of $100 million to $200 million, he figures.
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