It's taken a few trading sessions but it looks like the short sellers are cashing in on the news late last week that Jerrod Menz has stepped down as president of AAC Holdings after being one of five people charged in the death of a former patient in California. As of 2:20 p.m. Monday, AAC (Ticker: AAC) was off more than 13 percent to about $32.95. If they close at that level, it will be their lowest end to a trading day since mid-May. Volume has been very heavy, with almost 1.1 million shares having changed hands versus a daily average of about 270,000.
Short interest in Brentwood-based AAC has risen consistently since the company listed its shares on the Nasdaq last fall at $15 apiece and quickly began to climb. From less than 500,000 shares in mid-December, the number of shares sold short had risen above 1 million by mid-March and 2 million a month after that. Over the past four months, the number of days needed to cover short interest has consistently been in the double digits. By contrast, the days to cover short sellers of rival local behavioral health care venture Acadia Healthcare has been at eight or lower for more than three months.
New York Stock Exchange officials have told Noranda Aluminum Holding executives that the slide in the company's share price to below $1 has put it in the listing standards doghouse. The Noranda team now has six months to get their stock back above $1 on a regular basis. To that end, they will host on Aug. 24 a special shareholders' vote on a 1-for-7 reverse split. Noranda shares (Ticker: NOR) rose more than 6 percent Tuesday to 56.5 cents.
Brian Martin at FIG Partners has lowered his rating on shares of Pinnacle Financial Partners to 'market perform' from 'market outperform' following the bank holding company's Q2 profit report. Before the report, Martin's price target was $53, just a bit above where Pinnacle (Ticker: PNFP) is changing hands today. Over at SunTrust Robinson Humphrey, analysts have trimmed their price target for Nashville-based Pinnacle to $62 from $63 but maintained his 'buy' rating.
Macquarie analyst Vikas Dwivedi has launched coverage of several refining stocks with positive ratings, saying the sector will benefit from tight capacity and solid financials. Among the companies getting 'outperform' ratings is Brentwood-based Delek US Holdings. Mid-morning Tuesday, Delek (Ticker: DK) was trading at about $36.50. So far this year, they're up 34 percent.
Analysts at Zacks Investment Research have hiked their rating on shares of Pinnacle Financial Partners. They now rate the Nashville-based bank holding company a 'buy' instead of a 'hold' and see the shares climbing to $59 in the coming quarters. Pinnacle (Ticker: PNFP) ended last week at $53.10.
At Macquarie, Laurent Vasilescu and Stephanie Wakeham have begun covering shares of apparel retailer Genesco with a 'neutral' rating that balances the strong performance at the company's Journeys brand with the struggles of its Lids concept. Their target for Genesco (Ticker: GCO) is $69, about 10 percent higher than where the stock finished Friday's session.
Two firms tracking the shares of Pinnacle Financial Partners have lowered their ratings on Nashville's biggest bank company following its second-quarter profit report. Keefe Bruyette & Woods analyst Jefferson Harralson has trimmed Pinnacle to 'market perform' from 'outperform' but maintained his $54 price target. And analysts at Portales Partners have made a similar move, going to 'sector perform.' Pinnacle shares, which took a dip yesterday following the profit report, are up 1.6 percent to $55.49 (Ticker: PNFP) this morning.
We still have a bit of hospital stock news to pass on in the wake of the Supreme Court’s decision in favor in health insurance exchange subsidies. Mizuho Securities’ Sheryl Skolnick has upgraded shares of LifePoint Health to ‘buy’ from ‘neutral’ and set a price target of $95.71, which leaves about 10 percent of upside. Skolnick points out that Brentwood-based LifePoint (Ticker: LPNT) already is “nicely FCF positive” and will benefit from the higher exchange enrollments that are expected.
Newly public Community Healthcare Trust has picked up coverage from analysts at Evercore ISI. They have set a ‘buy’ rating on the Cool Springs-based real estate investment trust and see it climbing to $22 in the coming quarters. Community Healthcare (Ticker: CHCT) closed Monday at $19.07.
When Raymond James analyst John Ransom on Friday cut his rating for shares of Community Health Systems after they'd run up more than 12 percent Thursday on the heels of the Supreme Court's health insurance subsidies opinion, it suggested a straight valuation call.
That's only part of the story.
Ransom has some issues with the deep-down prospects for CHS' ability to grow profits. The Franklin-based company, he notes, doesn't have as much exposure to insurance exchanges and hasn't been helped by slow Medicaid expansion around the country. On top of that, he says the company has spent more money than expected on IT and M&A activities. That'll put something of a cap on growth — something investors will be watching closely given the strong numbers posted by the hospital sector in the spring of last year.
Paula Torch at Avondale Partners doesn't quite see it that way. She has raised her target for CHS to $77 from $62 (and for LifePoint Health to $94 from $84) and says the upcoming comparisons to last year's second quarter will be something to watch but won't change the fundamental dynamics at play.
“We believe that hospitals should be able to put up positive numbers given core strength with incremental benefits as utilization picks up for the exchanges. CYH is the best positioned to take advantage of a ramp in volumes given it has the easiest compares versus its peers,” she wrote.
SEE ALSO: Our post from Friday with additional analyst moves from anlaysts at Leerink, Oppenheimer and Jefferies
Hospital stocks are seeing a lot of action after the Supreme Court ruled Thursday to uphold subsidies for consumers buying health insurance in states using the federal marketplace.
Avondale Partners analyst Paula Torch reiterated her 'market outperform' rating for HCA Holdings and raised the firm's price target to $103 from $90, saying the Supreme Court ruling "clears the runway for the multiple to expand."
Mizuho analyst Sheryl Skolnick has upgraded the stocks of Community Health Systems from 'neutral' to 'buy' and raised her $52 price target all the way to $83.90. On the flip side, CHS was downgraded by Raymond James John Ransom, who dropped the firm's 'outperform' rating to 'market perform.'
Also happening today:
• Leerink analyst Ana Gupta raised her price target for HCA from $95 to $100. She also raised her target for CHS to $70 from $60 and LifePoint Health from $75 to $85.
• Analysts at Oppenheimer raised their price target on HCA to $82 from $60 and CHS to $102 from $87.
• Jefferies analyst Brian Tanquilut raised his price target for HCA to $108 from $95 and CHS to $79 from $75.
Veteran hospital analyst Gary Lieberman at Wells Fargo expects that the Supreme Court's ruling Thursday safeguarding health insurance exchange subsidies will be the last major challenge to the Affordable Care Act. As a result, he has upgraded shares of locals HCA Holdings and Community Health Systems as well as Tenet Healthcare — even though they soared Thursday — to 'outperform' from 'market perform.' Notably, he left intact his lower rating on LifePoint Hospitals. Overall, Lieberman says the hospital sector should now have solid long-term profit prospects.
Analysts at Wunderlich Securities have started covering the shares of newly public local bank holding company Franklin Financial Network and Avenue Financial Holdings. The firm has given Franklin Financial a 'buy' rating and price target of $28 — up from the stock's current level (Ticker: FSB) of about $22 — but stopped at 'hold' for Avenue. The latter (Ticker: AVNU) is seen climbing to $13.50 from the $11.55 at which it closed last Friday.
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