Quorum Health Corp (NYSE:QHC)

Quorum Health Corp (NYSE:QHC) Turnaround Gains Momentum

Quorum Health Corp (NYSE:QHC)

Quorum Health Corp (NYSE:QHC) has reached an agreement with UPMC Susquehanna for the sale of two Pennsylvania hospitals. The transaction builds on a similar agreement signed last month for the divestiture of two hospitals in Tennessee.

Quorum Health Divestiture Spree

UPMC Susquehanna plans to expand its portfolio with the acquisition of Quorum Health’s 70-bed Sunbury Community Hospital. The 47-bed Lock Haven Hospital will also join the company’s network as part of the transaction. The divestiture should close by September 30, 2017.

The sale of the two hospitals does not come as a surprise. Quorum Health Corp (NYSE:QHC) has resorted to acquiring and divesting hospitals as part of its turnaround plan. Last month it signed a definitive agreement with SSH Tennessee LLC for the sale of 45-bed Henderson County Community Hospital in Tennessee and 45-bed McKenzie Regional Hospital. The transaction, subject to customary regulatory approvals, is set to close in August.

The divestiture spree has not affected Quorum Health Systems sentiments among institutional investors. Sixty-three institutional holders have increased the positions in the stock over the past three months. The stock has attracted 19 new institutional investments totaling 1.7 million shares.

Insider trades are also building up as a further indication that the management team’s actions are bolstering the company’s long-term prospects. Regulatory filings indicate that senior vice president and chief medical officer Koury Shaheed acquired 8,500 shares of the company’s stock valued at $30, 260

Chief Executive Officer, Miller Thomas Daniel, strengthened his stake in the company with the acquisition of 185,600 shares valued at $527,250.

Healthcare Reform Sparks Concern

Quorum Health Corp (NYSE:QHC) faces uncertainty as talk of healthcare reform continues to gain momentum. The company’s turnaround plan could come under pressure depending on the breadth and depth of the expected reforms.

The company’s performance is tied to eight hospitals – all of which have ties to Medicaid. The Trump administration is proposing a reduction in Medicaid funding that could reach $800 million. Height Securities analysts, Shrey Verma, believes the proposed cuts could significantly hurt Quorum Health Systems payment streams.

“With the exception of two hospitals, we find that QHC’s top hospitals have significant exposure to the Medicaid program such that changes envisaged under the House-passed American Health Care Act (AHCA) could strain payment streams from Medicaid,” Verma in a statement .

Quorum Health Corp (NYSE:QHC) stock was down by 1.03% in Thursday’s trading session to end the day at $3.83 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Ardelyx Inc. (NASDAQ:ARDX)

Quorum Health Corporation (NYSE:QHC) Reports Net Loss Of (-$90.7) Million

Quorum Health Corporation (NYSE:QHC)

Quorum Health Corporation (NYSE:QHC) has announced its financial results for the last quarter as well as full year ended December 31, 2016. The company reported net revenue of $515.2 million in Q4 of the 2016 financial year. This represents a 7.7% drop compared to the $558.2 million that was reported during the same period for the previous financial year. Net revenue from the company’s two hospitals amounted to $4.7 million for the Q4 of the 2016 financial year compared to the $12.7 million reported in same period of the 2016 financial year.

In Q4, Quorum Health Corporation (NYSE:QHC) reported a net loss of -$90.7 million or -$3.19 per share. This is compared to the -$0.6 million or -$0.2 per share reported in Q2 of the 2015 financial year.

The company reported $30.7 million in Adjusted EBITDA in Q4 of the 2016 financial year compared to $77.7 million that was reported during the same period of the previous financial year. The company sold off two hospitals in 2016. The proceeds of $13.7 million were used to service debt. There was a $9.1 million decline in the company’s EBITDA during Q4 of 2016 compared to the $1.1 during the same period of the previous financial year. Consequently, the company’s Adjusted EBITDA, adjusted for divestitures, amounted to $39.8 million in Q4 of 2016 compared to the $78.8 that was reported in Q4 of 2015.

Quorum Health Corporation (NYSE:QHC) reported $2,138.5 million in net operating revenue during the 2016 financial year compared to the $2,187.3 million that was reported in the previous financial year. The represents a 2.2% decrease. Net operating revenue from the hospitals that were divested in 2016 amounted to $43.6 million in the 2016 financial year compared to the $54.8 million that was reported in the previous financial year. For the full 2016 financial year, the company reported a net loss of -$347.7 or -$12.24 compared to the net income of $1.3 million or $0.05 per share that was reported in the 2015 financial year.

Quorum Health Corporation (NYSE:QHC) reported $162.9 million in Adjusted EBITDA for the 2016 financial year compared to the 263.7 million that was reported in the 2015 financial year. The two hospitals that were sold in 2016 caused a $18.9 million decrease in EBITDA compared to a decrease of $5.4 million in EBITDA during the 2015 financial year. Consequently, Adjusted EBITDA, adjusted for divestitures, amounted to $181.9 in the 2016 financial year compared to $269.0 million for the 2015 financial year.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.