Hospital Stocks Jump After Bullish UBS Note

[Stocks-to-Watch]

Hospital stocks were climbing today after UBS hiked its view on the sector today to a Buy, citing the potential for reduced Medicaid pricing pressure over the next two years.

The firm boosted its ratings on Health Management Associates (HMA), LifePoint Hospitals (LPNT), Tenet Healthcare (THC) and Community Health Systems (CYH) to Buy from Neutral. According to the research note, eight million Americans lost commercial insurance coverage during the last several years (corporate layoffs robbed workers of employer benefits), with many shifting to Medicaid, which pays hospitals less for their services. UBS says the payor mix for hospitals is improving thanks to stabilizing enrollment in commercial insurance plans. Also, patient volumes face easy comps in 2011.

Shares of Health Management climbed 45 cents a share, or 4.7%, to $10 a share, while LifePoint gained $1.71 a shares, or 4.6%, to hit $39.14 a share. Tenet rose 13 cents a share, or roughly 2%, to $7.20 a share. And Community Health traded at $41.37 a share, a 3.25%, a $1.42 gain.



Original Article Source by Barrons.com