Friday, October 18, 2013

US Publicly-Held Hospitals Common Stock Market Prices at 5.17 Times Net Asset Book Values

From a review of SEC filings, I found 15 US Publicly-Held Hospital Organizations with Net Assets or Stockholders' Equity above $100 mil.  One of them Fresenius Medical Care is a German company but with a massive 70% of its Profits generated in the US.  Its North American Corporate HQs is in Waltham, Massachusetts.

Below here is the most recent Total Market Capitalization (Number of Common Shares Outstanding X Market Price Per Share) per the Google Finance website as compared with the most recent Net Assets Book Value for each of them.

What the stock market is saying is that these 15 Hospital stocks in total are trading at an incredibly huge 5.17 times book value of their Net Assets.  Since common stocks trade based on future earnings, this also shows that the astute stock market is signaling that the future earnings of these Publicly-Held Hospitals will be just incredibly robust under the Affordable Care Act.

This is especially the case since when the Affordable Care Act fully kicks in, future Hospital Operating Income will be bolstered by both many of the Uninsured getting insurance and by the many of the Underinsured getting much better insurance.

And for Publicly-Held Hospital Organization operating hospitals in States electing to expand Medicaid, this future Hospital Operating Income will be exceptionally robust.

 Market  Ratio

 Capitalization   Market 

 Above   Capitalization 

Net Assets  to 

State  Market  6-30-13 Book Value Net Asset
Hospital Organization HQs  Capitalization  Net Assets Amount Book Value

mil $s mil $s mil $s

Fresenius Medical Care MA             40,690              9,110             31,580                4.47
HCA TN             21,710             (7,485)             29,195                3.90
DaVita Health Partners CO             12,340              4,282              8,058                2.88
Universal Health Services PA              7,890              3,044              4,846                2.59
Mednax FL              5,430              2,193              3,237                2.48
Tenet Healthcare TX              4,860                 981              3,879                4.95
Community Health Systems TN              4,180              3,022              1,158                1.38
Health Management Associates FL              3,800              1,094              2,706                3.47
Health South AL              3,170                 393              2,777                8.07
LifePoint Hospitals TN              2,330              2,168                 162                1.07
Acadia Healthcare TN              2,020                 451              1,569                4.48
Amsurg TN              1,390              1,043                 347                1.33
Select Medical Holdings PA              1,250                 789                 461                1.58
Hanger TX              1,240                 533                 707                2.33
IPC The Hospitalist Co CA                 891                 286                 605                3.12

Total all 15
          113,191             21,904             91,287                5.17

As you can see from the above chart, these 15 US Publicly-Held Hospital Organizations have a Total Common Stock Market Capitalization of $113.191 bil at the most recent date, $91.287 bil above their Total Net Assets.