Community Health Systems (NYSE:CYH) is in the spotlight after the ‘American Health Care Act’, which would have replaced Obamacare, failed to muster enough support to bring a vote in the House of Representatives on Friday. Not surprisingly, shares of Community Health Systems (NYSE:CYH), which operates hospitals and outpatient facilities that generally benefit from more healthcare coverage (and Obamacare), rallied 9.66% in the week’s last session. In this article, let’s examine elite fund sentiment toward Community Health Systems (NYSE:CYH) using 13F data and look deeper into the effects that Friday’s events could have on the stock.
What Does The Smart Money Sentiment Say?
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According to our data, sentiment in Community Health has been stable. Of the 742 top funds in our database, 37 were long Community Health Systems (NYSE:CYH) at the end of December, unchanged from that of the previous quarter. Specifically, the top two elite holders, Glenn Russell Dubin‘s Highbridge Capital Management and Brian Taylor‘s Pine River Capital Management both kept their stakes the same quarter over quarter at 10 million and 5.3 million shares, respectively.
Due to Obamacare generally increasing overall expenditures on healthcare and by extension, hospitals and outpatient services, Community Health Systems (NYSE:CYH) benefits from the entitlement program. If President Trump lets Obamacare do what he says in the following tweet, ‘ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE’, Community Health Systems (NYSE:CYH) arguably has more time to right its fundamentals and to sell off assets at presumably higher valuations than before to deleverage. How long Friday’s event buys Community Health Systems (NYSE:CYH) and how well Community Health Systems (NYSE:CYH) management executes, controls costs, and gets top dollar for its planned divested assets will ultimately decide if Community Health Systems (NYSE:CYH)’s rally can continue in the long term. As it stands, some analysts think Community Health Systems (NYSE:CYH)’s high leverage might be one reason why PE funds/Chinese investors haven’t put a bid to take the company private. That being said, the stock is definitely one to watch, particularly since top shareholder Tianqiao Chen and Shanda recently went active according to SEC filings.