Community Health Systems Inc (NYSE:CYH) shares went up more than 15% since last Thursday including today’s unexplained 2.3% gain. Other hospital stocks such as Tenet Healthcare Corp (NYSE:THC) which lost 0.8%, LifePoint Health Inc. (NASDAQ:LPNT) which was up only 0.05%, and HCA Holdings Inc. (NYSE:HCA) which lost 0.3% today didn’t come close to Community Health Systems’ recent gains. We believe we found two explanations.
First Conan Laughlin’s North Tide Capital disclosed today after 4 pm a 3.5 million addition to its Community Health Systems position. North Tide Capital owned 3 million CYH shares at the end of December. Hedge funds sometimes share their large trades with other hedge funds before they disclose the transactions in a regulatory filing. This is purely speculation but North Tide might have done this or the news of North Tide’s large purchase might have leaked. By the way, North Tide completed its 3.5 million share purchase on or before March 17th.
The second explanation has something to do with Community Health Systems’ Quorum Health Corporation (NYSE:QHC) spin-off. Yesterday, Quorum Health Corporation announced a 1.1% increase in adjusted admissions between January 1st and March 21st. This is good news for CYH which reported a 1.5% decline in adjusted admissions in Q4. Community Health Systems shares declined more than 20% on February 16th after reporting disappointing Q4 results. Yesterday’s announcement may mean that Community Health Systems’ other hospitals may be experiencing an increase in admissions too.
Since CYH shares have been increasing for a few days now, we believe large purchases by funds over the last few days explain the recent strength in CYH shares. You can check out the details of North Tide Capital’s filing below:
Ownership Summary Table
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| North Tide Capital Master | 0 | 5,700,000 | 0 | 5,700,000 | 5,700,000 | 5.1% |
| North Tide Capital | 0 | 6,500,000 | 0 | 6,500,000 | 6,500,000 | 5.8% |
| Conan Laughlin | 0 | 6,500,000 | 0 | 6,500,000 | 6,500,000 | 5.8% |
Page 1 of 8 – SEC Filing
| SCHEDULE 13G | ||
| Under the Securities Exchange Act of 1934 | ||
| (Amendment No. )* |
| COMMUNITY HEALTH SYSTEMS, INC. |
| Common Stock, $0.01 par value |
| 203668108 |
| March 17, 2016 |
| (Date of Event which Requires Filing of this Statement) |
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