Hospital stocks remained flat despite the Federal Reserve's decision this week to hold interest rates steady for at least another month.
By standing pat, Chair Janet Yellen kept the federal rate at historic low levels of .25% to .5%., a plus for hospitals looking to expand or refinance. Hospitals, especially the not-for-profits, rely heavily on bond debt for financing.
The biggest stock mover of the week was Community Health Systems of Franklin, Tenn., and it was in the negative column. The giant hospital chain made news last Friday when it was reported that the company was exploring a sale of the company or big chunks of it.
On that news, the company's depressed stock price rose 16% on a single day to $12.29 from $10.62 at the previous day's close.
However, CHS, the nation's second-largest, investor-owned hospital company, gradually lost the gains this week. It closed Friday at $10.36. A year ago, it traded for about $40 per share until a dramatic falloff in earnings and stock price beginning last summer on flattening volumes from new insurance exchange patients.
Jefferies & Co. healthcare analyst Brian Tanquilut shared a prevailing opinion among analysts that it will be difficult for CHS to sell all of its 159 hospitals to a single buyer, including Apollo Capital Partners, which is rumored to be looking at such a deal.
Tanquilut said with CHS' $15 billion of long-term debt, a buyout would cost north of $20 billion, with an equity group or syndicate having to put in a very high 30% of equity to finance the deal.
Numerous analyst reports agreed, suppressing investor optimism for the shares.
The Modern Healthcare Hospital Stock Index comprised of nine hospital companies including CHS, Tenet Healthcare, LifePoint Health and Universal Health Services posted no gain for the week, closing at 738.75.
The broader NYSE Healthcare Index and S&P 500 Health Care Index each rose 1%.
