By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $376.00 and a stop-loss of $316.00 (Risk/reward ratio 1:2.5).
HCA Healthcare Inc. (HCA) is a leading healthcare services company in the United States (US) that operates ~185 hospitals, with mostly acute care centres as well as six behavioural hospitals and two rehabilitation hospitals. The company also runs ~125 ambulatory surgery centres, as well as urgent care, rehab, and other outpatient centres that form healthcare networks in many of the communities it serves.
The hospitals operated by HCA provide diagnosis, treatments, consultancy, nursing, surgeries, and other services, as well as medical education, physician resource centre, and training programmes. The company's footprint spans across the US and the United Kingdom (UK), and its hospitals house 49 500 beds, serving millions of patients annually.
Technically, a price in a bullish uptrend presents a promising investment opportunity (see the narrative on the main chart). A developing patten of higher lows and higher highs is a strong technical indicator of an uptrend, supporting our bullish stance. Higher lows indicates that buyers are stepping in at increasingly higher price levels and higher highs suggest growing bullish momentum, particularly as the stock continues to break through previous resistance levels. This highlights investor confidence and suggests that the stock is experiencing sustained accumulation.
A price in the accumulation phase of the Wyckoff price cycle also supports a bullish case for the stock. The stock typically moves sideways (within a range) during this phase. A breakout above the resistance confirms that the accumulation is complete, leading to a markup phase where prices trend higher.
The start of upside price momentum per the MACD indicator, as well as the recent uptick trajectory of the on-balance volume (OBV) indicator, supports our bullish view.
| Share Information | |
|---|---|
| Share Code | HCA |
| Industry | Health Care, Equipment & Service |
| Market Capital (USD) | 82.72 billion |
| One Year Total Return | 7.17% |
| Return Year-to-Date | 10.97% |
| Current Price (USD) | 333 |
| 52 Week High (USD) | 417 |
| 52 Week Low (USD) | 290 |
| Financial Year End | December |
| The stock price is trading below its 200-day, but above its 200-week simple moving average (SMA), which represents a long-term trend and is often seen as a strong support level. | |
| Consensus Expectations (Bloomberg) |
||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 21.96 | 24.91 | 27.83 | 30.82 |
| Growth (%) | 13.41 | 11.74 | 10.75 | |
| Dividend Per Share (USD) | 2.64 | 2.85 | 2.96 | 3.17 |
| Growth (%) | 7.80 | 3.87 | 7.24 | |
| Forward PE (times) | 13.37 | 11.97 | 10.81 | |
| Forward Dividend Yield (%) | 0.85 | 0.89 | 0.95 | |
| Earnings are expected to see double-digit growth in the short-to-medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | FE US - Buy (Continue to hold) |
MPWR US - Buy (Continue to hold) |
CHTR US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 40.63 | 617.57 | 340.26 |
| Current | 43.50 | 651.32 | 358.73 |
| Movement | +7.1% | +5.5% | +5.4% |
|
A developing symmetrical triangle pattern remains of interest. Crossed above its 200-day simple moving average. The start of upside price momentum is supportive.
Our profit target remains at $45.00 with a trailing stop-loss at $42.15. Exit the trade by 30 April 2025. |
A gap in the price remains of interest. Remains sandwiched between its 200-week and 200-day simple moving averages. Upside price momentum that halted is a concern.
Our profit target remains at $788.00 with a trailing stop-loss at $586.00. Exit the trade by 2 April 2025. |
A price in a developing symmetrical triangle pattern remains of interest. Remains just above its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $390.00 with a trailing stop-loss at $335.50. Exit the trade by 30 May 2025. |
| Share Name and Position | STE US (Buy) (Continue to hold) |
DOV US (Buy) (Continue to hold) |
DELL US (Buy) (Continue to hold) |
|---|---|---|---|
| Entry | 217.20 | 194.48 | 111.44 |
| Current | 223.79 | 198.36 | 110.65 |
| Movement | +3.0% | +2.0% | -0.7% |
|
An Elliott wave price that is forming a trough remains of interest. Testing its 200-day simple moving average. Upside price momentum supports the trade strategy.
Our profit target remains at $239.00 with a trailing stop-loss at $215.00. Exit the trade by 18 April 2025. |
Seasonal trends in the price of the stock remains of interest. Remains above its 200-day simple moving average. The start of downside price momentum is a concern.
Our profit target remains at $214.00 with a trailing stop-loss at $190.00. Exit the trade by 9 May 2025. |
The stock appears to be undervalued compared to its peers. Remains just below its 200-day simple moving average. Fading downside price momentum is supportive.
Our profit target remains at $138.00 with a trailing stop-loss at $101.00. Exit the trade by 30 April 2025. |
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