HCA’s stock price seesaw can’t deter funds

February 01, 2012   Jan Alexander

It’s bloated with debt and faces other hurdles, but hedge funds say it has value.

  Illustration by Edel Rodriguez
After hospital operator HCA Holdings went public at $30 a share in March 2011 in a $3.5 billion offering, hedge funds pounced — and they kept piling on throughout the following months. Eton Park Capital Management, Viking Global Investors, Valinor Management and Alyeska Investment Group were among the funds that bought large stakes.

Their timing was off — HCA’s stock rose as high as $35.24 in early June, only to plunge by 19 percent in one day and continue dropping to less than $18 a share following a disappointing second-quarter earnings report. But since then the Nashville-based company has become a favorite value play among hedge funds, which had increased their bets in HCA by more than 50 percent by the end of third quarter 2011, according to Ian Dogan, CEO of the web site Insider Monkey, which tracks hedge fund holdings. As of...


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