What happened
Shares of Community Health Systems (CYH +1.77%) rose as much as 11% in afternoon trading on Monday. Shareholders can thank investment management giant BlackRock (BLK +0.00%) -- the company's second-largest shareholder -- for the jump.
So what
A filing with the Securities and Exchange Commission, released on Friday, showed that BlackRock had recently purchased more than 1 million shares of Community Health's stock. That buying activity has increased BlackRock's ownership position in the troubled hospital operator to about 13%.
This marks the second vote of confidence from a big shareholder since the start of the year. Just a few weeks ago we learned that Shanda Group -- which is Community Health's largest shareholder -- also recently increased its position in the company. All this increased buying activity has led Community Health's share price to rise more than 35% since the start of the year.
Traders are cheering the fact that after crunching the company's numbers, these two large shareholders still like what they see.
Image source: Getty Images.
Now what
Should Foolish investors follow BlackRock and Shanda Group into this company's stock? My view is still a firm no. After all, Community Health is still saddled with a mountain of debt and is expected to post a sizable loss in 2018. That's not a situation that I want any part of.
On the flip side, it is possible that BlackRock and Shanda Group are buying at the bottom, and could make a killing if this company manages to fix its problems. Still, I'm not a fan of investing in situations that require a turnaround for me to make money. That's why I plan on keeping away from this stock.
