Please ensure Javascript is enabled for purposes of website accessibility

Why HCA Healthcare Stock Is Sinking Today

By Keith Speights - Mar 18, 2020 at 11:43AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another day, another coronavirus-related sell-off.

What happened

Shares of HCA Healthcare (HCA -1.38%) were sinking 17.4% lower as of 11:33 a.m. EDT on Wednesday. The hospital operator didn't report any new developments, but rising worries about the impact of the spread of COVID-19 took a toll on its stock.

So what

There are a couple of ways investors can look at the prospects for HCA in the midst of the COVID-19 pandemic and the related stock market crash. The perspective that's more prevalent right now is obviously a pessimistic one. Investors are afraid the number of cases of COVID-19 could overwhelm HCA's hospitals in the coming weeks.

The exterior of a hospital building.

Image source: Getty Images.

To be sure, this scenario is a real possibility. HCA's hospitals, at least in some areas, might not have enough beds to handle the increased number of patients admitted. The company could run into problems related to the lack of critical equipment, especially ventilators. HCA's staff could themselves be infected with the novel coronavirus, contributing to a shortage of qualified healthcare professionals needed to care for patients.

On the other hand, HCA's admissions rates will likely go through the roof. That's one of the most important lead indicators of the company's financial performance. The Trump administration is considering paying hospitals for treating uninsured patients who are diagnosed with COVID-19, so there's a good chance HCA won't bear any significant financial burden from treating uninsured patients with the pandemic raging on.

Now what

While you might think that healthcare stocks such as HCA might be less impacted by the COVID-19 outbreak than others, that hasn't been the case. But hospitals play such a vital role even when there isn't a pandemic going on that HCA's future still appears to be solid.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

HCA Healthcare, Inc. Stock Quote
HCA Healthcare, Inc.
HCA
$179.82 (-1.38%) $-2.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.