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What: Shares of National HealthCare
So what: Actually, yes. The license plate read: "TRACKMORGANKEEG." And on CAPS, we've got the number of the analyst that downgraded National HealthCare and sparked the sell-off. According to our supercomputer, Morgan Keegan is one of the better analysts on Wall Street, outperforming more than 91% of the investors we track.
Now what: According to Morgan, National HealthCare is worth about $44 per share, and likely to only pace the market's returns over the next 12 months. As such, the analyst sees no compelling need to buy the stock.
Me, I disagree. I mean, sure, priced at 11 times earnings, and projected to grow at 12% over the next five years, National HealthCare is not the cheapest stock I've ever seen. But it's reasonably priced, and it pays shareholders a 2.5% dividend. NH carries only minimal debt, and its balance sheet is loaded with more than $120 million in cash. I'd say these factors should suffice to help NH outperform the market by a tidy margin going forward.
Long story short, I'm calling B.S. (bullish sentiment) on this downgrade. I think the sell-off is overdone, and investors should give National HealthCare a second look.
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