QHC's surged after an Appaloosa stake, but has a long way to go before closing last week's bear gap
As markets soared to another record-setting session, Quorum Health Corp (NYSE:QHC) flew high on news that David Tepper's Appaloosa Management -- which dissolved its position in this tech stock -- took a 2.6% stake in the hospital chain. Specifically, QHC surged 15.3% to close at $5.89 -- and has now recovered almost 43% since hitting an earnings-induced all-time low of $4.12 last Thursday.
The Appaloosa vote of confidence -- which technically occurred in the second quarter, prior to QHC's drop -- is relatively rare for QHC, with 100% of analysts rating QHC a "hold" or worse. In fact, Mizuho last night lowered its price target on QHC to $5.75 from $8.50. Plus,while short interest dropped 21.9% over the previous two reporting periods, it would still take 7.8 days to cover the remaining 1.2 million shorted shares, at QHC's average daily volume.
That skepticism isn't too surprising, though, considering the Quorum Health Corp's (NYSE:QHC) performance. After going public in April, the Community Health Systems (NYSE:CYH) spin-off bounced along support in the $9-$10 region until last week's big-time bear gap, which cut the equity's value in half.
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