GEN - Healthcare Services Group: Expensive Valuations And A Hazy Outlook Could Limit Further Appreciation
- Industry-related occupancy challenges and a subdued revenue trend could continue in H1-21.
- HCSG’s collections and cash performance this year have been stellar, the strong cash balance may be needed to meet any potential financial penalties.
- HCSG is looking to resolve the long-standing SEC investigation, and the CFO has taken a temporary leave of absence.
- HCSG’s large client - GEN - continues to cling for dear life with the aid of fiscal stimulus, but there are doubts if this is sustainable; GEN’s long-standing CEO stepped down last month.
- HCSG’s stock valuations are no longer cheap, and there could be some short-term pressure according to the price action on the daily chart; this may open up a suitable window for share buybacks which have been relatively dormant.
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Healthcare Services Group: Expensive Valuations And A Hazy Outlook Could Limit Further Appreciation