NHC - National Healthcare Corporation: Finally Some Upside! - Hold For Further Valuation Growth

2024-02-15 11:20:10 ET

Summary

• National Healthcare Corporation stock has risen by over 75% on a total return basis since my last note in May 2020 - the majority occurring in the past few months.
• NHC has historically seen growth in revenues but a decline in operating income, which is a concerning sign for investors.
• The company's valuation based on price-to-sales ratio appears low, but its price-to-earnings ratio is high, indicating potential overvaluation.
• After an uplisting to the SmallCap 600, NHC stock has been buoyant, and amid market dynamics both positive and negative, growth opportunities are in play for top and bottom lines.
• As such, I favour a bullish outlook for the company's stock, which finally has some momentum. Q4 2023 earnings are due out on or around February 22 and I anticipate a positive outlook for 2024, even if NHC traditionally struggles for growth.

Investment Overview

I last covered National Healthcare Corporation ( NHC ), the Murfreesboro, Tennessee-based provider of senior health care services, in a note for Seeking Alpha back in May 2020 - nearly four years ago.

At that time, National Healthcare stock had fallen to what I considered to be an artificial low, of ~$60 per share, down from an (at that time) all-time high price of ~$86 per share....

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