DaVita Healthcare Partners: S&P 500’s Top Gainer on October 16



Top gainers

The S&P 500’s top gainers on October 16 were:

  • DaVita Healthcare Partners (DVA) rose 4.0%.
  • Freeport-McMoRan (FCX) rose 3.5%.
  • Wynn Resorts (WYNN) rose 3.2%.
  • Noble Energy (NBL) rose 2.8%.
  • Apache (APA) rose 2.7%.
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DaVita Healthcare Partners

DaVita Healthcare Partners, one of the largest kidney care companies in the US, was the S&P 500’s top gainer on October 16, 2017. DaVita rose on Monday when management released additional information about the charitable premium assistance program’s income exposure.

In recent months, the market sentiment on DaVita was weak due to questions about the AKF (American Kidney Fund), exposure to operating income from charitable premium assistance, and high premiums that DaVita receives for some of its services. On Monday, the stock rose as management answered these questions.

On October 10, DaVita announced that ~4,000 patients were receiving charitable premium assistance for commercial group coverage. It accounts for $450 million of DaVita’s expected annual operating income. Following the report, using the disclosures from the company, JPMorgan Chase analyst Gary Taylor cut DaVita’s rating to “underweight” and lowered the target price from $66 to $51 per share. He also added that more than 60% of DaVita’s profit is from AKF-subsidized patients.

DaVita released a statement on Monday stating lower exposure to its income from the charitable premium assistance program. DaVita said that in the case of eliminating the charitable premium assistance program, the annual operating income would be impacted by $100 million–$250 million.

On October 16, DaVita Healthcare Partners rose 4.02% and closed the day at $56.93—the highest intraday close in ten days.

In the next part of this series, we’ll discuss the S&P 500’s top losers on October 16.


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