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LifePoint, Community Health announce programs to buy back more stock

The Tennessean, September 17, 2010

A pair of Nashville-area hospital operators on Thursday announced new programs to buy back more of their common stock, moves that analysts say are intended to boost confidence among investors.

LifePoint Hospitals Inc. said it plans to buy back up to $150 million of its stock over the next 18 months. Community Health Systems followed with news of its own plans to buy back up to 4 million shares of common stock.

"It sends a message to investors that these companies feel good about their prospects and think that their valuations are very low and that it's a very attractive investment — a good use of their capital," said Frank Morgan, an analyst at RBC Capital Markets in Brentwood.

LifePoint's stock price fell nearly 5 percent in trading Thursday to close at $34.90 per share, down $1.79 on the day. That was a pullback from Wednesday's 10.6 percent gain — LifePoint's biggest gain in 16 months to its highest stock price since May — on speculation of a leveraged buyout that surrounded the company but hasn't materialized.

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