What Are These 2 Stocks Telling Us? – Community Health Systems Inc. (CYH), Embraer S.A. (ERJ)

Community Health Systems Inc. (NYSE: CYH) shares are 84.14% up in the year-to-date (YTD) period and have moved -1.66% or -$0.09 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +137.33% lower. Comparatively, the stock is -28.51% down YTD and 67.40% over the trailing 3-month period. If we look at the shorter duration, its week performance is 8.10% and 8.32% over the month.

Analyst Recommendations

On November 16, 2018, UBS recommended the CYH stock is a Sell, while earlier, Raymond James had Upgrade the stock as a Mkt Perform on February 20, 2020. 12 analysts offering the recommendations for the stock have a consensus rating of 3.20 to suggest that the CYH stock is a “Hold. 4 of the 12 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 1 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $5.34 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $4.06. The forecasts give the Community Health Systems Inc. stock a price target range of $6.00 on the higher side while at least one analyst think the stock could plunge to a low of $2.00. The two limits represent an upside potential of 11.0% or -167.0%.

Earnings Forecast

Analysts estimate the earnings to increase 211.80% in the current quarter to -$0.16, up from the -$0.29 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$1.31, down -13.30% from -$0.89 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.74 and $0.2. Wall Street estimates earnings per share to be at an average of -$1.59 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 26 over the last 12 months, while SEC filings reveal that there have been 9 insider sales over the same period. Insiders have purchases 331,955 shares while those sold by company executives and officers stand at 98,668. The last 3 months have seen insiders trade a total of 0 and 35,248 in purchases and sales respectively.

DINKINS MICHAEL, a Director at the company, bought 2,500 shares worth $10096.0 at $4.04 per share on Mar 09. The Director had earlier sold another 30,000 CYH shares valued at $0.16 million on Aug 03. The shares were sold at $5.17 per share.

Embraer S.A. (NYSE:ERJ), on the other hand, is trading around $5.54 with a market cap of $974.60M and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $6.60 and spell out a more modest performance – a 16.06% return. Some analysts are even forecasting -$2.09 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Embraer S.A. (ERJ) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

ERJ’s operating margin was negative on the trailing 12 months basis, remaining steady at -19.20%, while the operating expenses over the recent quarter were at $359.6 million. This represented a 33.06% of the company’s total revenues which amounted $537.2 million. With this in place, we can see that the company’s diluted EPS declined -$1.71 on the year-over-year period, growing to $0.04 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $10.33 billion from $10.86 billion over the previous quarter. Short term investments amounted to $127.7 million while total current assets were at $6.08 billion. The cash flow from operating activities totaled -$1.09 billion, significantly lower than the -$315.8 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$1.16 billion.

Major holders

Insiders own 12.40% of the company shares, while shares held by institutions stand at 40.20% with a share float percentage of 174.79M. Investors are also buoyed by the number of investors in a company, with Embraer S.A. having a total of 205 institutions that hold shares in the company.