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While investors around the world have been dumping stocks the past few days, HealthSouth Corporation (NYSE: HLS), the restructured rehabilitation company, reported one heck of a quarter. The company now expects to generate 2007 EBITDA of $300 and analysts are forecasting 2008 EBITDA of $360 million. Interest expense is estimated to come in at $200 million, maintenance capex of $30 million, leaving $120 million to $130 million for debt reduction and fund growth.
More importantly in today's tight credit market, the company was able to lock in all of its debt expense on low-cost, fixed-rate terms -- before the recently brutal change in the credit markets.
New HealthSouth management joined the company in 2004 and the fruits of their labor are just paying off. This is one gem of a turnaround investors should bottom fish on during this market correction.
Leerink Swann & Company, an investment banking firm specializing in the healthcare sector, reiterated its $27 price target on this $17 stock this morning.
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