Post-ruling analysis; Arctic Cat gains coverage

  • Updated: July 7, 2012 - 9:47 PM
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New Arctic Cats at Cities Edge Motorsports in Shakopee

Photo: Kyndell Harkness, Star Tribune

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POST-RULING ANALYSIS

After the historic ruling on the Affordable Care Act by the Supreme Court June 28, analysts got busy adjusting their ratings on stocks they cover. Wells Fargo analyst Gary Lieberman upgraded hospital stocks Community Health Systems (CYH), Tenet Healthcare (THC) and Vanguard Health Systems (VHS) from "market perform" to "outperform." He maintained "outperform" ratings on HCA Holdings Inc. (HCA) and Health Management Associates Inc. (HMA). But he downgraded Universal Health Services to "market perform."

Sheryl Skolnick, senior vice president of CRT Capital Group, told the Star Tribune: Hospital stocks "got an outcome that was shockingly positive.''

UnitedHealth will have some positives and negatives from the new law that will largely cancel each other out. So the overall impact on UNH earnings "will be modest," said Matthew Coffina, senior equity analyst at Morningstar.

ARCTIC GAINS COVERAGE

Arctic Cat and Polaris not only compete over sales of snowmobiles and ATVs but also for coverage from analysts.

Arctic Cat recently picked up analyst coverage from Gerrick Johnson, an analyst with BMO Capital Markets. Johnson covers the leisure industry and already covers Arctic rival Polaris Industries. Johnson initiated coverage on ACAT, June 29, with an "outperform" rating.

"We believe ACAT benefits from an improving economy, a robust recreational vehicle market, and the introduction of dynamic new products."

Arctic Cat now has regular coverage from seven analysts while Polaris has coverage from 11. Polaris also nudges out Arctic Cat with the better ratings. As of Monday Polaris had a consensus analyst rating of 4.83 (on a 1 to 5 scale) with Arctic Cat at 4.71.

PATRICK KENNEDY

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