UPDATE: Stifel Nicolaus Initiates Healthcare Services Group with Hold, Seeking Better Entry

Stifel Nicolaus initiates its coverage of Healthcare Services Group (NASDAQ: HCSG) with a Hold rating.

Stifel Nicolaus says, "We believe the company will continue to grow its dominant share in the underpenetrated nursing home outsourcing sector. We would prefer an entry point for the shares at $18.75, all else being equal. We expect two drivers to sustain HCSG's growth: its ability to deliver cost savings to its customers, and nursing home administrators' desire to focus on clinical services. We expect solid revenue growth, particularly in HCSG's smaller dietary business where higher revenues should generate margin expansion as the company leverages an underutilized management infrastructure."

HCSG closed at $19.33 on Monday.

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