Oppenheimer Positive On Community Health Systems (CYH)

Oppenheimer & Co. is positive on the hospital sector, and in particular, Community Health Systems

. In the research report, Oppenheimer writes, "Operationally, the hospitals continue to perform well. Although volume growth is down from last year due to tough comps, we believe it is actually in line with historical levels. Furthermore, bad debt has remained in check, while cost controls have remained strong. As a result, the hospital group was able to beat Q2:10 Street EPS estimates by an average of 6%." Oppenheimer goes on to say, "In summary, we believe the hospitals are a compelling sector to invest in given a highly favorable reimbursement outlook and a strong acquisition opportunity. Furthermore, valuations remain quite attractive, as TTM FCF yields are averaging 14%, while 2011 PE and EV-EBITDA are 11X and 6X, respectively. As a result, we would be buyers of the group at current prices. Our favorite name continues to be CYH, while we also maintain a favorable disposition toward HMA." Shares of Community Health Systems lost 41 cents or 1.3% yesterday to close at $30.48.