HCA (NYSE: HCA) COO Jon Foster sells 76.0% of his directly held shares

What happened

HCA Healthcare, Inc. (NYSE: HCA) COO Jon M. Foster sold 31,713 shares on Nov. 4 and Nov. 6, leaving 10,000 held directly.

The sale equals 76.0% of the 41,713 shares Foster held directly before the trade, by OptimistFi's calculation. The sales totaled $15.89 million.

The Nov. 4 sale was priced at a weighted average $514.07. On Nov. 6, the rest went in seven lots at weighted average prices from $491.98 to $498.97.

The Form 4 also reports that on Nov. 4 Foster exercised stock appreciation rights on 35,880 shares at a $145.24 exercise price. The rights vested in four equal annual installments beginning Jan. 29, 2021, and carried an expiration date of Jan. 29, 2030. In the same table, 20,309 shares were disposed of at $510.70 under transaction code F.

Separately, Foster transferred 16,142 shares from a trust to direct ownership on Nov. 4 in exchange for assets of equal value. The filing says the transfer did not change the total number of shares Foster may be deemed to own beneficially.

Key numbers

Metric Latest Change Source
Shares sold 31,713 shares SEC Form 4
Total sale value $15.89 million SEC Form 4
Weighted average sale prices $491.98 to $514.07 per share SEC Form 4
Shares held directly after the sale 10,000 shares SEC Form 4
Share of direct holding sold 76.0% Calculated from SEC Form 4

Read more: HCA Healthcare (HCA) company research

Why it matters

The sale leaves Foster's direct holding much smaller, though other HCA shares sit in trusts. The filing lists 72,308 shares in the LCF Trust, with Foster as trustee, and further shares in four other trusts.

OptimistFi has argued that HCA turns its hospital network into free cash flow that funds buybacks and dividends, but is exposed to reimbursement and interest-rate risks because of high leverage. A share sale by one executive does not test that cash engine. The same filing's rights exercise and trust transfer make it harder to read the sale as a signal on operations.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

What's next

HCA's next quarterly report is the next scheduled check on the cash flow, buyback and leverage points in OptimistFi's case. Weaker free cash flow or rising debt costs there would weaken the case, while steady cash conversion would support it.

More from OptimistFi

From OptimistFi Perps

Sources

Explore OptimistFi research on HCA Healthcare, Inc.: https://optimistfi.com/stocks/HCA

Browse HCA Healthcare, Inc. company coverage and explore the OptimistFi Thesis-Break Engine.

Browse every company OptimistFi covers at optimistfi.com/stocks, or read the latest evidence-first research.

Find available research on the HCA Healthcare, Inc. company page.

Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.