Should i invest in this stock?

Question

Healthsouth (HLSH)

its at a 52 week low and they just decided to split the stock 1:5
it would be my first stock purchase. theres always a future in healthcare. they just got over a big scandal 2 years ago. Is it bad or good to buy when stocks merge/split like this for every 5 shares you own it will be 1 at 5 x's the price. instead of 4.75 it will go to 23?!?!?

http://quicktake.morningstar.com/Stock/StockReturns.asp?Country=USA&Symbol=HLSH&pgid=qtqnlinkretn



Heres the link to the stocks performance

Answer 1

The answer is no. And here's why.

1) The stock is NOT had a 52 week low. That would be 3.43, not the curent price of 4.75.

2) This stock is pulling back below its 30dMA and did not hold that recent support line.

3) Looking at the fundamentals, this stock performs worse than the sector and industry

4) Technically, it's also performing worse than the sector and the industry.

Perhaps you might consider BAX or HUM instead? Though just be sure they hold their trendlines.

Generally, stay with the trend until it's broken. That's one of the keys to consistently making money!

As for the reverse split. It basically means the stock is soo low, that the company is hoping that by having a reverse split people will think it might be worth more.

Anyways, if you're new to trading, here's some advice.

Your first dollars should be spent on getting educated on investing. You don't have to train to trade them professionally, but we are talking about your future here. So the more you learn, the more it'll help you! So let's start there.

Learning how to invest is a broad question, so be prepared for a pretty long answer. Just take it in chunks!


How to invest depends on what you already know. We'll assume that you're beginning.

A good primer is How to Make Money in Stocks by William O'Neil. You can get it cheap just about anywhere. It’s widely available new or used.

Another good one is one of Jim Cramer's books (he’s got a few).

But books will only get you so far. At some point, you'll also want to get at least a little training. There are some great education companies if you want to make the investment. Investools.com or optionetics.com are both very good companies as is tmitchell.com

For free, you can start by visiting thestreet.com and investopedia.com. That'll get you a pretty good primer so at least you'll understand what the markets are and what a stock is, etc.

If you get a chance, watch Mad Money on CNBC. Don't trade any of his picks until you track many of them over time. Just use the show to get you to understand some basics and get a feel for the market itself.

Next, subscribe to something like Investorsbusiness daily or something like that that can help you identify good stocks.

Once you understand stocks, go to 888options.com. It's a website that'll help you understand options (what they do, how they work, etc). You don't need to trade them, but the more you know, the more you'll see how options can really be the safest way to invest (once you're educated).

For discipline (which is crucial to successful trading), probably Trading in the Zone by Mark Douglas or Mastering the Trade by John Carter

I know that’s a LOT to absorb. Just take it one step at a time for now. Start with a book or two to give you an idea of where to begin. Take your time, and let it seep in.

As you get up to speed, you should papertrade to practice (highly recommended). This should help reduce your losses in the beginning as you get used to buying/selling.

You can practice for free on almost any reputable broker site (optionsxpress, scottrade, thinkorswim, etc).

Start slow, then as you figure things out, you can buy more shares.

Congrats again on getting started. If you have any questions, please let me know.

Hope this helps!

Answer 2

I wouldn't purchase a stock like this. There are several better ones out there (UNH, HUM, any of the major pharma/healthcare stocks).

Also, the chart suggests the stock is due for a pullback to the low 4's or maybe even the middle 3's. Don't buy it, reverse splits are not something to invest in.

Answer 3

Sounds like a REVERSE stock split. So for every 5 shares worth 4.75 each, you'd have 1 share worth 23.75. Reverse splits are not a good sign.

Also, I looked up the stock symbol and came up empty. Don't invest in anything you can't research.

If you want to invest in healthcare, you might be better off with pharmaceutical companies like Merck or Pfizer (I personally own a few shares of Merck).

Answer 4

Healthsouth is a good stock and has had a history of gains. The whole concept is to buy low and sell high. I would buy.

Answer 5

There was a study done with monkeys, kindergardners and stock brokers. kindergardners picked the stocks they knew: Disney, toys'r'us, etc. Stock brokers did it their way. Ststistics, etc. And the monkeys picked stocks by throwing darts at a wall.. long story short.... stock brokers came in last. monkeys second, and kindergardners came in first... Pick stocks you know of and buy products from.

Answer 6

Consider researching your own companies... right here on Yahoo! Finance. I have found some solid performers this way. Go to: http://screen.finance.yahoo.com/stocks.html

Answer 7

never purchase a loser. you buy when stock is on uptrend, remember buy high sell higher.