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HCA shares fall on news of stock sale

NEW YORK (AP) -- Shares of HCA Holdings Inc. fell Tuesday after the largest U.S. hospital chain said that some of its largest shareholders plan to sell about 32 million shares of its common stock in an underwritten offering.

THE SPARK: HCA said the selling shareholders mainly include affiliates and funds related to private equity firms Bain Capital Partners LLC and Kohlberg Kravis Roberts & Co. HCA isn't selling any of the shares and won't receive any of the proceeds.

THE BIG PICTURE: Nashville, Tenn.-based HCA owns and operates hospitals and a variety of other health care facilities across the country. As of Sept. 30 it ran 162 hospitals and 112 free-standing surgery centers.

The company's shares have risen steadily this year, gaining about 50 percent so far. Last month, it reported a profit of $360 million, or 78 cents per share, reversing a loss in the same period the year before. Revenue increased 11 percent to $8.06 billion.

THE ANALYSIS: Susquehanna Financial Group analyst Chris Rigg backed his "Positive" rating for the company. He said that the two investment firms currently own about 40 percent of HCA's common stock and the sale will reduce their combined holdings to about 33 percent.

Rigg said that while HCA's shares will take a hit as a result of the offering, investors should look at any significant drop as a buying opportunity.

THE SHARES: Down $1.06, or 3.1 percent, to $32.81 in midday trading, after falling as low as $32.52 earlier in the session. Over the past 52 weeks, the company's shares have traded between $19.86 and $34.32.