The nurses all knew about the bats. They could hear them scratching inside the walls of the hospital... At Rockledge Regional Medical Center, the bats caused a big problem.
Bats Reveal Why Good Management Matters
By Marc Chaikin, founder, Chaikin Analytics
The nurses all knew about the bats. They could hear them scratching inside the walls of the hospital...
At Rockledge Regional Medical Center, the bats caused a big problem.
With roughly 300 beds, it's the second-biggest hospital along Florida's "Space Coast" region east of Orlando.
By the spring of 2023, its bat problem was out of control.
After a nurse caught a bat clinging to a curtain in the intensive care unit, the hospital had to move the entire unit to a different floor.
It also hired pest control. The company found roughly 3,000 bats living in crawl spaces in the building.
The media got ahold of the story. So Rockledge's management put out a statement...
We are working closely with the Florida Department of Wildlife, Department of Health, the State Epidemiologist, and a pest control company. They have assured us that there is no risk to patients or staff. With their help, we will proceed with mitigation efforts.
The local Fox News channel noted that the hospital would need to hurry...
Bat mating season was about to start. Under Florida law, it's illegal to disturb bats from April 15 to August 16.
In the end, Rockledge spent nearly $1 million to get rid of the bats.
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Mismanagement Across the Board
Later that year, two elevators stopped working. The hospital had to hold off on repairs due to a lack of cash on hand.
In December, some of the hospital's sinks got clogged with black sludge. A patient's granddaughter posted pictures of one of them on Facebook. She also noted that it smelled like sewage.
Rockledge's problems weren't a coincidence. They stemmed from one simple fact...
It was poorly run.
After years of mismanagement, the hospital's parent company – Steward Health Care – was in terrible financial condition.
In fact, it never paid the bill for its bat removal. The pest-control company ended up suing Steward for $1.6 million in unpaid services. That number included $936,320 for its work at Rockledge.
Steward operated about 30 hospitals in eight U.S. states. And they all had problems...
One of the company's other Florida hospitals couldn't get its elevator fixed. The repair company refused to come due to outstanding unpaid bills. Instead of paying up, the hospital hired someone else.
Notably, most of the problems we've discussed didn't put patients' lives at risk. But that's not the case for another one of Steward's hospitals...
In Massachusetts, St. Elizabeth's Medical Center had a bunch of its medical devices repossessed. Last year, a woman died after the hospital didn't have the embolism coil needed to save her life.
And across Steward's system, nurses complained about chronic shortages of basic supplies.
Unfortunately, this story doesn't really have a happy ending...
Steward declared bankruptcy last May. Its 30 hospitals were sold off to a handful of regional hospital systems.
Rockledge Medical Center is set to be demolished. Its new owner says that renovating the hospital would be too costly. Instead, it's going to build a new facility.
Beware of Mismanaged Businesses
Folks, if you're like me, you spend a lot of time looking at charts. And you also pay attention to market trends.
But at the end of the day, those lines on the page represent real companies and real people.
Put simply, good management matters.
Companies that perform well do so because of good decision-making. Don't forget that.
Even a company with a good product can't escape a management team that's determined to make bad decisions. And you always want to be on the lookout for companies that chronically make the wrong choices.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.87%
1
22
7
S&P 500
+0.97%
50
310
144
Nasdaq
+0.68%
6
66
28
Small Caps
+1.18%
144
1232
520
Bonds
+0.71%
Real Estate
+2.21%
0
15
16
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+9.1%
Industrials
+8.17%
Financial
+6.94%
Materials
+6.32%
Utilities
+5.86%
Consumer Staples
+5.38%
Consumer Discretionary
+5.34%
Communication
+5.19%
Real Estate
+4.63%
Health Care
+3.03%
Energy
+1.18%
* * * *
Industry Focus
Mining Services
4
26
4
Over the past 6 months, the Mining subsector (XME) has underperformed the S&P 500 by -7.95%. Its Power Bar ratio which measures future potential is Neutral, with an equal number of Bullish and Bearish stocks. It is currently ranked #4 of 21 subsectors and has moved up 12 slots over the past week.
Indicative Stocks
UEC
Uranium Energy Corp.
LEU
Centrus Energy Corp.
MTRN
Materion Corporation
* * * *
Top Movers
Gainers
CRL
+6.87%
ENPH
+5.13%
SNDK
+4.94%
PLTR
+4.6%
APTV
+4.55%
Losers
HUM
-3.46%
DVA
-2.98%
LUV
-2.41%
META
-2.22%
UNH
-2.07%
* * * *
Earnings Report
Earnings Surprises
GS The Goldman Sachs Group, Inc.
Q1
$14.12
Beat by $1.84
MTB M&T Bank Corporation
Q1
$3.32
Missed by $-0.08
* * * *
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