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Ornda Is On The Examining Table

Inside Wall Street


Don't count hospitals out of the current mergers-and-acquisitions rage. Hospital-management stocks have been in full recovery this year, and the biggies in the group--Columbia/HCA Healthcare and Tenet Healthcare--have been on the prowl. The third-largest publicly traded hospital-management company, OrNda (ORND), pronounced Orinda, will likely be the next target of either Columbia/HCA or Tenet. So say some buyout pros who have been buying into OrNda, which provides inpatient and outpatient services at its 47 hospitals in 14 states.

OrNda stock had been on the rise--from 151/4 in early June to 21 on Sept. 5--partly because of prospects of a buyout, says a New York money manager. He says Columbia/HCA and Tenet are interested in OrNda's networks in Arizona, Southern California, Southeastern Florida, Texas, and Nevada.

OrNda "has the best operating management in the industry," says one investment banker, who finds it "the most undervalued--and still under-appreciated stock in the group." In a buyout, he puts OrNda's worth at 30.

He notes that the company has been growing fast, mainly through acquisitions, since emerging from bankruptcy proceedings in 1990. Analysts see OrNda making $1.50 a share this year and $1.75 next, vs. a loss of $1.29 last year. OrNda officials weren't available for comment.BY GENE G. MARCIAL

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