We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Tenet Healthcare (THC) Stock
Read MoreHide Full Article
Tenet Healthcare Corporation (THC - Free Report) is poised well for growth on the back of its strategic initiatives and cost-curbing measures.
Like other hospital companies, Tenet Healthcare suffered muted business volumes in March and April due to the COVID-19 pandemic.
The company is well-poised for progress, evident from its favorable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
However, it is now better-placed to weather the business loss.
The company has been gaining traction from its operational efficiency and lower expenses. Tenet Healthcare started witnessing a rebound in elective procedures during May and June after substantial declines in the same during April.
In this context, the company’s cost-cutting methods are noteworthy. In response to the present scenario, the company furloughed employees. It also planned a reduction in supply, inventory and other purchased services.
The company’s cost-management program comprised primarily headcount cuts and the renegotiation of contracts with suppliers and vendors. Tenet Healthcare managed to save $300 million of costs by the end of 2019. In the first six months of 2020, operating expenses were down 5% year over year.
The hospital company boasts a strong inorganic growth story. It made multiple acquisitions, partnerships and strategic alliances, aimed primarily at boosting the scale of its business, operating capacity and geographical expansion. In 2019, it acquired 10 outpatient businesses (all of which are owned by USPI) and various physician practices for $25 million. Earlier, it constantly partnered with biggies like Cigna, Humana, Aetna, etc.
Tenet Healthcare remains focused on divesting its non-core and unprofitable business units to repay its debt and boost its solvency position. A number of divestitures made in the past three years have not only streamlined its operations but also generated funds to pay down debt. The company’s strategic priorities include completing its hospital divestitures and allocating capital to higher return investments across the capital structure. The company’s spin-off of its Conifer business into an independent publicly-traded company is expected to close by the end of 2021. These divestitures will help Tenet Healthcare focus on its core operations by enhancing its business rejig.
However, Tenet Healthcare withdrew its initial guidance for the full year due to the coronavirus effect on its business. This is a concern for investors.
The company's 2020 earnings estimate is pegged at $3.97, implying a 48.1% rise from the year-ago reported figure.
Price Performance
Shares of this company have gained 26.1% in a year’s time, outperforming the industry’s increase of 0.8%.
Other companies in the same space, such as Community Health Systems Inc. (CYH - Free Report) , HCA Healthcare Inc. (HCA - Free Report) and Acadia Healthcare Company Inc. (ACHC - Free Report) have also rallied 12.5%, 9.7% and 13.1%, respectively, in the same time frame. All the companies currently have the same Zacks Rank as Tenet Healthcare.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Here's Why You Should Retain Tenet Healthcare (THC) Stock
Tenet Healthcare Corporation (THC - Free Report) is poised well for growth on the back of its strategic initiatives and cost-curbing measures.
Like other hospital companies, Tenet Healthcare suffered muted business volumes in March and April due to the COVID-19 pandemic.
The company is well-poised for progress, evident from its favorable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
However, it is now better-placed to weather the business loss.
Here we discuss the reasons for retaining this currently Zacks Rank #3 (Hold) company in the investment portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company has been gaining traction from its operational efficiency and lower expenses. Tenet Healthcare started witnessing a rebound in elective procedures during May and June after substantial declines in the same during April.
In this context, the company’s cost-cutting methods are noteworthy. In response to the present scenario, the company furloughed employees. It also planned a reduction in supply, inventory and other purchased services.
The company’s cost-management program comprised primarily headcount cuts and the renegotiation of contracts with suppliers and vendors. Tenet Healthcare managed to save $300 million of costs by the end of 2019. In the first six months of 2020, operating expenses were down 5% year over year.
The hospital company boasts a strong inorganic growth story. It made multiple acquisitions, partnerships and strategic alliances, aimed primarily at boosting the scale of its business, operating capacity and geographical expansion. In 2019, it acquired 10 outpatient businesses (all of which are owned by USPI) and various physician practices for $25 million. Earlier, it constantly partnered with biggies like Cigna, Humana, Aetna, etc.
Tenet Healthcare remains focused on divesting its non-core and unprofitable business units to repay its debt and boost its solvency position. A number of divestitures made in the past three years have not only streamlined its operations but also generated funds to pay down debt. The company’s strategic priorities include completing its hospital divestitures and allocating capital to higher return investments across the capital structure. The company’s spin-off of its Conifer business into an independent publicly-traded company is expected to close by the end of 2021. These divestitures will help Tenet Healthcare focus on its core operations by enhancing its business rejig.
However, Tenet Healthcare withdrew its initial guidance for the full year due to the coronavirus effect on its business. This is a concern for investors.
The company's 2020 earnings estimate is pegged at $3.97, implying a 48.1% rise from the year-ago reported figure.
Price Performance
Shares of this company have gained 26.1% in a year’s time, outperforming the industry’s increase of 0.8%.
Other companies in the same space, such as Community Health Systems Inc. (CYH - Free Report) , HCA Healthcare Inc. (HCA - Free Report) and Acadia Healthcare Company Inc. (ACHC - Free Report) have also rallied 12.5%, 9.7% and 13.1%, respectively, in the same time frame. All the companies currently have the same Zacks Rank as Tenet Healthcare.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>