Stock To Watch: Tenet Healthcare (THC) In Perilous Reversal
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Tenet Healthcare as such a stock due to the following factors:
- THC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $111.3 million.
- THC has traded 208,898 shares today.
- THC is down 3% today.
- THC was up 6.2% yesterday.
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More details on THC:
Tenet Healthcare Corporation, an investor-owned health care services company, primarily operates acute care hospitals and related health care facilities in the United States. THC has a PE ratio of 138.4. Currently there are 11 analysts that rate Tenet Healthcare a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Tenet Healthcare has been 1.8 million shares per day over the past 30 days. Tenet Healthcare has a market cap of $4.6 billion and is part of the health care sector and health services industry. The stock has a beta of 1.42 and a short float of 10.9% with 3.90 days to cover. Shares are down 1.3% year-to-date as of the close of trading on Wednesday.
Analysis:
rates Tenet Healthcare as a
. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- TENET HEALTHCARE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TENET HEALTHCARE CORP turned its bottom line around by earning $0.32 versus -$1.20 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $0.32).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 354.2% when compared to the same quarter one year prior, rising from -$24.00 million to $61.00 million.
- Net operating cash flow has decreased to $219.00 million or 14.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 18.14 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, THC maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
- You can view the full Tenet Healthcare Ratings Report.
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