Tenet's ( THC) spending habits, long the subject of scorn from a group of devoted critics, are coming under fresh attack.

But this time, the naysayers include a noted company bull, and the ire is focused on an outlay that Wall Street often goes out of its way to praise. Tiring of the company's hefty losses and failure to deliver a timely turnaround, Tenet watchers are now questioning the prudence of Tenet's stock-buyback plan.

In a contentious earnings call Wednesday morning, outspoken fund manager Lee Cooperman of Omega Advisors harshly questioned managers at the big hospital chain for spending hundreds of millions of dollars on company stock even as they back away from earnings guidance. Cooperman's comments came as a surprise in part because in the past he has urged the company to buy back stock when it looked cheap. Meanwhile, a pair of analysts challenged Tenet's decision to pour its dwinding cash flow into shares it has clearly overpaid for in the past.

Tenet bulls were evidently unfazed by the developments, pushing the stock up 43 cents to $16.50 Wednesday. But with shares 68% below their year-ago high, Wednesday's session clearly caught the company's attention.

Falling Down

Dominating Wednesday's debate, Cooperman pressed Tenet to either offer some concrete earnings guidance, signaling that execs have a reasonable basis for valuing the stock, or quit throwing money into the market. The manager, whose fund is long Tenet stock, went on to criticize execs for doling out and then quickly abandoning an earnings forecast last December.

Back then, Tenet projected it could earn $2 a share by next year. Since then the company has offered only vague "preliminary" earnings guidance of $1.35 to $1.60 a share for 2003 and none at all for 2004.

Cooperman indicated Wednesday that Tenet has no business spending money on company stock if it has no idea what to expect in return. Instead, he suggested that Tenet consider spending the money on dividends -- so investors can shop around for better investments on their own. Tenet doesn't currently pay a regular dividend.

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