Tenet Healthcare: S&P Intraday Gainer (Update 1)

Updated to include information from Jefferies analyst.

NEW YORK ( TheStreet) -- Tenet Healthcare ( THC) was the best-performing stock in the S&P 500 on Monday morning.

The S&P 500 gained 14.08 points, or 1.01%, to 1,411.19.

Shares of Tenet rose 5.14% to $5.52. In recent news, a lawsuit by Tenet Healthcare against Community Health Systems has been dropped. Tenet Healthcare was fending off a hostile bid from Community Health.

Jefferies analyst Arthur Henderson said that hospital stocks have become more attractive lately. He has a buy rating on Tenet Healthcare with a $6.50 price target.

The U.S. Supreme Court is hearing oral arguments related to Obamacare starting on Monday. If the individual mandate is deemed unconstitutional, Henderson noted that many of these stocks like Tenet Healthcare will likely go down. At best, investors in these stocks should hope that everything remains the same.

Tenet Healthcare has an estimated price-to-earnings ratio for next year of 8.31 times; the average for health care providers is 18.75. For comparison, both Health Net ( HNT) and Amerigroup ( AGP) have higher forward P/Es of 10.18 and 13.21, respectively.

Eleven of the 19 analysts who cover Tenet Healthcare rated it hold. Six analysts gave the stock a buy rating and two rated it sell.

TheStreet Ratings gives Tenet Healthcare a C- grade and a hold rating. The stock has risen 7.8% year to date.

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-- Written by Alexandra Zendrian

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