NEW YORK ( TheStreet) - Shares of Tenet Healthcare ( THC) and Morgan Stanley ( MS) were among the best-performers in the S&P 500 on Monday. The S&P 500 rose 19.4 points, or 1.39%, to 1,416.51.
Shares of Tenet rose 5.52% to $5.54. 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 hospital stocks have gotten 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, the analyst said. Tenet Healthcare shares trade at an estimated price-to-earnings ratio for next year of 8.52 times; the average for health care providers is 18.8X. For comparison, both Health Net ( HNT) and Amerigroup ( AGP) have higher forward P/Es of 10.3X and 13.3X, respectively. Eleven of the 19 analysts who cover Tenet Healthcare rate it at hold. Six analysts give the stock a buy rating and two rate it at sell. TheStreet Ratings gives Tenet Healthcare a C- grade and a hold rating. The stock has risen 7.99% year to date.