NEW YORK (TheStreet) -- Shares of Tenet Healthcare (THC - Get Report) were gaining 3.6% to $33.94 with heavy trading volume on Tuesday after the hospital operator announced a deal with Duke LifePoint Healthcare to sell its North Carolina hospitals.

The sale includes Tenet's 137-bed Central Carolina Hospital in Sanford, its 355-bed Frye Regional Medical Center in Hickory, and 19 physician practices. Under the terms of the agreement, Duke LifePoint will maintain all services currently provided at the hospitals and offer employment to all employees.

Terms of the deal were not disclosed.

The transaction is expected to close between late in the fourth quarter of 2015 and the middle of the first quarter of 2016.

About 4.5 million shares of Tenet Healthcare were traded by 1:39 p.m. Tuesday, above the company's average trading volume of about 2.7 million shares a day.

TheStreet Ratings team rates TENET HEALTHCARE CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate TENET HEALTHCARE CORP (THC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • THC's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 54.13% to $410.00 million when compared to the same quarter last year. In addition, TENET HEALTHCARE CORP has also vastly surpassed the industry average cash flow growth rate of -3.80%.
  • TENET HEALTHCARE CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($2.11 versus $0.32).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 134.6% when compared to the same quarter one year ago, falling from -$26.00 million to -$61.00 million.
  • The debt-to-equity ratio is very high at 18.37 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 0.75, which illustrates the inability to avoid short-term cash problems.
  • You can view the full analysis from the report here: THC