Tenet Healthcare Corporation (THC)
Healthcare · NYQ · US
Fundamentals
Valuation and ratings
Tenet Healthcare Corporation trades at USD199.20, which is 115% below the USD428.58 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 57 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 10.1 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Tenet Healthcare Corporation
Tenet Healthcare Corporation operates as a diversified healthcare services company in the United States. The company operates through two segments: Hospital Operations and Services, and Ambulatory Care. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; pediatric quaternary care services through heart, liver, and kidney transplants programs; and limb salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging technology, surgical robotic, and telemedicine access services. In addition, it offers a range of procedures and services comprising orthopedics, total joint replacement, and spinal and other musculoskeletal procedures; gastroenterology; pain management; otolaryngology; ophthalmology; and urology. Further, the company operates acute care and specialty hospitals, off-campus emergency departments, imaging centers, urgent care centers, and micro-hospitals, as well as ambulatory surgery centers and surgical hospitals. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.
THC passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
15 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Stephen Mandel, LONE PINE CAPITAL LLC$426.24M · 3.4% of book
- Larry Robbins, GLENVIEW CAPITAL MANAGEMENT, LLC$287.76M · 7.2% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$272.23M · 0.1% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$126.76M · 0.1% of book
- David Einhorn, GREENLIGHT CAPITAL INC$99.45M · 4.9% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Tenet Healthcare Corporation (THC) undervalued?
Against our discounted cash flow estimate of USD428.58, THC at USD199.20 is 115% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own THC?
15 of the institutions we track reported a position in THC in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is THC's P/E ratio?
THC trades at 10.1 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.