Tenet Healthcare Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of hospital operator Tenet Healthcare (NYSE: THC  ) jumped as much as 12.4% on rather average trading volume.

So what: Last week, the American College of Cardiology reported that Medicare and Medicaid will make it harder to get approval for cardiac care, spinal fusion, and joint replacements in several states, and health-care stocks fell like flies. Today, Goldman Sachs says that the fears of denied Medicare claims by the boatload are overdone, and the stocks are bouncing back with a vengeance: Health Management Associates (NYSE: HMA  ) jumped as much as 11.3%, HCA (NYSE: HCA  ) gained 7% at most, and Community Health Systems (NYSE: CYH  ) enjoyed a 5.7% bounce.

Now what: So Goldman tells you not to worry about the more onerous approval procedures, while Wells Fargo thinks we'll see significantly fewer treatments approved, "because hospitals will begin making sure that every patient meets the coverage criteria." I'm inclined to agree with Goldman here, because hospitals already look over insurance criteria with a very jaundiced eye. So, not much has changed and this adjustment simply puts hospital-chain share prices back where they belong.

Interested in more info about Tenet Healthcare? Click here to add it to My Watchlist.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1736137, ~/Articles/ArticleHandler.aspx, 11/23/2014 12:38:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement