Tenet Healthcare (THC) had an impressive earnings call recently where they highlighted planned improvements and how their strategy is gaining traction. Its share price, after declining drastically the last few years, is beginning to reverse higher. With fundamental strength leading to share price gains, the trend looks sustainable. I am buying stock in this beaten down name as investor optimism returns.
Price Action
As the company's bottom-line suffered the last few years, its share price has fallen from nearly $60 to under $20. After trading down to roughly 2009 financial crisis levels, its turnaround in operations is leading to explosive price moves higher, as was seen following the earnings call. Although its share price is up roughly 100% on the year, it is still down 50% from its 2015 highs.
The recent price breakout above $25 was significant as it had acted as resistance the last few years. I am buying stock in the name as the company's share price is trending higher amid strengthening fundamental operations, which should create a sustainable trend going forward.
