Hedge Funds Are Buying Tenet Healthcare Corp (THC)

Tenet Healthcare Corp (NYSE:THC) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently.

According to most market participants, hedge funds are assumed to be slow, outdated financial tools of yesteryear. While there are more than 8000 funds trading at present, we look at the elite of this club, close to 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total capital, and by paying attention to their highest performing picks, we have unearthed a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as beneficial, bullish insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are many motivations for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if shareholders understand where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the key action surrounding Tenet Healthcare Corp (NYSE:THC).

How are hedge funds trading Tenet Healthcare Corp (NYSE:THC)?

At Q1’s end, a total of 37 of the hedge funds we track were long in this stock, a change of 32% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly.

According to our comprehensive database, Glenview Capital, managed by Larry Robbins, holds the biggest position in Tenet Healthcare Corp (NYSE:THC). Glenview Capital has a $658.5 million position in the stock, comprising 6.9% of its 13F portfolio. Coming in second is John Griffin of Blue Ridge Capital, with a $100.9 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other peers that hold long positions include Robert Pohly’s Samlyn Capital, Daniel Gold’s QVT Financial and Roberto Mignone’s Bridger Management.

Now, key money managers were breaking ground themselves. Cobalt Capital Management, managed by Wayne Cooperman, initiated the most valuable position in Tenet Healthcare Corp (NYSE:THC). Cobalt Capital Management had 26.8 million invested in the company at the end of the quarter. Keith Meister’s Corvex Capital also made a $21.1 million investment in the stock during the quarter. The other funds with brand new THC positions are Dmitry Balyasny’s Balyasny Asset Management, Van Schreiber’s Bennett Lawrence Management, and Mark Kingdon’s Kingdon Capital.

Insider trading activity in Tenet Healthcare Corp (NYSE:THC)

Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Tenet Healthcare Corp (NYSE:THC) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Tenet Healthcare Corp (NYSE:THC). These stocks are HCA Holdings Inc (NYSE:HCA), LifePoint Hospitals, Inc. (NASDAQ:LPNT), Health Management Associates Inc (NYSE:HMA), Universal Health Services, Inc. (NYSE:UHS), and Community Health Systems (NYSE:CYH). All of these stocks are in the hospitals industry and their market caps are closest to THC’s market cap.