Tenet Healthcare Corp (THC): Are Hedge Funds Right About This Stock?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Tenet Healthcare Corp (NYSE:THC) in this article.

Is Tenet Healthcare Corp (NYSE:THC) ready to rally soon? The best stock pickers are in a pessimistic mood. The number of long hedge fund positions decreased by 4 in recent months. Tenet Healthcare Corp (NYSE:THC) was in 44 hedge funds’ portfolios at the end of the third quarter of 2015. There were 48 hedge funds in our database with Tenet Healthcare Corp (NYSE:THC) positions at the end of the previous quarter. At the end of this article, we will also compare Tenet Healthcare Corp (NYSE:THC) to other stocks, including Buffalo Wild Wings (NASDAQ:BWLD), Allegiant Travel Company (NASDAQ:ALGT), and Symetra Financial Corporation (NYSE:SYA) to get a better sense of its popularity.

In today’s marketplace, there are numerous gauges investors have at their disposal to evaluate publicly traded companies. Two of the most innovative gauges are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the top money managers can outperform the market by a solid margin (see the details here).

With all of this in mind, let’s take a peek at the fresh action encompassing Tenet Healthcare Corp (NYSE:THC).

Hedge fund activity in Tenet Healthcare Corp (NYSE:THC)

Heading into Q4, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 8% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Glenview Capital, managed by Larry Robbins, holds the most valuable position in Tenet Healthcare Corp (NYSE:THC). Glenview Capital has a $608.8 million position in the stock, comprising 3% of its 13F portfolio. Coming in second is Visium Asset Management, led by Jacob Gottlieb, holding a $85.2 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions comprise Ross Margolies’ Stelliam Investment Management, and James Dondero’s Highland Capital Management.

Since Tenet Healthcare Corp (NYSE:THC) has witnessed a declination in interest from the smart money, it’s easy to see that there exists a select few funds that slashed their entire stakes by the end of the third quarter. At the top of the heap, Arthur B Cohen and Joseph Healey’s Healthcor Management LP sold off the biggest position of all the hedgies monitored by Insider Monkey, totaling close to $115.2 million in stock, and Christopher James’s Partner Fund Management was right behind this move, as the fund cut about $67 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tenet Healthcare Corp (NYSE:THC) but similarly valued. We will take a look at Buffalo Wild Wings (NASDAQ:BWLD), Allegiant Travel Company (NASDAQ:ALGT), Symetra Financial Corporation (NYSE:SYA), and Assured Guaranty Ltd. (NYSE:AGO). All of these stocks’ market caps are similar to Tenet Healthcare Corp (NYSE:THC)’s market cap.

As you can see, these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $460 million. That figure was $1.18 billion in Tenet Healthcare Corp (NYSE:THC)’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand, Buffalo Wild Wings (NASDAQ:BWLD) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks, Tenet Healthcare Corp (NYSE:THC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.