Tenet Healthcare is absolutely loathed by analysts on Wall Street. The current ratings consist of 10 holds, five sells and five strong sells. Not a single analyst that covers THC thinks it is a buy. But Cramer does.
The company owns and operates over 60 hospitals in the U.S., making it an economically impervious stock and a good defensive buy, Cramer said. But it’s even better as a speculative name.
The analysts are worried about liquidity and debt issues, but Cramer thinks Tenet has its bases covered. For one, the company could do an equity offering to pay down its bad debt. Equity offerings are rarely accretive, but Tenet’s would be, Cramer said.
Tenet also just signed up 845 new doctors, which will translate to more business and then better numbers. Additionally, Tenet is under new management with a COO that is actually a doctor. The company’s management had been seriously lacking, Cramer said. This could be the move that gets it back on sound footing.
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