Sadly,Tenet’s cash cushion doesn’t seem to impress

by Anne Zieger on September 12, 2010

Hospitals with top cash cushions

Tenet may have cash, but will the Street give it props?

As HEALTHCAREiX’s readers know, last week I made not very gentle fun of Tenet Healthcare Corp.’s leadership — specifically, the manner in which they were shoved aside in their efforts to buy an Aussie hospital chain. (OK, yeah, that *was* a bit mean, no?)

Now, what should pop up this week but news suggesting that hey, guys, I’m being way too hard on Tenet (THC). According to a report by stock analyst My Smart Trend, Tenet actually seems to be doing fine when it comes to cash.  In fact, Tenet ranks #1 in Cash Equivalents among healthcare facility operators – for non-number-types, the “cash cushion” — with $713 million on hand at the present time.

Tenet is followed by Community Health, with $548.75 million, Health Management Associates with $243.03 million, LifePoint Hospitals with $199.7 million and VCA Antech with a $193.76 million cushion.

That being said, Smart Trend still isn’t a Tenet fan. The firm advised its subscribers to sell on May 21, when the stock hit $5.25 per share. It closed at $4.45 per share on Friday 9/10.

Why would that be?

Well, first, let’s be clear that I’m NOT a financial analyst, just a peanut gallery member whose job it is, at times, to find the chinks in companies’ armor.  So I can’t say what’s pushing down Tenet’s stock.

On the whole Tenet seems to be doing a great job at improving efficiencies and lowering its debt load. In fact, it just completed a cash tender offer for 7.375 percent senior notes due 2013, three years ahead.  That, one hopes, lowers its overall interest load a tad at least.

All I know is that for a company that’s come such a long way away from near insolvency, those execs deserve some credit.  Tenet heads may make some headway next week, when they speak at the Morgan Stanley Global Healthcare Conference.  But at the moment, despite some real progress, it seems they can’t catch a (big) break.

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