Tenet Healthcare Corporation THC has completed the sale of its unit Aspen Healthcare Ltd. Aspen operates nine healthcare facilities in the United Kingdom and is now owned by NMC Healthcare UK Limited ("NMC"). With this sell-off, Tenet will not be able to operate in the United Kingdom any further.
Aspen's portfolio consists of Cancer Centre London, The Chelmsford, Claremont Private Hospital, The Edinburgh Clinic, Highgate Private Hospital, The Holly Private Hospital, Midland Eye, Nova Healthcare and Parkside Hospital. Tenet has acquired Aspen for a value of £142m from Welsh Carsonin, which comes in at around $214 million in 2015 to expand across the private healthcare market in the U.K.
Tenet has been actively taking some initiatives for the stock's turnaround and this move is one of them. The sale is part of a restructuring program undertaken by the company. It primarily includes disposal of some domestic hospitals along with Tenet's Conifer Health Solutions business. This transaction is expected to enable the company to focus on its core growth areas.
It has been divesting its non-core and unprofitable business units over the past couple of years for repaying debts and maintaining liquidity. Earlier this year, the company divested its Chicago area MacNeal Hospital and a minority interest in North Texas hospitals. One of its key strategies is to sell its hospitals and allocate capital to high-return investments. Divestments of hospital in Philadelphia fetched in about $600 million since the start of 2018. Tenet expects its divestiture program to yield more than $1 billion from the sale proceeds, which would further aid the company to stay focused on its core operations.
The company has also been lowering its long-term debt over the last few quarters. At the end of the second quarter, the debt-equity ratio improved by 1200 basis points from year-end 2017 level.
Shares of this Zacks Rank #3 (Hold) company have skyrocketed nearly 110% in the past year, outperforming its industry
's increase of 40.9%. This solid upside was primarily driven by the company's strong fundamentals like strategic alliances, partnerships, acquisitions along with divestitures of its non-core business units. It has also been able to cut down on/control/curb its cost through an effective plan.
Stocks to Consider
Investors looking for some stocks worth considering from the same industry may check out WellCare Health Plans, Inc. WCG , Anthem, Inc. ANTM and Humana Inc. HUM .
WellCare Health provides managed care services for government-sponsored health care programs. The company currently has a Zacks Rank #2 (Buy) and delivered a positive earnings surprise in all the trailing four quarters with an average beat of 53.89%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Operating as a health benefits company in the United States, Anthem pulled of an impressive earnings surprise of 6.65% over the last four quarters. Currently, it carries a Zacks Rank of 2.
Humana works as a health and well-being company in the United States. It came up with a positive surprise of 3.96%. It currently holds a Zacks Rank of 3.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Humana Inc. (HUM): Free Stock Analysis Report WellCare Health Plans, Inc. (WCG): Free Stock Analysis Report Anthem, Inc. (ANTM): Free Stock Analysis Report Tenet Healthcare Corporation (THC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research