Small Cap Network Blog

We made a stock pick of Tenet Healthcare (THC) several months ago, expecting the very thing we saw….smaller losses, and eventually, a return to profitability. Well, Tenet did their job - they lost only $15 million last quarter, or 3 cents per share. In the same quarter a year ago they lost 6 cents per share. Yet, the stock took a pretty hard hit, sinking from $6.23 to the current price of $5.49.

Actually, I know what it was….analysts were looking for a loss of only 1 cent per share. God forbid you don’t meet analyst’s expectations; clearly they know everything. (Yes, I’m being a smart-%$#*)

Whatever. This was never a trade. This was an investment, and we’re looking out the next several months…not the next few days. These cases where investors ‘buy the rumor and sell the news’ are best just ridden out, since they’re usually temporary.

Those same analysts are still expecting earnings of 1 cent per share for 2008, and 10 cents per share in 2009. They still don’t have a lot of credibility in my book, but if they’re anywhere close it’ll be a huge turn-around for Tenet. That was the whole point of tapping into the chart, which by the way, is still up by 34% from where we got in late last year.

So, we’re not flinching here. The uptrend is still technically intact, and this volatility is nothing new. Let’s stand pat.

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