5 Small-Cap Value Stocks Hedge Funds Love

1. Tenet Healthcare Corp (NYSE:THC)

Number of Hedge Fund Shareholders: 57

Hedge fund ownership of Tenet Healthcare Corp (NYSE:THC) has nearly doubled since the middle of 2020, reaching an all-time high for the stock at the end of Q1, and pushing it to the top of the list of small-cap value stocks that hedge funds love. Larry Robbins’ Glenview Capital and Andreas Halvorsen’s Viking Global own large stakes in THC, consisting of 6.38 million and 2.23 million shares respectively.

Tenet Healthcare Corp (NYSE:THC) was one of several hospital operators that suffered a cyberattack during the second quarter, which impacted the company’s full-year top-line guidance. THC’s cash flow and bottom-line forecasts weren’t affected though. THC’s improving profitability metrics haven’t been reflected in its stock price, which is trading at a forward P/E of just 11.3x, well below its five-year average of 14.1x.

Oakmark Funds shared its thoughts on Tenet Healthcare Corp (NYSE:THC) and the pandemic’s effects on the industry in its Q3 2021 investor letter:

“Tenet may be best known as the second-largest public hospital chain in the U.S., but its largest business is outpatient acute care centers. In early 2020, investors fled the health care industry because of the great uncertainty that the pandemic presented. The early days of the pandemic were very hard on the hospital industry especially, but as the Covid-19 surge peaked and diminished, hospitals were able to schedule elective procedures and engage in profitable activities.”

For more of the latest stock picks worth considering for your portfolio, check out 10 Safe Stocks to Buy Now According to Billionaire Dan Loeb and Billionaire Philippe Laffont is Selling These 10 Stocks.

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