How does Tenet keep doing it?

While your editor is anything but an investment pro, I do look at the markets from time to time and consider what they have to say about perceptions of our business. One thing that puzzles me, lately, is the success Tenet is having at keeping its stock price at yearly highs despite the, let us say, challenging period the hospital business is facing.

Take this week: As of Tuesday, Tenet (NYSE: THC) had hit a 52-week high of $6-odd dollars, compared with the 52-week low of $.78 per share. OK, I do know that the market has seen something of a rally since early March, and a rising tide lifts all boats, but why this boat?

Sure, Tenet has done a better job than some companies in the sector keeping its head above water. It reported a first-quarter profit that proved miles better than the same period in 2008, driven by a one-time debt swap gain, as well as higher revenue. That's pretty impressive, especially given that Tenet bankruptcy rumors were being seriously considered by the Street.

In recent times, Tenet has worked admirably hard at turning itself around, building admissions and revenue at a time when that just hasn't been a possibility for many hospital firms. We've heard the usual talk about Tenet's efforts to tighten up its ship internally, and efforts to improve collections. Yawn. To me that's like hearing that a farm is trying to grow more wheat. OK, I get it. What's the secret sauce?

Is it Tenet's apparently effective efforts to cut costs, higher admissions, its $335 million convertible preferred stock offering allowing it to pay down debt and raise its Moody's outlook? Probably some of all of the above, but no one factor explains the Street's fondness for the chain, which still faces some mighty obstacles.

Ultimately, it all comes down to whether Tenet can sustain what it's doing, whatever that is. I for one will be quite interested to learn what comes out of Tenet's November 3 investor call. Color me skeptical that they'll announce anything astounding, but I guess consistent performance speaks for itself.

Folks, do you think Tenet can keep it up? Are there better places to put your money if you're a healthcare investor? And hospital administrators, are you seeing anything on a local market level that would suggest why Tenet's getting ahead? I'm all ears on this one. - Anne