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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Tenet Healthcare Corporation (NYSE:THC) share price is 162% higher than it was three years ago. How nice for those who held the stock! On top of that, the share price is up 69% in about a quarter.
Because Tenet Healthcare made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 3 years Tenet Healthcare saw its revenue shrink by 2.6% per year. So we wouldn't have expected the share price to gain 38% per year, but it has. It's fair to say shareholders are definitely counting on a bright future.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Tenet Healthcare
A Different Perspective
Tenet Healthcare shareholders gained a total return of 5.1% during the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 6% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. It's always interesting to track share price performance over the longer term. But to understand Tenet Healthcare better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Tenet Healthcare you should know about.
Tenet Healthcare is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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