I’m exiting my position in $CAH (+0.31%) due to underperformance, likely caused by the non-renewal of the OptumRx contract, which ended in July 2024, as well as deteriorating future prospects.
These include an expected slowdown and declines in both EPS and revenue for 2025.
I am replacing it with $THC (+0.4%) to maintain sector balance in my portfolio, as I believe this stock has stronger potential due to its relatively low valuation compared to peers, positive momentum, favorable earnings revisions (14 upgrades versus 2 downgrades), solid future growth prospects, and manageable debt levels.
While it’s not exactly in the same industry—Tenet operates surgery centers, ambulatory facilities, laboratories, and pharmacies—it remains within the broader healthcare sector.
I also see this as a potential "buy-the-dip" opportunity, following a 15% decline this past month after a strong bull run that drove the stock price from $53 to $163 over the course of a year.
I feel that is important to mention that I use Seeking Alpha as my source of information. The analysis than can be found there, the financial information and also the quantitative factors that they give to the stocks, have a significant importance on the decisions I make. In this case, $CAH (+0.31%) had a Strong Buy quant rate when I bought it and now it is classified as a Hold and has been stuck there for months now, meanwhile $THC (+0.4%) has mantained a Buy or Strong Buy rating for the last few months.
