Tenet Healthcare has undergone a major turnaround effort since late 2017, following an acquisition strategy that left it facing operating inefficiencies and a debt-heavy balance sheet. In recent years, Tenet’s new leadership has improved management practices, pruned its asset portfolio through hospital divestitures, and embarked on a restructuring effort. Operationally, Tenet is expanding high-acuity service lines in outpatient settings, improving operating efficiency inside and outside healthcare facilities, and increasing focus on service quality. All of these factors appear to be positively impacting ROICs at Tenet, which began to exceed its weighted average cost of capital in 2017, according to our calculations, for the first time since The Vanguard Group’s acquisition in 2013. We appreciate these trends. We also like the firm’s increasing focus on the high-margin ambulatory surgery business and believe Tenet is on track to meet its goal of opening 575-600 ambulatory surgery centers by the end of 2025.