Tenet Healthcare in Bidding War to Acquire Healthscope

Here's the thing: Tenet currently has a market cap of approximately $2.3 billion so this would be a large takeover bid, comparatively.

Rumors started creeping up on Tuesday that an acquisition offer may be in the works, which sent Tenet's stock price sharply lower -- pushing the stock below key support at $5.

Analyst Expectations: Looking ahead to next quarter's earnings announcement, analysts expect Tenet to earn $0.05 per share, which is 2 cents more than the company made during the same quarter last year.

Robert W. Baird, the last firm to issue a rating on Tenet, downgraded the stock to a "Neutral" rating on June 1 and gave the stock a price target of $5.

Fundamental Analysis: Tenet has a mixed fundamental outlook -- based on the return on equity (ROE) the company is providing and the stock's PEG ratio.

Tenet has an ROE of 44.46. When you compare that to Universal Health Service's ROE of 15.96 -- another stock in the Hospitals industry -- you can see that Tenet is providing a solid return to its owners.

Tenet has a PEG ratio of 2.31 -- which is high compared to the industry average of 1.41. Typically, a PEG ratio less than 1 is a sign the stock price is not overvalued.

Technical Analysis: Tenet has lost 24.48 percent of its value during the past month and is currently trading below its 20-day, 50-day and 200-day moving averages.

Disclosure: Hansen does not own shares of the stocks discussed above. Positions can change without notice.