Healthcare Stock Hits 6-Month High on Acquisition Buzz

Sentiment surrounding LHC stock is unusually bullish

Digital Content Manager
Mar 29, 2022 at 9:26 AM
facebook twitter linkedin


A report just came out that UnitedHealth (UNH) will acquire home health-care concern LHC Group, Inc. (NASDAQ:LHCG) in a deal worth $5.4 billion in cash, which works out to $170 per share. LHC will be absorbed into UnitedHealth's Optum health-care services unity. 

The shares of LHC are bounding higher after the report, last seen up 7.3% at $168.70 in premarket trading, and set to open at a six-month high. The equity tested its 200-day moving average during the past couple sessions, after notching just two closes above the trendline since early August. Year-to-date, LHCG is up more than 14%, heading into today, though it's down 19.6% in the last 12 months. 

Options traders are exceptionally bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), a whopping 40 calls have been picked up for every put during the past 10 weeks, culminating in a ratio that stands higher than all other readings from the last year. 

Additionally, the stock's Schaeffer's put/call open interest ratio (SOIR) stands higher than 10% of readings in its annual range, implying short-term options traders have rarely been more call-biased. 

Sentiment is sunny amongst the brokerage bunch, too. All but three of the 12 analysts in coverage consider LHCG a "buy" or better, while the 12-month consensus price target of $170.08 is an 8.2% premium to last night's close. 

On the other hand, short sellers have piled on recently, with short interest up 19.1% in the last reporting period. The 1.42 million shares sold short now make up 4.7% of the stock's current available float, and would take over a week to cover, at its average daily pace of trading. 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners