Healthcare Stock Hits 6-Month High on Acquisition Buzz

Sentiment surrounding LHC stock is unusually bullish

Deputy Editor
Mar 29, 2022 at 9:26 AM
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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. 

 




 
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