NEW BULLISH Plays
Team Health Holdings - TMH - close: 45.12 change: +0.92
Stop Loss: 42.90
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on January -- at $---.--
Listed on January 09, 2016
Time Frame: Exit PRIOR to earnings in early February
Average Daily Volume = 875 thousand
New Positions: Yes, see below
Tonight we are adding TMH as a relative strength play. Really? A relative strength play for a stock that lost -23.7% in 2015 and is down -35% from its 52-week high? The answer is yes.
TMH is in the services sector. According to the company,
"At TeamHealth, our purpose is to perfect our physicians' ability to practice medicine, every day, in everything we do. Through our more than 16,000 affiliated physicians and advanced practice clinicians, TeamHealth offers outsourced emergency medicine, hospital medicine, anesthesia, orthopaedic hospitalist, acute care surgery, obstetrics and gynecology hospitalist, urgent care, post-acute care and medical call center solutions to approximately 3,400 civilian and military hospitals, clinics, and physician groups and post-acute care facilities nationwide. Our philosophy is as simple as our goal is singular: we believe better experiences for physicians lead to better outcomes-for patients, hospital partners and physicians alike."
TMH definitely made some headlines in the last quarter of 2015. On October 20th shares of TMH surged on an unsolicited $5 billion buyout offer from AmSurg (AMSG). TMH management rejected the offer. On November 2nd AMSG tried again and raised the cash portion of the cash and stock offer. TMH said no again. Then on November 23rd TMH announced they had completed their acquisition of IPC Healthcare Inc., a national acute hospitalist and post-acute provider organization.
TMH did not have a good second half in 2015. The stock peaked near $70 in August and the correction accelerated in December. Finally TMH found support in mid December around the $43-45 zone. TMH briefly pierced support at the bottom of this trading range on January 4th when stocks started 2016 with a loss. The U.S. market went on to produce its worst first five days of the year on record. Yet TMH shares did not participate. The stock continued to consolidate sideways, building support (the relative strength I was referring to).
It looks like traders started to notice that TMH was not breaking down any further. The stock started to see stronger volume as it bounced toward the top of its trading range. Today we see shares of TMH breakout past resistance at $45.00 and its 20-dma. If the broader market does bounce TMH could accelerate higher. Today's intraday high was $45.44. We are suggesting a trigger to launch bullish positions at $45.55. We will plan on exiting prior to TMH's earnings report in early February (no firm date yet).
Trigger @ $45.55
- Suggested Positions -
Buy TMH stock @ $45.55
- (or for more adventurous traders, try this option) -
Buy the FEB $50 CALL (TMH160219C50) current ask $1.55
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike