NEW DIRECTIONAL CALL PLAYS
Universal Health Services - UHS - close: 114.84 change: +2.05
Stop Loss: 111.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 1.6 million
Entry on September -- at $---.--
Listed on September 23, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
Love it or hate it the Affordable Care Act (ACA) also known as Obamacare has been a boon for some hospitals, increasing the number of patients they see.
UHS is one of the biggest hospital companies in the U.S. with 225 facilities, including 25 acute care hospitals. According to a company press release, "Universal Health Services, Inc. (UHS) is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands."
At Deutsche Bank analyst recently issued a bullish report on the top five U.S. hospital companies in the U.S. and how Obamacare was going to help drive earnings growth in 2015. UHS was the top of the list and Deutsche bank raised their price target from $115 to $125.
That analyst may be on to something as UHS has seen some earnings growth acceleration in just the last two quarters. UHS' most recent earnings report was July 25th. Wall Street expected a profit of $1.25 a share on revenues of $2.21 billion. UHS reported a profit of $1.55 a share with revenues up +5.5% to $2.2 billion. UHS management then raised their 2014 guidance significantly above consensus estimates.
Right now shares of UHS are testing resistance in the $115.00-115.65 zone. I am suggesting a trigger to buy calls at $115.75.
Trigger @ $115.75
- Suggested Positions -
Buy the 2015 Jan $120 call (UHS150117C120) current ask $4.20
Option Format: symbol-year-month-day-call-strike