It’s been a busy morning for large, unusual call buying in many different sectors. The most recent was an interesting call buy in Envision Healthcare Holdings Inc (EVHC).
A trader in the know? just bought 1,582 September $40 calls, paying 73 cents for the calls. That’s a total transaction value of $115,000 or so. A nice sized bet for calls that are well out of the money and expiring in September.
Envision Healthcare Holdings Inc (EVHC) is currently trading up 56 cents to $35.44, so this trader expects a nice surge in the shares of EVHC soon. The 52 week high is $38.02, and the low is $24.50.
EVHC is scheduled to report earnings August 6, 2014 at 4 PM, so this call buy could be related a positive earnings leak. These things happen all the time. Of course, you should keep in mind, even with good earnings stocks often get punished initially anyways. Case in point, Amkor Technology (amkr).
Looking that the ratings situation, Envision Healthcare Holdings Inc is currently rated a BUY, with a consensus price target of $40. So if not an earnings play, this trader could be banking on a firm upgrading EVHC, and bumping the price target up to the mid low to mid 40’s. That’s a very plausible play as well.
Either way, we like it, and we’re waiting for a little pull back from this mornings surge to jump on this bandwagon. This trader knows something we don’t and we’re looking to play follow the leader.