Healthcare services operator Astrana Health (ASTH) is up 30% over the past year, despite a recent pullback. One trader sees further gains in the weeks ahead.
That’s based on the June $45 calls. With 30 days until expiration, 6,037 contracts traded compared to a prior open interest of 110, for a 55-fold surge in volume on the trade. The buyer of the calls paid $0.26 to make the bullish bet.
Astrana shares recently traded for about $39, meaning shares would need to rise about $6, or 7.5%, for the option to move in-the-money. The strike price of the option is close to Astrana’s 52-week high of $45.71.
Operationally, the company has performed well. Earnings grew 13% over the last year, and revenues are up nearly 20%.
Healthcare spending continues to rise at a faster rate than the economy, which tends to make for a reasonable investment for patient investors who buy when shares are declining.
Action to take: Astrana shares can be volatile in the short term, but investors looking for a small-cap play in the healthcare space may want to use those dips to accumulate positions.
For traders, the June $45 calls could see mid-double-digit returns in the coming weeks. Shares are trending higher in the short-run but could be prone to steep pullbacks. Traders should look to take a quick profit.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.