This post was just published on ZYX Buy Change Alert.
The position is long with an average price of $20.40. Currently, 40% of the full core position size is being held. Profits have been taken as high as $39.26.
THC confirms FY13 adjusted EBITDA view $1.325B-$1.425B. THC also reports Q4 continuing ops EPS 52c, consensus 68c; Q4 revenue $2.33B, consensus $2.34B. THC sees Q1 adjusted EBITDA $250M-$290M. This outlook excludes any contribution related to the managed care portion of the 30 month California Provider Fee program, which is now expected to contribute $53M to adjusted EBITDA in the quarter ending June 30.
Our analysis of earnings shows the risk in this stock has increased. Our new target zone is $45 to $48. Our previous target zone was $36 – $44. At first these statements may seem confusing, but think in terms of the risk reward matrix in the All Around Alerts. THC stock has just moved to the right of where is was before.
For practical purposes it means that the ownership of this stock is shifting from Smart Money to the momo crowd. The momo crowd can run it higher but can also quickly sell.
What To Do Now?
Those holding the stock may consider taking profits on another 10% tranche in the zone of $37.70 to $39. The stock is at $38.12 as of this writing. This will leave 30% of the full core position size held.
Those not in the stock may not enter at this time.
