Option Trade 
HCA Holdings Inc (NYSE:HCA) Calls 
Monday, May 04, 2015

**OPTION TRADE: Buy the HCA Jul 2015 80.000 call (HCA150717C00080000) at or under $2.25. Place a protective stop loss at $0.90, and a pre-determined sell at $4.00.

by Ian Harvey

May 04, 2015


HCA Holdings Inc (NYSE: HCA), a holding company whose affiliates owns and operates hospitals and related health care entities, is scheduled to report its first-quarter numbers on May 5th . HCA is scheduled to announce before the market opens, with analysts expecting $1.34 per share, up from $0.76 during the same period last year. The stock is up 3.6% on the year.

The positive impacts of Obamacare on the health care industry continue to mount, with higher number of insured Americans lifting patient counts at hospitals across the nation. HCA has enjoyed nice earnings growth in recent quarters, with earnings rising 29.4% during the company's fourth quarter. Analysts expect additional earnings growth ahead, forecasting an earnings rise of 15% next year. HCA has a reasonable valuation, with a P/E of slightly under 18, which combined with the company's forecast earnings growth suggests there is plenty of value in the stock.

Technical Details

HCA Holdings traded up 0.66% during trading on Friday, hitting $74.50. 2,231,470 shares of the company’s stock traded hands.

Technical indicators for HCA are bullish and the stock is in a strong upward trend.

HCA Holdings has a 52 week low of $50.69 and a 52 week high of $80.20. The stock has a 50-day moving average of $76.00 and a 200-day moving average of $72.00.

The company has a market cap of $31.33 billion and a price-to-earnings ratio of 17.91.


HCA Holdings last released its earnings data on Tuesday, February 3rd. The company reported $1.33 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.23 by $0.10. The company had revenue of $9.64 billion for the quarter, compared to the consensus estimate of $9.59 billion.

During the same quarter in the previous year, the company posted $0.92 earnings per share. The company’s revenue for the quarter was up 9.1% on a year-over-year basis. On average, analysts expect HCA Holdings to post $4.99 EPS for the current fiscal year and $5.55 EPS for the next fiscal year.

The Upcoming Report

Analysts on the Street are expecting HCA Holdings, Inc. to post an earnings per share number of $1.34 for the quarter that ends on 2015-03-31. The figure is the consensus from all of the firms that have issued estimates on the company.

Research analysts have a consensus long-term growth estimate of $11.25 on the company. This estimate considers both sales and earnings over the next three to five years. The three months ago estimate was at $11.25.

Analysts Opinions

Cantor Fitzgerald reissued their buy rating on shares of HCA Holdings in a research report sent to investors last Wednesday morning. The firm currently has an $88.00 price target on the stock.

Also recent analyst activity consisted of Deutsche Bank reiterating their Buy stance on April 16. Deutsche Bank increased their price target on HCA from $89 to $90. This corresponds to a 17.83% upside from the last closing price. On the date of report, the stock closed at $77.81.

The company has also been the subject of a number of other research reports:-

• Analysts at RBC Capital raised their price target on shares of HCA Holdings from $85.00 to $88.00 and gave the company an “outperform” rating in a research note on Thursday, April 16th.

• Finally, analysts at Oppenheimer set a $87.00 price target on shares of HCA Holdings and gave the company a “buy” rating in a research note on Wednesday, February 4th.

There are currently twenty-four analysts that cover HCA stock. Of those twenty-four, twenty have a Buy rating, four have a Hold rating. On a consensus basis this yields to a Buy rating. The consensus target price stands at $86.05.


Universal Health Services (UHS) already reported its quarterly report, and the results were better than expected. This is a positive sign for the overall industry, therefore expect a good quarter for HCA, and shares to move higher on the report.

Therefore, based on the facts above the following options trade is recommended…..

**OPTION TRADE: Buy the HCA Jul 2015 80.000 call (HCA150717C00080000) at or under $2.25. Place a protective stop loss at $0.90, and a pre-determined sell at $4.00.

”Success is simple. Do what's right, the right way, at the right time.”

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Options traders win because they are successful.

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