Top Ways to Trade Primary Care M&A

Aug 24, 2022
It was nothing to worry about!

Primary care stocks are on the run again.

Just weeks ago, Amazon said it would acquire 1Life Healthcare (ONEM) to its growing healthcare unit for $3.9 billion, or $18 a share.

Now there’s word that Owl Creek Asset Management wants Cano Health (CANO) to “pursue strategic alternatives.”  

In fact, Owl Creek said:

“Given the persistent and wide gap between where Cano shares trade and the valuation of comparable companies, we believe there is ample room to come to terms with a strategic buyer that maximizes value for shareholders and provides the Company a platform for future growth.  The industry is ripe for consolidation with large healthcare companies looking to grow.” 

“Recent transactions support this assertion and the willingness of buyers to pay a meaningful premium to where Cano’s stock has traded for much of this year.  For example, as recently as July, Inc. announced that it was buying 1Life Healthcare Inc. for $3.9 billion.  Amazon is paying well over three times this year’s expected revenue of One Medical…”

After all, according to Grand View Research:

“Primary care is the center of the U.S. healthcare system, reforms in the healthcare coverage will re energize the infrastructure and aid the rebuilding of the primary care payment and delivery model. The comprehensive care provided by primary care physicians (PCPs) and the continuous patient and physician relationship is essential to improve the quality of care which will lead to positive patient outcomes in the long run.”

On that news, shares of CANO are up about 10% today on a volume spike to 5.2 million, as compared to daily average volume of 3.9 million.  Even Oak Street Health Inc. (OSH) is up.