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Takeaway: Our Healthcare team scores big long Athenahealth and short AMN Healthcare Services.

It’s been a huge week for our healthcare team. Two monster calls which have worked out very well.

Big Hedgeye Healthcare Victory In This Battleground Stock | $ATHN - z athn

First up.

Healthcare analyst Tom Tobin’s long call on battleground stock Athenahealth (ATHN) with 30% short interest.

Spot on.

ATHN shares rocketed over 24% after delivering strong 3Q results. The healthcare technology company continues to take market share as it builds product awareness among physicians.

(Case in point? Check out the company's hilarious, new #LetDoctorsBeDoctors campaign, with full-fledged music video featuring doctor/rapper ZDogg, in “EHR State of Mind”)

Tobin sees at least 30% upside from here.

Here's an update on ATHN from Healthcare analyst Andrew Freedman post today’s run-up in the stock:

“The quarter was very strong across most key metrics. But Doc adds were the big upside surprise in the quarter with 3,953 net collector physicians added compared to 2,846 consensus. While we flagged the sequential acceleration in our ATHN practice tracker in the quarter, we were still surprised by how strong the number was.  

 

Despite a seasonal dip in bookings in Q3, management stated that they are tracking in-line with their 30% bookings target year-to-date."

We maintain that ATHN is a $200+ stock as they are best positioned competitively to take share in a consolidating ambulatory practice management and EHR management.”

Big Hedgeye Healthcare Victory In This Battleground Stock | $ATHN - athn docs

Click here (and here) to read more on our Healthcare team’s Athena thesis.

* * *

 

Another big win (this time on the short side) is AMN Healthcare Services (AHS). It's plummeted a whopping 17% on the week after a number of hospitals, including HCA and CYH, reported disappointing quarterly results.

Even though the stock is up today, we’re sticking with our bearish call. Here’s another update from Freedman:

"AHS came under pressure this week as the hospitals continue to report disappointing volume growth related to the #ACATaper.  Hospitals have been on a hiring spree to catch up with incremental ACA related demand, and now that is starting to slow as evident by the most recent Healthcare JOLTS data. 

 

With think organic growth collapses in coming quarters and stock that ultimately trades back down to the mid-teens."

 

 

Click here to read our Healthcare team’s short thesis on AHS.

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