MOH Call Buyers Take Over as Shorts Step Back

Molina Healthcare options traders have turned sharply more constructive on the stock, with the put/call ratio collapsing to 0.80 on October 20, its lowest level in 52 weeks.

That reading sits 3.3 standard deviations below its 20-day mean of 1.18. Over the prior six weeks, the ratio had traded in a narrow band around 1.24. The shift toward calls accelerated on October 19, when the PCR printed 0.89, and extended further the following day. This is the most extreme options skew MOH has seen all year.

Short Sellers Pulling Back

The options repositioning coincides with a meaningful reduction in short positions. Short interest fell to 5.5% of the free float as of October 20, down from a level running closer to 6.3% a month ago. The one-month decline is 8.3%. Shares outstanding short now sit at approximately 2.84 million.

The prior earnings preview (published October 18) noted the same directional move. That trend has continued. Short interest is broadly unchanged on the day but down on the week.

Borrow Market Remains Loose

Availability in the lending market is at 9,999% of shares currently shorted, meaning roughly 100 shares are available to borrow for every one already out on loan. Borrow costs stand at 0.46%, elevated from the 0.11% low touched on October 19 but still near the bottom of the recent range. There is no mechanical pressure on existing short positions.

Context From the Street

The analyst consensus is a hold, with 15 hold-rated analysts and none at outperform as of October 20. The most recent target-price changes, all from late July, were reductions: Wells Fargo cut to $220, Truist to $225, and RBC to $218 from $248. Barclays carries an underweight with a $180 target.

The stock closed at $219.72 on October 20, up 4.5% on the day and 4.9% on the week. Peers CNC, ELV and UNH gained 2.8%, 3.5% and 11.0% respectively over the same week.

Earnings are scheduled for October 22. The last two prints each produced one-day declines of more than 10%.

Data Summary

• PCR: 0.80 (52-week low; 3.3 standard deviations below 20-day mean of 1.18)
• Short interest: 5.5% of free float, down 8.3% over one month
• Borrow cost: 0.46%; availability at 9,999% of shorted shares
• Stock: +4.9% over one week; last two earnings prints saw moves of roughly minus 11% each
• BlackRock reported a 12.6% stake as of September 30, up from 6.9% previously disclosed