Three converging signals point the same way on INFU (InfuSystem Holdings). Short sellers are leaving. Borrowing costs are near rock-bottom. And options traders just placed the most bullish bet in months.
The put-call ratio hit 0.15 on May 18. That's 2.4 standard deviations below the 20-day mean of 0.42. Options traders are overwhelmingly buying calls over puts. The 52-week low sits at 0.047 — so there's context — but this reading marks a sharp break from recent norms. Three weeks ago the PCR sat above 0.54. The swing since has been dramatic.
SI % FF dropped to 0.8% of free float. That's down 20.5% in one week and down nearly 25% over the past month. With positions this small, the short thesis has largely been abandoned. The lending market confirms it. Cost to borrow has fallen to 0.48% — compared to 2.23% on May 4, a collapse of nearly 80% in two weeks. Availability is exceptionally loose, with over 12 million shares available to borrow against roughly 162,000 currently shorted. Short pressure on this name has effectively evaporated.
The stock dropped 17% on May 7 earnings. Three insiders responded by buying the dip. CEO Carrie Lachance bought 2,000 shares at $8.83 that same day. CFO Barry Steele bought 7,000 shares at $8.71. Independent Director Paul Gendron added 5,000 shares at $8.88. The CEO then bought another 1,000 shares on May 11. These are small dollar amounts. The signal, though, is directional — senior management buying with their own capital right after a steep sell-off.
Four analysts rate INFU a Buy. The mean price target is $14.88 — a 67% premium to the May 18 close of $8.90. Roth Capital raised its target to $15 in February. Lake Street assumed coverage with a $15 target last September. The company's EPS surprise factor sits at the 97th percentile, suggesting estimates have consistently been beaten. Next earnings are scheduled for August 13.
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