Icahn Capital LP reported a 7.8% stake in BHC
The shares of Bausch Health Companies Inc (NYSE:BHC) are up 4.3% at $31.41 at last check, after Icahn Capital LP reported a 7.8% stake in the pharmaceutical concern, which is the equivalent of 27.8 million shares. The firm said shares are undervalued, and intends to work on enhancing them. In other news, Glenview Capital Management, which owns about 6% of the company, called for the spinoff of its eye care unit to be completed by 2021.
With help from the 20-day moving average, BHC is on track for its 10th straight day of gains. Earlier hitting a nearly five-year high of $32.25 at this morning's session highs, a number of bull gaps over the past several months have helped the security up to a 51.4% year-to-date lead.
Despite the recent rally, there's still a bit of room for optimism amongst the brokerage bunch. Of the 11 analysts in coverage, four carry a "hold" rating on BHC. Plus, the 12-month consensus price target of $29.22 is a 7.3% discount to current levels.
Short sellers have begun to hit the exits, with short interest down 13.6% in the two most recent reporting periods. Yet at the stock's average pace of trading, it would still take over four days for shorts to buy back their bearish bets -- an ample amount of buying power that could unwind and hit the market
Lastly, BHC options are relatively cheap at the moment. The stock's Schaeffer's Volatility Index (SVI) of 54% stands higher than 12% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment.