Conclusion, Investment Implications, Strategy

Owens & Minor, Inc. (OMI) is amid favorable conditions to resume its April 2020 Strategic advance from major underlying support near $35.26, which is currently being tested.  A sustained rise above this area would target an additional 15% rise to $44.00 per share.  This is an Asbury Value trade idea.

Analysis and Rationale

Owens & Minor, Inc. (OMI), together with its subsidiaries, operates as a healthcare solutions company in the United States and internationally. It operates through two segments, Global Solutions and Global Products. The company provides its products and services to multi-facility networks of healthcare providers, independent hospitals, surgery centers, physicians’ practices, and networks of hospitals directly, as well as indirectly through third-party distributors. Owens & Minor, Inc. was founded in 1882 and is headquartered in Richmond, Virginia.

The rightmost green highlights in Chart 1 below show that OMI is currently rebounding from an Aug 20th test of its 200-day moving average, a widely-watched major trend proxy currently situated at $35.26 (upper panel) while also rebounding from monthly (our Tactical time period) oversold extremes (lower panel).  The other green highlights show that similar oversold extremes closely coincided with other tests of the 200-day MA and coincident Tactical bottoms on May 19th and Feb 23rd.  These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment just above major support.  

Chart 1

If the current major uptrend in OMI is still valid, this is where it should resume.  A sustained rise above the $35.26 area would indicate this is the case and target an additional 15% rise to $44.00 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $36.33 area, a long entry price of $38.26 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 5.0%.

Table 1


Click Here for a table containing all of our current stock, ETF and index ideas.

Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.