U.S. Physical Therapy [USPH]
| item | value |
|---|---|
| Vehicle | Common equity, USPH |
| Ladder position | 1 — the default |
| Implied vol minus trailing realised vol | −3.9 points — IV 38.23% (USPH270319C00080000, $80 strike, 2027-03-19, measured 2026-07-30) against trailing 252-day realised 42.10% |
| Quoted size at the strike | $80 Mar-2027 call: bid $9.08 × 1, ask $12.07 × 11. Spread $2.99 = 28.3% of mid. Open interest not reported (null) |
| Argument for anything above equity | None offered, therefore equity |
Implied vol sits below realised here too — the second inversion in this three-name run, after UFPT. And as with UFPT it is a quoting artefact rather than an opportunity: the entire 2027 call chain holds 17 contracts across all strikes, the at-the-money bid is for one contract, and open interest is not even reported.
Per criteria.md: "Depth of position is not depth of quote" and "chain depth is not strike
depth." USPH fails both. A 1 × 11 quote with a 28.3% spread is not a market.
| Vehicle | Equity, and only equity |
| Thesis horizon | 5 years for the ownership test; 12 months for the multiple trade |
| 12-month target | $97 (+21.9%) — a mean-reversion trade on a 6.9th-percentile multiple |
| 5-year Valuation Criteria | FAIL — required 21.1% CAGR vs 12.2% trailing and 2.5% same-clinic |
| The tension, stated | The two horizons point in opposite directions. criteria.md makes the implied path the BINDING ownership test; the 12-month target is what a book trades on. A +21.9% 12-month target does not override a Valuation Criteria FAIL, and a Quality Criteria FAIL on a sub-WACC ROIC cannot be rescued by cheapness — "cheap cannot rescue a failure here. This is what stops value traps." |
| Monitoring line if the book takes it anyway | Mature-clinic revenue growth (10-Q segment table). Currently +2.5%. Below +1% for two consecutive quarters and the multiple has further to fall |
| Confirmation of the bull read | 2026 MPFS increase of +1.75% flows through to net rate per visit above +1.5% for two consecutive quarters and average daily visits per clinic re-accelerates above +4% |
| Sizing input | Trailing 252-day vol 42.1% — between RMD's 27.5% and UFPT's 47.2% |
| Structural sizing note | 34.1% of consolidated earnings belong to non-controlling partners. Any sizing model reading consolidated net income or consolidated EBITDA overstates the economics attributable to a USPH shareholder by roughly half again. Size on attributable figures |
$1.21bn market cap, size_bucket: small. Equity liquidity adequate for the book's intended size —
size constrains position sizing, never admission. The options chain fails outright.