Hi everyone, I just shorted PRSC. After acquiring a company the stock rose 45% past two days.  I took a large short position at 40.20 and I believe this company will reverse down to the mid or lower 30's.  Wanted to see everyones input.

Simply shooting the S&P 500 to a new record wasn't enough for shareholders of specialty health-counseling and nonemergency transportation provider Providence Service (NASDAQ: PRSC ) who witnessed their stock explode higher by 34.4%. The main catalyst was Providence Service's announcement that it would acquire U.K.-based Ingeus for $58 million in a combination of cash and restricted stock that will vest in four years. Based on certain earnings and performance thresholds, Providence may pay Ingeus up to $124 million in earn-out payments as well over the next five years. Over the past three years, Ingeus' revenue and adjusted EBITDA have grown by 28.6% and 18.7%, respectively. The purchase should allow Providence to take advantage of foreign opportunities and will be immediately accretive to earnings upon closing in the second quarter of this year.

Why Providence Service, Balchem, and Castlight Health Are Today's 3 Best Stocks (^GSPC, BCPC, CSLT, PRSC)

I agree that the rally is a little exuberant, but what they're buying is growth abroad, which looks like a bit of a shift for the company.

Providence Service (NASDAQ: PRSC ) , a provider of human social services and community transportation, is undervalued with an EBITDA -- earnings before interest, taxes, depreciation, and amortization -- multiple of only 6.8 due to uncertainty regarding the bidding process for new contracts and state participation in Medicaid expansion. However the long term bullish outlook driven by multiple demand drivers (e.g., new contracts, geographic expansion, membership growth, rate increases) remains intact.

This Healthcare Transportation Provider Is Really Going Places (PRSC)

This is actually a useful MF analysis (for a change), their financials are improving quite a bit.

However, to have a short position in this market, especially in a name which went vertical in a couple of days seems a good trading idea to me, FWIW.

Thanks for your input, wanted to see if a few members who do a lot of research could put some insight also. My target is between $34 - $36 and then I'll cover my position. The stock doesnt run with huge volume, and also if there will be any talks about equity raising you know in which direction this company will run.