stocks · Friday, May 8, 2026 · 4 min
Insider bought $5.6M of GEHC two days after the 13% earnings drop: buy at $62.65, stop $58.50
GE HealthCare cratered 13% on April 29 after cutting its profit forecast on tariff costs and a memory-chip squeeze. Two days later a 10% owner bought $5.6M of stock at $61.71. Buy at $62.65, hold a stop at $58.50.
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Aim for $70.84: 50-day moving average, the level the stock needs to reclaim to confirm the bottom
Aim for $76.09: 200-day moving average, where the year-long downtrend would technically break
Why this size: Risk 0.5% of account at the stop. Stop is 6.6% below entry ($62.65 to $58.50), so position = 0.5% / 6.6% = 7.6% of account. Round down to 7% to leave a buffer for the 15% healthcare-sector cap.
When you'd hold this: 6 to 12 weeks, around Q2 earnings expected late July, IEEPA tariff-refund window open now
GE HealthCare, the company that makes the X-ray machines, MRI scanners and CT scanners in your local hospital, dropped 13% on April 29 after telling investors it would earn less money this year than it had promised three months ago. Two trading days later, on May 1, a person who already owns more than 10% of the company spent $5.6 million buying more stock at $61.71 a share1. That insider does not need to add to a giant existing position unless they believe the next year is better than the price suggests.
What just happened
Last Wednesday GE HealthCare reported its quarterly results and cut its full-year profit forecast2. Management blamed three things: tariffs on parts they import, memory-chip prices going up, and oil and freight costs going up. Together those add about $250 million of unexpected cost in 2026. The stock fell 13% in one day, the worst single-day move it has made since being spun out of GE in 2023.
The selling kept going for two more days. On May 1, with the stock pinned near the 52-week low of $58.75, a major holder filed paperwork showing they bought 91,034 shares for $5.6 million at an average price of $61.711. Public filings of this size, from someone who already owns 11% of the company, are the strongest single-name signal an outsider can read. The same week, Pershing Square (Bill Ackman's fund) launched a $1.4 billion buyback of its own listed vehicle3, which means cash that was sitting in his hands is now actively being deployed into US equities.
So what
A company missed a quarter because of trade policy and chip prices. Both of those problems are external, not company-specific. The chip crunch is hitting every device maker right now, not just this one. The tariffs are the result of trade-policy decisions that are still being argued in court, and there is a Supreme Court IEEPA tariff case that could send some of those payments back to the company as refunds.
Meanwhile the underlying business is fine. The order book sits at a record $21.8 billion2, management got an FDA clearance for a next-generation CT scanner the same quarter2, and analysts who cover the stock still publish a median price target around $984, roughly 56% above today's price. The market sold the stock down to where it now trades at about 14 times the new, lower 2026 profit forecast. That is the cheapest this stock has been since it became a public company.
Which is why the insider is buying. They are not betting on tariffs going away tomorrow. They are betting that hospitals are still going to need imaging equipment in 2027, that the memory-chip spike is a 12-month problem rather than a 10-year problem, and that 14 times earnings is a price that will look low in a year.
What to do about it
Buy GE HealthCare around today's price of $62.65. If it closes below $58.50 (just under the recent low and the level where the insider's buy goes underwater), get out, the thesis is broken. The natural goals are $70.84 first and $76.09 second, prices that mark where the year-long downtrend would technically reverse. The reason this is a buy and not a hold is that an 11% owner just put $5.6 million of cash into the stock 48 hours after a 13% crash, and they are not going to do that for a 5% bounce. They are looking at $90-plus.
Risk: if the next quarter shows the chip and freight costs getting worse rather than better, or if a new round of tariffs lands on medical devices specifically, the stock could test $55. That is what the stop is for.
What we got right (and wrong) before
We have not had a closed call in the medical-device space recently. The closest active position is the SRAD insider-buy post from yesterday (entered at $14.12, no fill yet because the stock is below that). Same template: large insider buys $5M to $10M, stock is at multi-month lows, the operating problems look fixable. We are running both because they sit in different sectors.
For the nerds
GEHC at $62.65, +2.65% on the day. RSI 14-day at 23.44, oversold. MACD histogram -0.52 with the line below signal, still bearish but stretched. 50-day SMA $70.84, 200-day SMA $76.09, price below both. Year low $58.75, year high $89.77. Forward P/E roughly 14x on guided $4.80 to $5.00 EPS midpoint. Free cash flow guide cut from $1.7B to ~$1.6B. Insider Form 4: 91,034 shares purchased 2026-05-01 at $61.71 average, 10%+ owner, lifting position to 948,331 shares (+11% delta own)1. Backlog $21.8B per Q1 release2. Q1 adjusted EBIT margin contracted 150bps to 13.5%, full-year margin guide cut to 15.4-15.7%2. Tariff impact 2026 expected <$250M, lower than 2025 per management on the call2. Photonova Spectra photon-counting CT received FDA clearance in the quarter2. Intelerad acquisition closed for $2.3B, contributing to new combined Advanced Imaging Solutions segment2. Median analyst target ~$98 (~56% upside)4. CBOE total put/call ratio 0.80 today (mildly bullish baseline). Crypto Fear & Greed at 38 (Fear), VIX at 17.39, neutral risk backdrop for adding a contra-trend equity position.
Not financial advice. Do your own research.
What we passed on
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- $OPCHPENDING+0.5% since pass
Option Care Health insider bought $1.9M at $20.95. Smaller signal, and the home-infusion thesis is already crowded after the 2024 rally.