It's all the rage to capitalize on graying baby boomers as a way to pick stocks, and today I believe I've found a keeper: Lincare Holdings ( LNCR). Lincare is one of the nation's largest at-home providers of oxygen and other respiratory therapy services. Its customers typically need supplemental oxygen or other respiratory therapy services in order to alleviate the symptoms and discomfort of respiratory problems, so Lincare products help these patients achieve a better quality of life. It is estimated that the home respiratory market represents more than $5 billion in annual sales. Lincare's most recent annual sales were $1.45 billion, and its closest competitor, Apria Healthcare Group ( AHG), has comparable sales. Together, the two giants share most of the home respiratory market, which has an estimated annual growth rate of about 6%. This growth reflects increases in the number of respiratory patients, and it is due to the increasing number of people over the age of 65. Growth in the home respiratory market is also a reflection of patients choosing an alternative to hospitalization. Respiratory disease is the fourth leading cause of death in the U.S., and with baby boomers approaching retirement age, it is estimated that number of chronic obstructive pulmonary disease, or COPD, sufferers will continue to increase. Studies show that in-home treatment is not only beneficial in cost, but with correct treatment procedures, it can be more successful than other treatment options. Lincare's continued growth hinges on delivering not only quality equipment and supplies but in-home training and treatment follow-up. In 2006, oxygen and other respiratory therapy services accounted for about 92% of Lincare's net revenue. Additionally, Lincare repurchased about 6.5 million shares of its common stock in the open market for around $246.7 million. Lincare's first-quarter 2007 net income ended March 31 was $53.9 million, or 59 cents a share, compared with $47.9 million, or 48 cents a share, for the first quarter of 2006. Revenue in the first quarter of 2007 was $378.5 million, representing a 13.5% increase over the first quarter of 2006, resulting in a 24% increase in first-quarter EPS. Lincare comes in with a return on equity (ROE) of 21.27%, a forward P/E of 7.69, and free cash flow just shy of $200 million. These facts lead me to choose Lincare as our deep-in-the-money call today. Buy 10 November 32.50s (LQNKZ) for $7.50 or better. If our good-till-canceled order gets filled, we will be in control of 1,000 shares of Lincare common stock all the way out until the third Friday of November.