2016 Closes with More Gains for Home Health Markets
Home Health Index | 2017 January Update: After a choppy year marked by ups and downs in the stock market, the nation’s largest publicly traded home health care companies ended the year on a high note, according to the latest findings by Stoneridge Partners. Stoneridge’s Home Health Index, which tracks the market values of Almost Family (Nasdaq: AFAM), Amedisys s(Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), continued its upward trend in the final month of the year, coming off two months of consecutive increases.
All three companies saw their market values rise in December, with the overall index climbing 5.42% from November—a significant jump from the 2.93% uptick seen in November. The increase outpaced the S&P 500 Index, which rose 1.54% in December. Despite this increase, the home health index is still below its year-to-date value by 8.57%, while the S&P 500 is up 10.04%.
The December spike was in line with overall market rallies on Wall Street, as investors appeared to be keen on the potential impacts of an incoming Trump administration.
“The Trump rally continued in December for most of the public home health companies,” said Rich Tinsley, president of Stoneridge Partners. “With notable acquisitions and new hires coming through before the end of the year, home health is poised for more gains heading into 2017.”
Almost Family saw the biggest gains of the month, with its share price rising 6.78% during December. Year to date, the stock is up 15.35%. Almost Family also reported record revenues during the third quarter of 2016.
Amedisys, which continued its acquisitive streak in December, also saw a jump in its market value. Its stock price rose 2.87% from November. Year to date, the company’s market value is up 9.26%. Amedisys also announced it would welcome a new CFO at the start of 2017.
Share price values for LHC Group, based in Lafayette, Louisiana, continued to tick upward following a solid 19.34% increase in November. The stock rose 6.58% in December. However, year to date, the company’s stock price is down 1.08%.
Addus HomeCare’s (Nasdaq: ADUS) stock saw a small uptick in December, rising 1.01% from the previous month. Addus is not tracked on the Home Health Index because little of the company’s revenue comes from Medicare. Year to date, the stock is up a whopping 55.49%. The company added a new CEO at the start of 2016.
Quote Of The Month
“Medicare generally does not verify claims or conditions before making payment. [It puts] a lot of trust in doctors and nurses to make proper diagnoses…there is a lot of trust placed, and that trust can be abused,” said an assistant U. S. Attorney based in Illinois.
Read the Full Article Here: U.S. Attorney: Common Home Health Schemes ‘Turn System Upside Down’
See It to Believe It!
The Stoneridge Partners Home Health Indhttp://homehealthcarenews.com/2017/01/u-s-attorney-common-home-health-schemes-turn-system-upside-down/ex (HH Index) is updated monthly and measures the performance of these three publicly traded home health companies, all listed on the NASDAQ:
- Almost Family (AFAM)
- LHC Group (LHCG)
- Amedisys (AMED)
Please note the graphs representing (1) HH Index to the percentage change in the S&P 500 Index for over 14 years, (2) 12 month trailing chart of the HH Index, and (3) HH Index to the price of Addus stock (non-Medicare) can be found in the most recent issue of the Home Health Index.
Here are the results of the stock prices for the past two years:
|Company||12/31/16||1 mos change||YTD change||12/31/15||12/31/14|
Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.
Enterprise Value (EV)
|EV (in M)||12/31/2016||12/31/2015||12/31/2014|
|HH Index Total||3015||2668||2036|
Enterprise Value (EV), aka Selling Price, as a Percent of Revenue.
|HH Index Average*||103%||103%||68%|
Multiples of EV/EBITDA.
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||14.26||12.86||NA|
*Included Gentiva prior to its acquisition in February 2015 by Kindred.
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. EV has been calculated based on stock prices September 1. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology that may differ from that used by a company its reporting.
SOLD BY STONERIDGE!
- At Home Health Services in Schnecksville, PA was acquired by Ocean Healthcare. Joe Lynch, Partner, provided sell-side advisory services for this transaction.
Recent Transactions From Around the Country:
- Amedisys, a Louisiana-based home health provider, has signed an agreement to acquire the Massachusetts-based home health company, Home Staff LLC. The transaction is scheduled to close on February 1, 2017 and would make Amedisys the largest personal care provider in Massachusetts.
- Almost Family, the Louisville-based home health nursing and personal care services provider, has completed its acquisition of the home health and hospice assets of Community Health Care Systems, Inc., a national home health and hospice provider. The acquisition creates the largest public hospital-home health joint venture in the country.
- LHC Group, the Louisiana-based home nursing firm, and LifePoint Health, which operates hospitals in smaller communities, have finalized a joint venture to operate LifePoint’s Home Health Agencies and hospices and some LHC agencies near LifePoint hospitals.
- Epic Health Services, a national home health care and pediatric skilled nursing company, has signed a definitive agreement to be acquired by Bain Capital Private Equity, a global investment firm. The transaction is expected to close the first quarter of 2017.
Exclusively Listed for Sale by Stoneridge Partners:
- Florida – Located in the huge east coast Florida District 9, this is a $6 million Medicare agency with approx. 98% of revenue coming from traditional Medicare. Very well run with excellent financial records and solid bottom line. Stoneridge File SDC-7429
- Florida – $4.5 million Medicare certified home health agency in Districts 6 and 7. Solid bottom line. Accredited and outstanding clinicals. Stoneridge File SBA-5272
- Florida – $4 million in pure private pay. 15% bottom line. Accredited on the central east coast. Stoneridge File SBA-3250
- Florida – Located in the Orlando area this is a $4 million diversified home health agency. Payor sources include Medicare, Medicaid and private pay, 35% of which is traditional Medicare. Top management will assure smooth transition. Well run with excellent financial records and solid bottom line. Stoneridge File SDC-3739
- Florida – Home care company in affluent area on west coast of Florida. $2.7 million run rate. Non-Medicare with 86% pure private pay. Consistent moderate growth. Caregivers are W-2 employees. Stoneridge File SBA-1253
- Florida – $2.5 million Medicare agency in Port St. Lucie. Great reputation and clinicals. Stoneridge File SCM-6191
- Florida – $2.4 million Medicare certified home health agency in District 3. Outstanding clinical with highest star rating. Longtime Home Care Elite top agency. Excellent growth opportunities. Stoneridge File SBA-4836
- Florida – $1.4 million growing private duty business in District 7. Well-run clinically and poised for growth FY 2017. Stoneridge File SCM-5220
- Florida – $1 million accredited Medicare home health agency in District 8. Stoneridge File SBA-5224
- Illinois – $5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS. Stoneridge File SBA-2734
- Illinois – $3.4 million Medicare deficiency free home health agency in Northern Illinois. This agency has built its success by concentrating on a very profitable and loyal market niche, and has an outstanding reputation with both their patients and community. Stoneridge File SCM-3291
- Illinois – $1.5 million Medicare certified home health agency. Clean survey and deficiency free. Quality clinical operation with staff in place. Stoneridge File SBA-7425
- Illinois – Opportunity to establish a Medicare certified home health agency. Pristine license in state under moratorium. Medicare certification. Accredited. Stoneridge File SBA-5000
- Indiana – Opportunity to establish a Medicare hospice, accredited and ready to grow with new owner. Stoneridge File SBB-7911
- Louisiana – $3 million Medicare certified and accredited home health agency. Strong referral base and outstanding clinicals. Stoneridge File SBA-7299
- Michigan – $1.8 million Medicare agency located in high-end resort community. Stoneridge File SBB-5471
- Missouri – $2.8 million Medicaid agency in greater St. Louis area. Nice bottom line. Excellent add-on acquisition opportunity. Stoneridge File SBB-9001
- Multi-State – $30 million behavioral health agency. Well-established, platform opportunity. Stoneridge File SBB-8101
- Nevada – $1.2 million Medicare home health agency located in Las Vegas, Nevada. Clean, profitable and family owned since 2004. HomeCare Elite recipient in 2010, 2012, 2013, 2016. Stoneridge File SCM-6180
- Ohio – $4+ million Medicare/Medicaid agency located in NE Ohio. Stoneridge File SBA-8002
- Ohio – $1 million profitable Medicare/Private Pay personal care business in Northern Ohio. Great relationships with local VA hospital would give new owner built in growth. Stoneridge File SCM-1020
- Oklahoma – Medicare certified hospice for sale in Central Oklahoma. $2.1 million run rate. Accredited. Multiple locations. Stoneridge File SBA-3881
- Pennsylvania – $2.8 million Medicare certified home health agency with small hospice operations in Eastern Pennsylvania. 72% traditional Medicare for home health. Great tuck-in opportunity for strategic buyer. Requires corporate support functions. Stoneridge File SBA-4227
- Southwest – $60 million agency providing home health, personal care and hospice services in the Southwest. Approximately 50% of revenue derived from hospice operations. Long history with great reputation for quality care. Consistent, strong growth. Multiple locations with strong presence in the markets served. Stoneridge File SBA-5050
- Southwest – $30 million hospice company with accompanying home health located in the southwest United States. Stoneridge File SJL-9650
- Texas – $7 million Houston-based Medicare home health agency. Accredited, expertly run and growing. Stoneridge File SJL-1500
- Texas – $4.1 million Dallas based home care company. Well managed and showing strong growth trends for 2016. Stoneridge File SJL-6002
- Texas – $3.5 million home health agency in Houston (metro). Diversified agency – 70% Medicare, 30% private pay. Inherent capacity for growth. Stoneridge File SJL-2000
- Texas – $3.2 million hospice in McAllen, Texas. CHAP accredited with a solid reputation. Stoneridge File SJL-1112
- Texas – Profitable $3 million Medicare & Medicaid home care company in East Texas. Well-run with an excellent reputation, full staff in place and a 4.5 star rating. Stoneridge File SJL-9472
- Texas – Growing $2.6 million west Texas Medicare certified home health agency. Accredited with a wide variety of referral sources. Stoneridge File SJL-2892
- Texas – $2.8 million private pay home care agency in a major metropolitan market. Pure private pay, no Medicaid, no Medicare. Approximately 10$ EBITDA. Stoneridge File SDC-8557
- Texas – $2.6 million established home health agency in Dallas with both Medicare and Medicaid lines of business. Stoneridge File SJL-8335
- Texas – $2 million Medicare accredited home health care company located in Southeast Texas near Huntsvile. Strong financials, clinically clean with nice opportunity for growth. Stoneridge File SCM-9753
- Texas – $1.3 million profitable Medicare and Medicaid agency located in a growing market just north of Dallas. Clean clinically with excellent financials. Stoneridge File SJL-1492
- Texas – $1.2 million established and profitable home health agency with two offices and service area from Conroe to Galveston. Stoneridge File SJL-6249
- Texas – Established and profitable $1.2 million private pay agency located in the Dallas/Fort Worth metroplex. Clean surveys with all appropriate staff in place. Stoneridge File SJL-1373
- Texas – $1.1 million solid and clean Medicare home health agency located in the Fort Worth area. Stoneridge File SJL-7530
- Texas – $1 million agency in Tyler, Texas. Excellent opportunity to break into the attractive market. Stoneridge File SJL-8967
- Wisconsin – $1.2 million Medicare certified home health agency. Licensed in Wisconsin. Clean survey and deficiency free. Staff in place. Motivated seller. Stoneridge File SBA-5776
- Florida – Lee County Medicare agency. Approximately $400,000 in revenue. Accredited. 4 1/2 star rating. Oasis quality assessment 97.7%. Florida district 8. Stoneridge File SBA-4186. ON CONTRACT
- New Jersey – Opportunity to enter much sought after New Jersey market via a small hospice in the southern part of the state. Stoneridge File SJL-9002a ON CONTRACT
- Pacific Northwest – $2+ million all private pay agency located in the pacific northwest. Established and profitable with employees, software systems and marketing in place. Stoneridge File SJL-3008 ON CONTRACT
- Pennsylvania – $4+ million hospice located in Western Pennsylvania. Stoneridge File SBA-5001 ON CONTRACT
- Texas – $4.9 million well established Medicare provider in the Dallas/Ft. Worth metroplex. Deficiency free and showing positive growth. Stoneridge File SJL-4918 ON CONTRACT
To see more home care agencies and hospices exclusively listed for sale by Stoneridge Partners click here.
Do you know of any acquisitions that have taken place? We would be interested in your comments. At the top of this column is a “Contact Tab” with a section for comments. These can be sent anonymously. The return email address can be left blank. We are interested in what you have to say, or acquisitions that you know about.
Another Cartoon Favorite From the New Yorker
Home Health Index | 2017 January Update: From Rich Tinsley, Publisher of “The Home Health Index”. Rich can be reached at [email protected] or (239) 561-0826 and toll-free 800-218-3944