Home Health Stocks Bloom in May Rally

Stoneridge Partners | Home Health Index June 2017: Home health stocks bloomed in May, rallying from the previous month, according to the latest Home Health Index published by Stoneridge Partners. The share prices of three of the largest publicly traded home health companies—Almost Family (Nasdaq: AFAM), Amedisys Inc. (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—rose 9.10% in May from the previous month and vastly outpaced the S&P 500 index.

The May uptick was the strongest monthly jump in home health values, on average, since the start of the year, while the S&P 500 climbed just under 1%, at 0.99% during the month. By comparison, the index rose 7% in April and 4.5% in March. Year over year, the index is up 31.81%, while the S&P 500 has risen 15.01% over the same time period.

“Home health shares rallied in May, signifying investors’ growing confidence in the sector during the month. May was also marked by some major transactions that added to the growing trend of home health and health and hospital system joint ventures,” said Rich Tinsley, president of Stoneridge Partners. “Stocks may have been further buoyed after federal agencies delayed some incoming regulatory changes in May, providing some potential relief for home health companies with a presence in select states.”

Almost Family saw the strongest gains during the month, with its share price rising 15.61% during May from April. Year to date, the Louisville-based company’s stock is up 30.16%.

Amedisys shares rose 3.97% during the month, a increase from the 12% gain in April following its first quarter earnings results. Year to date, the stock is up 40.56%.

LHC Group, which announced a major joint venture deal with a Texas hospital group in May, saw its share price jump 8.61% during the month. Compared to a year ago, the stock is up 43.33%, leading its peers in gains over the last 12 months. Year to date, the stock has risen 31.73%.

The stock price for Addus Homecare (Nasdaq: ADUS), based in Frisco, Texas, is not tracked by the index because little of its revenue comes from Medicare, rose 7.23% in May from April. Year to date, the stock has inched up 5.85%. However, compared to a year ago, the stock is has soared 80.54%.

 

Quote Of The Month 

“Drastic Medicaid cuts like those included in this budget would jeopardize access to care for the most vulnerable in our society. Protecting the frail and elderly is important both today and in the coming years when demand will dramatically increase.” – American Health Care Association/National Center for Assisted Living (AHCA/NCAL)

Read the Full Press Release Here: AHCA/NCLA Responds to President Trump’s Proposed Budget for 2018

See It To Believe It!

The Stoneridge Partners Home Health Index (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)

This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index for over 14 years, going back to 2002.
[visualizer id=”8359″]
This is a 12 month trailing chart of the HH Index compared to the actual prices of the individual companies that make up the chart.
[visualizer id=”8361″]

This graph displays HH Index performance over the past 24 months.

[visualizer id=”8363″]
This graph compares the HH Index to the price of Addus stock (non-Medicare).
[visualizer id=”8362″]

(Home Health Index May 2017 | Stoneridge Partners)

Here are the results of the stock prices for the past two years:

Company 5/31/17 1 mos change YTD change 5/31/16 5/31/15
Almost Family 57.40 +15.61% +30.16% 41.81 38.40
Amedisys 59.92 +3.97% +40.56% 50.87 31.02
LHC Group 60.20 +8.61% +31.73% 42.0 36.76
HH Index* 59.17 +9.1% +34.05% 44.89 35.39
S&P 500 2411.8 +0.99% +7.73% 2096.96 2107.39
Addus 37.10 +7.23% +5.85% 20.55 28.01

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) 5/31/17 5/31/16
Almost Family 779 560
Amedisys 1780 1800
LHC Group 1050 852
HH Index Total 3609 3213
Addus 376 245


Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 5/31/17 5/31/16
Almost Family 116% 100%
Amedisys 122% 137%
LHC Group 112% 92%
HH Index Average* 110% 110%
Addus 91% 70%


Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 5/31/17 5/31/16
Almost Family 13.99 13.11
Amedisys 18.70 22.52
LHC Group 12.22 10.36
HH Index Average* 14.97 15.33
Addus 11.19 10.20

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. 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 which may differ from that used by a company it’s reporting. (Home Health Index June 2017 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Summit BHC, a leading provider of addiction treatment and behavioral health services, announced the acquisition of both English Mountain Recovery, an addiction treatment center in Sevierville, Tennessee and Women in Recovery an outpatient treatment center in Mesa, Arizona.
  • LHC Group, one of the nation’s largest home health care providers, has entered into a definitive agreement to form a joint venture with Baptist Memorial Home Health Care, purchasing the majority of Baptist’s home health and hospice operations.
  • Washington-based, Island Hospital, is selling it’s home health care division to Utah-based, Canyon Home Care & Hospice.
  • Visiting Nurse Association Health Group, the largest nonprofit home health care provider in New Jersey, has signed an LOI to merge with the Visiting Nurse Association of Ohio.
  • AccentCare, the Dallas-based in-home services provider, acquired Grace Visiting Nurses and Home Health Services, a health care and personal care services company based in Jacksonville, Texas.
  • Sunny Days In-Home Care acquired Daly Care, a lifestyle management and in-home care provider.
  • Caring People, a New York-based senior home care provider is acquiring Stellar Home Care, a Connecticut based home care agency.
  • Mediware Information Systems, Inc. announced it has finalized an agreement to acquire Kinnser Software, Inc., the leading provider of software solutions for home health and hospice providers.

Exclusively Listed For Sale By Stoneridge Partners

Do you know of any acquisitions that have taken place?  We are interested in your comments.  At the top of this column is a “Contact Tab” with a section for comments.  These can be sent anonymously and the return email address can be left blank.

 

Another Cartoon Favorite from the New Yorker

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Stoneridge Partners | Home Health Index June 2017: From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at [email protected] or (239) 561-0826 and toll-free 800-218-3944

Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Almost Family | Amedisys | LHC Group

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Stoneridge Partners | DrunkWood Builds Kentucky: Local installation artist and furniture builder recently installed his rendition of the state of Kentucky on an office wall at Stoneridge Partners, 710 Breckenridge Lane in St. Matthews. He also built a custom table, constructed from reclaimed wood from a local rackhouse – the building in which whiskey is aged.

President and CEO Rich Tinsley says, “I’ve admired the work of DrunkWood for quite awhile. I also believe in supporting and showcasing Kentucky artisans and local products. For instance, we use engraved Louisville Slugger bats to memorialize big deals we’ve closed.”

In an interview by Maggie Kimberl / February 9, 2016 in The Whiskey Wash (link to full article is below), John King said: To this day, I still do DrunkWood out of my backyard, shed, or garage. I like to keep things small and personal by only doing custom orders. Also, I don’t have much storage. I get asked all the time if people can come to my shop and see my work, I always tell them, “Sure, just watch out for my dogs poop in the yard”. I don’t have any work in any shops or retailers because I want the pieces priced in a way anyone can afford them. From coast to coast, people overcharge the shit out of anything made from bourbon staves. I laugh sometimes when I see prices on certain pieces. My style is pretty rustic and basic, some people are doing some amazing things with barrel wood.

 

John King, owner of DrunkWood LLC, takes used wine & bourbon barrels and reclaimed wood and turns them into unique pieces of home decor and furniture. DrunkWood only takes custom orders and keeps minimal items in stock. Please feel free to contact John King with any questions or pricing inquiry at [email protected]

Stoneridge Partners | DrunkWood Builds Kentucky

DrunkWood constructed this table from ricks, the wooden structures on which barrels of whiskey rest during aging.

 

 

 

Stoneridge Partners | DrunkWood Builds Kentucky

To see more of his work visit his Facebook page and follow him on Twitter.

https://www.facebook.com/StoneridgePartners/videos/1890336414521191/

 

https://thewhiskeywash.com/whiskey-styles/bourbon/bourbon-country-crafters-drunkwoods-john-king/

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Rich Tinsley To Discuss Mergers and Acquisitions Outlook for Post Acute Care

Stoneridge Partners | 2017 Post Acute Link Care Continuum Conference: President and CEO Rich Tinsley and Partner Brian Bruenderman will be attending the Care Continuum Conference”  by Lincoln Healthcare Leadership held Sunday through Tuesday, June 11 – 13, at Sheraton Grand Chicago, in Chicago, IL. Rich will be participating in the 9:15-10:15 a.m. Monday Concurrent Session, “Post Acute M&A Outlook: Buying, Building & Valuation,” that is open to all attendees.

Stoneridge Partners | 2017 Post Acute Link Conference

Rich Tinsley

The session will feature a panel, who will discuss a variety of M&A issues specific to post acute care, including:  valuation and deal activity, consolidation trends within and across sectors, debt and equity financing trends, build vs. buy recommendations for each sector, interest rate predictions, and senior living overbuilding.

Stoneridge Partners | 2017 Post Acute Link Conference

Brian Bruenderman

Founded in 1998, Lincoln Healthcare Leadership is a healthcare intelligence company serving C-level leaders of large providers. The organization’s core product is best-in-class executive conferences known for visionary education, exceptional peer networking, authentic customer service, and memorable experiences. They currently own and operate five conferences in four healthcare segments: hospitals, home health, long-term care, and senior living. Lincoln Healthcare Leadership’s mission is to inspire excellence in leadership, strategy, and innovation and to help providers accelerate change as healthcare moves from fee-for-service to a value-based system.

At Post Acute Link (PAL), you will learn how post acute care fits into value-based care, network with other post acute sectors, and meet with solution partners of your choosing, who will help you execute faster on your strategy. PAL will take you from strategy to operational excellence, to potential partners, all in one unusually productive experience.

Rich and Brian will be available for private meetings throughout the conference. To schedule, call (800) 218-3944 or email [email protected] or [email protected].


Stoneridge Partners is a professional mergers and acquisitions (M&A) advisory firm who works with mid-market home care, hospice and behavioral health companies – exclusively. Our primary focus has been and still is facilitating transactions that not only provide value, but also make sense for you. We know the market and the business exceptionally well and bring this insight to each and every interaction. If you would like a member of our firm to speak at your conference or association, please contact Tina Mackin at (800) 218-3944 or [email protected].


Stoneridge Partners | 2017 Post Acute Link Conference

 

More information:
Post Acute Link Care Continuum Conference
Lincoln Healthcare Leadership

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