Home Health Care Stocks Posts Gains in September

Home health care stocks are once again gaining value at a steady clip, bucking the summer’s turbulent times, according to the latest data in the Home Health Index.

The index, which follows the market values of three of the largest publicly traded home health care companies in the U.S.—Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—climbed 8.66% in September compared to the previous month.

The Index beat the S&P 500, which rose 1.93% during the month of September. The latest numbers add more evidence that the home health industry is once again on firmer footing after taking a jolt over the summer on regulatory uncertainty.

“Investors seem to have regained confidence in the home health care industry after a brief downturn,” said Stoneridge President Rich Tinsley. “No company lost value in this month’s Index.”

Lafayette, Louisiana-based LHC Group’s stock rose a steady 8.69% in September. Year to date, LHC Group’s stock has leapt up 55.19%, which is the biggest gain of any company in the Index. LHC is also currently experiencing its lowest-ever vacancy and turnover rate for employees, CEO and chairman Keith G. Myers said during this year’s Home Health Care News Summit in Chicago.

Amedisys, which spent part of September preparing for and managing the effects of Hurricane Irma, also posted gains during the month. The Baton Rouge, Louisiana-based company’s stock value rose 7.12% in September. Year to date, its shares are up 31.27%, according to the Index.

Though its stock dipped in August, Louisville, Kentucky-based Almost Family is on an upward trajectory again. The company gained 10.27% in September, pushing its year-to-date share values up 21.77%.

Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, grew its share values by 3.67% in September. Year to date, Addus’s stock price has risen 0.71%.

Quote Of The Month 

“We need to continue reaching out to patients, family caregivers and other health care professionals to help them understand the benefits that hospice care brings, particularly when provided in a timely fashion as part of a continuum of care,” said NHPCO President and CDO Edo Banach.

Read the Full Article Here: What Hospice Care Looks Like in America

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 October 2017 | Stoneridge Partners)

 

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

Company 9/30/17 1 mos change YTD change 9/30/16 9/30/15
Almost Family 53.70 +10.27% +21.77% 36.77 40.05
Amedisys 55.96 +7.12% +31.27% 47.44 37.98
LHC Group 70.92 +8.69% +55.19% 36.88 44.77
HH Index* 60.19 +8.66% +36.36% 40.36 40.93
S&P 500 2519.36 +1.93% +12.53% 2168.27 1920.23
Addus 35.3 +3.67% +.071% 26.16 31.15

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) 9/30/17 9/30/16
Almost Family 896 515
Amedisys 1928 1730
LHC Group 1402 760
HH Index Total 4226 3005
Addus 438 331


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

Company 9/30/17 9/30/16
Almost Family 125% 88%
Amedisys 131% 128%
LHC Group 144% 89%
HH Index Average* 133% 102%
Addus 106% 91%


Multiples of EV/EBITDA

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

Company 9/30/17 9/30/16
Almost Family 22.2 12.32
Amedisys 22.77 20.81
LHC Group 15.18 9.46
HH Index Average* 20.05 14.20
Addus 13.44 13.66

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 October 2017 | Stoneridge Partners)

SOLD by Stoneridge!

  • Sun Cities Caregivers of Sun City, AZ.  Partner, Brian Bruenderman, provided sell-side advisory services.
  • Champion Caregivers of Ft. Worth Texas was aquired by Bluebird Homecare, Inc. Partner, Joe Lynch, provided sell-side advisory services.

Recent Transactions From Around The Country

  • Stonerise at Home has expanded it’s services into Northern West Virginia, Southern West Virginia and Eastern Ohio with the aquisition of MediHome Health Agency.
  • The Vistria Group aquired majority stake in St. Croix Hospice based out of Oakdale, Minnesota.
  • D’Amore Healthcare, Inc. aquired Pat Moore Foundation, a substance abuse, detoxification and addiction treatment center in Huntington Beach, California.
  • The Ensign Group, has acquired Comfort Hospice Care, a hospice provider serving Southern Nevada through a subsidiary of its home health and hospice portfolio, Cornerstone Healthcare, Inc.
  • LifeCare Home Health LLC, a post-acute health care provider, announced the acquisition of Beyond Faith Homecare & Rehab LLC, which has multiple locations across Texas.

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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Home Health Index October 2017 | Stoneridge Partners

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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