Home Health Index | 2018 DECEMBER UPDATE

Home Health Stocks Shake Recent Slumps

Home Health Stocks Shake Recent Slumps

As expected, home health stocks are once again trending upward, shaking off the minor slumps they experienced during September and October.

Home health stocks rose 21.52% in November over the previous month, according to the most recent Home Health Index (HHI) from mergers and acquisitions firm Stoneridge Partners. The HHI, updated monthly, monitors the market values of Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG).

Baton Rouge, Louisiana-based Amedisys and Lafayette, Louisiana-based LHC Group are the two largest publicly traded and independent home health companies in the country.

“There was a broader dip to U.S. markets in September and October, which is likely why we saw a slight drop in home health stock values,” Stoneridge Partners President Rich Tinsley said. “Home health stocks are back up, more in line with what we had been seeing on a regular basis throughout much of 2018.”

While the HHI was up by more than 21%, the S&P 500 stayed relatively flat, increasing by just 0.65% in November compared to October.

Stock prices for Amedisys and LHC Group each performed strongly.

Amedisys, which maintains an executive office in Nashville, Tennessee, saw its stock jump 24.04% in November compared to the previous month.

Meanwhile, LHC Group’s stock similarly climbed 18.38% in November compared to the previous month.

Amedisys and LHC Group posted solid third-quarter 2018 financial results at the end of October and at the beginning of November, respectively, suggesting the HHI boost could be linked to that success. Additionally, home health stakeholders have been encouraged by the final home health payment rule from the Centers for Medicare & Medicaid Services (CMS) for 2019, despite ongoing concerns associated with the Patient-Driven Groupings Model (PDGM) for 2020.

Besides Amedisys and LHC Group, Stoneridge Partner’s HHI also keeps tracks the stock value of Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS). Stoneridge does not include Addus in the final HHI calculation, however.

Addus saw its stock increase by 14.68% in November over October.

Quote Of The Month 

“The more you are prepared, the less ‘legalities’ you will have to take care of when the time comes.  Not having to run amok searching for bills and will and insurance policies (oh, my!) will allow you to focus on the actual day-to-day care.” Nora Duncan, state director for AARP Connecticut

Read the Full Article Here: Senior Caregiving 101 

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index December 2018 | Stoneridge Partners)

 

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

Company 11/30/18 1 mos change YTD change 11/30/17 11/30/16
Amedisys 137.93 +24.04% +161.68% 54 41.44
LHC Group 105.43 +18.38% +72.13% 65.77 42.88
HH Index* 121.68 +21.52% +115.60% 59.72 41.87
S&P 2739.67 -+0.65% +2.47% 2637.37 2238.83
Addus 75.45 +14.68% +116.81% 33.3 34.7

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) 11/30/18 11/30/17 11/30/16
Amedisys 4060 1820 1410
LHC Group 3400 1280 841
HH Index Total 7460 4046 2799
Addus 834 410 313


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

Company 11/30/18 11/30/17 11/30/16
Amedisys 250% 125% 101%
LHC Group 214% 133% 95%
HH Index Average* 232% 130% 95%
Addus 171% 100% 87%


Multiples of EV/EBITDA

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

Company 11/30/18 11/30/17 11/30/16
Amedisys 24.71 17.25 17.77
LHC Group 25.47 13.91 10.21
HH Index Average* 25.09 18.20 13.26
Addus 22.27 12.27 12.94

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 December 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Prestige Adult Foster Care, a Worcester home health care agency, has acquired the Westborough home health agency Around the Clock.
  • Discovery Behavioral Health acquired Ambrosia Treatment Center, a residential drug and alcohol addiction treatment center in Medford, NJ.
  • Advantage In-Home Services, a provider of personal home care, was acquired by Alpine Investors.

SOLD!!! By Stoneridge

  • Stoneridge Partners represented a Florida based Home Healthcare agency that closed November 2018

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.

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Home Health Index December 2018 | 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: Amedisys | LHC Group

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 NOVEMBER UPDATE

Mirroring Market Trends, Home Health Stocks Dip

Mirroring Market Trends, Home Health Stocks Dip

Home health stocks had been showing signs of cooling off moving into October. They now appear to firmly be trending downward.

Home health stocks dropped 11.23% in October compared to the previous month, according to mergers-and-acquisitions firm Stoneridge Partners’ most recent Home Health Index (HHI). Updated on a monthly basis, the HHI monitors the market values of the two largest publicly traded and independent home health companies in the United States: Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG).

Year to date, the HHI is still up more than 77%, reflective of the strong momentum home health stocks had been seeing for most of 2018.

Although home health stocks were down in October, it’s difficult to say how much of that decline was tied to industry outlook, as opposed to a broader market dip, Stoneridge Partners President Rich Tinsley said. The S&P 500 was down 6.93% in October compared to the previous month, for example, experiencing its worst month since at least September 2011.

“U.S. markets lost nearly $2 trillion in October, so it wasn’t exactly a great month all around,” Tinsley said. “Home health stocks were down even more than the S&P,  so the dip could be industry-specific, perhaps, tied to investors’ not-so-optimistic outlook of what policymakers are doing.”

As expected, the Centers for Medicare & Medicaid Services issued its final home health payment rule at the end of October, increasing the Medicare payment rate to providers by 2.2% next year. The agency projects that increase to be about $420 million.

CMS also announced it was finalizing its Patient-Driven Groupings Model, including widely opposed behavioral adjustment components that some critics say will negatively affect home health agencies once the payment reform is implemented in 2020.

Baton Rouge, Louisiana-based Amedisys’ stock dipped 10.04% in October compared to September. Year to date, Amedisys stock was up 110.97%, according to the HHI. Amedisys also has an executive office in Nashville, Tennessee.

Lafayette, Louisiana-based LHC Group’s stock likewise dropped in October, falling by 12.67% compared to the previous month. LHC Group’s stock was up 45.50% year to date.

In addition to Amedisys and LHC Group, Stoneridge Partner’s HHI also tracks the stock activity of Addus HomeCare Corporation (Nasdaq: ADUS). The Frisco, Texas-based home care and hospice provider is not included in the final HHI analysis, however, because Addus derives most of its revenue from Medicaid sources.

Addus saw its stock drop by 5.05% in October compared to the previous month. Year to date, Addus stock was up 89.05%.

Quote Of The Month 

“You’re focused on medical and social issues because you know you can’t take care of people like the homebound unless you’re attending to both of those realms” – Bruce Leff, director of the Center for Transformative Geriatric Research and a professor of medicine at Johns Hopkins University

Read the Full Article Here: Full Care Spectrum Will One Day Be Provided in People’s Homes 

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index November 2018 | Stoneridge Partners)

 

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

Company 10/31/18 1 mos change YTD change 10/31/17 10/31/16
Amedisys 111.20 -10.04% +110.97% 46.45 49.49
LHC Group 89.06 -12.67% +45.40% 66.55 35.93
HH Index* 100.13 -11.23% +77.42% 53.13 40.68
S&P 500 2722.05 -6.93% +1.81% 2575.50 2179.98
Addus 65.79 -5.05% +89.05% 35.30 24.87

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) 10/31/18 10/31/17 10/31/16
Amedisys 3570 1660 1730
LHC Group 3220 1300 735
HH Index Total 6790 3712 2980
Addus 744 444 313


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

Company 10/31/18 10/31/17 10/31/16
Amedisys 226% 114% 113%
LHC Group 238% 135% 86%
HH Index Average* 232% 118% 97%
Addus 163% 108% 87%


Multiples of EV/EBITDA

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

Company 10/31/18 10/31/17 10/31/16
Amedisys 23.66 15.80 18.45
LHC Group 31.19 14.13 9.14
HH Index Average* 27.43 16.19 13.51
Addus 20.62 13.30 12.94

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 November 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Briggs Healthcare acquired Selman-Holman & Associates to expand Home Health Compliance Portfolio
  • Nova Leap Health Corp, an international provider of personal home care and support services, acquired the business assets of New Hampshire-based Living at Home SeniorCare

SOLD!!! By Stoneridge

  • Stoneridge Partners represented a Colorado based agency in a transaction that closed in October 2018
  • Stoneridge Partners represented an Ohio based agency in a transaction that closed in October 2018
  • Stoneridge Partners represented a Texas based agency in a transaction that closed in October 2018
  • Stoneridge Partners represented an Arizona based agency in a transaction that closed in October 2018
  • Stoneridge Partners represented a Georgia based agency in a transaction that closed in October 2018

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.

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Home Health Index November 2018 | 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: Amedisys | LHC Group

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 OCTOBER UPDATE

Home Health Stocks Cool Off After Months of Growth

Home Health Stocks Cool Off After Months of Growth

After several months of robust growth, home health stocks have leveled off somewhat, though a plateau may be relatively short-lived.

Despite regulatory obstacles on the horizon, home health stocks saw strong growth in June, July and August. September yielded mixed results, however, according to Stoneridge Partners’ latest Home Health Index, updated monthly.

Overall, the Home Health Index was up by 0.74% in September over the previous month. Bucking summer’s recent trends, the Index slightly unperformed the broader market, as the S&P 500 climbed by 1.42% in September compared to the previous month.

Stoneridge Partners’ Home Health Index charts the market values of Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), two of the largest publicly traded and independent home health care companies in the country.

“Home health stocks had been seeing double-digit levels of growth in some cases, so a slowdown was bound to happen at some point,” Stoneridge Partners President Rich Tinsley said. “Amedisys, in particular, had been seeing very strong growth of late, which really wasn’t the case last month.”

Amedisys’ stock dipped 1.12% in September compared to August, according to the Index. Amedisys maintains an executive office in Nashville, Tennessee, with a corporate headquarters in Baton Rouge, Louisiana.

While Amedisys’ stock value fell slightly, LHC Group’s stock rose. Lafayette, Louisiana-based LHC Group’s stock ticked upward by 3.08% in September compared to the previous month.

The Home Health Index was up 99.86% in September on a year-to-date basis.

Although home health stocks did see a slowdown, they’re primed to possibly rebound in months ahead, as industry stakeholders have partnered with legislators in both the U.S. House of Representatives and Senate to reshape the widely opposed behavioral adjustment aspect of the Patient-Driven Groupings Model (PDGM).

“The home health industry is facing some pressures, most notably in the form of PDGM, which could be the biggest change to home health care in years,” Tinsley said. “But the industry as a whole has proven it’s capable in terms of advocacy and outreach, so we’re optimistic.”

In addition to Amedisys and LHC Group, the Home Health Index also tracks Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS), though it does not include the company in its monthly update. This is due to the fact that Addus’ revenue comes mainly from Medicaid rather than Medicare.

Addus’ stock jumped 6.76% in September compared to the previous month, according to the Index.

Quote Of The Month 

“Today’s homecare professionals are incredibly skilled clinicians who are extremely self-reliant and detail-oriented. They can think critically and creatively to try and keep patients out of the hospital, and are the advocates for the patients – with the physician, caregivers, and other outside agencies. Nurses and other clinicians who are interested in home care need to be open to working in a setting that is different from the traditional clinical setting.  Patients are able to remain at home because our clinicians make a difference in their lives.” ~ Marla Duerr, Vice President of Patient Care Services for Catholic Health Home and Community Based Care

Read the Full Article Here: Demand Increasing for Home Health Professionals 

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index October 2018 | Stoneridge Partners)

 

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

Company 9/30/18 1 mos change YTD change 9/30/17 9/30/16
Amedisys 123.61 -1.12% +134.51% 55.96 47.44
LHC Group 101.98 +3.08% +66.50% 70.92 36.88
HH Index* 112.80 +0.74% +99.86% 60.19 40.36
S&P 500 2925 +1.42% +9.40% 2519.36 2168.27
Addus 69.29 +6.76% +99.11% 35.30 26.16

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) 9/30/18 9/30/17 9/30/16
Amedisys 3990 1928 1730
LHC Group 3520 1402 760
HH Index Total 7510 4226 3005
Addus 857 438 331


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

Company 9/30/18 9/30/17 9/30/16
Amedisys 252% 131% 128%
LHC Group 260% 144% 89%
HH Index Average* 256% 133% 102%
Addus 188% 106% 91%


Multiples of EV/EBITDA

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

Company 9/30/18 9/30/17 9/30/16
Amedisys 26.45 22.77 20.81
LHC Group 34.08 15.18 9.46
HH Index Average* 30.27 20.05 14.20
Addus 23.75 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 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Hospice Source, the National Leader in Hospice DME aquired Harrisburg, Pennsylvania based Dynamic Health Services, Inc.
  • Bristol Hospice LLC, a portfolio company of Webster Capital acquired Optimal Health Services and Suncrest Hospice
  • VITAS Healthcare, the nation’s leading provider of end-of-life care acquired Hospice of Citrus and the Nature Coast

SOLD!!! By Stoneridge

  • Sonas Home Health Care, a portfolio company of Boyne Capital, acquired Advanced Nursing Solutions, a Tampa-based pediatric home-care provider.  Sell side advisory services provided by Partner Ben Bogan.

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.

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Home Health Index October 2018 | 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: Amedisys | LHC Group

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 SEPTEMBER UPDATE

Home Health Stocks Continue Summer Swell

Home Health Stocks Continue Summer Swell

 Home health care stocks have performed strongly this summer, with Stoneridge Partners’ monthly Home Health Index seeing double-digit growth across June and July. That growth came despite proposed regulatory hurdles introduced by health care policymakers, headlined by the Patient-Driven Groupings Model (PDGM).

August largely brought more of the same, as stocks continued their upward push, according to the latest Index update. Stoneridge Partners’ Home Health Index tracks the market values of Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), two of the largest publicly traded and independent home health care companies in the United States.

Overall, the Home Health Index jumped by 13.23% in August over the previous month. Year to date, the Index was up 32.27%.

Once again, Index gains far outpaced the S&P 500. Compared to the double-digit growth home health stocks are seeing, the S&P 500 only gained 2.17% in August compared to the previous month.

“There’s a lot of change going on in the home health industry, whether we’re talking about PDGM, value-based purchasing or even greater opportunities for remote patient monitoring capabilities,” Stoneridge Partners President Rich Tinsley said. “Sometimes change can be a catalyst for businesses, though, which is certainly reflected by what we’re seeing in terms of stock values.”

Amedisys’ stock climbed 17.25% in August compared to the previous month. Year to date, Amedisys stock was up 137.17%. Amedisys is headquartered in Barton Rouge, Louisiana, with an executive office in Nashville, Tennessee.

Meanwhile, Lafayette, Louisiana-based LHC Group’s stock increased by 8.53% in August compared to July. Year to date, LHC Group stock was up 61.52%.

The Home Health Index was up 61.57% in August over the previous 24-month period.

“Broadly, a greater inclusion with the continuum of care and a rapidly aging population are a couple underlying reasons why the home health industry has a lot of momentum right now,” Tinsley said.

In addition to Amedisys and LHC Group, the Stoneridge Index also monitors Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS). The Index does not include the company in its monthly update, however, as most of Addus’ revenue comes from Medicaid and not Medicare.

In contrast to Amedisys and LHC Group, Addus’ stock dropped 3.21% in August compared to the previous month. Year to date, Addus stock was up 86.49%.

Quote Of The Month 

“It’s no secret that the home health care industry is growing. It’s not just growing in the services and number of agencies and providers it offers, but also in demand. ” –  Valerie VanBooven, RN, BSN, Editor in Chief of HomeCareDaily.com

Read the Full Article Here: Growing Demands Within The Home Health Care Industry

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index September 2018 | Stoneridge Partners)

 

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

Company 8/31/18 1 mos change YTD change 8/31/17 8/31/16
Amedisys 125.01 +17.25% +137.17% 52.24 53.55
LHC Group 98.93 +8.53% +61.52% 65.25 45.26
HH Index* 111.97 +13.23% +98.40% 55.40 46.20
S&P 500 2884 +2.17% +7.78% 2471.65 2170.95
Addus 64.9 -3.21% +86.49% 34.05 18.86

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) 8/31/18 8/31/17 8/31/16
Amedisys 3980 1719 1890
LHC Group 3430 1299 911
HH Index Total 7410 3845 3341
Addus 804 424 232


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

Company 8/31/18 8/31/17 8/31/16
Amedisys 252% 116% 144%
LHC Group 253% 134% 110%
HH Index Average* 253% 122% 117%
Addus 176% 103% 67%


Multiples of EV/EBITDA

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

Company 8/31/18 8/31/17 8/31/16
Amedisys 26.41 20.30 23.64
LHC Group 33.19 14.06 11.08
HH Index Average* 29.80 18.28 15.78
Addus 22.30 12.99 9.68

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 September 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • AccentCare, a company for post-acute home healthcare services, bought Denton-based Accolade HomeCare and Hospice.
  • Hospice Source, the National Leader in Hospice DME aquired Oklahoma City, OK based Redrock Medical.

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 September 2018 | 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: Amedisys | LHC Group

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 AUGUST UPDATE

Home Health Care Stocks Post Solid Response to PDGM

Home Health Care Stocks Post Solid Response to PDGM

July kicked off with big news for home health agencies when the Centers for Medicare & Medicaid Services (CMS) floated plans to both increase payments and overhaul the current prospective payment system with its new Patient-Driven Groupings Model (PDGM).

Overall, positives for the industry appear to have outweighed the negatives as home health care stocks performed strongly in July, according to the latest update of the Home Health Index by Stoneridge Partners.

The Index tracks market values of two of the nation’s largest publicly traded home health care companies: Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG).

Largely buoyed by the success of Nashville, Tennessee-based Amedisys, the Index jumped 14.96% in July over the previous month. In doing so, the Index dramatically outpaced the S&P 500, which gained 4.28% and the S&P showed signs of recovery after a down June.

“The proposed payment rule from CMS is projected to increase Medicare payments to home health agencies in calendar year 2019 by $400 million, or 2.1%, so that’s certainly a good sign for providers,” Stoneridge Partners President Rich Tinsley said. “And even though there are still important concerns regarding PDGM, it is a step forward from the Home Health Groupings Model, mainly in the sense that PDGM offers budget neutrality even after CMS’s 2019 2.1% increase.”

Amedisys’ stock climbed 22.98% in July compared to the previous month. Year to date, Amedisys’ stock more than doubled, increasing by 102.28%.

Lafayette, Louisiana-based LHC Group’s stock in July increased by a more modest 6.81%. Year to date, LHC Group’s share value was up 48.82%.

If included in CMS’ final rule, PDGM would be implemented Jan. 1, 2020. Among its major points, PDGM would change the 60-day episode of care unit of payment to 30 days and also stop the practice of using the number of therapy visits provided by home health agencies to determine payment.

In general, Amedisys and LHC Group leadership has expressed confidence in the wake of PDGM, while stating that their respective companies will continue to closely monitor updates related to CMS’ new model.

“This is something the industry was mostly prepared for,” Tinsley said.

Besides Amedisys and LHC Group, the Index also tracks Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS), though it does not include the company in its monthly report. Most of Addus’ revenue comes from Medicaid and not Medicare.

Addus’ stock increased 18.25% in July compared to the previous month. Year to date, Addus’ stock prices were up 92.67%.

Quote Of The Month 

“Health care consumers—especially those living with chronic conditions—need to be empowered with home-based solutions that can help them stay healthier, out of the hospital, and living safely and comfortably in their own homes.” – Humana spokesperson

Read the Full Article Here: Humana Highlights Home Health’s Value in Reducing Hospital Readmissions

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index August 2018 | Stoneridge Partners)

 

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

Company 7/31/18 1 mos change YTD change 7/31/17 7/31/16
Amedisys 106.62 +22.98% +102.28% 47.36 54.49
LHC Group 91.15 +6.81% +48.82% 57.9 45.39
HH Index* 98.89 +14.96% +75.22% 51.57 46.73
S&P 500 2822.74 +4.28% +5.58% 2470.3 2173.6
Addus 67.05 +18.25% +92.67% 33.95 18.45

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) 7/31/18 7/31/17 7/31/16
Amedisys 3100 1556 1890
LHC Group 3010 1137 911
HH Index Total 6110 4530 3341
Addus 634 399 232


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

Company 7/31/18 7/31/17 7/31/16
Amedisys 201% 105% 144%
LHC Group 272% 121% 110%
HH Index Average* 237% 117% 117%
Addus 149% 97% 67%


Multiples of EV/EBITDA

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

Company 7/31/18 7/31/17 7/31/16
Amedisys 22.41 18.31 23.64
LHC Group 30.17 13.35 11.08
HH Index Average* 26.29 17.65 15.78
Addus 19.51 12.75 9.68

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 August 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Wellforce, the parent company of Tufts Medical Center, will acquire Home Health Foundation as it expands out of state.
  • Optimal Health Services, a provider in hospice and home health services was acquired by Bristol Hospice.
  • Delphi Behavioral Health Group, a leading nationwide provider of addiction and detox treatment programs, acquired Family Recovery Specialist of Miami, Florida.

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 August 2018 | 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: Amedisys | LHC Group

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 JULY UPDATE

Pre-Claim Does Not Trouble Home Health Investors

Pre-Claim Does Not Trouble Home Health Investors

 Despite looming challenges associated with a possible new pre-claim review demonstration and other regulatory uncertainties on the horizon, home health care stocks performed well in June, according to the latest update of the Home Health Index by Stoneridge Partners.

The Index tracks market values of Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), two of the largest publicly traded and independent home health care companies in the United States.

Overall, the Index gained 11.79% in June compared to the previous month, substantially outperforming the S&P 500, which fell about 0.94% in the wake of international trade tariffs put in place by the Trump administration.

“There’s a lot of uncertainty out there for investors right now in terms of policy,” Stoneridge Partners President Rich Tinsley said. “Despite what’s going on internationally, though, investors seem pretty confident in the home health industry domestically.”

Baton Rouge, Louisiana-based Amedisys’ stock jumped by 13.08% in June compared to the previous month. Year to date, Amedisys’ stock climbed to an impressive 64.48%, according to the Index.

LHC Group’s stock also saw a spike in June, increasing by 10.50%. The Lafayette, Louisiana-based company’s year-to-date share value was up 39.33% as well.

Stock prices for both companies have been buoyed in the early part of July after the Centers for Medicare & Medicaid Services (CMS) proposed increasing Medicare payments to home health agencies by 2.1%, or $400 million, in calendar year 2019. The agency also released more information about a new payment framework coming in 2020, providing investors with more visibility into what that change will entail.

“Home health providers certainly have momentum moving forward into July,” Tinsley said.

In addition to Amedisys and LHC Group, the Index also highlights Addus HomeCare (Nasdaq: ADUS), though it does not include the Frisco, Texas-based company in its monthly report because most of its revenue comes from Medicaid rather than Medicare.

While stock prices for Amedisys and LHC Group rose in June, prices for Addus dipped slightly, falling by 2.66% compared to the previous month. Year to date, Addus’ stock prices were still up by 62.93%, however.

Quote Of The Month 

“This (At-home personal care) is not an out-of-control, costly benefit, it’s a pretty predictable benefit and one that’s pretty essential to ensuring people’s ability to maintain their independence and continue living at home.” – Researcher Karen Davis

Read the Full Article Here: Fresh Research Supports a Medicare Benefit for At-Home Personal Care

 

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index July 2018 | Stoneridge Partners)

 

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

Company 6/30/18 1 mos change YTD change 6/30/17 6/30/16
Amedisys 86.7 +13.08% +64.48% 62.81 50.48
LHC Group 85.34 +10.50% +39.33% 67.89 43.28
HH Index* 86.02 +11.79% +52.42% 64.12 45.46
S&P 500 2706.92 -0.94% +1.25% 2423.41 2098.86
Addus 56.7 -2.66% +62.93% 37.2 17.43

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) 6/30/18 6/30/17 6/30/16
Amedisys 2880 2157 1790
LHC Group 2950 1313 875
HH Index Total 5830 4479 3234
Addus 637 436 216


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

Company 6/30/18 6/30/17 6/30/16
Amedisys 186% 149% 136%
LHC Group 266% 141% 106%
HH Index Average* 226% 152% 115%
Addus 149% 110% 62%


Multiples of EV/EBITDA

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

Company 6/30/18 6/30/17 6/30/16
Amedisys 20.81 26.7 22.36
LHC Group 29.56 15.8 10.65
HH Index Average* 25.19 21.45 15.44
Addus 19.60 15.01 9.02

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 July 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Humana and private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe acquired Curo Health Services in the latest effort by the insurer to grow its outpatient medical services for seniors.
  • Netsmart, one of the largest providers of behavioral health electronic records (EHR’s) in the United States, has acquired the home care and hospice solutions of Change Healthcare, formerly known as McKesson Homecare and McKesson Hospice.
  • Humana and private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe completed their planned acquisition of Kindred Healthcare.
  • Insurer Anthem, Inc. has completed its acquisition of Aspire Health, the nation’s largest provider of non-hospice, community-based palliative care.

SOLD!!! by Stoneridge

  • Stoneridge Partners, Partner Benjamin Bogan, provided sell side M&A advisory services in the sale of Alpha Health in Kissimmee, Florida to Trilogy Healthcare.
  • Stoneridge Partners, Partner Joseph Lynch, provided sell side M&A advisory services in the sale of Accommodation Healthcare, LLC of Houston, TX to D&S Residential Holdings.

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 July 2018 | 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: Amedisys | LHC Group

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Home Health Index | 2018 JUNE UPDATE

Home Health Stocks off To Hot Summer Start

Home Health Stocks off To Hot Summer Start

Home health stock prices rebounded in April after a short-lived decline in values in March.

Following a turbulent spring, home health stocks appear poised to enjoy a strong summer. The positive gains are reflected in the latest Home Health Index (HHI), which tracks the market values of the nation’s two largest publicly held home health care providers, published by Stoneridge Partners.

It’s now been two months since Almost Family (Nasdaq: AFAM) and LHC Group (Nasdaq: LHCG) completed their merger, which doubled the size of LHC Group. As a result, May represented the second month in which the HHI comprises two companies only, because Almost Family is no longer traded as an individual stock.

At the end of May, the HHI was up 11.4% month over month . Year to date, the index is up 36.4%. Comparatively, the S&P 500 slightly rose by 2.9% over the same time period.

The overall stock rally comes as a number of M&A deals are closing around the home health industry.

“Today’s M&A landscape is highly competitive and hotter than ever,” said Stoneridge Partners President Rich Tinsley. “As more deals take place, the future appears strong for companies that aggressively seek to be acquired or to grow through acquisition.”

Last month, LHC Group’s stock price increased 4.52%. Year-to-date, the company’s stock is up 26.1%. As May came to a close, LHC Group CEO Keith Myers discussed the industry’s energetic merger and acquisition landscape during the 2018 UBS Global Healthcare Conference in New York City. According to Myers, the mega-merger gives the Lafayette, Louisiana-based company a strong foundation for future mergers, particularly deals focused on personal care services.

May was also another strong month for Amedisys Inc. (Nasdaq: AMED); the Baton Rouge, Louisiana-based company’s stock price rose 17.7%. The home health care provider is also seeing its own stock as valuable. At the start of June, it was reported that Amedisys bought back $178 million worth of stock from the global investment firm, KKR (NYSE: KKR). Year-to-date, Amedisys’ stock is up 45.5%.

Elsewhere in the industry, Frisco,Texas-based Addus HomeCare (Nasdaq: ADUS) stock continued to rise in May, closing the month with a 12.5% rally. Year-to-date, Addus’ stock is up 67.4%. Even though Addus is a major personal care services provider, it’s not part of the HHI because little of its revenue comes from Medicare.

Quote Of The Month 

“Find the people you feel safe and comfortable enough with to talk about it. That’s one of the definite benefits of social media. There are all sorts of people who have been through similar situations and are easier to relate to. It’s important to say ‘This happened, and I’m struggling with it, and I need to work through it.” – Karen Zangerle, Executive Director of PATH (Providing Access to Help)

Read the Full Article Here: Reach out: Celebrity Suicides bring mental health issues to forefront

 

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index June 2018 | Stoneridge Partners)

 

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

Company 5/31/18 1 mos change YTD change 5/31/17 5/31/16
Amedisys 76.67 +17.736% +45.46% 59.92 50.87
LHC Group 77.23 +4.52% +26.09% 60.2 42.0
HH Index* 76.95 +11.37% +36.35% 59.17 44.89
S&P 500 2732.54 +2.95% +2.20% 2411.8 2096.96
Addus 58.25 +12.54% +67.39% 37.1 20.55

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) 5/31/18 5/31/17 5/31/16
Amedisys 2510 1780 1800
LHC Group 1430 1050 852
HH Index Total 3940 3609 3213
Addus 585 376 245


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

Company 5/31/18 5/31/17 5/31/16
Amedisys 162% 122% 137%
LHC Group 135% 112% 92%
HH Index Average* 137% 117% 110%
Addus 149% 91% 70%


Multiples of EV/EBITDA

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

Company 5/31/18 5/31/17 5/31/16
Amedisys 18.13 18.7 22.52
LHC Group 15.97 12.22 10.36
HH Index Average* 18.01 14.97 15.33
Addus 17.05 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 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Private equity firm, KKR acquired Nashville-based Envision Healthcare Corporation

SOLD!!! by Stoneridge

  • Stoneridge Partners, Associate Partner Coley McDevitt, provided sell side M&A advisory services in the sale of Divine Home Healthcare, Inc to Pioneer Group, LLC.
  • Stoneridge Partners, Partner Brian Bruenderman, provided sell side M&A advisory services in the sale of Christian Care Communities to Amedisys, Inc.

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

     

More

Home Health Index June 2018 | 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

Please follow us on Facebook  and Linkedin

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Home Health Index | 2018 MAY UPDATE

Home Health Stocks Rebound as Home Health Index Narrows to Two Comapnies

Home Health Stocks Rebound as HHI Narrows To Two Companies

Home health stock prices rebounded in April after a short-lived decline in values in March.

The bounce-back came on the heels of major changes in the sector at the beginning of 2018, including the completion of a mega-merger that will change the scope of the Home Health Index (HHI) created by Stoneridge Partners moving forward.

The HHI, which has long tracked the market values of Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), has narrowed to two companies following the merger of AFAM and LHCG at the start of April 2018. Almost Family will no longer be included in the HHI because it is no longer traded as an individual stock.

The mega-merger makes LHC Group the second-largest home health care company in the nation, with 775 locations in 36 states and combined annual revenue of nearly $2 billion. The merger also had a profound impact on the company’s stock price, which jumped 20.9% in April from the previous month. Year to date, the stock is up 21.5%.

Despite having closed this enormous transaction, LHC Group seemingly isn’t slowing down on its mergers and acquisitions activity. The company has an active pipeline of 24 ongoing discussions with health systems and hospitals to form home health joint ventures, CEO Keith Myers stated during the company’s recent first quarter earnings call.

Also in April, Amedisys’s (NASDAQ: AMED) stock price rose 9.3%. Amedisys is based in Baton Rouge, Louisiana. During Q1 2018, Amedisys saw its margins swell to their highest levels since 2015, according to quarterly earnings results published in early May. Year to date, the stock is up 25.2%.

Removing Almost Family from the HHI led to significant change in the index. At the end of April, the HHI was up 18.4%, with the recalculation of the index playing a role in the uptick. By comparison, the HHI declined 2.7% in March. Year to date, the index is up 24.4%. Home health stocks weren’t the only ones to rebound from a tough March; the S&P 500 slightly recovered, rising 0.90%.

Share value gains may have been partly buoyed by the announcement that non-skilled in-home care supports will be allowed as a supplemental benefit for Medicare Advantage plans in 2019, the Centers for Medicare & Medicaid Services said in a proposal at the beginning of April. Medicare Advantage is a growing opportunity for the large home health care providers.

“On top of the completion of a major transaction that changed the face of the home health care industry, the news from CMS definitely helped companies overcome a turbulent March,” said Stoneridge Partners President Rich Tinsley. “And with strong first quarter earnings, the coming months may be even better for home health companies.”

Elsewhere in the industry, Frisco,Texas-based Addus HomeCare (Nasdaq: ADUS) continues its positive stock streak. As April ended, Addus’ stock price rose 7.19%. Year-to-date, Addus stock is up 49.86%. Even though Addus is a major personal care services provider, it’s not part of the HHI because little of its revenue comes from Medicare.

Quote Of The Month 

Gone are the days of visiting hours and restricted call times; home health care means friends and family can visit whenever they want. “Receiving care at home allows patients to stay in their own environment within close range to loved ones.  We know this can have a positive impact on mental well being.” – Rebecca Bell, General Manager – Member Health at Medibank

Read the Full Article Here: Five Benefits of Home Health Care

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 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 since 2002.

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

(Home Health Index May 2018 | Stoneridge Partners)

 

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

Company 4/30/18 1 mos change YTD change 4/30/17 4/30/16
Amedisys 65.97 +9.33% +25.16% 57.63 51.49
LHC Group 74.45 +20.94% +21.55% 55.43 40.34
HH Index* 70.21 +18.40% +24.40% 54.24 44.61
S&P 500 2654.8 -.90% -.70% 2388.13 2065.3
Addus 52.15 +7.19% +49.86% 34.6 18.5

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) 4/30/18 4/30/17 4/30/16
Amedisys 2260 1950 1780
LHC Group 1440 1010 756
HH Index Total 3700 3739 3025
Addus 607 409 192


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

Company 4/30/18 4/30/17 4/30/16
Amedisys 150% 137% 145%
LHC Group 136% 122% 98%
HH Index Average* 143% 128% 113%
Addus 145% 102% 57%


Multiples of EV/EBITDA

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

Company 4/30/18 4/30/17 4/30/16
Amedisys 17.59 23.92 19.95
LHC Group 16.08 13.06 9.75
HH Index Average* 16.84 18.92 14.34
Addus 18.44 13.1 8.02

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 May 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Amedisys enlarged its personal care footprint with its subsidiary Associated Home Care’s close of the acquisition of East Tennessee Personal Care Services based in Knoxville, Tennessee.
  • Delphi Behavioral Health Group has merged with Summit Behavioral Health in a deal that brings with it facilities in New Jersey, Massachusetts and Pennsylvania—three new markets for Delphi.
  • National Home Health Care of Cromwell merged with Great Lakes Caring of Jackson and Jordan Health Services of Dallas.

SOLD!!! by Stoneridge

  • Stoneridge Partners, Partner Ben Bogan and Associate Partner Charles Jantzi, provided sell side M&A advisory services in the Addus Homecare & Ambercare transaction with revenue of approximately $57,000,000.

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

May-HHI

     

More

Home Health Index May 2018 | 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

Please follow us on Facebook  and Linkedin

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Stoneridge Partners, Ben Bogan and Charles Jantzi, provided sell side M&A advisory services in the Addus Homecare & Ambercare transaction with revenue of approximately $57 million


NEWS RELEASE
NEWS PROVIDED BY

Yahoo Finance

Transaction Elevates Addus to the Leading Provider of Both Personal Care and Hospices Services in the State of New Mexico

FRISCO, Texas, May 1, 2018 /PRNewswire/ — Addus HomeCare Corporation (NASDAQ: ADUS), a provider of comprehensive home care services, today announced that it has completed the purchase of Ambercare Corporation, Inc., a provider of personal care, hospice and home health services, headquartered in Albuquerque, New Mexico.  Ambercare currently serves approximately 2,600 consumers through 15 locations located across New Mexico and, for 2017, generated revenue of approximately $57 million. Addus funded the purchase price of $40.0 million (net of excess cash) through the delayed draw term loan portion of its credit facility.

Dirk Allison, President and Chief Executive Officer of Addus, commented, “We welcome the team from Ambercare, a long-time provider of high quality home care services, to Addus.  We are pleased to complete this transaction, which is consistent with the central elements of our acquisition strategy. It builds on our already strong presence in New Mexicoto give us market leading positions; it expands our scope of home care services in the market; and it is expected to be immediately accretive to our earnings. We are particularly excited to supplement our service offering with hospice services through this acquisition. Our management team has deep experience in the hospice industry, and we intend to continue to grow this segment of the business.

This transaction is the second large acquisition we have completed in the past 30 days. These deals reflect our growing acquisition pipeline, which we expect will continue to help us expand our market share and diversify our client base in targeted markets.  With a strong financial position and substantial cash flow from operations, we believe we are well-positioned both to fund our organic growth and execute additional accretive acquisitions during 2018.”  Stoneridge Partners, Ben Bogan and Charles Jantzi, provided sell side M&A advisory services in the Addus Homecare & Ambercare transaction.

Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as “will,” “continue,” “expect,” “believe” and similar expressions. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare’s relationships with referral sources, increased competition for Addus HomeCare’s services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize and other risks set forth in the Risk Factors section in Addus HomeCare’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2017, which is available at www.sec.gov. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized.

 About Addus
Addus is a provider of comprehensive home care services that include, primarily, personal care services that assist with activities of daily living, as well as hospice and home health services. Addus’ consumers are primarily persons who, without these services, are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus’ payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. Addus currently provides home care services to approximately 39,000 consumers through 156 locations across 25 states. For more information, please visit www.addus.com.

Related Links
SOURCE Yahoo Finance
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Home Health Index | 2018 APRIL UPDATE

Home Health Stocks Falter as Economic Uncertainties Linger

Home Health Stocks Falter as Economic Uncertainties Linger

After surviving market turbulence in January and February 2018, home health share prices failed to experience the same buffer in March. The Home Health Index by Stoneridge Partners, which tracks the market value of the three largest public home health companies — Almost Family (NASDAQ: AFAM), LHC Group (NASDAQ: LHCG) and Amedisys (NASDAQ: AMED) — fell 2.67% last month, roughly tracking the overall stock market. By comparison, the S&P declined 3.10% in March.

The good news: not every company in the HHI experienced stock price declines. Year to date, the HHI is up 5.07%. Amedisys, based in Baton Rouge, Louisiana, saw its stocks climb 2.14%. The increase may be a positive response to news in March that Amedisys received an average Quality of Patient Care Star Rating of 4.22 (out of a possible 5 stars total) from the Centers for Medicare & Medicaid Services. That rating is approximately 30% higher than the industry average.

Louisville Kentucky-based Almost Family’s stock fell 5.12%, while Lafayette, Louisiana-based LHC Group experienced a drop of 4.43% during March. On March 29, Almost Family and LHC Group completed their long-discussed merger. The all-stock merger created the second-largest home health provider in the country with an annual revenue of nearly $1.8 billion. Kindred Healthcare (NYSE: KND) remains the largest home health company in the industry, though its home health and hospice business is also undergoing an acquisition by Humana (NYSE: HUM).

However, home health companies may fare better following an April 2 announcement from CMS that non-skilled in-home care supports will be allowed as a supplemental benefit for Medicare Advantage plans in 2019.

“Home health providers surely welcome this change, and this announcement puts companies in a strong position for April and the remainder of 2018,” said Stoneridge Partners President Rich Tinsley. “That’s good news after a rocky March that saw declines in the HHI and S&P 500, as investors reacted to fears over major economic uncertainties, including a potential trade war with China and other countries rattled markets.”

Also of note in the home health industry, Frisco, Texas-based Addus HomeCare (NASDAQ: ADUS) stock prices rose 39% after it announced it achieved a new record for net service revenue during Q4 2017. Addus, a major personal care services provider, is not part of the HHI because little of the company’s revenue comes from Medicare.

Quote Of The Month 

“It’s easier for seniors to plan their own funerals than to budget and plan for assisted living.  I think the thought that they might not be able to care for themselves is frightening.  You know that death is going to happen. But you don’t know what you’re going to go through on the way there.” – Karen Hanson, the community service manager for Home Instead Senior Care.

Read the Full Article Here: Senior care planning should begin early

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 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 since 2002.

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

(Home Health Index April 2018 | Stoneridge Partners)

 

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

Company 3/31/18 1 mos change YTD change 3/31/17 3/31/16
Almost Family 58.95 +2.34% +6.50% 49.85 38.58
Amedisys 59.21 +11.97% +12.33% 51.2 38.2
LHC Group 64.38 +1.23% +5.11% 48.52 36.84
HH Index* 60.85 +4.86% +7.81% 49.86 37.87
S&P 500 2718.5 -3.77% +1.68% 2396.96 1948.05
Addus 34.35 -6.15% -1.29% 33.7 23.41

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) 3/31/18 3/31/17 3/31/16
Almost Family 879 750 444
Amedisys 2090 1790 1670
LHC Group 1280 1050 670
HH Index Total 4249 3590 2784
Addus 500 391 180


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

Company 3/31/18 3/31/17 3/31/16
Almost Family 110% 120% 87%
Amedisys 138% 126% 136%
LHC Group 120% 117% 87%
HH Index Average* 123% 121% 103%
Addus 120% 98% 54%


Multiples of EV/EBITDA

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

Company 3/31/18 3/31/17 3/31/16
Almost Family 25.02 19.05 12.09
Amedisys 16.29 21.96 18.76
LHC Group 14.27 12.51 8.64
HH Index Average* 18.53 17.84 13.16
Addus 15.21 12.54 7.52

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 April 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Nova Leap Health Corp, based in Halifax, Nova Scotia, an international provider of personal home care and support services acquired the business assets of Home Health Solutions, Inc. located in Holyoke, Massachusetts.
  • LHC Group, a Louisiana-based home health care provider has become the second-largest in the United States with the completion of its acquisition of Almost Family, a Kentucky-based firm.

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

     

More

Home Health Index April 2018 | 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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