AGENCIES FOR SALE
Mixed Results Drag Home Health Stocks Down Overall in May
The U.S. stock market took a downward turn in May – and home health stocks were not immune to the dip, according to the latest Home Health Index (HHI) from M&A advisory firm Stoneridge Partners.
As a whole, home health stocks were down 2.86% in May over the previous month. That is in comparison to the S&P 500 which sank further — 6.11% — in May compared to April. But even within the broader market downturn, there were still some bright spots for home heatlh.
The stock value of Lafayette, LA-based LHC Group was up slightly, by 1.58%. Year to date, LHC Group stock is up 20.88%. And Frisco, TX-based Addus saw its stock value rise 0.53% in May compared to April. Year to date, Addus stock is down 0.07%. In contrast, stock values for Baton Rouge, LA-based Amedisys were down 6.96% in May over the previous month. Year to date, Amedisys stock is down 4.25%.
“May produced mixed results for home health stocks,” said Stonereidge Patners President Rich Tinsley. “While they were down as a group, we’re continuing to see some positive performance from Addus and LHC. I expect Amedisys to level out in the near-term as well.”
The Stoneridge Partners HHI follows the stock values of Amedisys Inc. (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), two of the country’s largest independent and publicly-traded home health companies. Stoneridge does not include Addus HomeCare Corporation (Nasdaq: ADUS) in its final HHI calculations but still tracks the provider’s stock monthly.
“We’re getting into crunch time. The home health industry is really charging full-steam ahead in its preparations for the Patient-Driven Groupings Model,” Tinsley said. “It’s going to be interesting to watch stock performance as we near that January 1, 2020 implementation date.”
“Although there are no formal metrics of quality for pediatric home health, it is evident from several national surveys that family caregivers are frequently shouldering enormous burdens that lead them away from their own gainful employment and create social, emotional and financial hardship,” researchers Ann & Robert H. Lurie of Children’s Hospital of Chicago and Northwestern University Feinberg School of Medicine
Read the Full Article Here: Shortage of home healthcare for youth is draining families emotionally and financially
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:
This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index going back to 2002.
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.
This graph displays HH Index performance since 2002.
This graph compares the HH Index to the price of Addus stock (non-Medicare).
|Company||5/31/19||1 mos change||YTD change||5/31/18||5/31/17|
Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.
|EV (in M)||5/31/19||5/31/18||5/31/17|
|HH Index Total||7820||3940||3609|
|HH Index Average*||210%||149%||117%|
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||21.30||17.05||14.97|
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 to it’s reporting. (Home Health Index June 2019 | Stoneridge Partners)
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Home Health Index June 2019 | Stoneridge Partners