Home Health Index Continues Hot Streak in June
Stoneridge Partners | Home Health Index July 2017: Home health companies continued to see strong returns during June, according to the latest findings of the Home Health Index by Stoneridge Partners.
The index, which tracks the average market values of three of the largest publicly traded home health care companies – Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG) – jumped 8.35% compared to the previous month.
The index, on a hot streak, also vastly outpaced the S&P 500, which increased just 0.48%. The June rise was just behind the biggest monthly increase for the index year to date seen in May, when the index rose 9.1%.
“Home health companies, which have been rewarded for their deal making throughout the year, continued to see the ongoing streak of share price gains,” said Rich Tinsley, president and CEO of Stoneridge Partners.
Almost Family, based in Louisville, Kentucky, had strong gains in June, with the company’s stock price rising 7.4%. Year to date, Almost Family’s stock is up 39.8%. The company has been actively pursuing joint venture deals throughout the first half of the year, after completing the nation’s largest public home health-hospital joint venture with Community Health Systems (NYSE: CYH) late in 2016.
Baton Rouge, Louisiana-based Amedisys Inc. also saw its stock price rise in June, albeit at a slower pace. From the previous month, Amedisys’ share price rose 4.82%. Since the start of the year, the stock is up 47.34%. Amedisys agreed to pay $43.8 million to investors during the month in a settlement of a lawsuit that dates back to 2010.
LHC Group, based in Lafayette, Louisiana, saw the highest share price growth in June, soaring 12.77% from the previous month. The stock has also risen the most compared to its peers since the start of the year, jumping 48.56%. The company’s stock has been buoyed by its strong position in joint venture deals, and CEO Keith Myers stated in a June presentation that he predicts LHC Group could double in size with its potential growth opportunities.
Addus HomeCare (Nasdaq: ADUS), which is not tracked on the index because too little of its revenue comes from Medicare, saw marginal gains in June. Its stock price inched up 0.27% last month.
Quote Of The Month
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-Steny Hoyer, House Democratic Whip
Read the Full Article Here: Why is Health Care So Complicated?
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.
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 over the past 24 months.
This graph compares the HH Index to the price of Addus stock (non-Medicare).
(Home Health Index July 2017 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||6/30/17||1 mos change||YTD change||6/30/16||6/30/15|
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)||6/30/17||6/30/16|
|HH Index Total||4479||3234|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||152%||115%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||21.45||15.44|
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 2017 | Stoneridge Partners)
Sold by Stoneridge!
- Superior Home Health Care, Inc. in Baton Rouge, Louisiana was acquired by Hometown Healthcare Management. Ben Bogan and Charles Jantzi provided sell-side advisory services.
- Home Care Assistance closed on Living Well Assisted Living at Home in Sausalito, California. Rhonda Gronberg provided buy-side advisory services.
Recent Transactions From Around The Country
- Traditions Hospice of South Houston, a home health and hospice provider in Texas, acquired the Houston-based hospice provider, Hallmark Hospice.
- The Ensign Group, Inc. closed on several transactions this month. From Brookdale Senior Living, they acquired the real estate and operations of two assisted living facilities in Texas and three assisted living facilities in Wisconsin. In Colorado, the Ensign Group acquired the real estate and operations of two continuing care retirement communities, the Villas at Sunny Acres as well as Medallion Post Acute Rehabilitation and Medallion Villas.
- Kindred Healthcare struck a deal to sell its skilled nursing business for $700 million in cash to BM Eagle Holdings, a joint venture led by affiliates of BlueMountain Capital Management.
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