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%.
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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 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|
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|
|HH Index Total||4226||3005|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||133%||102%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||20.05||14.20|
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 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.
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Home Health Index October 2017 | Stoneridge Partners