Home Health Care Stocks Regain Footing in August
The share prices of two of the three biggest public home health care companies are on the rebound after a turbulent July, according to the latest data in the Home Health Index tracked by Stoneridge Partners.
The index, which follows the 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)—gained 7.42% in August compared to the previous month.
The Index beat the S&P 500, which rose a steady 0.05% during the month of August. The 7.42% increase marks a dramatic rebound from July, when the Home Health Index tumbled 19.57% on fears that the Centers for Medicare & Medicaid Services’ (CMS) proposed home health groupings model (HHGM) could shake up the market.
“Home health companies rebounded in August after regulatory concerns marked the previous month,” said Stoneridge President Rich Tinsley. “The sector continues to have an ‘up’ year relative to the stock market.”
Though LHC Group saw a significant drop in its share value in July, the Lafayette, Louisiana-based company’s stock climbed 12.69% in August. Year to date, LHC Group’s stock has jumped 42.78%.
Baton Rouge, Louisiana-based Amedisys also had a good month. The company’s stock prices rose 10.30% in August. Year to date, its shares are up 22.54%, according to the Index. Amedisys CEO Paul Kusserow recently said the home health industry represented “a united front” in opposition to the proposed payment model.
Only one company in the index didn’t share the growth in August. Louisville, Kentucky-based Almost Family’s stock shed 1.52% in August. Despite the drop, the company’s share values are up 10.43%, year-to-date.
Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, edged up 0.29% in August. Year to date, Addus’s share price has fallen 2.85%.
Quote Of The Month
“This is the first time that any administration has seemed to be so focused on regulatory relief,” said Vinita Ollapally, manager of regulatory affairs for the American College of Surgeons.
Read the Full Article Here: How the Trump administration is reshaping health care — without Congress
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 September 2017 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||8/31/17||1 mos change||YTD change||8/31/16||8/31/15|
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)||8/31/17||8/31/16|
|HH Index Total||3845||3341|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||122%||117%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||18.28||15.78|
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 2017 | Stoneridge Partners)
SOLD by Stoneridge!
- CareFinders Total Care, a New Jersey-based home healthcare provider, completed the acquisition of Sovereign Home Healthcare of Connecticut. Partner, Brian Bruenderman, provided sell-side advisory services.
Recent Transactions From Around The Country
- Seaside Healthcare has acquired the Savannah and Atlanta locations of Access MHA of Georgia, a community based mental health and substance use disorder treatment provider for children, adolescents and adults.
- All Metro Health Care acquired Massachusetts-based, Independence Healthcare Corp., a provider of non-medical home healthcare services.
- UNC Health Care and Carolinas Healthcare System, two of the largest healthcare providers in North Carolina have announced their plan to create one of the largest hospital networks in the country.
- Associated Home Care, a subsidiary of Amedisys, Inc., has entered into an agreement to acquire Intercity Home Care, a Massachusetts-based personal care provider. The transaction is expected to close October 1, 2017.
- The Ensign Group acquired two Arizona skilled nursing facilities on September 1, 2017: Desert Blossom health and Rehabilitation Center in Mesa, AZ and Pueblo Springs Rehabilitation Center in Tucson, AZ.
- AccentCare strikes a joint venture deal with UCLA Health aimed at providing a continuum of care for patients that have been discharged from the hospital.
- LHC Group has entered into a joint venture with Texas-based Christus Health, a non-profit health system.
- In Nebraska, Memorial Community Hospital & Health System has selected the Visiting Nurse Association to take over its home health and hospice services.
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
Home Health Index September 2017 | Stoneridge Partners