Home Health Stocks Edge Higher, But Trail S&P In March 

Home Health Stocks Edge Higher, But Trail S&P In March

Healthcare mergers and acquisitions firm Stoneridge Partners has released its March Home Health Index (HHI), showing a modest increase for home health stocks over February’s results.

The Stoneridge Partners HHI follows the monthly market values for Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (Nasdaq: LHCG), two of the country’s largest home health, hospice and personal care providers. While Addus is not included in the HHI tabulations, Stoneridge also follows market changes for its stock.

“After seeing mixed results in February, home health stocks rebounded and saw some success in March,” Stoneridge Partners President Rich Tinsley said. Home health stocks rose 0.99% compared to the previous month. However, the index underperformed the S&P 500, which climbed 2.6% during the same timeframe.

Stock values for Baton Rouge, Louisiana-based Amedisys were up 0.2% in March according to the HHI. And values for Lafayette, Louisiana-based LHC Group performed even better, increasing by 2% compared to the previous month. Stocks of Frisco, Texas-based Addus, however, experienced a 3.2% decline.

Year-to-date, Amedisys and LHC Group have seen impressive growth. Amedisys stock values are up 5.2%, while LHC Group has seen an increase of 16%, according to Stoneridge Partners. Year over year, Amedisys and LHC Group were up 103.8% and 76.1%, respectively. Alternatively, Addus was down 5.4% year-to-date, but still up 32.4% year over year.

“As we’ve said before, M&A activity from both LHC and Amedisys has helped them achieve that success,” Tinsley said. “LHC Group finalized its joint venture with Geisinger Home Health and Hospice in early April, so we’re eager to see what that will mean for the company’s stock in the coming months.”

Quote Of The Month 

“It is difficult and even painful for patients and families to make the decision about turning to hospice care.” – Vipul Shah, MD McLeod Hospice and Palliative Care

Read the Full Article Here:  The Truth Behind Four Common Hospice Myths 

 

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 April 2019 | Stoneridge Partners)

 

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

Company 3/31/19 1 mos change YTD change 3/31/18 3/31/17
Amedisys 122.94 +0.22% +6.10% 60.34 51.35
LHC Group 108.43 +2.04% +14.99% 61.56 53.17
HH Index* 115.69 +0.99% +10.03% 59.30 50.74
S&P 2867.19 +2.61% +14.90% 2631 2350.5
Addus 64.41 -3.18% -5.36% 48.65 32.75

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) 3/31/19 3/31/18 3/31/17
Amedisys 3930 2090 1790
LHC Group 3800 1280 1050
HH Index Total 7730 4249 3590
Addus 775 500 391


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

Company 3/31/19 3/31/18 3/31/17
Amedisys 237% 138% 126%
LHC Group 210% 120% 117%
HH Index Average* 224% 123% 121%
Addus 150% 120% 98%


Multiples of EV/EBITDA

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

Company 3/31/19 3/31/18 3/31/17
Amedisys 23.36 16.29 21.96
LHC Group 23.06 14.27 12.51
HH Index Average* 23.21 18.53 17.84
Addus 19.80 15.21 12.54

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 April 2019 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Sodexo acquired the Good Care Group, expanding British homecare business
  • Choice Homecare of Tyler TX acquired Legacy Hospice which has offices in Tyler and Sulphur Springs, TX
  • BrightStar widened their regional footprint with an acquisition of Harmony Home Care

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 

  

Testimonial

I would recommend your services to any business owner looking to sell their company, especially the owner of a home care or home healthcare company.  You clearly have many years of experience working with buyers and sellers, and you have a full understanding of the home care business.

About a year after I started Sovereign Home Health of Connecticut I reached out to a couple business brokers to lay the foundation of a relationship in case the day came when I would be ready to sell my business.  You were gracious to spend time with me when we were very small and it was clear that an exit was a long time off in the future.   The market intelligence that you shared along the way was critical and invaluable as I built the business.  When the time came and I made the decision that I wanted to exit the business you quickly and effectively made several introductions and within a short period of time we had a couple offers on the table.   You held my hand at every step along the way and coached me well throughout the entire process.

Again, feel free to pass my cell phone on to any future potential clients that want to have the confidence of hearing from someone who has benefited by working with you.

-Syd Kain after working with Partner Brian Bruenderman

More

Home Health Index April 2019 | 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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