Amedysis, LHC Group Stock See Double-Digit January Gains 

Amedisys, LHC Group Stock See Double-Digit January Gains

Healthcare mergers and acquisitions firm Stoneridge Partners has released its latest Home Health Index (HHI), and it shows good news for shareholders. Home health stocks performed strongly in January, rising 11.87% – growth that slightly outperformed the broader market. The S&P 500 climbed  8.51% in January.

Updated monthly, the Stoneridge HHI tracks the market values of Frisco, Texas-based Addus, as well as Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (LHCG).

“Home health stocks were down in December, but they’ve rebounded in the early part of 2019 thanks to great performance by both Amedisys and LHC Group,” said Stoneridge Partners President Rich Tinsley. “Addus is the only exception at this time, which is still down. But we’ll  get more insight into how these companies are really doing when they report quarterly earnings this month.”

Stock prices for Baton Rouge, Louisiana-based Amedisys and Lafayette, Louisiana-based LHC Group both recorded double-digit gains. Amedisys saw its stock rise by 12.22% in January compared to December. The company will look to carry that momentum throughout February, further buoyed by the closing of its $340 million Compassionate Care Hospice acquisition on Feb. 4. Stock values for LHC Group, meanwhile, jumped 11.42% in January compared to the previous month. In comparison, Addus stock dipped by double digits, falling 10.48%. Stoneridge’s final HHI calculation does not include Addus, however, due to the company’s revenue mix.

The HHI was up 102.69% in January over the trailing 12 months, thanks largely to Amedisys being up 147.96% on a 12-month basis. LHC Group was up 63.69% in January over the trailing 12 months, while Addus was up 66.48%. From January 2018 to January 2019, the S&P 500 was down 4.15%, reflective of the home health industry’s heightened ability to withstand macro-level headwinds compared to other sectors.

Quote Of The Month 

“As lifespans increase, and as the cost of health care reaches new heights, many adults are shouldering the responsibility of ongoing support for their family members,” Angie O’Leary, head of wealth planning at RBC Wealth Management – U.S.

Read the Full Article Here: Why Respite Care Remains Important Part of Home Care Agencies’ Service Mix 

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 February 2019 | Stoneridge Partners)

 

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

Company 1/31/19 1 mos change YTD change 1/31/18 1/31/17
Amedisys 131.12 -12.22% +12.22% 52.88 45.47
LHC Group 104.11 -11.42% +34.45% 63.60 49.74
HH Index* 117.62 -11.87% +46.32% 58.03 47.55
S&P 2707.76 -8.51% -7.14% 2825.09 2280.22
Addus 60.93 +10.48% +48.87% 36.60 33.90

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) 1/31/19 1/31/18 1/31/17
Amedisys 4170 1840 1610
LHC Group 3610 1280 985
HH Index Total 7780 4017 3217
Addus 687 410 371


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

Company 1/31/19 1/31/18 1/31/17
Amedisys 257% 125% 116%
LHC Group 227% 127% 112%
HH Index Average* 242% 124% 110%
Addus 141% 99% 97%


Multiples of EV/EBITDA

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

Company 1/31/19 1/31/18 1/31/17
Amedisys 25.39 15.94 20.35
LHC Group 27.09 13.63 11.95
HH Index Average* 26.24 16.88 15.23
Addus 18.35 12.04 14.03

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 February 2019 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Banner Health has assumed operations of TRU Hospice in Northern Colorado
  • Baton Rouge based Amedisys acquired Compassionate Care Hospice
  • HouseWorks, a private-pay in-home care company, has acquired Philadelphia based Caring Friends Home Care
  • California based chronic disease management company Livongo Health has acquired Denver based myStrength

SOLD!!! By Stoneridge

  • Stoneridge Partners represented a Pennsylvania based Home Healthcare agency that closed January 2019
  • Stoneridge Partners represented the buyer of a Texas based Healthcare agency that closed January 2019

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 February 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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