Amedysis, LHC Group Stock Down in December
Amedisys, LHC Group Stock Down in December
Home health stocks were back down in December, failing to escape the broader market’s downward turn.
Indeed, home health stocks dropped 13.59% in December compared to November, the most recent Home Health Index (HHI) from mergers and acquisitions firm Stoneridge Partners shows. Updated on a monthly basis, the HHI tracks the market values of two of the nation’s largest publicly traded home health companies: Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG).
While home health stocks plunged more than 13%, the S&P 500 also plummeted 8.91% in December over the previous month, according to the HHI. In general, though, the index has far outperformed the S&P 500 since 2004.
“This is actually one of the very rare instances over the past several years where we’ve seen home health stocks actually fall behind the broader market,” Stoneridge Partners President Rich Tinsley said. “That’s somewhat surprising, though I don’t except that trend to continue for long. Even with the Patient-Driven Groupings Model (PDGM) on the horizon, it’s a promising landscape for the home health industry due to macro-level factors, including consumer demand.”
Stock prices for Amedisys and LHC Group both dropped by double digits in December.
Amedisys — headquartered in Baton Rouge, Louisiana, with an executive office in Nashville, Tennessee — saw its stock drop 15.29% in December compared to November, according to HHI.
Meanwhile, Lafayette, Louisiana-based LHC Group saw its stock drop by 11.37% in December over the previous month.
In addition to Amedisys and LHC Group, Stoneridge Partner’s HHI also monitors the stock value of Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS). Stoneridge does not include Addus in the final HHI calculation, however.
Similar to Amedisys and LHC Group, Addus, which derives most of its revenue from Medicaid sources, saw its stock drop 9.79% in December compared to November.
Quote Of The Month
“Site of care, we continue to believe, is going to move from an institutional mindset, where everything is done institutionally, to a much lower-cost setting, including the home and digital” – Bruce Broussard, CEO and president of Humana Inc.
Read the Full Article Here: Humana CEO: Home-Based Care, Social Determinants of Health ‘Most Impactful’ to Health Care System
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.
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 since 2002.
This graph compares the HH Index to the price of Addus stock (non-Medicare).
(Home Health Index January 2019 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||12/31/18||1 mos change||YTD change||12/31/17||12/31/16|
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)||12/31/18||12/31/17||12/31/16|
|HH Index Total||6960||3888||3015|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||217%||120%||103%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||23.48||16.38||14.26|
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 January 2019 | Stoneridge Partners)
Recent Transactions From Around The Country
- AccentCare Inc. of Dallas, TX acquired Steward Home Care and Hospice
SOLD!!! By Stoneridge
- Stoneridge Partners represented a Florida based Home Healthcare agency that closed December 2018
- Stoneridge Partners represented a Florida based Healthcare agency that closed December 2018
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
Home Health Index January 2019 | Stoneridge Partners