Amedisys Bounces Back While Other Home Health Stocks Dip in September

Amedisys Bounces Back While Other Home Health Stocks Dip in September

The Stoneridge Partners Home Health Index (HHI) for September shows Amedisys, Inc. (Nasdaq: AMED) made up some of the ground it lost in August, despite a continued downward trend in the greater home health market.

Stoneridge Partners bases its monthly HHI on the stock values of Baton Rouge, Louisiana-based Amedisys and Lafayette, Louisiana-based LHC Group, two of the largest publicly-traded home health companies in the country. The M&A firm also tracks the performance of Addus HomeCare Corporation (Nasdaq: ADUS) stocks, but does not include the Frisco, Texas-based company in its final HHI calculations.

While Amedisys stock was up just more than 2%, LHC Group stock was down nearly 3.6% – leading to slight overall dip of almost 0.6% for home health stocks in September. But that figure also excludes a nearly 10% decline for Addus stock in September, giving back its impressive August gains and then some. In comparison, the S&P 500 rose in September, up nearly 2% from the prior month.

With a bevy of big news coming from Amedisys in the past several weeks, the success of its stock price isn’t surprising. The company announced a new agreement in July with ClearCare to develop a nationwide network of personal care partners, making it an attractive partnership target for Medicare Advantage plans. Then last month, news broke that Amedisys had entered a new partnership with Walmart to expand home health care access nationwide.

Some turmoil within the home health industry as 2020 approaches is also to be expected, according to Stoneridge Partners President Rich Tinsley.

“We’re inching closer to the Patient-Driven Groupings Model, which is making a lot of people nervous,” Tinsley said. “Even these big providers are going to be affected by it because PDGM is the biggest reimbursement shift the industry has seen in decades — and it could come with an 8% payment cut.”

Still, despite the uncertainty of a new payment model, home health stocks were up year-over-year and year-to-date in September. Stocks values tracked by the HHI have increased almost 9% compared to September 2018, and almost 17% since the start of this year. Additionally, Addus was up more than 14% year-over-year and almost 16.5% year-to-date in September.

Quote Of The Month

“One of the ways that digital solutions for behavioral health issues can reduce stigma is that it can be experienced in complete privacy, and it can make treatment for behavioral and emotional health issues much more accessible,” – Ellen Beckjord, associate vice president of population health and clinical affairs at UPMC Health Plan.

Read the Full Article Here:  The future of health care: How digital behavioral health interventions can support your workforce

 

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.

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This graph compares the HH Index to the price of Addus stock (non-Medicare).
[visualizer id=”8362″]

(Home Health Index October 2019 | Stoneridge Partners)

 

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

Company 9/30/19 1 mos change YTD change 9/30/18 9/30/17
Amedisys 131.36 +2.06% +12.43% 123.61 55.96
LHC Group 114.28 -3.56% +22.30% 101.98 70.92
HH Index* 122.82 -0.64% +16.82% 112.80 60.19
S&P 2983.69 +1.96% +19.57% 2924.87 2519.36
Addus 79.19 -9.99% +16.35% 69.29 35.3

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) 9/30/19 9/30/18 9/30/17
Amedisys 4390 3990 1928
LHC Group 3980 3520 1402
HH Index Total 8370 7510 4226
Addus 1070 857 438


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

Company 9/30/19 9/30/18 9/30/17
Amedisys 242% 252% 131%
LHC Group 195% 260% 144%
HH Index Average* 219% 256% 133%
Addus 188% 188% 106%


Multiples of EV/EBITDA

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

Company 9/30/19 9/30/18 9/30/17
Amedisys 24.41 26.45 22.77
LHC Group 19.57 34.08 15.18
HH Index Average* 21.99 30.27 20.05
Addus 25.72 23.75 13.44

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 for its reporting. (Home Health Index October 2019 | Stoneridge Partners)

Recent Transactions From Around The Country

  • TEAM Services, which is backed by Alpine Investors, has acquired AmeriBest Home Care, a portfolio company of Boyne Capital
  • Appriss Health, provider of the most comprehensive platform for opioid stewardship and substance use disorder (SUD) in the U.S. acquired OpenBeds
  • Arosa+LivHOME acquired LifeLinks, a provider of Aging Life Care services in North Carolina and Tennessee
  • Three Oaks Hospice acquired Total Hospice & Palliative Care, ABS Palliative and Hospice Care and Fellowship Hospice
  • Community Psychiatry Management, the largest outpatient mental health organization in California acquired Calabasas Behavioral Health and Gelbart and Associates

CLOSED by Stoneridge

  • Stoneridge Partners represented an Oklahoma based agency that closed October 2019
  • Stoneridge Partners represented an Illinois based agency that closed September 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.

 

Another Cartoon Favorite 

   

 

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Home Health Index October 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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