Home Health Companies Record Strong April Results

Home Health Index May 2017 | Stoneridge Partners: The share prices of publicly held home health companies reached a new index high in April, rising nearly 7% during the month and far outpacing the performance of the S&P 500 index, according to the Home Health Index tracked by Stoneridge Partners.

Year over year, home health companies Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG) on average have gained approximately 32% in value versus the S&P 500, which has risen 17% over the same time frame and which rose just over 1% during April. The Home Health Index has risen steadily this year, surpassing the performance of the overall stock market.

April’s Home Health gains surpassed a slighter uptick of 1.77% seen in March and 4.5% increase in February, marking a steady, consistent climb.

“The Home Health Index saw a solid increase in April, in part due to confidence among providers following regulatory delays and pro-business initiatives in Washington,” said Rich Tinsley, president of Stoneridge Partners. “The outlook remains strong for home health companies that are considering a sale as part of a succession plan, or simply to take advantage of the strong sellers’ market.”

By company, all three providers tracked by the Home Health Index experienced gains during April, with Amedisys seeing the greatest increase at more than 12% month-over-month. The company’s CEO Paul Kusserow commented during a recent investor healthcare conference that the company views an opportunity in several recent home health regulatory delays, and the impact of fewer rules from the Centers for Medicare and Medicaid Services (CMS) on Amedisys’s performance.

LHC Group’s share price increase tapered during April to 4.25%, after a major uptick of 9.58% in March, while Almost Family’s performance reversed course in April and ticked up 4.09% after experiencing a 4.31% decline the previous month.

Addus Homecare (Nasdaq: ADUS), which is not tracked by the index because little of its revenue comes from Medicare, also shifted course in March, with a 5.65% gain in its share price. The company posted losses in the three previous months, most recently declining 2.82% in March.

Enterprise value of all four publicly held companies, including Addus, has risen year over year to date, with selling price as a percent of revenue exceeding 100% in all cases, according to Stoneridge Partners’ analysis.

 

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Read the Full Article Here: Healthy M&A Expected Following Trump’s First 100 Days

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.
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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.
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This graph displays HH Index performance over the past 24 months.

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This graph compares the HH Index to the price of Addus stock (non-Medicare).
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(Home Health Index May 2017 | Stoneridge Partners)

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

Company 4/30/17 1 mos change YTD change 4/30/16 4/30/15
Almost Family 49.65 +4.09% +29.87% 37.24 44.71
Amedisys 57.63 +12.23% +46.57% 48.34 26.78
LHC Group 55.43 +4.25% +22.39% 35.56 33.03
HH Index* 54.24 +6.89% +32.46% 40.38 34.84
S&P 500 2388.13 +1.60% +16.84% 2059.74 2060.25
Addus 34.60 +5.65% -48.63% 17.19 23.02

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) 4/30/2017 4/30/2016
Almost Family 779 489
Amedisys 1950 1780
LHC Group 1010 756
HH Index Total 3739 3025
Addus 409 192


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

Company 4/30/2017 4/30/2016
Almost Family 125% 96%
Amedisys 137% 145%
LHC Group 122% 98%
HH Index Average* 128% 113%
Addus 102% 57%


Multiples of EV/EBITDA

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

Company 4/30/2017 4/30/2016
Almost Family 19.77 13.33
Amedisys 23.92 19.95
LHC Group 13.06 9.75
HH Index Average* 18.92 14.34
Addus 13.10 8.02

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 May 2017 | Stoneridge Partners)

Recent Transactions From Around The Country

  • AccentCare, a multi-state home health and hospice provider, has acquired Mississippi’s largest home health provider, Sta-Home Health & Hospice.
  • Origins Behavioral Healthcare, a provider of residential and outpatient substance use treatment, was acquired by TRT Holdings, Inc.
  • Amedysis, Inc., the Baton Rouge, Louisiana-based home health and hospice provider signed a definitive agreement to buy the assets of the Knoxville-based personal care provider, East Tennessee Personal Care Service.
  • Addus Homecare signed a definitive agreement to purchase Options Home Care, a provider of personal care services across New Mexico.

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 May 2017 | 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: Almost Family | Amedisys | LHC Group

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