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Home Health, Post-Acute Care Stocks Values Continue to Gain Ground in May

After two months of uncertainty, the U.S. economy continues to show small but clear signs of stabilization. And according to the latest Home Health (HHI) and Post-Acute Care (PAI) Indices from mergers and acquisitions firm Stoneridge Partners, that’s especially true for post-acute and home health providers.

An influx of coronavirus relief funding distributed by the U.S. Department of Health and Human Services (HHS) under the CARES Act continued to lift healthcare stock values in May, particularly for home health providers, which received roughly $1.7 billion from the Act’s Provider Relief Fund.

“Home health and post-acute stocks followed up their April gains with even better performance in May,” said Stoneridge Partners President Rich Tinsley. “That’s partly because of the relief funding and regulatory waivers that Medicare providers have received, but also because of the continued focus on home-based care nationally.”

Home Health Index

The Stoneridge HHI follows the stock values of Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group Inc. (Nasdaq: LHCG). Amedisys stock values improved by more than 4% in May compared to April, and LHC Group stock soared 20% higher during that same period – resulting in an 11% improvement for the overall HHI in May. In comparison, the S&P 500 rose by just more than 4%.

Post-Acute Care Index

Stoneridge also tracks stock values for post-acute care companies in its PAI, which includes both Amedisys and LHC Group, plus Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living (NYSE: BKD).

Eagle, Idaho-based The Pennant Group saw the biggest month-over-month stock value increase in May, shooting up more than 22% over April’s results. Frisco, Texas-based Addus, and Birmingham, Alabama-based Encompass Health saw their stocks climb by 18% and nearly 10%, respectively, during that same period. Brookdale, meanwhile, saw more modest gains, as its stock rose by just more than 1% in May compared to April.

“Brookdale has some additional challenges as a senior living operator,” Tinsley said. “ They care for seniors in communal settings, and those types of providers have been hit hard by the coronavirus. Their pandemic response efforts have looked different from what we’ve seen from home-based care enterprises, and their financial recovery will likely look different as well.”

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 June 2020 | Stoneridge Partners)

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

Company 5/31/20 1 mos change YTD change 5/31/19 5/31/18
Amedisys 192.05 +4.11% +15.55% 111.88 76.67
LHC Group 162.51 +20.01% +17.97% 112.95 77.23
HH Index* 177.28 -11.40% +16.65% 112.42 76.95
S&P 3044.31 +4.33% -5.77% 2751.98 2732.54
Addus 98.96 +18.13% -1.79% 68.01 58.25

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) 5/31/20 5/31/19 5/31/18
Amedisys 6400 3840 2510
LHC Group 5440 3980 1430
HH Index Total 11840 7820 3940
Addus 1350 860 586


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

Company 5/31/20 5/31/19 5/31/18
Amedisys 323% 222% 162%
LHC Group 260% 197% 135%
HH Index Average* 292% 210% 149%
Addus 225% 157% 137%


Multiples of EV/EBITDA

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

Company 5/31/20 5/31/19 5/31/18
Amedisys 26.51 21.84 18.13
LHC Group 26.03 20.76 15.97
HH Index Average* 26.27 21.30 17.05
Addus 34.88 20.99 18.01

The Stoneridge Partners Post-Acute Care 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)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.
[visualizer id=”11962″]

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 June 2020 | Stoneridge Partners)

More

Home Health Index May 2020 | 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

Please follow us on Facebook  and Linkedin

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Home Health and Post-Acute Care Stock Values Stabilize in April Thanks to Stimulus Funds

Stock values for home health and post-acute care providers started clawing their way back in April from the significant hits they took in the previous month. That’s according to the new Home Health (HHI) and Post-Acute (PAI) Indices compiled by national healthcare mergers and acquisitions advisory firm Stoneridge Partners.

As the U.S. continues its response to the coronavirus pandemic, resulting in record unemployment and widespread shelter-in-place orders, multiple Congressional stimulus packages have helped reduce daily stock market downswings. Overall, the S&P 500 climbed more than 11% in April as compared to March; a comparatively dismal month that saw a drop in the S&P of roughly 14%.

Healthcare providers also benefitted from emergency financial relief in April, as the U.S. Centers for Medicare & Medicaid Services (CMS) sought to stabilize the industry on the frontlines of the country’s coronavirus response.

“Toward the middle of April, CMS began distributing $30 billion in funding created by the CARES Act to all types of Medicare providers to help sustain cash flow and cover COVID-19 costs,” said Rich Tinsley, President and CEO of Stoneridge Partners. “Policymakers already followed up on that $30 billion with additional emergency relief, too, with more likely coming in May.”

Home Health Index

The Stoneridge Partners HHI tracks monthly stock values for Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (Nasdaq: LHCG). In April, Amedisys saw a slight gain over the previous month, with stock values climbing less just more than 0.3%. In contrast, LHC Group’s stock dipped by nearly 8% during that same period.

Post-Acute Index

The Stoneridge Partners PAI includes both Amedisys and LHC Group, as well as Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

Stock values for the additional companies making up the PAI saw marked improvements in April. Addus stock rose by nearly 17% in April over March, while The Pennant Group bested even that performance with a more than 28% gain. Brookdale’s stock values increased by almost 14% during the same period, and Encompass Health saw a more than 3% gain compared to March.

Year to date, the stock values for Addus (13.70%), Brookdale (40.99%) Encompass Health (15.56%), LHC Group (11.44%) and The Pennant Group (19.99%) are all up, while Amedisys stock is down 4.61%.

Earnings Calls

Amedisys, Addus, Brookdale and LHC Group are all holding conference calls this week to discuss Q1 2020 financial results.

Encompass Health hosted its Q1 earnings call on April 29, using a portion of the call to specifically discuss the difficulties of working through the Patient-Driven Groupings Model (PDGM) and the coronavirus at the same time.

“We had a lot of momentum heading into 2020, and January and February were a strong start to the year,” Encompass Health CEO Mark Tarr said during the call. “In mid-March, we began experiencing a significant impact from the COVID-19 pandemic.”

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 May 2020 | Stoneridge Partners)

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

Company 4/30/20 1 mos change YTD change 4/30/19 4/30/18
Amedisys 184.16 +0.34% +10.81% 120.25 65.97
LHC Group 129.99 -7.85% -5.64% 111.19 74.45
HH Index* 157.08 -3.05% +3.35% 115.72 70.21
S&P 2912.43 +11.26% -9.85% 2931 2654.8
Addus 81.02 +16.56% -16.66% 67.65 52.15

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) 4/30/20 4/30/19 4/30/18
Amedisys 6470 4480 2260
LHC Group 4220 3800 1440
HH Index Total 10690 8280 3700
Addus 1130 832 607


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

Company 4/30/20 4/30/19 4/30/18
Amedisys 331% 259% 150%
LHC Group 203% 210% 136%
HH Index Average* 267% 235% 143%
Addus 189% 161% 145%


Multiples of EV/EBITDA

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

Company 4/30/20 4/30/19 4/30/18
Amedisys 27.04 25.43 17.59
LHC Group 20.78 23.07 16.08
HH Index Average* 23.91 24.25 16.84
Addus 29.32 21.23 18.44

The Stoneridge Partners Post-Acute Care 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)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.
[visualizer id=”11962″]

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 May 2020 | Stoneridge Partners)

More

Home Health Index May 2020 | 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

Please follow us on Facebook  and Linkedin

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Home Health Stocks Withstand March Coronavirus Turmoil

March was a tumultuous month for the U.S. economy, as the spread of the coronavirus across the country closed businesses, sent workers home and resulted in record unemployment.

The stock market plunged, then was bolstered late in the month after the implementation of federal economic stimulus packages including the $2 trillion CARES Act. Still, the S&P 500 finished down more than 14%. But the new Stoneridge Partners Home Health Index (HHI) and Post-Acute Care Index (PAI) show that while stock values for post-acute care providers were not spared from the abrupt downturn, some home health stocks avoided the market volatility and continued on an upward trajectory.

The Stoneridge Partners HHI tracks the stock values of Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group Inc. (Nasdaq: LHCG). Amedisys stock values were up more than 5% in March, while LHC Group’s stock saw a more than 13% bump – leading to a nearly 9% overall increase for the HHI compared to February.

“The market was incredibly volatile in March as the country faced unprecedented challenges due to the coronavirus,” Stoneridge Partners President Rich Tinsley said. “Home health stocks weren’t entirely immune to that, but they rebounded nicely because of continued macro-level headwinds and the fact home health providers play such a vital role in providing care during this global emergency.”

Home health providers were also buoyed by multiple regulatory actions taken by the Centers for Medicare and Medicaid Services (CMS), such as expanding telehealth rules, suspending the Review Choice Demonstration (RCD) and loosening homebound requirements under Medicare.

“CMS realizes how important in-home care is right now, especially with older adults self-isolating and maintaining social distance,” Tinsley said.

The results were not as positive for the post-acute care providers tracked by the Stoneridge Partners PAI.

Stock values for Frisco, Texas-based Addus were down almost 13% in March compared to February, and Birmingham, Alabama-based Encompass Health was down nearly 17%. Eagle, Idaho-based Pennant — the home health and hospice spinoff that was once part of The Ensign Group (Nasdaq: ENSG) — was down almost 92% in March compared to February. And Brentwood, Tennessee-based Brookdale Senior Living saw an eye-popping 110% decrease in its stock values.

“I’m not surprised that senior housing operators saw such large losses in March because they’re among those exposed to the most risk from the coronavirus. I’m confident those values will bounce back once we see our efforts to contain the virus begin to take hold across the country,” Tinsley said.

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 2020 | Stoneridge Partners)

 

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

Company 3/31/20 1 mos change YTD change 3/31/19 3/31/18
Amedisys 183.54 +0.34% +10.81% 122.94 60.34
LHC Group 140.2 -7.85% -5.64% 108.43 61.56
HH Index* 161.87 -3.05% +3.35% 115.69 59.30
S&P 2584.59 +11.26% -9.85% 2867.19 2631
Addus 67.6 +16.56% -16.66% 64.41 48.65

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) 3/31/20 3/31/19 3/31/18
Amedisys 5680 3930 2090
LHC Group 4420 3800 1280
HH Index Total 10100 7730 4249
Addus 928 775 500


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

Company 3/31/20 3/31/19 3/31/18
Amedisys 290% 237% 138%
LHC Group 213% 210% 120%
HH Index Average* 252% 224% 123%
Addus 155% 150% 120%


Multiples of EV/EBITDA

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

Company 3/31/20 3/31/19 3/31/18
Amedisys 24.49 23.36 16.29
LHC Group 21.77 23.06 14.27
HH Index Average* 23.13 23.21 18.53
Addus 24.05 19.80 15.21

 

The Stoneridge Partners Post-Acute Care 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)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

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 April 2020 | Stoneridge Partners)

More

Home Health Index April 2020 | 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

Please follow us on Facebook  and Linkedin

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Uncertainty over PDGM, Coronavirus Results in Setback for Home Health Stocks in February

The latest Home Health Index (HHI) from mergers and acquisitions advisory firm Stoneridge Partners shows home health stocks took a hit in February, bringing their recent momentum to an abrupt halt. The continued transition to the Patient-Driven Groupings Model (PDGM) and fear over the spread of coronavirus are the most likely culprits behind the decline, which mirrored an almost identical downturn in the broader market. Both the HHI and the S&P 500 were down just more than 9% for the month.

“After starting 2020 on a high note, home health stocks struggled in the second month of the year,” said Rich Tinsley, President and CEO of Stoneridge Partners. “Some of that we expected as companies are still in the early stages of their adjustment to PDGM. What we couldn’t necessarily have anticipated was the market’s response to the spread of coronavirus. Home health stocks were not spared from the downturn caused by fear over the virus’ arrival in the U.S.”

Last month, rising anxieties over the continued spread of coronavirus contributed to the largest single-week stock market downturn since 2008, with roughly $6 trillion in market value taken off the table.

Released monthly, the HHI follows the stock values of Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG). LHC Group bore the brunt of the HHI’s decline last month, losing 20% of its stock value compared to January. Alternatively, the stock value of Baton Rouge, Louisiana-based Amedisys was down just 1.43%.

Even considering February’s losses, LHC is still outperforming its market values from last fall. Over the trailing 12 months, LHC Group’s stock was up more than 14% as of February. Amedisys’ 12-month performance was even more impressive, up nearly 42%.

“Financially, both companies had a strong year in 2019,” Tinsley said. “And even though February was a tough month for the market in general, there are plenty of reasons for them to remain optimistic about the rest of 2020.”

Post-Acute Market Performance

The Stoneridge Partners Post-Acute Index (PAI) is now in its second month, tracking stock values for Encompass Health Corp. (NYSE: EHC), Brookdale Senior Living, Inc. (NYSE: BKD) and The Pennant Group, Inc. (Nasdaq: PNTG). Additionally, Stoneridge has moved its monitoring of stock values for Addus HomeCare Corporation (Nasdaq: ADUS) from the monthly HHI to the Post-Acute index.

Companies in the PAI also suffered setbacks in February. Addus stock values were down almost 24% in February compared to January. Similarly, stock values for Encompass Health and Brookdale were down nearly 3% and 0.30% compared to January, respectively.

Meanwhile, The Pennant Group — the publicly traded home health and hospice provider that spun off from The Ensign Group last year — saw its stock values buck the trend and climb by almost 3% in February compared to the previous month.

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 March 2020 | Stoneridge Partners)

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

Company 2/28/20 1 mos change YTD change 2/28/19 2/28/18
Amedisys 174.01 -1.43% +4.70% 122.65 59.21
LHC Group 121.46 -20.00% -11.83% 106.39 64.38
HH Index* 147.74 -9.06% -2.79% 114.52 60.85
S&P 2954.22 -9.18% -8.56% 2796.5 2718.5
Addus 76.27 -23.69% -21.55% 66.35 34.35

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) 2/28/20 2/28/19 2/28/18
Amedisys 6320 4010 2020
LHC Group 4400 3680 1310
HH Index Total 10720 7690 4278
Addus 1230 761 410


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

Company 2/28/20 2/28/19 2/28/18
Amedisys 323% 247% 134%
LHC Group 214% 232% 131%
HH Index Average* 269% 240% 128%
Addus 206% 156% 99%


Multiples of EV/EBITDA

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

Company 2/28/20 2/28/19 2/28/18
Amedisys 26.40 24.39 16.08
LHC Group 22.68 27.61 13.99
HH Index Average* 24.54 26.00 19.02
Addus 31.93 20.31 12.02

The Stoneridge Partners Post-Acute Care 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)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

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 March 2020 | Stoneridge Partners)

More

Home Health Index March 2020 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at [email protected]oneridgepartners.com 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

Please follow us on Facebook and Linkedin

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Dear Valued Customer/Supplier:

On March at 8 pm EST, Governor Wolf issued an extensive Executive Order for the State of Pennsylvania and it’s businesses.

West Penn Oil Co.,Inc. has been identified in this order as an “essential business” due to our manufacture and distribution of chemicals that support the transportation industry.

Our products are sold to retailers and distributors who support:

  • Vehicle fleets including state, local and federal police, EMT fleets, as well as to other essential personnel including doctors, nurses, healthcare workers, grocers, food delivery, pharmacy delivery and ambulances.
  • Public and private transportation necessary to ensure the public may complete essential trips for food, medicine and care of loved ones.
  • Repair facilities for a multitude of essential infrastructure sectors as identified by the US Federal Government.

We are continuing to produce product and ship orders as quickly as possible.

Our facilities will be open our regular stated hours for pick up’s as well as deliveries.

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AGENCIES FOR SALE

  • Medicare certified home health organization
  • $9.6 million in annual revenue
  • 98% traditional Medicare and other PPS Payors
  • Medicare/Medicaid certification
  • Multiple locations
  • $5 million revenue
  • Home health and hospice covering 10 counties in West Texas/Eastern New Mexico
  • No clinical issues, under CAP
  • Very profitable
  • Easily separated
  • $3.5 million home care company
  • 100% Medicaid
  • 20%+ year over year revenue growth since 2016
  • Nice bottom line
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