Stoneridge Partners Home Health Index Increased 4.23% To A New High
Home Health Index Reaches All-Time High
Stoneridge Partners | Home Health Index May 2016: The market performance of three of the largest publicly held home health companies is outpacing the S&P 500 index with an all-time record index high in April.
The Stoneridge Partners Home Health Index (HH Index) saw a 4.23% uptick in April versus the previous month, indicating the average market value of Almost Family (NASDAQ: AFAM), LHC Group (NASDAQ: LHCG) and Amedisys (NASDAQ: AMED) has risen beyond its previous record high, seen in August 2015.
Year-to-date, the index level has increased 8.95%, and is up 30.26% for the trailing 12-month period.
“Home health companies experienced strong performance in the first several months of 2015, marked by an uptick in share prices year-to-date,” said Rich Tinsley, president and CEO of Stoneridge Partners, which publishes the monthly home health index. “Operators continue to adapt to the changing payment landscape and patient mix, and have a positive outlook on future mergers and acquisitions.”
Among the three companies, LHC Group saw the greatest increase with an 11.85% uptick in its stock price during the month. Addus, not tracked by the index due to its revenue being more heavily based in Medicaid reimbursements, but also a strong market player, saw its share price rise 7.08% during the month.
The S&P, used as a benchmark for the Home Health Index, increased 5.56% during April, but is down 20 points .
The Quote Of The Month
“Our corporate development pipeline remains very strong. I’ll remind you that this pipeline consists of potential transactions that we believe could be completed in 12 months. And as such, it changes on a quarter-to-quarter basis. At this time, our pipeline consists of a balanced portfolio of 23 opportunities totaling approximately $350 million in trailing annual revenues. And we are highly confident that 2016 will be a record year in acquisitions for the company.”
-CEO Keith Myers, LHC Group, on Q1 2016 Results – Earnings call
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)
Please note the graphs representing (1) HH Index to the percentage change in the S&P 500 Index for over 14 years, (2) 12 month trailing chart of the HH Index, and (3) HH Index to the price of Addus stock (non-Medicare) can be found in the most recent issue of the Home Health Index.
Here are the results of the stock prices for the past two years:
|Company||4/30/16||1 mos change||YTD change||4/30/15||4/30/14|
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))||5/1/2016||4/1/2016||3/1/2016||2/1/2016||1/1/2016||12/1/2015||11/1/15||10/1/15|
|HH Index Total||3025||2783||2479||2,415||2,668||2,778||2,652||2,634|
Enterprise Value (EV), aka Selling Price, as a Percent of Revenue.
|HH Index Average*||99%||93%||96%||94%||83%||62%|
Multiples of EV/EBITDA.
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||14.34||13.16||12.09||11.85||14.38||8.88|
*Included Gentiva prior to its acquisition in February 2015 by Kindred.
**The spike in multiple of EBITDA for Amedisys may have been the result of increased earnings announced around that time. It seems that stock trades on current earnings but multiple of EBITDA is calculated on a trailing twelve months.
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. EV has been calculated based on stock prices September 1. 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 that may differ from that used by a company its reporting.
Pennsylvania: $4 million Pennsylvania Medicaid home care agency was sold
California: LWF Home Care Specialists, a private duty home care company, recently sold to a home care company
Exclusively Listed for Sale by Stoneridge Partners:
- Texas – $1.9 million Medicare certified home health agency providing service to Region 2. More than 88% of revenue is from traditional Medicare. Stoneridge File SJL-3650
- Florida – Accredited home health agency with approximately $850,000 in traditional Medicare revenue. Solid bottom line. 4.5 stars. Florida district 9. SDC-5177
- Texas – $4.1 million Dallas based home care company. Well managed and showing strong growth trends for 2016. Stoneridge File SJL-6002
- Pennsylvania – Approximately $2 million in revenue. Licensed for entire state of Pennsylvania, so ready for growth. Stoneridge File SJL-9991
- Hawaii – Well-established home care agency with stable revenue in an attractive service area. Stoneridge File SBB-7750
- Illinois – $5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS. Stoneridge File SDC-2734
- Texas – $4 million profitable and accredited home health and hospice in south Houston. 95% and 99% Medicare reimbursed. Management and marketing teams in place. Stoneridge File SJL-1986 ON CONTRACT
- Pennsylvania – $1.8 million Medicare agency located in eastern Pennsylvania.82% traditional Medicare. Growing agency with strong potential for future growth. Stoneridge File SBA-2745 ON CONTRACT
- Florida – Orange County Medicare agency. $3.5 million in revenue. Diversified payor base includes private pay, Medicaid & Medicare. Florida District 7. Stoneridge File SDC-3739
- Florida – Broward County Medicare Agency. $1.8 million in revenue. Diversified payor base includes private pay, Medicaid & Medicare. Accredited and established for many years. Florida district 10. Stoneridge File SDC-7120
- Florida – Just under $2 million accredited Medicare home health agency in District 8. Stoneridge File SBA-5224 ON CONTRACT
- Florida – Lee County Medicare agency. Approximately $400,000 in revenue. Accredited. 4 1/2 star rating. Oasis quality assessment 97.7%. Florida district 8. Stoneridge File SBA-4186 ON CONTRACT
- Texas – $4.9 million well established Medicare provider in the Dallas/Ft. Worth metroplex. Deficiency free and showing positive growth. Stoneridge File SJL-4918
- Tennessee – CON for 5 counties in Southeastern TN. Estimated service area of more than 530,000 people with over 87,000 who are older than 65. Rare opportunity to establish or expand services in populous CON. Stoneridge File SBA-6338 ON CONTRACT
- Alabama – CON for 7 counties in Northeastern AL. Estimated service area of more than 550,000 people with over 91,000 who are older than 65. Rare opportunity to establish or expand services in populous CON. Stoneridge File SBA-6777 ON CONTRACT
- Florida – Accredited Medicare Home Health Agency with approx. $3 million revenue, 98% of which comes from traditional Medicare. Very profitable, well established agency in Pinellas County. Stoneridge File SDC-5218
- Pennsylvania – $4+ million hospice located in Western Pennsylvania. Stoneridge File SBA-5001 ON CONTRACT
- Mid-Atlantic region – $30 million Medicare/Medicaid agency with multiple branches in several states, including CON service areas. Long history and great reputation for quality care. Stoneridge File SBB-8300 ON CONTRACT
- Ohio – $4+ million Medicare/Medicaid agency located in NE Ohio. Stoneridge File SBA-8002
- California – Approximately $8 million private duty home health and staffing company located in Northern California with multiple locations. Stoneridge File SBA-7500
- New York and New Jersey – Approximately $3 million private pay agency. Licensed in the 5 Boroughs of NY and the entire state of NJ with current operations predominantly in Central NJ. Stoneridge File SBA-8015 ON CONTRACT
- New Jersey $3.5 million Medicaid agency in Northern NJ. Great opportunity for existing operator to add revenue and service area. Motivated seller. Stoneridge File SBB-9254
- Colorado – $2.5 million diversified home care agency and hospice, accredited with excellent books and records. Stoneridge File SJL-1005 ON CONTRACT
- Rhode Island – $2.5 million Medicare agency. Accredited in CON state. Stoneridge File SBB-1100
- Texas – $4.8 million Medicare agency in Houston metro area with solid bottom line. 65% of revenue from traditional Medicare and the balance in private non-skilled care. Stoneridge File SJL-2000
- Oklahoma – $1.5 million Medicare agency. 89% of revenue from traditional Medicare. Stoneridge File SJL-4131
- Florida – $4 million in pure private pay. 15% bottom line. Accredited on the central east coast. Stoneridge File SDC-3250
- Texas – $4 million East Texas Medicare certified home health agency with diverse payor sources, including Medicare, Medicaid, pediatric and private pay. Stoneridge File SJL-3665
- Massachusetts – $5 + million home health agency, primarily Medicaid, but also private pay and commercial insurance, plus Medicare certification. Zero deficiencies on last survey. Stoneridge File SBA-9300. ON CONTRACT
- Florida – $5 million Medicare agency located in the Tampa – St. Pete area. Accredited, with solid bottom line. Stoneridge File SBA-4109. ON CONTRACT
- Texas – $1.5 million East Texas Medicare certified home health agency, providing skilled care, approx 75% from traditional PPS Medicare. Last survey was deficiency free. Stoneridge File SJL-4088 ON CONTRACT
- Texas – $2.3 million Medicare certified home health agency in Houston, Texas. 92% Traditional Medicare. Stoneridge File SDC-1542
- Texas – $3.3 million accredited Medicare home health agency. Profitable and still growing with approximately 87% of revenue coming from traditional Medicare. Strong marketing team in place with diversified referral sources. Stoneridge File SJL-1500. ON CONTRACT
- Texas – $2 million Fort Worth Medicare agency, approx 90% traditional Medicare. Stoneridge File SJL-2650. ON CONTRACT
- Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care. Diverse payor sources. Stoneridge File SBA-5232
- Texas – $1 million Medicare agency in the DFW area – 99% of revenue from traditional Medicare. Stoneridge File SJL-1015. ON CONTRACT
To see more home care agencies and hospices exclusively listed for sale by Stoneridge Partners go to the following link: Agencies for Sale
Do you know of any acquisitions that have taken place? We would be interested in your comments. At the top of this column is a “Contact Tab” with a section for comments. These can be sent anonymously. The return email address can be left blank. We are interested in what you have to say, or acquisitions that you know about.
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President /CEO of Stoneridge Partners, Rich Tinsley is presenting a webinar entitled The Successful Sale of a Homecare Agency on May 17 at 1:00 EDT. For more information and to sign up today please visit https://curaport.leadpages.co/successfulsale/.
From Rich Tinsley, Publisher of “The Home Health Index” email@example.com 1-800-218-3944. This Home Health Index (HH Index) measures the performance of three publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), and Amedisys (AMED). This index is updated monthly. If you would like to receive a monthly e-mail of this update, simply click the button below.