Home Health Index | 2017 MARCH UPDATE

Home Health Index Continues Steady Climb in February 

Home Health Index March 2017 | Stoneridge Partners: Coming off a hot stock market rally at the start of 2017, home health care companies continued to see their values rise in February, according to the latest data from Stoneridge Partners’ Home Health Index. The Index tracks the market values of three of the largest, publicly-traded home health care companies, including Almost Family (Nasdaq: AFAM), Amedisys Inc, (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG). Overall, the index rose 4.84% in February from January. By comparison, the Index rose 7.72% in January.

The February increase in the Home Health Index was nearly in line with the greater market performance, but was outpaced slightly by the S&P 500, which rose. 5.12% during the month. The month was marked by one of the strongest jobs reports in post-recession history, with more than 235,000 jobs added to the economy.

“The economy continued to strengthen in February, with the overall Home Health Index rising steadily,” said Rich Tinsley, president of Stoneridge Partners. “Investors’ excitement over home health may have dialed back from the January, but the greater economy picked up steam during the month in line with the overall stock market rally.”

Amedisys, based in Baton Rouge, Louisiana, saw the biggest increase in share price, with its stock rising 12.06% in February from January.  The rise was nearly double the 6.66% increase in December. Year to date, the stock is up 30.21%.

Louisville-based Almost Family also experienced strong gains with share prices rising 5.06% during the month. The company posted gains of more than 7% in January, and its stock is up 5.06% year to date.

But not everyone was celebrating gains in February. Lafayette, Louisiana-based LHC Group saw its stock prices decline 2.45% in February. Year to date, however, the company’s shares are up 7.13%. By comparison, the stock rose more than 8% in January.

Addus Homecare (Nasdaq: ADUS), which is not tracked by the Index because little of its revenue comes from Medicare, also saw a slight share price contraction in February. Its stock price declined 0.59%. The Illinois-based company’s share prices are up 44.76% year to date.

Quote Of  The Month 

“From an organic growth perspective, I don’t think there’s a better story in the health care service marketplace than there is in both home health and hospice,” said Benjamin Breier, CEO, Kindred Healthcare.

Read the Full Article Here: Kindred CEO: Massive Home Health Opportunity Demands ‘Blue Collar’ Approach

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 change of the HH Index to the percentage change in the S&P 500 Index for over 14 years, going back to 2002. It has been quite a ride.

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 compares our HH Index to the price of Addus stock (non-Medicare).

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

Company 2/28/17 1 mos change YTD change 2/29/16 2/28/15
Almost Family 49.85 +5.06% +30.39% 38.58 35.62
Amedisys 51.20 +12.06% +30.21% 38.20 30.17
LHC Group 48.52 -2.45% +7.13% 36.84 33.80
HH Index* 49.86 +4.84% +21.76% 37.87 33.20
S&P 500 2396.96 +5.12% +17.27% 1948.05 2104.50
Addus 33.70 -0.59% 44.76% 23.41 21.90

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) 2/28/2017 2/29/2016
Almost Family 645 456
Amedisys 1700 1330
LHC Group 949 693
HH Index Total 3294 2479
Addus 352 246

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

Company 2/28/2017 2/29/2016
Almost Family 105% 89%
Amedisys 123% 108%
LHC Group 108% 90%
HH Index Average* 112% 96%
Addus 92% 74%

Multiples of EV/EBITDA.

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

Company 2/28/2017 2/29/2016
Almost Family 13.87 12.44
Amedisys 21.47 14.92
LHC Group 11.52 8.94
HH Index Average* 15.62 12.10
Addus 13.28 10.28

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.

SOLD BY STONERIDGE!

  • East Texas Care Team in Longview, Texas was acquired by Traditions Health Care Holding Company. Partner, Joe Lynch, provided sell-side advisory services for this transaction.
  • Stoneridge Partners represented a 100 ADC hospice in Pennsylvania in a transaction that closed in February 2017. Partner, Benjamin Bogan, provided sell-side advisory services for this transaction.

Recent Transactions From Around the Country:

  • Amedisys, the Baton Rouge-based home health and hospice provider, signed an exclusive agreement with Tenet Healthcare Corporation to acquire six of their home health and hospice operations in Arizona, Illinois, Massachusetts and Texas.
  • The Ensign Group continues its expansion with the acquisition of Hospice of the Pines, a hospice provider serving several Arizona communities.

Exclusively Listed for Sale by Stoneridge Partners:

  • Arizona -$3 million profitable home care agency in Phoenix, Arizona.  15-year history with great reputation and great staff in place. Stoneridge File SBB-2113
  • Connecticut  Private pay and Medicaid home care agency in Connecticut. $4 million run rate revenue. Steady growth curve. Experienced staff in place. Stoneridge File SBB-6020
  • Florida  Located in the huge east coast Florida District 9, this is a $6 million Medicare agency with approx. 98% of revenue coming from traditional Medicare. Very well run with excellent financial records and solid bottom line. Stoneridge File SDC-7429
  • Florida – $4.5 million Medicare certified home health agency in Districts 6 and 7. Solid bottom line. Accredited and outstanding clinicals. Stoneridge File SBA-5272
  • Florida – $4 million in pure private pay.  15% bottom line.  Accredited on the central east coast.  Stoneridge File SBA-3250
  • Florida – Located in the Orlando area this is a $4 million diversified home health agency.  Payor sources include Medicare, Medicaid and private pay, 35% of which is traditional Medicare.  Top management will assure smooth transition.   Well run with excellent financial records and solid bottom line. Stoneridge File SDC-3739
  • Florida – Home care company in affluent area on west coast of Florida. $2.7 million run rate. Non-Medicare with 86% pure private pay. Consistent moderate growth. Caregivers are W-2 employees. Stoneridge File SBA-1253
  • Florida – $2.5 million Medicare agency in Port St. Lucie. Great reputation and clinicals. Stoneridge File SCM-6191
  • Florida – $2.4 million Medicare certified home health agency in District 3. Outstanding clinical with highest star rating. Longtime Home Care Elite top agency. Excellent growth opportunities. Stoneridge File SBA-4836
  • Florida – $1.4 million growing private duty business in District 7. Well-run clinically and poised for growth FY 2017. Stoneridge File SCM-5220
  • Illinois – $5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS. Stoneridge File SBA-2734
  • Illinois – $3.4 million Medicare deficiency free home health agency in Northern Illinois.  This agency has built its success by concentrating on a very profitable and loyal market niche, and has an outstanding reputation with both their patients and community. Stoneridge File SCM-3291
  • Illinois – $1.5 million Medicare certified home health agency. Clean survey and deficiency free. Quality clinical operation with staff in place. Stoneridge File SBA-7425
  • Louisiana – $3 million Medicare certified and accredited home health agency. Strong referral base and outstanding clinicals. Stoneridge File SBA-7299
  • Massachusetts – $8.5 million home health and hospice. Established agency with multiple offices. Great expansion opportunity for existing operator or entry into Boston metro market. Stoneridge File SBB-9773
  • Michigan – Profitable $1.8 million private duty business located in Northern Michigan.  Family owned for over 25 years with great ties to local community, agencies and referral base. Stoneridge File SCM-4900
  • Michigan – $1.8 million Medicare agency located in Western Michigan. Stoneridge File SBB-5471
  • Midwest – Private duty business with over $6 million in pure private pay revenue. No Medicare or Medicaid. Many years established, excellent financial records with solid bottom line. Stoneridge File SDC-3469
  • Missouri – $2.8 million Medicaid home care agency in greater St. Louis area. Recent expansion with additional growth opportunity. Stoneridge File SBB-9001
  • Mountain West – $2 million private pay agency located in the Mountain West. Impressive growth patterns and very profitable. Stoneridge File SJL-2549
  • Multi-State – $30 million behavioral health agency. Well-established, platform opportunity. Stoneridge File SBB-8101
  • Nevada – $1.2 million Medicare home health agency located in Las Vegas, Nevada. Clean, profitable and family owned since 2004. HomeCare Elite recipient in 2010, 2012, 2013, 2016. Stoneridge File SCM-6180
  • Northwest – Home care company in Northwestern US. $15 million in annual revenue. Multiple locations with a strong presence in the communities it serves. Non-Medicare services. Consistent, strong growth. Stoneridge File SBA-9523
  • Oklahoma – Medicare certified hospice for sale in Central Oklahoma. $2.1 million run rate. Accredited. Multiple locations. Stoneridge File SBA-3881
  • Pacific Northwest – Home care company in the Pacific Northwest. $1.3 million in annual revenue. Predominantly private pay. Well-established. Outstanding clinical. Stoneridge File SBA-5773
  • Southwest – $60 million agency providing home health, personal care and hospice services in the Southwest. Approximately 50% of revenue derived from hospice operations. Long history with great reputation for quality care. Consistent, strong growth. Multiple locations with strong presence in the markets served. Stoneridge File SBA-5050
  • Southwest – $30 million hospice company with accompanying home health located in the southwest United States. Stoneridge File SJL-9650
  • Texas – $5.5 million well-established PHC and Medicare provider located in the Dallas/Ft. Worth Metroplex. Showing positive growth and  impressive profitability. Stoneridge File SJL-4918 
  • Texas – $3.5 million home health agency in Houston (metro). Diversified agency – 70% Medicare, 30% private pay. Inherent capacity for growth.  Stoneridge File SJL-2000
  • Texas – $3.2 million hospice in McAllen, Texas. CHAP accredited with a solid reputation. Stoneridge File SJL-1112
  • Texas – Profitable $3 million Medicare & Medicaid home care company in East Texas. Well-run with an excellent reputation, full staff in place and a 4.5 star rating. Stoneridge File SJL-9472
  • Texas –  Growing $2.6 million west Texas Medicare certified home health agency. Accredited with a wide variety of referral sources. Stoneridge File SJL-2892
  • Texas – $2.8 million private pay home care agency in a major metropolitan market. Pure private pay, no Medicaid, no Medicare. Approximately 10$ EBITDA. Stoneridge File SDC-8557
  • Texas – $2.6 million established home health agency in Dallas with both Medicare and Medicaid lines of business. Stoneridge File SJL-8335
  • Texas – $2 million Medicare accredited home health care company located in Southeast Texas near Huntsvile. Strong financials, clinically clean with nice opportunity for growth. Stoneridge File SCM-9753
  • Texas – $1.3 million all private pay agency located in Ft. Worth. Excellent reputation, excellent reviews and extremely profitable. Stoneridge File SJL-5115
  • Texas – $1.3 million profitable Medicare and Medicaid agency located in a growing market just north of Dallas. Clean clinically with excellent financials. Stoneridge File SJL-1492
  • Texas – $1.2 million established and profitable home health agency with two offices and service area from Conroe to Galveston. Stoneridge File SJL-6249 
  • Texas – Established and profitable $1.2 million private pay agency located in the Dallas/Fort Worth metroplex. Clean surveys with all appropriate staff in place. Stoneridge File SJL-1373
  • Texas – $1.1 million solid and clean Medicare home health agency located in the Fort Worth area. Stoneridge File SJL-7530 
  • Virginia – $13 million Medicare/Medicaid home health agency located in Western Virginia. Long community reputation. Stable & consistent growth over the last 10 years. Platform suitable for expansion. Stoneridge File SBB-3980
  • Virginia – Opportunity to establish a Medicare home health agency in Central Virginia. Stoneridge File SBB-3980
  • Wisconsin – $1.5 million Medicare certified home health agency. Licensed in Wisconsin. 4 star rating. Staff in place. Motivated seller. Stoneridge File SBA-5776
  • Pennsylvania – $2.8 million Medicare certified home health agency with small hospice operations in Eastern Pennsylvania. 72% traditional Medicare for home health. Great tuck-in opportunity for strategic buyer. Requires corporate support functions. Stoneridge File SBA-4227 ON CONTRACT
  • Texas – $7 million Houston-based Medicare home health agency. Accredited, expertly run and growing. Stoneridge File SJL-1500 ON CONTRACT
  • Texas – $4.1 million Dallas based home care company. Well managed and showing strong growth trends for 2016. Stoneridge File SJL-6002 ON CONTRACT

To see more home care agencies and hospices exclusively listed for sale by Stoneridge Partners click here.

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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From Rich Tinsley, Publisher of “The Home Health Index”. Rich can be reached at rich@stoneridgepartners.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: Almost Family | Amedisys | LHC Group

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