Home Health Index | 2017 APRIL UPDATE

Home Health Values Tick Upward in March

Home Health Index April 2017 | Stoneridge Partners: The home health industry continued to see share prices rise modestly in March, faring better than the down stock market during the month, according to the latest Home Health Index by Stoneridge Partners.

The Index, which tracks the market values of three of the largest, publicly-traded home health care companies—Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—saw a modest increase in March, rising 1.77% from the previous month. While the index rose during the month, home health companies performed inconsistently. The index on average has continued to see steady gains throughout the beginning of 2017 and is up 14.94% year to date as of March 31.

The monthly increase was slower than the 4.48% growth seen in February and 7.72% uptick in January. Still, the Index outpaced the S&P 500 in March, which declined for the first time this year, dropping 1.94% during the month. Year to date, the S&P 500 has risen 4.99%.

“The Home Health Index continued to see modest gains in March following the release of end-of-year earnings results,” said Rich Tinsley, president of Stoneridge Partners. “Home health companies were able to see some gains, on average, while the stock market cooled from its rally in January and February.”

LHC Group Inc. saw huge gains in March, with its stock price rising 9.58%. The Lafayette, Louisiana-based home health provider reported strong end-of-year earnings in March. By comparison, the company’s stock declined 2.45% in February. Year to date, LHC Group’s share prices have risen 16.35%.

Almost Family, based in Louisville, deviated from gains in February. The company’s share price declined 4.31% in March. The stock has risen steadily throughout the first three months of 2017, jumping 7.6% in January and 5.06% in February. Year to date, the stock is up 8.16%.

Baton Rouge-based Amedisys’ stock remained largely flat in March, rising 0.29% from the previous month. Year to date, the company’s stock has reaped big gains, and is up 20.46% year to date. Amedisys was on a hot streak at the start of the year, with the share price rising 6.66% in January and 12.06% in February.

Addus Homecare (Nasdaq: ADUS), which is not tracked by the index because little of its revenue comes from Medicare, continued its losing streak in March. The stock price for the Downers Grove, Illinois-based provider declined 2.82% in March, marking the third consecutive month of declining share price. Year to date, the stock is down 6.56%.

Quote Of  The Month 

“We expect the behavioral health care M&A market to gain some real traction in 2017 and beyond, as policymakers have finally begun to focus on what had been a backwater of the healthcare deliver system,” commented Lisa Phillips, editor of The Health Care M&A Report, which publishes the report.

Read the Full Article Here: Behavioral Health Care M&A Activity Jumps in Q1:2017, According to Data from HealthCareMandA.com

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.


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).
(Home Health Index April 2017 | Stoneridge Partners)

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

Company 3/31/17 1 mos change YTD change 3/31/16 3/31/15
Almost Family 47.70 -4.31% +8.16% 37.24 44.71
Amedisys 51.35 +0.29% +20.46% 48.34 26.78
LHC Group 53.17 +9.58% +16.35% 35.56 33.03
HH Index* 50.74 +1.77% +14.94% 40.38 34.84
S&P 500 2350.50 -1.94% +4.99% 2059.74 2060.25
Addus 32.75 -2.82% -6.56% 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) 3/31/2017 3/31/2016
Almost Family 750 444
Amedisys 1790 1670
LHC Group 1050 670
HH Index Total 3590 2784
Addus 391 180


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

Company 3/31/2017 3/31/2016
Almost Family 120% 87%
Amedisys 126% 136%
LHC Group 117% 87%
HH Index Average* 121% 1.03%
Addus 98% 54%


Multiples of EV/EBITDA.

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

Company 3/31/2017 3/31/2016
Almost Family 19.05 12.09
Amedisys 21.96 18.76
LHC Group 12.51 8.64
HH Index Average* 17.84 13.16
Addus 12.54 7.52
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. (Home Health Index April 2017 | Stoneridge Partners)

Recent Transactions From Around the Country

  • New Vista Behavioral Health, a leading provider of addiction treatment, has acquired Avalon Malibu, a provider of mental health and addiction treatment.
  • Signature Healthcare Services, LLC which operates Aurora Behavioral Health Care has entered into a real state investment trust deal with Care Capital Partners, Inc. for six of their behavioral health facilities.
  • Adding to their portfolio of treatment programs in Southern Florida and California, Delphi Behavioral Health Group, acquired the Palm Beach Institute in West Palm Beach, Florida.

 

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
  • California – $1 million Medicare certified and JCAHO accredited home health agency located in the bay area. Growth opportunities abound for this long established agency (2004). Stoneridge File SCM-3055
  • 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 – Private pay – SW Coast (Naples/Ft. Myers area) $2 million revenue; all caregivers W-2 employees; over 40% gross profit with solid bottom line. Zero deficiences. Stoneridge File SDC-8438
  • 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 
  • 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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Home Health Index April 2017 | Stoneridge Partners: From Rich Tinsley, Publisher of “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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