Home Health Index | 2017 JUNE UPDATE

Home Health Stocks Bloom in May Rally

Stoneridge Partners | Home Health Index June 2017: Home health stocks bloomed in May, rallying from the previous month, according to the latest Home Health Index published by Stoneridge Partners. The share prices of three of the largest publicly traded home health companies—Almost Family (Nasdaq: AFAM), Amedisys Inc. (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—rose 9.10% in May from the previous month and vastly outpaced the S&P 500 index.

The May uptick was the strongest monthly jump in home health values, on average, since the start of the year, while the S&P 500 climbed just under 1%, at 0.99% during the month. By comparison, the index rose 7% in April and 4.5% in March. Year over year, the index is up 31.81%, while the S&P 500 has risen 15.01% over the same time period.

“Home health shares rallied in May, signifying investors’ growing confidence in the sector during the month. May was also marked by some major transactions that added to the growing trend of home health and health and hospital system joint ventures,” said Rich Tinsley, president of Stoneridge Partners. “Stocks may have been further buoyed after federal agencies delayed some incoming regulatory changes in May, providing some potential relief for home health companies with a presence in select states.”

Almost Family saw the strongest gains during the month, with its share price rising 15.61% during May from April. Year to date, the Louisville-based company’s stock is up 30.16%.

Amedisys shares rose 3.97% during the month, a increase from the 12% gain in April following its first quarter earnings results. Year to date, the stock is up 40.56%.

LHC Group, which announced a major joint venture deal with a Texas hospital group in May, saw its share price jump 8.61% during the month. Compared to a year ago, the stock is up 43.33%, leading its peers in gains over the last 12 months. Year to date, the stock has risen 31.73%.

The stock price for Addus Homecare (Nasdaq: ADUS), based in Frisco, Texas, is not tracked by the index because little of its revenue comes from Medicare, rose 7.23% in May from April. Year to date, the stock has inched up 5.85%. However, compared to a year ago, the stock is has soared 80.54%.

 

Quote Of The Month 

“Drastic Medicaid cuts like those included in this budget would jeopardize access to care for the most vulnerable in our society. Protecting the frail and elderly is important both today and in the coming years when demand will dramatically increase.” – American Health Care Association/National Center for Assisted Living (AHCA/NCAL)

Read the Full Press Release Here: AHCA/NCLA Responds to President Trump’s Proposed Budget for 2018

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 displays HH Index performance over the past 24 months.


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

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

Company 5/31/17 1 mos change YTD change 5/31/16 5/31/15
Almost Family 57.40 +15.61% +30.16% 41.81 38.40
Amedisys 59.92 +3.97% +40.56% 50.87 31.02
LHC Group 60.20 +8.61% +31.73% 42.0 36.76
HH Index* 59.17 +9.1% +34.05% 44.89 35.39
S&P 500 2411.8 +0.99% +7.73% 2096.96 2107.39
Addus 37.10 +7.23% +5.85% 20.55 28.01

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) 5/31/17 5/31/16
Almost Family 779 560
Amedisys 1780 1800
LHC Group 1050 852
HH Index Total 3609 3213
Addus 376 245


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

Company 5/31/17 5/31/16
Almost Family 116% 100%
Amedisys 122% 137%
LHC Group 112% 92%
HH Index Average* 110% 110%
Addus 91% 70%


Multiples of EV/EBITDA

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

Company 5/31/17 5/31/16
Almost Family 13.99 13.11
Amedisys 18.70 22.52
LHC Group 12.22 10.36
HH Index Average* 14.97 15.33
Addus 11.19 10.20

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 June 2017 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Summit BHC, a leading provider of addiction treatment and behavioral health services, announced the acquisition of both English Mountain Recovery, an addiction treatment center in Sevierville, Tennessee and Women in Recovery an outpatient treatment center in Mesa, Arizona.
  • LHC Group, one of the nation’s largest home health care providers, has entered into a definitive agreement to form a joint venture with Baptist Memorial Home Health Care, purchasing the majority of Baptist’s home health and hospice operations.
  • Washington-based, Island Hospital, is selling it’s home health care division to Utah-based, Canyon Home Care & Hospice.
  • Visiting Nurse Association Health Group, the largest nonprofit home health care provider in New Jersey, has signed an LOI to merge with the Visiting Nurse Association of Ohio.
  • AccentCare, the Dallas-based in-home services provider, acquired Grace Visiting Nurses and Home Health Services, a health care and personal care services company based in Jacksonville, Texas.
  • Sunny Days In-Home Care acquired Daly Care, a lifestyle management and in-home care provider.
  • Caring People, a New York-based senior home care provider is acquiring Stellar Home Care, a Connecticut based home care agency.
  • Mediware Information Systems, Inc. announced it has finalized an agreement to acquire Kinnser Software, Inc., the leading provider of software solutions for home health and hospice providers.

Exclusively Listed For Sale By Stoneridge Partners

State
Agency Profile
Status
Reference Number
Arizona$2+ million home care agency in Southern Arizona. Diverse payor sources (Medicaid/Private Pay/ W/C. Diverse referral sources. Great reputation. Available
SBA-6228
California$6 million revenue. Hyrbid payor mix - 70% in network, 20% out of network, 10% private cash pay. Destination oriented treatment facility. 48 residential beds and 6 detox beds. JCAHO accredited. Beautiful property with more adjacent available for purchase. Tons of amenities.Available
SJD-2579
California$4.8 million neuroscience-driving recovery treatment center for traumatic brain injury and SUD. Has helped over 180 professional athletes from the NFL, NHL, NBA and MLB. $1.2 million AEBITDA. Great campus offering full continuum of care. Zero competition in this space.
Available
STS-1907
California$5 million revenue with $1.25 million EBITDA. Full continuum treatment center. 3 residential houses, 2 sober living and 1 outpatient. JCAHO certified. Private pay and out of network. Available
SJD-4380
California$2+ million revenue. $550,000 net profit. 28 bed, 4 facilities. Full continuum of care treatment center in California. Growing quickly with a large wait list. 10 bed detox license. Gorgeous real estate for sale or lease. Great reputation and referrals. Available
SJD-8481
CaliforniaMedicare certified Home Health agency that was established in 2003. $2 million annual revenue in 2018. PDGM revenue neutral. Located in Southern California. Clean business with no ADR's. Available
SCM-7298
CaliforniaGrowing $1.9 million revenue. Private pay. Independently owned. Full staff in place. Available
SJL-4483
California$1.6 million Hospice located in Los Angeles County. Consistent census of 25 patients over the last 3 years. Joint commission accredited. Strong bottom line with staff in place. Available
SCM-9679
California32 bed detox and residential treatment center. Great location and setup. In network. Large growth with a waiting list. Seeking loan/debt investment. Attractive income option for investor. Available
SJD-2449
CaliforniaTrauma treatment facility. Searching for real estate partner to buy property and lease back, as well as further expansion. Great business plan and current growth and new contracts. Great results and outcomes. Available
SJD-6424
Colorado65 bed full continuum treatment center in Mountain West. #1 million EBITDA. Motivated seller seeking timely close. Great census and solid numbers.Available
SJD-1453
Connecticut$6 million Medicaid/Medicare home care agency. 13-year history, clean surveys. Consistent growth.
Available
SBB-3697
FloridaMedicare certified home health agency. District 10. Census: Minimal. Accredited.Available
SBA-1233
Georgia$5 million annual revenue private duty agency. Metro Atlanta service area. Well-positioned for additional growth. Available
SBB-5907
GeorgiaID/DD Services. $1 million revenue. Residential and Day Services. Atlanta Suburb. Available
SBH-6806
Illinois$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS.Available
SBA-2734

Illinois$2.8 million Home Health agency. 100% Medicare. Loyal caregiver and patient base. Available
SCM-3291
IllinoisHospice. Census in mid-70's. Accredited. Chicago area.Available
SBA-5325
KentuckyMedication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid. Available
STS-1093
LouisianaBoutique full service clinical laboratory specializing in preventative diagnostic testing.
Medicare & Medicaid certified, and insurance contracts in over 20 Southeast States. Several unique programs and innovative technologies.
Available
SJD-6825
Maryland/DC/VirginiaLarge Medicare & Medicaid home care agency. Poised for continued growth.Available
SBB-7499
MassachusettsMedicare and Medicaid certified Home Health agency.
$13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited.
Available
SBA-6010
Michigan$1.5 million private duty home health agency in eastern Michigan. Profitable and well positioned for additional growth. Self-sufficient staff in place. 82 long-term clients. Available
SCM-6034
New York$13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs.Available
SBB-8249
New YorkAnnualizing at $1.3 million revenue. 40% Non-Medicare/Private Insurance skilled nursing. 45% Managed LTC. Southern New York. Joint Commission Accreditation.Available
SBA-6824
New Mexico$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community. Staff in place.Available
SBA-5295
North Carolina$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins. Available
SBH-9905
OhioSoutheastern Ohio. $3.5 million annual revenue. Diverse referral source mix.Available
SBB-4298
Oklahoma$1.7 million ID/DD agency. Long history in the community. Profitable/recent rate increase. Available
SBB-8891
Pacific NorthwestFull continuum in Washington State. $3,625,000. revenue with $1,100,000 EBITDA. States has moved from BHO to MCO for Medicaid. Co-occurring, Medicaid paid, 40 bed facility, 40 employees, census is very strong.
Outpatient is full. Opportunity for marketing. SUD mental health gambling. Equine therapy and other perks.
Available
SJD-4921
Pennsylvania$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line. Available
SJL-7605
South28 bed, IOP capacity of 40, full continuum SUD treatment center, dual diagnosis, pending JCAHO. $4+ million revenue, highly competitive in network contracts, average census of 30. Existing marketing relationships with county, parole, local hospitals, churches and universities. Solid business in desirable location, little competition, good opportunity. Available
SJD-1118
Southeast/Midwest8 locations, 6 cities with over 100 employees. Mental health/Psych/Therapy/Counseling/School based/SUD IOP pilot. $4.5 million revenue. $750,000 EBITDA. Huge growth opportunity and great business, reputation, and numbers. Available
SJD-7830
Southwest$25 million in annual revenue. Provider of Waiver and ICF ID/DD Services. Statewide Platform. Strong management team. Excellent reputation for quality services. Available
SBH-2042
Southwest$5+ million outpatient treatment center. Fully accredited. 37 beds. Recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of network and transitioning some in network.Available
SJD-3448
Southwest64 bed full continuum treatment center in 2 Southwest US metropolitan cities.
JCAHO accredited.
In-network.
$4 million pro forma EBITDA run rate. 3rd location set to open May 2019. Run rate based on 30% occupancy with significant growth expected. Strong infrastructure to support growth trajectory.
Available
SJD-4008
South-Atlantic$12+ million in annual revenue. Home Health Agency (HHA) and Adult Day Care Center (ADC). HHA (represents 85% of revenue). ADC (represents 15% of revenue). HHA is primarily Medicaid business but is Medicare-certified. Accredited. Available
SBA-9973
South TexasHospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues. Available
SBA-8064
Texas$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. Available
SJL-6009
Texas$2.6 million revenue Home Health agency in East Texas. Great local reputation, with strong financials. 2018 adjusted EBITDA $606,000. Has second license with minimal census available.Available
SCM-9753
Texas$2 million Medicare home health agency in Austin, TX. Offers outstanding reputation and strong management & clinical teams. CHAP accredited & consistently Top 100 or Top 500 Home Care Elite for past 8 years. Available
SJL-5971
Texas$1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable. Available
SJL-6080
Texas48 bed full continuum treatment campus, all in-network. Established management team, 3-year CARF Accredited. $1.7 million of AEBITDA on $6 million of revenue. Major metropolitan market. Great asset for a strategic buyer.
Available
STS-5370
Texas$1.4 million revenue pediatric therapy business. Company provides Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST) to disadvantaged and disabled children in near a major metropolitan city in Texas and the surrounding counties. Positive reputation for providing quality help in an environment comfortable to the child. Founded in January 2008 as an investment for the owner. Average census is 190 patients with a goal of 225 for calendar year 2019.
Available
SCM-3034
Texas$1 million revenue. Very clean and well established home health agency in the heart of West Texas. Fully staffed and ready for a new owner to step right in.Available
SJL-8770
Texas$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare. Available
SBA-1542
TexasPediatric therapy company in Houston, TX. Census of 165. 75% Medicaid reimbursed. Systems and staff in place. Available
SJL-4615
TexasHome Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue. Available
SCM_4098
Texas36 bed full continuum treatment center located near a major metropolitan market. State-of-the-art campus with growth potential. Growing census, in-network for most insurance. Motivated seller
Available
STS-6078
TexasClean hospice provider number. Located in West Texas.Available
SJL-2984
USANew software application. Potential investment opportunity. Great test results.
Helps connect those in recovery socially. Helps connect therapists to patients. Facilitates total successful recovery and gathers important helpful data.
Available
SJD-1777
Virginia$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. Available
SCM-7368
Virginia$1.2 million private duty/private pay home health business in Northern Virginia. Located in one of the most affluent counties in the country where the elderly population growth is outpacing the nations.Available
SCM-1483
Florida$9.5 million Home Health Agency located on Florida's East Coast. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. Under Contract
SCM-6925

Florida$3.5 million private duty home health agency on Florida's east coast. CHAP accredited. 26 years of outstanding service. Diversified pay mix; Private duty, Workers comp, Private pay, and Long-term care insurance. Strong management and support staff. Under Contract
SCM-8429
FloridaMedicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.Under Contract
SBA-8305
Florida$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.Under Contract
SCM-1148
FloridaMedicare certified home health agency. $1.4 million annual revenue. 4.5-star & Home Care Elite 2 years running. Accredited. District 3. Motivated Seller. Under Contract
SCJ-1730
FloridaPrivate pay home care agency. Approximately $1,000,000. in annual revenue. Medicare/Medicaid certification. Accredited. W-2 employees. District 8. Under Contract
SBA-3041
FloridaNon-skilled home care agency. $600,000 in annual revenue. Outstanding reputation and quality service. Key staff in place. District 5.Under Contract
SBA-3885
Minnesota$8 million Medicaid agency. Well-established in metropolitan service area with staff in place.Under Contract
SBB-7085
OklahomaHome Care Agency. Approximately $1.5 million in annual revenue. Predominantly private pay with some LTC, VA, and WC. Outstanding clinical. Great reputation. Under Contract
SBA-2761
TexasAlmost 100% Medicare. Texas based home health agency. $6+ million revenue. Extremely profitable. Perfect surveys with a 4-star rating and consistently ranked as a top agency in the country.Under Contract
SJL-5800
Texas$3.6 million Hospice, home health and palliative care agency. 90% Traditional Medicare. Service area in 13 counties around Harris County. CHAP accredited. Staff in place. Under Contract
SBA-7440
Texas$3 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line.Under Contract
SJL-3670
Texas$2.2 million Dallas-area Medicare home health agency. 22% bottom line. Well-established with a very clean compliance record. Full management team in place. Under Contract
SJL-2228
Virginia$6 million Medicare certified agency in Northern Virginia. Under Contract
SBA-7366

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.

 

Another Cartoon Favorite from the New Yorker

Stoneridge Partners | Home Health Index June 2017

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Stoneridge Partners | Home Health Index June 2017: 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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