Home Health Care Stocks Regain Footing in August
The share prices of two of the three biggest public home health care companies are on the rebound after a turbulent July, according to the latest data in the Home Health Index tracked by Stoneridge Partners.
The index, which follows 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)—gained 7.42% in August compared to the previous month.
The Index beat the S&P 500, which rose a steady 0.05% during the month of August. The 7.42% increase marks a dramatic rebound from July, when the Home Health Index tumbled 19.57% on fears that the Centers for Medicare & Medicaid Services’ (CMS) proposed home health groupings model (HHGM) could shake up the market.
“Home health companies rebounded in August after regulatory concerns marked the previous month,” said Stoneridge President Rich Tinsley. “The sector continues to have an ‘up’ year relative to the stock market.”
Though LHC Group saw a significant drop in its share value in July, the Lafayette, Louisiana-based company’s stock climbed 12.69% in August. Year to date, LHC Group’s stock has jumped 42.78%.
Baton Rouge, Louisiana-based Amedisys also had a good month. The company’s stock prices rose 10.30% in August. Year to date, its shares are up 22.54%, according to the Index. Amedisys CEO Paul Kusserow recently said the home health industry represented “a united front” in opposition to the proposed payment model.
Only one company in the index didn’t share the growth in August. Louisville, Kentucky-based Almost Family’s stock shed 1.52% in August. Despite the drop, the company’s share values are up 10.43%, year-to-date.
Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, edged up 0.29% in August. Year to date, Addus’s share price has fallen 2.85%.
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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 September 2017 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||8/31/17||1 mos change||YTD change||8/31/16||8/31/15|
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)||8/31/17||8/31/16|
|HH Index Total||3845||3341|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||122%||117%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||18.28||15.78|
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 September 2017 | Stoneridge Partners)
SOLD by Stoneridge!
- CareFinders Total Care, a New Jersey-based home healthcare provider, completed the acquisition of Sovereign Home Healthcare of Connecticut. Partner, Brian Bruenderman, provided sell-side advisory services.
Recent Transactions From Around The Country
- Seaside Healthcare has acquired the Savannah and Atlanta locations of Access MHA of Georgia, a community based mental health and substance use disorder treatment provider for children, adolescents and adults.
- All Metro Health Care acquired Massachusetts-based, Independence Healthcare Corp., a provider of non-medical home healthcare services.
- UNC Health Care and Carolinas Healthcare System, two of the largest healthcare providers in North Carolina have announced their plan to create one of the largest hospital networks in the country.
- Associated Home Care, a subsidiary of Amedisys, Inc., has entered into an agreement to acquire Intercity Home Care, a Massachusetts-based personal care provider. The transaction is expected to close October 1, 2017.
- The Ensign Group acquired two Arizona skilled nursing facilities on September 1, 2017: Desert Blossom health and Rehabilitation Center in Mesa, AZ and Pueblo Springs Rehabilitation Center in Tucson, AZ.
- AccentCare strikes a joint venture deal with UCLA Health aimed at providing a continuum of care for patients that have been discharged from the hospital.
- LHC Group has entered into a joint venture with Texas-based Christus Health, a non-profit health system.
- In Nebraska, Memorial Community Hospital & Health System has selected the Visiting Nurse Association to take over its home health and hospice services.
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|
|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|
|California||Medicare 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|
|California||Growing $1.9 million revenue. Private pay. Independently owned. Full staff in place.||Available|
|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|
|California||32 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|
|Connecticut||$6 million Medicaid/Medicare agency. Nice growth trend. Stable margins, great surveys.||Available|
|Florida||$9.5 million Home Health Agency. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare.||Available|
|Florida||$1.6 million revenue. Pediatric Medicaid agency.||Available|
|Florida||Medicare 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|
|Georgia||ID/DD Services. $1 million revenue. Residential and Day Services. Atlanta Suburb.||Available|
|Illinois||$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS.||Available|
|Illinois||$2.8 million Home Health agency. 100% Medicare. Loyal caregiver and patient base.||Available|
|Illinois||Hospice. Census in mid-70's. Accredited. Chicago area.||Available|
|Louisiana||Boutique 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.
|Maryland/DC/Virginia||Large Medicare & Medicaid home care agency. Poised for continued growth.||Available|
|Massachusetts||Medicare and Medicaid certified Home Health agency. |
$13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited.
|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|
|Minnesota||$9 million Medicaid agency. Consistent growth & profitability. Recent rate increase. Attractive Medicaid margin.||Available|
|New York||Annualizing at $1.3 million revenue. 40% Non-Medicare/Private Insurance skilled nursing. 45% Managed LTC. Southern New York. Joint Commission Accreditation.||Available|
|New Mexico||$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community. Staff in place.||Available|
|North Carolina||$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins.||Available|
|Ohio||Southeastern Ohio. $3.5 million annual revenue. Diverse referral source mix.||Available|
|Oklahoma||$1.7 million ID/DD agency. Long history in the community. Profitable/recent rate increase.||Available|
|Pacific Northwest||Full 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.
|South||28 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|
|South||National growth opportunity. No direct competition for niche market. Unique program and strong branding. PHP/IOP with census and revenue growth. Seeking strategic partner||Available|
|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|
|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|
|Southwest||64 bed full continuum treatment center in 2 Southwest US metropolitan cities.|
$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.
|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|
|South Texas||Hospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues.||Available|
|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|
|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|
|Texas||$1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable.||Available|
|Texas||48 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|
|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|
|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|
|Texas||$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare.||Available|
|Texas||$650,000 revenue. Medicare certified. Licensed in 6 counties North of Dallas, TX.||Available|
|Texas||Pediatric therapy company in Houston, TX. Census of 165. 75% Medicaid reimbursed. Systems and staff in place.||Available|
|Texas||Home Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue.||Available|
|Texas||Clean hospice provider number. Located in West Texas.||Available|
|USA||New 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.
|Virginia||$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000.||Available|
|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||
|Florida||Medicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.||Under Contract||
|Florida||$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.||Under Contract||
|Kentucky||Medication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid.||Under Contract||
|New York||$13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs.||Under Contract||
|Oklahoma||Home Care Agency. Approximately $1.5 million in annual revenue. Predominantly private pay with some LTC, VA, and WC. Outstanding clinical. Great reputation.||Under Contract||
|Pennsylvania||$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line.||Under Contract||
|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||
|Texas||$3.5 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line.||Under Contract||
|Texas||$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place.||Under Contract||
|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||
|Virginia||$6 million Medicare certified agency in Northern Virginia.||Under Contract||
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.
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Home Health Index September 2017 | Stoneridge Partners