Home Health Care Stocks Posts Gains in September
Home health care stocks are once again gaining value at a steady clip, bucking the summer’s turbulent times, according to the latest data in the Home Health Index.
The index, which follows the market values of three of the largest publicly traded home health care companies in the U.S.—Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—climbed 8.66% in September compared to the previous month.
The Index beat the S&P 500, which rose 1.93% during the month of September. The latest numbers add more evidence that the home health industry is once again on firmer footing after taking a jolt over the summer on regulatory uncertainty.
“Investors seem to have regained confidence in the home health care industry after a brief downturn,” said Stoneridge President Rich Tinsley. “No company lost value in this month’s Index.”
Lafayette, Louisiana-based LHC Group’s stock rose a steady 8.69% in September. Year to date, LHC Group’s stock has leapt up 55.19%, which is the biggest gain of any company in the Index. LHC is also currently experiencing its lowest-ever vacancy and turnover rate for employees, CEO and chairman Keith G. Myers said during this year’s Home Health Care News Summit in Chicago.
Amedisys, which spent part of September preparing for and managing the effects of Hurricane Irma, also posted gains during the month. The Baton Rouge, Louisiana-based company’s stock value rose 7.12% in September. Year to date, its shares are up 31.27%, according to the Index.
Though its stock dipped in August, Louisville, Kentucky-based Almost Family is on an upward trajectory again. The company gained 10.27% in September, pushing its year-to-date share values up 21.77%.
Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, grew its share values by 3.67% in September. Year to date, Addus’s stock price has risen 0.71%.
Quote Of The Month
“We need to continue reaching out to patients, family caregivers and other health care professionals to help them understand the benefits that hospice care brings, particularly when provided in a timely fashion as part of a continuum of care,” said NHPCO President and CDO Edo Banach.
Read the Full Article Here: What Hospice Care Looks Like in America
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 October 2017 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||9/30/17||1 mos change||YTD change||9/30/16||9/30/15|
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)||9/30/17||9/30/16|
|HH Index Total||4226||3005|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||133%||102%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||20.05||14.20|
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 October 2017 | Stoneridge Partners)
SOLD by Stoneridge!
- Sun Cities Caregivers of Sun City, AZ. Partner, Brian Bruenderman, provided sell-side advisory services.
- Champion Caregivers of Ft. Worth Texas was aquired by Bluebird Homecare, Inc. Partner, Joe Lynch, provided sell-side advisory services.
Recent Transactions From Around The Country
- Stonerise at Home has expanded it’s services into Northern West Virginia, Southern West Virginia and Eastern Ohio with the aquisition of MediHome Health Agency.
- The Vistria Group aquired majority stake in St. Croix Hospice based out of Oakdale, Minnesota.
- D’Amore Healthcare, Inc. aquired Pat Moore Foundation, a substance abuse, detoxification and addiction treatment center in Huntington Beach, California.
- The Ensign Group, has acquired Comfort Hospice Care, a hospice provider serving Southern Nevada through a subsidiary of its home health and hospice portfolio, Cornerstone Healthcare, Inc.
- LifeCare Home Health LLC, a post-acute health care provider, announced the acquisition of Beyond Faith Homecare & Rehab LLC, which has multiple locations across Texas.
Exclusively Listed For Sale By Stoneridge Partners
|State||Agency Profile||Status||Reference Number
|Arizona||Opportunity to establish hospice in Phoenix area. ACHC-accredited.||Available|
|California||$11 million multi-location addiction treatment center. Located in Southern California. 21% bottom line. Strong growth trends. JCAHO-accredited.||Available|
|California||Medicare-certified home health agency established in 2003. $2 million annual revenue in 2018. PDGM revenue-neutral. Located in Southern California. Clean business with no ADRs.||Available|
|Colorado||Opportunity to establish Medicare home health agency. Denver market. ACHC accreditation until 2022.||Available|
|Florida||Medicare-certified home health agency. Approximately $3.8 million in revenue with 17% bottom line. Located in Districts 9 and 10. Revenues split evenly between districts. Accredited. 4.5-star quality of patient care rating.||Available|
|Georgia||ID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb.||Available|
|Illinois||$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4.5-star rating by CMS.||Available|
|Louisiana||Boutique full-service clinical laboratory specializing in preventative diagnostic testing. Medicare- and Medicaid- certified, with insurance contracts in more than 20 southeastern states.||Available|
|Massachusetts||Medicare- and Medicaid-certified home health agency. |
$13+ million in annual revenue with continued growth. Diverse payor mix. Strong management in place. Accredited.
|Massachusetts||Medicare- and Medicaid-certified home health agency. Motivated seller in western Massachusetts. $7.5 million annual revenue. Great add-on for existing provider.||Available|
|Michigan||Medicare home health and hospice agency. $10 million in annual revenue with numerous referral relationships.||Available|
|Michigan||$2 million ID/DD agency in the Detroit area. Profitable service provider with existing management team in place.||Available|
|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|
|Mid-Atlantic||$10+ million non-skilled home care agency. Primarily Medicaid reimbursed with 20% EBITDA margins. Strong management team in place.||Available|
|Multi-State||Well-established pediatric provider. Revenue more than $40 million. Medicaid and insurance accepted.||Available|
|Nevada||Medicare-certified home health agency in Las Vegas area. Approximately $1 million in annual revenue. Accredited.||Available|
|New Mexico||Home health and hospice with $15 million in annual revenue. Revenue split is 2/3 home health and 1/3 hospice. Medicare- and Medicaid-certified. Accredited.||Available|
|New York||Licensed home care services agency with services in five boroughs. Approximately $20 million in revenue and a long-standing history in the community.||Available|
|New York||Licensed home care services agency with $13 million in revenue. 30-year history. Licensed in all five boroughs.||Available|
|New Mexico||$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.||Available|
|North Carolina||$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins.||Available|
|Oklahoma||Medicare-certified home health agency with $9.6 million in annual revenue. 98% traditional Medicare and other PPS payors. Medicare- and Medicaid-certified with multiple locations.||Available|
|South||Treatment center with 28 beds, intensive outpatient program capacity of 40, full continuum of substance use disorder services and dual diagnosis treatment capability. JCAHO accreditation pending. $4+ million in revenue, highly competitive in-network contracts. Average census of 30. Existing relationships with county, parole, local hospitals, churches and universities. Solid business in desirable location with little area competition.||Available|
|South||Full continuum, JCAHO-accredited substance use disorder treatment center on 100+ acre horse ranch. Dual diagnosis treatment capability with 16 beds and 22 staff. $1.5 million EBITDA on $3.5 million in revenue. In-network with great contracts/rates and strong census.||Available|
|South||Partial hospitalization treatment program/intensive outpatient program seeking strategic partner. Strong census and revenue growth. No direct competition for niche market.||Available|
|Southwest||$5+ million 37-bed outpatient treatment center. Fully accredited and recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of network but transitioning to some in-network.||Available|
|Southwest||64 bed full continuum 64-bed full continuum treatment center in two southwestern US metropolitan cities. JCAHO-accredited and in-network. $4 million pro forma EBITDA run rate based on 30% occupancy with significant growth expected. Strong infrastructure to support growth trajectory.||Available|
|South-Atlantic||Home health agency and adult day care center with $12+ million in annual revenue. Home health represents 85% of revenue while adult day represents 15% of revenue. Home health is primarily a Medicaid business but is Medicare-certified. Accredited.||Available|
|South Texas||Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.||Available|
|Tennessee||Very rare opportunity in a Certificate of Need state, located in Nashville, TN (Davidson County). Projected 2019 revenue in excess of $800,000.||Available|
|Texas||$5.3 million Medicaid agency in San Antonio, TX. 16.5% EBITDA. CHAP-accredited. Staff can remain in place for a smooth transition.||Available|
|Texas||$5.3 million all-Medicaid home care company located in Houston, TX. 20%+ year-over-year revenue growth since 2016.||Available|
|Texas||Home health and hospice covering 10 counties in west Texas/eastern New Mexico with $5 million in revenue. No clinical issues, under CAP. Very profitable. Easily separated.||Available|
|Texas||$3.5 million Medicare certified $3.5 million Medicare certified home health agency located in San Antonio, TX. Fully staffed and CHAP-accredited. Branch office is included in sale.||Available|
|Texas||$1.7 million Medicare home health agency located in Southwest Houston. Well-established with predictable referral sources and revenues.||Available|
|Texas||$1 million Medicare-certified agency licensed in seven counties in the Houston area. 80% traditional Medicare.||Available|
|USA||New software application helping build social connections among patients in recovery and giving them increased access to therapists. Potential investment opportunity. Facilitates total successful recovery and gathers important helpful data.||Available|
|Virginia||$6 million Medicare-certified agency in Northern Virginia.||Available|
|Virginia||Physical therapy and wellness operation with $2.3 million in revenue. 95% cash payors. Potential to franchise nationwide. 2018 EBITDA was $257,000.||Available|
|West||Premier provider of primary mental health services for adolescents aged 13-18 with two locations. Currently growing in-network contracts.||Available|
|East||Healthcare testing laboratory with $7 million in revenue and $4 million EBITDA. 16 employees, multiple state licenses.||Under Contract||
|Florida||$9.5 million home health agency with strong management, clinical and financial operations. 99% of revenue comes from traditional Medicare.||Under Contract||
|Florida||Medicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.||Under Contract||
|Kentucky||Medication-assisted clinic. Intensive outpatient program counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid.||Under Contract||
|Kentucky||Medication-assisted treatment center. Suboxone only. Strategic location between Louisville and Lexington, Kentucky. Great reputation with strong clinical team in place. 110 clients with room to grow. In-network contracts. Clients pay $150 per visit for counseling twice per month. Owners are near retirement and will help with the transition.||Under Contract||
|North Carolina||$5 million Medicaid agency. $5 million Medicaid agency. CAP/PCS services. Long history of providing quality services.||Under Contract||
|Pacific Northwest||Full continuum substance use disorder, mental health and gambling addiction treatment center in Washington state with $3,625,000 in revenue and $1,100,000 EBITDA. 40 bed facility with 40 employees. Strong census, full outpatient program and Medicaid payors.||Under Contract||
|Southwest||Provider of waiver and intermediate care facility ID/DD services with $25 million in annual revenue. Statewide platform with a strong management team and excellent reputation for quality services.||Under Contract||
|Texas||Three Hospice companies with Three hospice companies with affiliated home health and $6 million in total revenue. Locations in south, southcentral, and southeast Texas.||Under Contract||
|Texas||$4 million home health agency based in Dallas/Ft. Worth. Full staff in place. Medicare and managed care with great contacts.||Under Contract||
|Texas||$3+ million hospice agency based in Dallas/Ft. Worth. Well established with full staff in place. Clinically clean and growing.||Under Contract||
|Texas||$1.4 million revenue pediatric Pediatric therapy business with $1.4 million in revenue. Provides physical therapy (PT), occupational therapy (OT) and speech therapy (ST) to disadvantaged and disabled children in a major Texas city and surrounding counties. Positive reputation for providing quality care in a child-friendly environment. Average census is 190 patients with a goal of 225 for calendar year 2019.||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 October 2017 | Stoneridge Partners