Home Health Stocks Hold Steady in April
Home Health Stocks Hold Steady in April
Health care mergers and acquisitions firm Stoneridge Partners’ most recent Home Health Index (HHI) shows that home health stocks held largely steady in April, decreasing just 0.03% over the previous month. The stocks did, however, slightly underperform the broader market, with the S&P 500 up 2.23% in April compared to March.
The Stoneridge Partners HHI follows the monthly market values for home health, hospice and personal care giants Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG). Stoneridge also tracks market changes for Addus HomeCare Corporation (Nasdaq: ADUS), though it is not included in the final HHI tabulations.
“Home health stock values were pretty consistent last month as the three publicly-traded companies neared their first quarter financial results,” Stoneridge Partners President Rich Tinsley said. “Addus had a very strong April, and LHC Group also fared well. Amedisys values showed some negative fluctuation compared to March.”
Addus stock was up 5.03% in April compared to March. Lafayette, Louisiana-based LHC Group saw its stock values rise by 2.55%, while stock of Baton Rouge, Louisiana-based Amedisys took a 2.19% dip in April compared to the previous month. Despite these small monthly shifts, both LHC and Amedisys have charted very strong performances annually. Amedisys stock was still up 89.96% on a year-over-year basis in April, and LHC Group was up 59.68% year over year.
Despite a solid first quarter, Amedisys’s stock values were down 6.21% following the release of its Q1 financial results at the start of the month, trading at $119.88 per share.
“It’s definitely going to be interesting to follow these companies and their stock values as Patient-Driven Groupings Model (PDGM) implementation draws closer,” Tinsley said. “The companies have all touted their preparation and readiness — but there’s bound to be some speed bumps in the road approaching January 1, 2020.”
Quote Of The Month
“When a person already feels vulnerable by illness – they heal at better rates and with more positive outcomes in familiar and comfortable surroundings”, home health nurse, Tarita Bumbray.
Read the Full Article Here: Bedside Manners: Home Health Nurses Become First Line of Care
See It To Believe It!
The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:
- 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 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 since 2002.
This graph compares the HH Index to the price of Addus stock (non-Medicare).
(Home Health Index May 2019 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||4/30/19||1 mos change||YTD change||4/30/18||4/30/17|
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)||4/30/19||4/30/18||4/30/17|
|HH Index Total||8280||3700||3739|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||235%||143%||128%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||24.25||16.84||18.92|
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 to it’s reporting. (Home Health Index May 2019 | Stoneridge Partners)
Recent Transactions From Around The Country
- Arose+LivHome acquired Forever Young Home Care in North Carolina
- Jet Health Inc. acquired Boise-based First Choice Home Health and Hospice
- The Ensign Group, Inc. acquired Hospice operations in Austin and Houston, TX
- Blue Wolf, Peloton Equity acquired In-Home Care VNA
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||$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||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.||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.
SOLD!!! By Stoneridge
- Stoneridge Partners represented an Ohio based agency that closed April 2019
Another Cartoon Favorite
Home Health Index May 2019 | Stoneridge Partners