Amedisys, LHC Group Stocks Trend Downward in August
Amedisys, LHC Group Stocks Trend Downward in August
Home health stocks took a hit in August according to the Stoneridge Partners Home Health Index (HHI). Amid volatility in the broader market, stock values tracked by the Stoneridge HHI were down nearly 4.4% compared to the previous month. The S&P 500 was down just over 1.8%.
The Stoneridge Partners HHI monitors the stock values of Baton Rouge, Louisiana-based Amedisys, Inc. and Lafayette, Louisiana-based LHC Group, Inc., two of the country’s largest independent and publicly-traded home health companies. The mergers and acquisitions advisory firm also tracks but does not include stock values for Addus HomeCare Corporation in its final HHI calculations.
Amedisys (Nasdaq: AMED) stock values saw the biggest dip in August, down 4.7% compared to July. Still, the home health provider remains up nearly 3% year-over-year. LHC Group (Nasdaq: LHCG) stock was down nearly 4.1% compared to the previous month — but it still outpaced its performance in August of last year by nearly 19.8%.
The lone bright spot in August was Addus (Nasdaq: ADUS), stealing the show with an 8.6% increase in stock values month-over-month, and nearly 35.6% year-over-year.
“Companies released their second quarter results at the beginning of August, so that could have temporarily affected the continued growth we’ve seen from Amedisys and LHC Group,” Stoneridge Partners President Rich Tinsley said. “Plus, as Medicare-reimbursed providers, they are facing a host of regulatory changes in the months to come. That uncertainty might have been a factor. Addus, on the other hand, does mostly Medicaid-reimbursed home care — plus, it has Medicare Advantage changes working in its favor. So they may have been better positioned in August to continue leading the recent charge for home health stocks.”
Year over year, home health stocks were up about 10.4% while the S&P 500 was up less than 1.5%, according to the Stoneridge Partners HHI.
Quote Of The Month
“We shouldn’t be treating mental and physical health as two completely separate things. The way we tend to respond to psychological health issues is quite different from our responses to physical health issues. As a society, we don’t train proactively about mental health issues. We don’t teach early prevention strategies. There seems a lot of discomfort and stigma around people who disclose they have psychological health issues.” – Shelley MacDermid Wadsworth, Professor of human development and family studies and director of the Military Family Research Institute of Purdue
Read the Full Article Here: Supporting the mental health of military personnel, families and veterans in times of war
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 September 2019 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
| Company | 8/31/19 | 1 mos change | YTD change | 8/31/18 | 8/31/17 |
| Amedisys | 128.71 | -4.70% | +10.16% | 125.01 | 52.24 |
| LHC Group | 118.5 | -4.06% | +26.82% | 98.93 | 65.25 |
| HH Index* | 123.61 | -4.39% | +17.56% | 111.97 | 55.40 |
| S&P | 2926.46 | -1.81% | +17.27% | 2884 | 2471.65 |
| Addus | 87.98 | +8.55% | +29.27% | 64.90 | 34.05 |
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) | 8/31/19 | 8/31/18 | 8/31/17 |
| Amedisys | 4490 | 3980 | 1719 |
| LHC Group | 4130 | 3430 | 1299 |
| HH Index Total | 8620 | 7410 | 3845 |
| Addus | 1150 | 804 | 424 |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
| Company | 8/31/19 | 8/31/18 | 8/31/17 |
| Amedisys | 248% | 252% | 116% |
| LHC Group | 203% | 253% | 134% |
| HH Index Average* | 226% | 253% | 122% |
| Addus | 203% | 176% | 103% |
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
| Company | 8/31/19 | 8/31/18 | 8/31/17 |
| Amedisys | 24.92 | 26.41 | 20.3 |
| LHC Group | 20.33 | 33.19 | 14.06 |
| HH Index Average* | 22.63 | 29.80 | 18.28 |
| Addus | 27.74 | 22.30 | 12.99 |
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 for its reporting. (Home Health Index September 2019 | Stoneridge Partners)
Recent Transactions From Around The Country
- Unilever acquired Bolivian’s Personal and Home Care Business Asterix
- Addus HomeCare Corp. acquired Hospice Partners of America LLC, which has 21 locations in Texas, Idaho, Kansas, Missouri, Oregon and Virginia
- St. Paul, Minnesota based St. Croix Hospice acquired Hometown Hospice & Homecare
- Care Advantage Inc., a Chesterfield County-based home health provider acquired Allegiance Home Care
CLOSED by Stoneridge
- Stoneridge Partners, Partner Joe Lynch, assisted with the partnership of CAP Funds and Bayou Home Care in August 2019
- Stoneridge Partners represented a New Mexico based agency that closed August 2019
Exclusively Listed For Sale By Stoneridge Partners
| State | Agency Profile | Status | Reference Number |
|---|---|---|---|
| Arizona | Opportunity to establish hospice in Phoenix area. ACHC accredited. | Available | SBB-8218 |
| California | $11 million multi-location addiction treatment center. Located in Southern California. 21% bottom line. Strong growth trends. JCAHO accredited. | Available | SJL-7229 |
| 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 | SCM-7298 |
| Colorado | Opportunity to establish Medicare home health agency. Denver market. ACHC accreditation until 2022. | Available | SJL-7771 |
| Florida | Medicare certified home health agency. Approx. $3.8 million revenue with 17% bottom line. District 9 & 10. Revenues split evenly between districts. Accredited. 4.5 star quality of patient care rating | Available | SBA-3029 |
| Georgia | ID/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 |
| 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. | Available | SJD-6825 |
| Massachusetts | Medicare and Medicaid certified Home Health agency. $13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited. | Available | SBA-6010 |
| Massachusetts | Medicare/Medicaid Home Health Agency. Motivated seller in western MA. $7.5 million annual revenue. Great add-on for existing provider. | Available | SBB-7607 |
| Michigan | Medicare home health and hospice agency. $10 million annual revenue. Attractive referral relationships. | Available | SBB-8684 |
| Michigan | $2 million ID/DD. Profitable. Existing management team in place. Greater Detroit area. | Available | SBH-1697 |
| 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 |
| Mid-Atlantic | $10+ million home care agency. Non-skilled, primarily Medicaid reimbursed. 20% EBITDA margins. Strong management team in place. | Available | SBH-9651 |
| Multi-State | Well-established pediatric provider. Revenue over $40 million. Medicaid and insurance. | Available | SBB-2138 |
| Nevada | Medicare certified home health agency. Approx. $1 million in annual revenue. Accredited. Las Vegas area. | Available | SBA-8367 |
| New Mexico | Home health and hospice. $15 million annual revenue. Revenue split: 2/3 Home health and 1/3 Hospice. Medicare/Medicaid certified. Accredited. | Available | SBA-5334 |
| New York | LHCSA in five boroughs. Approx. $20 million revenue. Long history in the community. | Available | SBB-9207 |
| New York | $13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs. | Available | SBB-8249 |
| 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 |
| Oklahoma | Medicare certified home health organization. $9.6 million in annual revenue. 98% traditional Medicare and other PPS Payors. Medicare/Medicaid certification. Multiple locations. | Available | SBA-6607 |
| 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 | SJD-1118 |
| South | Full continuum, JCAHO accredited, co-occurring, SUD treatment center on 100+ acre horse ranch. 16 beds, 22 staff. $1.5 million EBITDA on $3.5 million revenue. In-network. Good reputation, great contracts/rates, solid opportunity. Census is great. | Available | SJD-3485 |
| 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 | SJD-8349 |
| 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 |
| Southwest | 64 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 Texas | Hospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues. | Available | SBA-8064 |
| Tennessee | Very rare opportunity in a CON state. Located in Davidson County in Nashville, TN. Projected 2019 revenue in excess of $800,000. | Available | SCM-8651 |
| Texas | $5.3 million Medicaid agency in San Antonio, TX. 16.5% EBITDA. CHAP accredited. Staff in place for a smooth transition. | Available | SJL-5322 |
| Texas | $5.3 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line. | Available | SJL-3670 |
| Texas | $5 million revenue. Home health and hospice covering 10 counties in West Texas/Eastern New Mexico. No clinical issues, under CAP. Very profitable. Easily separated. | Available | SJL-4994 |
| Texas | $4 million home health agency. Dallas/Ft. Worth based. Full staff in place. Medicare and managed care with great contacts. | Available | SJL-8406 |
| Texas | $3.5 million Medicare certified home health agency. Located in San Antonio, TX. Fully staffed & CHAP accredited. Branch office included in sale | Available | SJL-4824 |
| Texas | $1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable. | Available | SJL-6080 |
| Texas | $1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare. | Available | SBA-1542 |
| 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. | Available | SJD-1777 |
| Virginia | $6 million Medicare certified agency in Northern Virginia. | Available | SBA-7366 |
| Virginia | $2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. | Available | SCM-7368 |
| West | Premier provider of primary mental health services for adolescents aged 13-18. 2 locations. In process of growing in-network contracts. | Available | SJD-7984 |
| East | Healthcare testing laboratory. $7 million revenue, $4 million EBITDA. 16 employees, multiple state licenses. | Under Contract | SJD-1067 |
| Florida | $9.5 million Home Health Agency. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. | Under Contract | SCM-6925 |
| Florida | Medicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10. | Under Contract | SBA-8305 |
| 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 | STS-1093 |
| 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 expand and grow, minimal marketing. In-network contracts. Clients come in twice a month and pay $150 per visit for counseling. Owners are near retirement and will help with the transition. | Under Contract | STS-2658 |
| North Carolina | $5 million Medicaid agency. CAP/PCS services. Long history, quality services. | Under Contract | SBB-4927 |
| 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. | Under Contract | SJD-4921 |
| Southwest | $25 million in annual revenue. Provider of Waiver and ICF ID/DD Services. Statewide Platform. Strong management team. Excellent reputation for quality services. | Under Contract | SBH-2042 |
| Texas | Three Hospice companies with affiliated home health. $6 million total revenue. South, South Central, and South East Texas locations. | Under Contract | SJL-9650 |
| Texas | $3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. | Under Contract | SJL-6009 |
| 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. | Under Contract | SCM-3034 |
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.
Conference News
Brian Bruenderman, Partner and Executive Vice President of Stoneridge Partners is speaking at the National Association for Home Care & Hospice Conference in Seattle, Washington on Monday, October 14, 2019 at 4:30 pm in room 6E.
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Home Health Index September 2019 | 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: Amedisys | LHC Group