Post-Acute Care Stocks Cool Off
Home Health Index | 2021 February Update
Coming off a scorching performance in December, home health and post-acute care stocks gave back some of their impressive gains in January according to the latest Stoneridge Partners Home Health and Post-Acute Indices.
The Home Health Index (HHI) dipped by almost 4% last month; the Post-Acute Care Index (PAI) did slightly better, dropping by nearly 3.5%. The overall S&P also dropped by 0.6% last month, likely fueled by concerns about the new COVID-19 variants disrupting recovering economies, and raising – perhaps unfounded – fears about what the “January Barometer” means for the rest of 2021.
Nonetheless, the companies that make up the HHI and PAI are stronger than ever before.
“Home health and post-acute care providers performed incredibly well in 2020, and they are still in a much better position now than they were just a few months ago when we saw record numbers of new infections each day,” said Stoneridge Partners President Rich Tinsley. “That’s not to say they aren’t still dealing with a lot of operational challenges, so I think we will continue to see some ups and downs over the next several months. But we’ll learn more in the coming weeks as the companies start to discuss their Q4 financial results.”
Home Health Index
The monthly Stoneridge Partners HHI tracks stock values for Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG), two of country’s largest home-based care companies.
Amedisys saw its stock dip by almost 1.5% in January compared to December, though that had little effect on the company’s overall outstanding performance over the past year – its stock remained up by more than 63% at the end of last month compared to the prior 12 months. Similarly, LHC Group’s stock fell by nearly 6.7% in January, but was still up by more than 36% over the last 12 months.
“Executives from both LHC Group and Amedisys have talked about the historic levels of M&A activity they expect in 2021, so I think we’ll see their stock values surging as we head into March and beyond,” Tinsley said. “The wave of consolidation linked to the Patient-Driven Groupings Model (PDGM) may still be to come.”
Post-Acute Care Index
The PAI from Stoneridge combines the stock values for Amedisys and LHC Group with market performance results for Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG).
Brookdale was the lone bright spot in January’s PAI, with its stock jumping up by nearly 12.5% in January. A sizable home health and hospice provider, the Brentwood, Tennessee-based Brookdale is also one of the largest owners and operators of senior living communities in the country.
In contrast, Frisco, Texas-based Addus’ stock was down 3.8% in January, and after months of consecutive gains, Eagle, Idaho-based Pennant saw its stock fall by 4.6% compared to the previous month. Birmingham, Alabama-based Encompass Health stocks dipped by just more than 2% during that same period.
Quote of the Month
“One of the things that PDGM did for us was promote continuous learning. The focus for PDGM was all about changing how we manage care. And then when COVID came along, it was a bit of a parallel; we switched to focusing on infection control and other wrinkles.” – MaineHealth Care at Home President Donna DeBlois
Read the Full Article Here: An Unexpected Savior: How PDGM Prep Helped Home Health Agencies Ease COVID-19’s Impact
Articles Featuring Stoneridge
National Healthcare M&A Firm Stoneridge Partners Announces Record Year, Expresses Optimism for 2021
View our quarterly M&A webinars on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Visit the Speaker Series Webinar Library on our website.
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 2008.
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 February 2021 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
| Company | 1/31/21 | 1 mos change | YTD change | 1/31/20 | 1/31/19 |
| Amedisys | 289.07 | -1.45% | -1.45% | 176.49 | 131.12 |
| LHC Group | 199.11 | -6.66% | -6.66% | 145.75 | 104.11 |
| HH Index* | 244.09 | -3.65% | -3.65% | 161.12 | 117.62 |
| S&P | 3731.17 | -0.66% | -24.90% | 3225.52 | 27.07.76 |
| Addus | 112.67 | -3.77% | -3.77% | 94.34 | 60.93 |
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) | 1/31/21 | 1/31/20 | 1/31/19 |
| Amedisys | 10370 | 6200 | 4170 |
| LHC Group | 6760 | 5000 | 3610 |
| HH Index Total | 17130 | 11200 | 7780 |
| Addus | 1950 | 1470 | 687 |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
| Company | 1/31/21 | 1/31/20 | 1/31/19 |
| Amedisys | 513% | 328% | 257% |
| LHC Group | 328% | 243% | 227% |
| HH Index Average* | 421% | 286% | 242% |
| Addus | 256% | 222% | 141% |
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
| Company | 1/31/21 | 1/31/20 | 1/31/19 |
| Amedisys | 39.29 | 32.96 | 25.39 |
| LHC Group | 31.17 | 23.30 | 27.09 |
| HH Index Average* | 35.23 | 28.13 | 26.24 |
| Addus | 32.25 | 31.59 | 18.35 |
The Stoneridge Partners Post-Acute Care 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)
- Addus (ADUS)
- The Pennant Group, Inc. (PNTG)
- Encompass Health (EHC)
- Brookdale Senior Living Inc. (BKD)
This graph displays Post-Acute Care Index performance starting late 2019.
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 February 2021 | Stoneridge Partners)
Recent Transactions From Around The Country
- Rethink First acquired Whil, a leading digital provider of mindfulness, stress resilience, mental well-being and sustainable performance solutions.
- Grant Avenue Capital recently acquired Salt Lake City-based Valeo Home Health & Hospice from Eduro Healthcare, an operator of skilled nursing facilities.
Exclusively Listed For Sale By Stoneridge Partners
Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners
Posted 4 weeks ago by Coley M
Very rare opportunity in a CON state. Located in Davidson County in Nashville, TN. 2020 revenue in excess of $650,000.
Home Health / Tennessee / 32 views
Posted 1 month ago by Luci
Substance use disorder treatment center, PHP, IOP, co-occurring disorders. 2019 EBITDA of $400k, 2020 revenue trend nearly $2 million and growing. Average daily census of...
Behavioral Health / Mountain West / 42 views
Posted 2 months ago by Ben B
Non-skilled home care company. $10+ million in annual revenue. Predominantly Medicaid. Highly profitable. Accredited. Strong management team in place.
Posted 2 months ago by Joe L
$1 million Medicare home health agency in northwest Minnesota. Well-established. Diverse referral sources. Long history of excellent care.
Home Health / Minnesota / 62 views
Posted 3 months ago by Ben B
Non-skilled licensed home care organization. Approximately $2 million in annual revenue. Strong management team in place. Southern California.
Home Care / California / 97 views
Posted 4 months ago by Coley M
$15 million private duty Medicaid agency. $3+ million EBITDA. Contracted with seven state Aging Service Access Points (ASAP).
Home Health / Massachusetts / 142 views
Posted 4 months ago by Brian B
$10 million Medicaid personal care provider. Large consumer-direct component. History of steady growth.
Posted 4 months ago by Brian H
$50 million ID/DD platform opportunity. Multi-state, Midwest. Tenured management team to stay in place. Double digit year over year organic growth. Significant future opportunities for...
Posted 5 months ago by Partners
$4.2 million home health agency in Houston, Texas. 17.5% bottom line. Large coverage area. Diverse referral network. Fully staffed with no clinical issues.
Home Health / Texas / 167 views
Posted 5 months ago by Jacob L
Outpatient facility offering mental health and substance use disorder treatment, including co-occurring/dual diagnosis therapy and MAT. One company with four reputable brands operating in six...
Behavioral Health / Midwest / 201 views
Posted 5 months ago by Joe L
Clean and accredited hospice provider number in the coveted San Antonio marketplace. Current license is valid until the end of May 2022.
Posted 6 months ago by Joe L
Fast growing private pay home care agency in north east Tennessee. $1.2+ million in revenue. Quality focused and very profitable.
Posted 6 months ago by Brian H
$8 million Midwest ID/DD agency. Highly profitable. Consistent staff and clients.
Posted 6 months ago by Partners
$2.1 million revenue. Dallas/Ft. Worth based Medicaid pediatric therapy business. 16% EBITDA margin. More than 300 patients. Also services San Antonio and surrounding areas.
Home Health / Texas / 171 views
Posted 6 months ago by Partners
$12 million Medicaid home care business. Experienced management team in place. Strong financials, long-term consistent growth. EBITDA over $1 million.
Home Care / Pennsylvania / 195 views
Posted 6 months ago by Ted Cohen
$1+ million non-skilled home care agency. 20% AEBITDA. 90% of revenue from Medicaid Waiver program. Includes Medicare-certified, ACHC accredited home health license. Management team in...
Posted 8 months ago by Jacob L
Three locations in southeastern US. Real estate is also for sale. Residential, PHP, IOP and sober living programs; detox is outsourced through BioCore. More than...
Behavioral Health / Southeast / 267 views
Posted 8 months ago by Partners
Medicare-certified home health agency. Licensed to service Chester, Lancaster, and Delaware counties. ACHC-accredited. Minimal census of 20+/- patients.
Home Health / Pennsylvania / 241 views
Posted 8 months ago by Partners
Medication-assisted treatment/office-based addiction treatment center utilizing Suboxone, Vivitrol and Zubsolv; also specializing in pain management, group counseling and hormone replacement therapy. Three locations in a...
Behavioral Health / Southwest / 250 views
Posted 8 months ago by Partners
$4.9 million Medicare home health agency located in Phoenix, Arizona. Showing strong year over year revenue growth since 2018. Diverse referral sources, well run with...
Home Health / Arizona / 264 views
Posted 8 months ago by Partners
$5 million Midwest-based ABA provider. Day supports and counseling. Highly profitable and respected. CARF accredited. Contracted with state and insurance companies.
Behavioral Health / Midwest / 289 views
Posted 8 months ago by Coley M
$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.
Home Health / Michigan / 284 views
Posted 8 months ago by Partners
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...
Behavioral Health / Kentucky / 298 views
Posted 8 months ago by Partners
Ohio ID/DD provider with $1.1 million revenues. A high-quality operation with existing staff to manage the transition to new ownership.
Posted 9 months ago by Joe L
$3.5 million all-Medicaid home care company located in Houston, TX. 20%+ year-over-year revenue growth since 2016.
Posted 9 months ago by Joe L
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...
Home Health / Southwest / 318 views
Posted 9 months ago by Ben B
Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.
Posted 9 months ago by Ted Cohen
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%...
Home Health / South Atlantic / 309 views
Posted 9 months ago by Jacob L
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...
Behavioral Health / Texas / 297 views
Posted 9 months ago by Ted Cohen
$5+ million home health, home care, case management, and hospice company. Approximately 15% revenue from hospice, other service line revenues distributed relatively evenly. Multiple locations....
Posted 9 months ago by Brian H
$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins.
ID/DD / North Carolina / 271 views
Posted 9 months ago by Ben B
$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.
Home Health / New Mexico / 281 views
Posted 9 months ago by Ted Cohen
Medicare and Medicaid certified home health agency. $16.5 million in annual revenue with continued growth. 90%+ Medicaid. Strong management in place. Accredited.
Home Health / Massachusetts / 326 views
Posted 10 months ago by Ben B
$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4.5-star rating by CMS.
Home Health / Illinois / 293 views
Posted 10 months ago by Brian H
ID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb.
Posted 10 months ago by Ted Cohen
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....
Home Health / Florida / 329 views
Home Health Index February 2021 | 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 at 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
