November Leads to Mixed Results for Home Health, Post-Acute Care Stocks

Last month saw a reversal of fortune for the post-acute care providers tracked by the Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices.

The HHI – which has mostly made steady progress over the past several months – took a hit in November, falling by more than 7% compared to October’s results. In contrast, the PAI jumped up by almost 5% in November after months of struggles related to the COVID-19 pandemic. The S&P 500 similarly saw healthy gains last month, up almost 12% over October.

“November was a bit of a mixed bag for providers in the post-acute care space,” said Stoneridge Partners President Rich Tinsley. “The companies in the HHI have largely withstood much of 2020’s economic chaos, while the PAI companies have really struggled. But last month, the PAI made some significant progress after a punishing year. Let’s hope that means more good things to come for all of them in 2021.”

Home Health Index

The Stoneridge Partners HHI follows the stock value of Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG), two of the largest home health, hospice and personal care service providers in the U.S.

After months of almost consistent gains, stock values for Baton Rouge, Louisiana-based Amedisys dropped by nearly 6% last month. Lafayette, Louisiana-based LHC Group saw an even sharper decline over the same period, dropping more than 10% on a month-over-month basis.

LHC Group announced an expansion of its hospice business in November through the purchase of Grace Hospice in Oklahoma. The company also announced the acquisition of East Valley Hospice and East Valley Palliative Care in Arizona.

“LHC Group has been clear about its mission to expand into hospice, ideally tri-locating all of its services in key markets,” Tinsley said. “This is a continuation of that strategy.”

Even with November’s losses, year-to-date the HHI is still up by more than 45% over last year.

Post-Acute Care Index

The PAI combines Amedisys’ and LHC Group’s stock values with values for Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group, Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

November marked an impressive turnaround for the additional providers making up the PAI, all of which have faced an uphill climb in 2020 due to the challenges posed by COVID-19 for companies operating in the congregate senior living space. Addus, Pennant, Brookdale and Encompass Health all recorded gains last month.

Values for Brentwood, Tennessee-based Brookdale were up nearly 31% in November compared to October, while Birmingham, Alabama-based Encompass Health was also up by a large margin during that time — almost 24%. Encompass’ growth has been fueled by collaboration between its home health, hospice and in-patient rehabilitation service lines; still, the company recently announced it was exploring strategic alternatives for its home health and hospice segment, likely in an effort to develop untapped value for its shareholders.

Meanwhile, Pennant stock was up by almost 18% in November, and Addus recorded nearly a 2% gain.

“I’m glad to see these companies seem to have turned a corner,” Tinsley said. “As the COVID-19 vaccine rolls out, I think we’ll continue to see positive gains for these providers whose work has been in the spotlight all year.”

Quote of the Month

“This study is important because it demonstrates that investing in disease-specific training among home care workers – for example, in cardiovascular disease – may be a way to improve their experience caring for patients. These findings support the need for additional training requirements for those home care workers caring for patients with complex clinical conditions, like heart failure.”- Dr. Madeline Sterling, a health services researcher in the Division of General Internal Medicine at Weill Cornell Medicine

Read the Full Article Here: Disease-Specific Training for Home-Based Care Workers Can Improve Staffing, Boost Quality

Articles Featuring Stoneridge

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)
(Home Health Index December 2020 | Stoneridge Partners)

Here are the results of the stock prices for the past two years:

Company 11/30/20 1 mos change YTD change 11/30/19 11/30/18
Amedisys 244.79 -5.49% +47.29% 162.96 137.93
LHC Group 196.32 -9.34% +42.51% 133.40 105.43
HH Index* 220.56 -7.24% +45.12% 148.18 121.68
S&P 3660.25 +11.94% +13.29% 3140.98 2739.67
Addus 99.25 +1.72% +2.09% 93.21 75.45

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) 11/30/20 11/30/19 11/30/18
Amedisys 8190 5560 4060
LHC Group 6140 4200 3400
HH Index Total 14330 9760 7460
Addus 1450 1280 834

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 11/30/20 11/30/19 11/30/18
Amedisys 405% 294% 250%
LHC Group 298% 224% 214%
HH Index Average* 352% 259% 232%
Addus 191% 213% 171%

Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 11/30/20 11/30/19 11/30/18
Amedisys 31.03 29.55 24.71
LHC Group 28.28 21.49 25.47
HH Index Average* 29.66 25.52 25.09
Addus 24.09 30.30 22.27

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 December 2020 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Hospice provider The Care Team has acquired InTeliCare Home Health & Hospice in Michigan
  • Texas-based Silverstone Hospice has acquired Comfort Care Hospice in the Dallas-Fort Worth region

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

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky

Opportunity to establish a Houston-based hospice.  Low-census provider licensed for regions 3, 4, 5 and 6.

 Hospice /  Texas

Opportunity to establish a Medicare hospice and Medicare home health agency.  Greater Salt Lake city area.  Clean provider number with management and field staff in...

 Home Health /  Utah

Large, established franchise territory.  $2.5 million revenue.  Two offices with strong leadership teams in place.

 Home Care /  Michigan

ABA in-home and community-based autism treatment for children and families.  Located in Northeastern VA.  $1M in revenue.  Completely self-sufficient staff to remain.

 Other /  Virginia

Home health with $8+M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Private duty home care franchise.  $5M in revenue.  Quality track record with strong management team.  Excellent 18-year history,

 Home Care /  Colorado

Home care franchisee.  $8.4M in revenue.  Highly profitable agency.  Medicaid/private pay.

 Home Care /  Kentucky

Skilled home health agency.  JCAHO accredited, zero deficiencies.  Excellent reputation and referral relationships.  $400k in revenue, impressive growth potential.

 Home Health /  Colorado

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

In-home DME manufacturer.  Patented mobility system.  $7.7M+ in revenue.  GSA/VA contract.  Strong industry supplier partnerships.

 Other /  California

Medicare-certified home health and hospice provider.  $19M in revenue.  Attractive strategic geography.

 Home Health /  Ohio

$1M in revenue.  Small Medicare home health agency.  Region 5.

 Home Health /  Florida

Private pay home care.  $1.6M in revenue.  Profitable, great reputation.  Tenured staff.

 Home Care /  Illinois

Medicare-certified home health agency.  District 3.  Approximately $700k in revenue.  Accredited.

 Home Health /  Florida

Medicare-certified home health agency.  District 5.  Minimal census.  Accredited.

 Home Health /  Florida

Co-occurring, dual-diagnosis, addiction and mental health treatment center, 13- year history.  PHP, IOP, OP levels of care, prime location and setting, treating SUD and multiple...

 Behavioral Health /  Arizona

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois

$2.5M private pay home care agency.  20-year history, diverse referral sources.  Competitive bill rates.  Unique and successful recruiting and retention strategy.

 Home Care /  Virginia

$27M highly profitable, tech-enabled health care staffing company.  Provides on-demand workers for LTC facilities.  Impressive growth trends with extraordinary upside

 Other /  Midwest

Well-established and profitable franchisee.  Revenue of $4.9M.  Medicaid and private pay.

 Home Care /  Southwest

ABA in-home autism therapy for children.  $2.4M in revenue.  Strong growth and bottom line.

 Other /  California

Opportunity to acquire a Medicare-certified home health agency. JCAHO-accredited.  Zero deficiencies.  Region 9.

 Home Health /  Florida

Opportunity to acquire a Medicare-certified home health agency.  JACHO-accredited.  Zero deficiencies.  Minimal census.

 Home Health /  Pennsylvania

Opportunity to acquire a Medicare-certified home health agency.  Zero deficiencies.  Minimal census.

 Home Health /  Kansas

Rare southern hospice/home health CON opportunity.  $3.5M in revenue, 60+ hospice ADC.  Strong staff recruiting and retention.

 Home Health /  South

Medicaid/private pay, Medicare-certified.  $3 million in revenue.  CHAP-accredited.


4-star home health agency.  $2.5 million revenue.  Experienced management team.  Strong financials with outstanding local reputation.  Huge growth opportunities.

 Home Health /  Michigan

$1.5 million revenue chiropractic/physical therapy business.  High profit margin/low operating costs.  Diverse referral sources.

 Other /  Maryland

$3.3 million in revenue.  Autism center providing ABA, OT, PT and ST.  In-clinic and in-home services.

 Other /  Michigan

Non-skilled licensed home care organization.  Approx. $2 million in annual revenue.  Strong management team in place.  Southern California.

 Home Care /  California

Joint Commission-accredited psychiatric treatment center.  Residential, PHP, IOP, OP and home health services.  National referral base; reputation for excellence, innovation.  $3M EBITDA on $7M revenue...

 Behavioral Health /  Midwest

Central Ohio-based home health company with private pay.  $2.3 million in revenue.  13.5% EBITDA.  Strong growth trends, full staff in place.

 Home Health /  Ohio

$2+ million private pay.  Profitable with great reputation.

 Home Health /  Pennsylvania

Profitable hospice agency with $600,000 in revenue.  Ready to grow with full complement of staff in place.

 Hospice /  Pennsylvania

Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.

 Hospice /  Texas / Popular

$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.

 Home Health /  New Mexico

Home Health Index December 2020 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index.” Rich can be reached at [email protected] 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