After a lackluster start to 2022, February was a blockbuster month for home health and post-acute care providers.

Most of the publicly-traded companies tracked by the Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices experienced solid stock gains. Stoneridge Managing Director and Partner Brian Bruenderman said the rebound was driven in part by improvements in the labor landscape.

“Make no mistake, workforce shortages still exist in the home health and post-acute industry, and likely will for some time to come,” said Bruenderman. “But we are seeing signs of recovery from COVID-related labor struggles. Providers are doing a better job of retaining existing employees and recruiting new ones – and right now, even the smallest improvements can substantially lift a provider’s operations.”

The HHI was up slightly more than 14% in February compared to January, while the PAI climbed just more than 13%. In comparison, the S&P 500 dropped nearly 3.5% during that same period.

Home Health Index

The stock values of home health giants Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG) were greatly improved in February, with Amedisys up nearly 19% and a more than 9% increase for LHC.

Investors have responded positively to Amedisys’ emphasis on core operations as President and COO Chris Gerard prepares to take over the CEO role on April 15. The company also announced recent M&A activity, buying the home health assets of AssistedCare Home Health and RH Homecare Services. But current progress on the workforce front was the major headline after months of labor challenges.

“As health care labor markets become more challenged nationwide, Amedisys was able to drive our clinical turnover down an additional 9% from 2020 to 2021,” Chairman and CEO Paul Kusserow said during a Q4 earnings call. “Additionally, to fuel our present and future growth, we increased our recruitment numbers by driving a 27% increase in recruited headcount.”

LHC Group also posted net-positive new hire numbers and continued to see a decline in the number of its clinicians in COVID-19 quarantine.

Post-Acute Care Index

PAI companies Addus HomeCare Corporation (Nasdaq: ADUS), Encompass Health Corporation (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD) also saw their stock values rise in February. Addus and Encompass both improved by more than 6%, while Brookdale had a banner month with a 22% jump in its stock values as compared to January. The only provider that didn’t join the rally was The Pennant Group, Inc. (Nasdaq: PNTG), where stock values dipped – though only slightly – by just more than 1% in February.

After announcing that it planned to spin off its home health and hospice segment into a standalone, publicly-traded entity, Encompass Health now appears willing to explore strategic alternatives. According to recent reports, privately-held AccentCare, Inc. and Aveanna Healthcare Holdings (Nasdaq: AVAH) may be among the interested suitors.

Quote of the Month

”We have a real caregiver problem that’s going to last 20-plus years. This is the new normal, we’re going to have a workforce shortage that’s going to last forever.” – David Ellis, President and Founder of Home Care 100

Read the Full Article Here: Examining the Future of Homecare

Articles Featuring Stoneridge

Traditions Health Expands Reach with Acquisitions in 3 States. Ben Bogan, Partner and Managing Director of Stoneridge Partners served as the exclusive advisor.

Visit the Speaker Series Webinar Library on our website to watch our most recent Speaker Series discussing how to avoid common pitfalls when selling your healthcare business.

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)

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

Company 2/28/22 1 mos change YTD change 2/28/21 2/28/20
Amedisys 160.24 +18.66% -1.01% 253.64 174.01
LHC Group 136.17 +9.10% -0.77% 181.71 121.46
HH Index* 148.21 +14.07% -0.90% 217.68 147.74
S&P 4370.5 -3.36% -8.30% 3841.0 2954.22
Addus 85.04 +6.65% -9.06% 107.57 76.27

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) 2022 2021 2020
Amedisys 5620 8550 6320
LHC Group 4720 5610 4400
HH Index Total 10340 14160 10720
Addus 1460 1630 1230

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

Company 2022 2021 2020
Amedisys 255% 413% 323%
LHC Group 217% 272% 214%
HH Index Average* 236% 343% 269%
Addus 175% 215% 206%

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care 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 March 2022 | Stoneridge Partners)

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 at Stoneridge Partners.

Non-medical home care franchisee.  $9.6+M in revenue.  50% Medicaid/30% Private Pay/ 14% VA/ 6% Misc.  Experienced management team to stay post-transition.

 Home Care /  Multi-State

Hospice.  45+ ADC.  Rio Grande Valley.  No CAP or regulatory issues.

 Hospice /  Texas

$2M revenue home care agency.  100% private pay.  Primarily non-medical.  Skilled designation, not Medicare-certified.  W-2 caregivers.  Region 8.  Accredited.

 Home Care /  Florida

Profitable private-duty home health agency in Northern Virginia.  $1.5M in revenue.  20+ years in the community.

 Home Health /  Virginia

Profitable home care franchise with consistent sales growth.  Revenue of $1.3M.  Great reputation within the community.

 Home Care /  Iowa

$40M+ home care agency with 20+% AEBITDA.  Primarily private-duty, non-medical (90%).  Medicaid waiver programs.  40% family caregivers.  Multiple locations.

 Home Care /  Pennsylvania

Colorado Springs and surrounding areas.  Opportunity to grow existing small hospice.  Motivated Seller

 Hospice /  Colorado

Medicare-certified home health agency.  Houston/Kingwood area.  Approximately $600k in revenue.  Accredited.

 Home Health /  Texas

I/DD provider offering SCL & FHP services.  $3M in revenue.  Recent rate increase.

 I/DD /  Kentucky

Hospice.  30+ADC.  No CAP or regulatory issues.

 Hospice /  Illinois

Behavioral Health/Suboxone Clinic.  $900k in revenue.  21 years in business with stellar reputation.  Single office, great opportunities for expansion.  All cash paying patient base.

 Behavioral Health /  Kentucky

I/DD residential services.  $11M in revenue.  Highly profitable agency with long-standing reputation.  Community Residential Services (CRS) 4-bed model & Integrated Community Supports (ICS) apartment settings.

 I/DD /  Minnesota

Well established home health agency.  $4M in revenue.  Fully staffed.  Profitable.  Good history of compliance.

 Home Health /  Missouri

Home Health CON in Montgomery County.  Profitable agency generating over $1.3M in revenue.  95%+ Medicare.  Built in marketing relationship and growth potential.

 Home Health /  Maryland

Skilled Home Health & Private Duty. $4.4 million in revenue. 22% census increase over last year. Established over 23 years.

 Home Health /  Florida

Medicare/Medicaid Home Health agency. $8 million in revenue. Long history in the community.

 Home Health /  Oklahoma

86 patient hospice located Northeast of Houston, TX. $4M+ in revenue with 20% + adjusted EBITDA. Full staff in place. Excellent record of compliance.

 Hospice /  Texas

Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.

 Home Health /  Florida

Hospice. 150 ADC. Strong growth. Expertly run with administrative team willing to stay involved. No CAP or regulatory issues.

 Hospice /  Southwest

Mental Health Treatment Center. $1.1M in revenue. Long-established, profitable practice. Full spectrum of medical treatment and therapy services.

 Behavioral Health /  Indiana

Medical Staffing Agency. $4.6M in revenue. Established over 25 years. Excellent rapport with regional hospital network.

 Other /  Kentucky

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

 Home Health /  Kentucky / Popular

Home health with $8M 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

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

$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 / Popular

Home Health Index March 2022 | Stoneridge Partners

From Brian Bruenderman, Publisher of “Home Health Index.” Brian 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