Public Home Health Companies Beat the Market in October

The market was friendly to Amedisys Inc. (Nasdaq: AMED) in October, with the company’s share price gaining 4.32%. Other large publicly traded home health companies were not so fortunate, with LHC Group (Nasdaq: LHCG) posting a decline of 0.95% and Almost Family (Nasdaq: AFAM) seeing its share price dip 0.38%.

Still, the overall performance of the home health companies equated to a 0.79% increase in market value, according to the latest Home Health Index from Stoneridge Partners. That means the home health sector, as measured by these three major players, beat the S&P 500, which rose 0.54% in October.

From late spring to early summer, the Index was hitting all-time highs, but now it has cooled.

“The Index has plateaued the last couple of months, yet valuations remain strong and we expect those strong gains for sellers to continue into 2017,” said Rich Tinsley, president of Stoneridge Partners.

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Baton Rouge-based Amedisys has had a strong year, with its share price up 25.86% as of the end of October. However, the company was hit hard by flooding around its corporate headquarters, and also has recorded high costs related to transitioning to a new technology platform. Early in November, after sharing news of these challenges in advance of its third quarter earnings, Amedisys’ share price plummeted from $43.78 on Nov. 2 to $38.20 the next day.

Since that time, its stock has been rising, and was trading at $41.24 as of market close on Monday.

Louisville-based Almost Family and Lafayette, Louisiana-based LHC Group also have seen strong gains in share price so far in November after posting solid quarterly results.

Downer’s Grove, Illinois-based Addus Homecare (Nasdaq: ADUS) is not officially included in the Index because it does not rely heavily on Medicare for revenue, as the other companies do. However, Stoneridge tracks Addus’ share price as a point of comparison.

Addus’ share price dropped 4.93% between September and October. However, its share price surged after reporting record revenue earlier this month, jumping from $26.00 on Nov. 7 to $32.95 on Nov. 10. It ended the day Monday at $31.85 per share.

Written by Tim Mullaney

Photo credit: “Nasdaq” by Sami Keinänen, CC BY SA-2.0