Amedisys, Inc. (Nasdaq: AMED) has authorized a program that would allow the repurchase of up to $75 million of its outstanding common stock over the next year, the major home health and hospice provider announced.
Amedisys’ board of directors approved the stock repurchase program Wednesday.
“Amedisys is committed to a disciplined capital allocation strategy,” said Amedisys President and CEO Paul Kusserow in a prepared statement. “This announcement reflects the continue confidence of the board and our management in our long-term plan. While we continue to prioritize investing in accretive acquisitions, our current capital position and strong free cash flow profile will adequately support reinvesting in our business while preserving the option to return capital to shareholders.”
The announcement of Amedisys’ repurchase program comes after the company released a list of more than 200 candidates last week for potential acquisitions, joint ventures and partnerships. Amedisys also recently disclosed its plan to move its executive team from Baton Rouge, Louisiana to Nashville, Tennessee.
“What we did this morning was really a response to the flexibility that we now have, and not to displace opportunities,” Amedisys Vice Chariman and CFO Ronald LaBorde said Wednesday at the 10th Annual Wells Fargo Healthcare Conference. “We’re just trying to balance that going forward, not knowing exactly when opportunities will come and at what level.”
In the last six months, Amedisys shares jumped from slightly less than $28 per share to more than $41, an increase of nearly 50%, The Advocate reported. Stock buybacks typically occur when management believes the company’s shares are undervalued. By reducing its outstanding common stock, then, a company increases earnings per share, which in turn improves the value of the remaining shares.
Written by Kourtney Liepelt