On the heels of generally positive quarterly earnings, the largest home health providers experienced a turnaround month in October after two consecutive months of market turbulence, according to the latest Home Health Index (HH Index) from Stroneridge Partners, a health care mergers and acquisitions firm. The index appears to be creeping back toward its record high value set just three months ago.
Stock prices of three of the largest home care and hospice providers—Almost Family (NASDAQ: AFAM), LHC Group (NASDAQ: LHCG) and Amedisys (NASDAQ: AMED)—rose across the board.
The overall HH Index, which measures the performance of these three publicly traded home health companies and compares them against the S&P 500 performance, moved up 2.7% in October. The general market fared even better, rising 8.3% during the same month.
Amedisys was the front runner for the month, with a stock increase of 4.2%. The company posted positive quarterly earnings at the end of the month and announced its acquisition of Florida-based Infinity HomeCare for $63 million. The company is bullish on acquisitions, naming 300 potential deals in its pipeline looking forward.
Almost Family saw its stocks rise 3.6% in October from the previous month, according to the index. The home health and nursing services provider recently revealed its quarterly earnings for the third quarter period of 2015, with impressive revenue results. It also acquired Black Stone Operations during the period.
Stock prices were relatively stagnant for LHC Group, rising just 0.6% over the month. However, the stock value is up 85% from a year ago. The home health and hospice provider recently acquired Nurses’ Registry and Home Health Corp. for $5.7 million. The U.S. Bankruptcy Court approved the sale at the end of October, after Nurses’ Registry became part of a civil judgement following an investigation and False Claims Act litigation for fraudulent Medicare billing.
Though Stoneridge Partners also measures Addus HomeCare (NASDAQ: ADUS), another large home care provider, the company is not included in the index as little of their revenue comes from Medicare. Addus experienced a significant stock price decline following lower-than-expected quarterly earnings. The stock had previously surged to a 52-week high before the earnings were announced. In October, the value declined nearly 20%.