The market values of three of the most prominent home health care companies hit an all-time index high for the third month in a row in June. The latest Home Health Index by health care merger and acquisitor advisory firm Stonebridge Partners surpassed previous index high recorded in May and April.
The index measures the monthly average market performance of Almost Family (Nasdaq: AFAm), LHC Group (Nasdaq: LHCG) and Amedisys (Nasdaq: AMED). For the month of June, the index rose 1.25% versus May. Year to date, the index is up 11.01%, and has risen 15.68% for the trailing 12-month period.
“With back-to-back records set in May and June, the large publicly traded home health companies continue to drive valuations across the board, supporting a strong M&A market,” said Rich Tinsley, president and CEO of Stoneridge Partners. “Operators are continuing to respond to challenges ranging from new payment models to shifting patient mix, and investors are rewarding them.”
During the month, LHC Group had the biggest gains, rising 3.05% over May. The Lafayette, Louisiana-based company’s market performance was strong the previous two months, when it rose 4.12% in May and a whopping 11.85% in April, according to the Index. However, year to date, the company is still down 4.44%.
Almost Family’s stock prices rose 1.91% in June over May. The stock is up 11.46% year to date. Amedisys, which has the highest year-to-date gains of the three companies tracked on the Index, saw its stock prices dip slightly, dropping 0.77% in June from the previous month. Year to date, the stock is up 28.38%.
Another major home care company, Addus, which is not tracked on the index because of its heavy reliance on Medicaid reimbursement-based revenue, has been having a tougher year than the index tracked companies. Year-to-date, the company’s stock is down 25.13% and dropped 15.18% in June alone.
Overall, the Index once again outpace the S&P 500 for the month, which saw an uptick of 0.9%.
In addition to higher stock prices, the home health care industry has seen its transaction volume rise, with the number of deals recently doubling from a year ago.
Written by Amy Baxter