Average market values of the three largest publicly traded companies in the home health industry hit a new all-time high in the most recent Stoneridge Partners Home Health Index. For the fourth month in a row, market values for Almost Family (Nasdaq: AFAM), LHC Group (Nasdaq: LHCG) and Amedisys (Nasdaq: AMED), increased and surpassed the previous index all-time high.
For the month of July, the index, which tracks the monthly average market values of AFAM, LHCG and AMED, rose 2.8%, above the previous index high reached in June. Year to date, the index is up 14.12% and 9.81% for the trailing 12-month period.
“Buoyed by strong M&A activity, the home health index is continuing to hit all-time market value highs,” Rich Tinsely, president and CEO of Stoneridge partners, said in a prepared statement. “Home health companies are taking new regulations in stride as measures continue to roll out from national payers.”
New regulations, including CMS’ Pre-Claim Review Demonstration, which rolled out on August 3 in Illinois, did not seem to be a drag on home health companies. The demonstration requires home health agencies to submit claims earlier in the care process for reimbursement. The program will continue to roll out in Florida, Michigan, Texas, and Massachusetts in the coming months.
For the month of July, Amedisys saw the largest increase of 7.94% in stock price. Year to date, the stock is up 38.85%. These numbers precede the announcement of Amedisys CFO, Ronald A. LaBorde’s retirement.
LHC Group followed Amedisys with an increase of 4.88% in July. Year to date, the stock is up only 0.22%. But while LHC Group’s stock climbed, executives parsed down previous acquisition ambitions. The company lowered its estimated $1 billion revenue pipeline from new acquisitions down to more than $750 million in a recent quarterly earnings call.
Almost Family actually saw a decline in July of 5.42%, though year to date, the company’s stock is up 5.41%. The Louisville, Kentucky-based Almost Family is one company affected by pre-claim requirements. Executives were open to the potential upside of the demonstration during a recent earnings call, but noted they were unsure how the model would impact financials overall.
Addus Homecare, which isn’t included in the index due to its very little revenue coming in from Medicare, saw an increase for July as well. Its stock price rose 5.85%.
Even though the Index continued to increase, it did not outpace the S&P 500, which saw an uptick of 3.56%, compared to 0.9% in June.
Written by Alana Stramowski