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Here's Why You Should Add Amedisys (AMED) to Your Portfolio
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Amedisys, Inc. (AMED - Free Report) has been gaining investor confidence on consistent positive results. Over the past six months, the company’s share price has outperformed its industry. The stock has gained 62.9% compared with 13.5% growth recorded by the industry. Also, the company has outperformed the S&P 500’s 3.8% increase.
This renowned home health and hospice services provider has a market cap of $2.85 billion. The company’s five-year projected growth rate is favorable at 18.6% compared with the industry’s 14.4%.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 60 days, eight analysts revised their estimates upward, with no movement in the opposite direction. Resultantly, earnings estimates increased around 3.7% to $3.11 per share.
Per our Style Score, Amedisys sports a Growth Score of A, which is reflective of the company’s strong prospects. Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Let’s find out whether the recent positive trend is a sustainable one.
Strategic Buyouts
Amedisys is developing and acquiring business lines that will complement its existing home care and hospice business. Over the past year, the company made a number of strategic acquisitions — the recent one being that of East Tennessee Personal Care Service (ETPCS), a personal care provider, headquartered in Knoxville, TN. According to Amedisys, this buyout will expand the company’s personal-care footprint outside of Massachusetts and Florida.
Currently, management expects the company to have enough cash balance for making a number of acquisitions in the future.
Favorable 2018 Home Health Final Rule
According to a report by HEALTHCAREfirst, the decision on 2018 Home Health Final Rule was taken without the implementation of the Home Health Groupings Model (HHGM) scheduled for rollout in 2019. Amedisys is optimistic about the implementation of this rule and expects this to positively impact the business in the future.
Personal Care Prospects Attractive
Recently, Amedisys integrated a new operating segment within its business — Personal Care. Per management, this segment is stabilizing and performing as per the company’s expectation as it integrates recent tuck-in acquisitions. The company is looking forward to huge growth prospects within this segment. With the Intercity acquisition, it has closed and successfully integrated two personal care acquisitions and completed the buyout of East Tennessee Personal Care Services in February 2018. Moreover, the company is working on expanding the geographical presence of the Personal Care business.
Favorable Demographic Trends
The home health industry is poised for tremendous growth in the long term, driven by the aging U.S. population, patients’ desire for independence and home health as a cheaper care modality. The company should continue to benefit from the aging demographics of the U.S. population and the need for higher acuity patients to be taken care of in a home nursing environment.
Illumina expects long-term earnings growth of 19.3%.
Chemed has an expected long-term earnings growth rate of 10%.
Walgreens Boots has an expected long-term earnings growth rate of 10.4%.
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Here's Why You Should Add Amedisys (AMED) to Your Portfolio
Amedisys, Inc. (AMED - Free Report) has been gaining investor confidence on consistent positive results. Over the past six months, the company’s share price has outperformed its industry. The stock has gained 62.9% compared with 13.5% growth recorded by the industry. Also, the company has outperformed the S&P 500’s 3.8% increase.
This renowned home health and hospice services provider has a market cap of $2.85 billion. The company’s five-year projected growth rate is favorable at 18.6% compared with the industry’s 14.4%.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 60 days, eight analysts revised their estimates upward, with no movement in the opposite direction. Resultantly, earnings estimates increased around 3.7% to $3.11 per share.
Per our Style Score, Amedisys sports a Growth Score of A, which is reflective of the company’s strong prospects. Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Let’s find out whether the recent positive trend is a sustainable one.
Strategic Buyouts
Amedisys is developing and acquiring business lines that will complement its existing home care and hospice business. Over the past year, the company made a number of strategic acquisitions — the recent one being that of East Tennessee Personal Care Service (ETPCS), a personal care provider, headquartered in Knoxville, TN. According to Amedisys, this buyout will expand the company’s personal-care footprint outside of Massachusetts and Florida.
Currently, management expects the company to have enough cash balance for making a number of acquisitions in the future.
Favorable 2018 Home Health Final Rule
According to a report by HEALTHCAREfirst, the decision on 2018 Home Health Final Rule was taken without the implementation of the Home Health Groupings Model (HHGM) scheduled for rollout in 2019. Amedisys is optimistic about the implementation of this rule and expects this to positively impact the business in the future.
Personal Care Prospects Attractive
Recently, Amedisys integrated a new operating segment within its business — Personal Care. Per management, this segment is stabilizing and performing as per the company’s expectation as it integrates recent tuck-in acquisitions. The company is looking forward to huge growth prospects within this segment. With the Intercity acquisition, it has closed and successfully integrated two personal care acquisitions and completed the buyout of East Tennessee Personal Care Services in February 2018. Moreover, the company is working on expanding the geographical presence of the Personal Care business.
Favorable Demographic Trends
The home health industry is poised for tremendous growth in the long term, driven by the aging U.S. population, patients’ desire for independence and home health as a cheaper care modality. The company should continue to benefit from the aging demographics of the U.S. population and the need for higher acuity patients to be taken care of in a home nursing environment.
Other Key Picks
Other top-ranked stocks in the broader medical sector are Illumina, Inc (ILMN - Free Report) , Chemed Corporation (CHE - Free Report) and Walgreens Boots Alliance, Inc. (WBA - Free Report) . While Illumina sports a Zacks Rank #1, Walgreens Boots and Chemed carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Illumina expects long-term earnings growth of 19.3%.
Chemed has an expected long-term earnings growth rate of 10%.
Walgreens Boots has an expected long-term earnings growth rate of 10.4%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>