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Bull Of The Day: Cross Country Healthcare (CCRN)

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Cross Country Healthcare (CCRN - Free Report) is a Zacks Rank #2 (Buy) and it is the Bull of the Day today.  This healthcare staffing firm is going to see the benefits of the rising costs in healthcare workers salaires as the pandemic rages on.  There are reports that part time nurses were getting $35 per hour before the pandemic, but that level spiked to $125 and has now settled back down to $85.  That is really a one off data point, but it tells the story that I want to focus on.

The idea is that healthcare workers are under phenomenial stress right now as the pandemic hs them concerned not only for patients, but themselves and the families as well.  To say that they all deserve more pay is an understatement!

At the same time, there is a shortage of healthcare professionals, so this in turn will drive up the salaries that much more.

Earnings History

I see a really good earnings history with four beats in the last four quarters. There were two consecutive beats of 500%, so that has really skewed the average.

Each time the company posted those massive beats they posted and EPS gain when the consensus was calling for a loss. We have to love that!

Estimates

Wall Street has smartened up, at least for the estimates going forward. I don’t see any more losses, but still some beatable numbers. I see 7 cents for this quarter up 5 cents in the last month. Next quarter flipped from a loss of a penny to a gain of 2 cents.

The full year numbers are showing big moves, with this year moving from 12 cents to 31 cents and next year lifting from 18 cent to 29 cents.

These are solid moves in the right direction.

Valuation

The 24x forward multiple is a little high, but nothing crazy, I saw revenue contract a little in the most recent quarter but that could start to turn around. A price to book of less than 3x is great to see as value players love that and the multiple is 2x for CCRN. The price to sales multiple of 0.4x is a little worrisome, but that should resolve itself in the coming quarters.

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