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DaVita Ties Up With WellHealth, Expands in Southern Nevada
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Denver, CO-based DaVita HealthCare Partners Inc. (DVA - Free Report) , a leading provider of dialysis services announced that HealthCare Partners Nevada, a unit within its medical group, has acquired WellHealth Quality Care, Nevada's ‘first and only’ commercial accountable care network. Although the company did not disclose the financial terms of this deal, it is expected the transaction to close by the first half of 2017.
A glimpse at the share price movement of the stock reveals a dismal trend as DaVita lost almost 7% year to date, comparing unfavorably with the Zacks categorized Medical-Outpatient and Home Healthcare sub-industry’s gain of roughly 0.8% and the S&P 500’s promising return of 8.7%.
However, DaVita gained 11.8% till yesterday’s close of $64.85 since the last quarter’s promising earnings performance.
Meanwhile, the estimate revision trend for the current year seems quite favorable, with one estimate moving up in the last one month and no downward movement. Notably, the current year estimate for the stock edged up by a penny to $3.76 per share over the past month.
According to DaVita, the consolidated company would exclusively focus on the quality of care and cost efficiencies of the already existing value-based health care model in the U.S. It is to be noted here that WellHealth is a Nevada-based private medical organization having a wide network covering various specialties (including anesthesiology and an OB-GYN network).
Per management, the latest development strengthens DaVita’s goal of building ‘the leading independent medical group in America’. In this regard, DaVita recently announced a joint venture with Inspira Health Network to expand dialysis services at the Bridgeton, Millville and Vineland centers of South Jersey.
Our Take
Acquiring dialysis centers and businesses that own and operate dialysis centers has been DaVita’s preferred business strategy so far. Of late, the company has been focusing on the Accountable care space as well.
DaVita has compelling fundamentals in terms of revenues and adjusted earnings, multiplying at a CAGR of 19% and 7.6%, respectively, over the last four years.
Meanwhile, DaVita holds a long-term expected earnings growth of almost 12% and an earnings yield of 5.8%, better than the industry average of roughly 4.4%. Of the recent developments, the partnership with Rock Health is a notable one. We believe the latest acquisition of WellHealth in the form of diversification of business, would further strengthen DaVita’s fundamentally.
Zacks Rank & Key Picks
Currently, DaVita has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and IDEXX Laboratories, Inc. (IDXX - Free Report) . Addus HomeCare and IDEXX Laboratories sport a Zacks Rank #1 (Strong Buy). Meanwhile, LHC Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 46%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 15.3% in the last three months.
IDEXX Laboratories has an expected earnings growth of almost 15%. The company posted a promising year-to-date return of almost 63.3%.
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DaVita Ties Up With WellHealth, Expands in Southern Nevada
Denver, CO-based DaVita HealthCare Partners Inc. (DVA - Free Report) , a leading provider of dialysis services announced that HealthCare Partners Nevada, a unit within its medical group, has acquired WellHealth Quality Care, Nevada's ‘first and only’ commercial accountable care network. Although the company did not disclose the financial terms of this deal, it is expected the transaction to close by the first half of 2017.
A glimpse at the share price movement of the stock reveals a dismal trend as DaVita lost almost 7% year to date, comparing unfavorably with the Zacks categorized Medical-Outpatient and Home Healthcare sub-industry’s gain of roughly 0.8% and the S&P 500’s promising return of 8.7%.
However, DaVita gained 11.8% till yesterday’s close of $64.85 since the last quarter’s promising earnings performance.
Meanwhile, the estimate revision trend for the current year seems quite favorable, with one estimate moving up in the last one month and no downward movement. Notably, the current year estimate for the stock edged up by a penny to $3.76 per share over the past month.
According to DaVita, the consolidated company would exclusively focus on the quality of care and cost efficiencies of the already existing value-based health care model in the U.S. It is to be noted here that WellHealth is a Nevada-based private medical organization having a wide network covering various specialties (including anesthesiology and an OB-GYN network).
DAVITA INC Price
DAVITA INC Price | DAVITA INC Quote
Per management, the latest development strengthens DaVita’s goal of building ‘the leading independent medical group in America’. In this regard, DaVita recently announced a joint venture with Inspira Health Network to expand dialysis services at the Bridgeton, Millville and Vineland centers of South Jersey.
Our Take
Acquiring dialysis centers and businesses that own and operate dialysis centers has been DaVita’s preferred business strategy so far. Of late, the company has been focusing on the Accountable care space as well.
DaVita has compelling fundamentals in terms of revenues and adjusted earnings, multiplying at a CAGR of 19% and 7.6%, respectively, over the last four years.
Meanwhile, DaVita holds a long-term expected earnings growth of almost 12% and an earnings yield of 5.8%, better than the industry average of roughly 4.4%. Of the recent developments, the partnership with Rock Health is a notable one. We believe the latest acquisition of WellHealth in the form of diversification of business, would further strengthen DaVita’s fundamentally.
Zacks Rank & Key Picks
Currently, DaVita has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and IDEXX Laboratories, Inc. (IDXX - Free Report) . Addus HomeCare and IDEXX Laboratories sport a Zacks Rank #1 (Strong Buy). Meanwhile, LHC Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 46%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 15.3% in the last three months.
IDEXX Laboratories has an expected earnings growth of almost 15%. The company posted a promising year-to-date return of almost 63.3%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>