Thursday, February 28, 2019

This is not financial advice, continued

House of cards?

These are the publicly-traded companies I've identified that are currently working the hospice space. You can read more about them at their respective websites.

I've decided to buy one (1) share in each of these companies.

I'm doing it in order to be able to obtain information and ask questions as a shareholder. This is not investment advice, and I'm not suggesting that anyone else go out and do this.

At the market close on February 28, 2019 I own AMED, EHC, and ENSG. I entered limit orders, and am waiting for my price on HUM, CHE, and LHCG.

Humana (NYSE: HUM) is 40% (minority) owner of a 3-way investment consortium whose other two (majority) owners split the remaining 60% - private equity firms Welsh, Carson, Anderson & Stowe and TPG Capital. They're trying to combine the hospice operations of three former companies: Kindred, Gentiva, and Curo.

It's also the story behind the amazing blog, Generic Hospice.

Amedisys (NSDQ: AMED) is pursuing "non-organic growth."

CHEMED Corporation (NYSE: CHE) has two divisions, Vitas and Roto Rooter.

Encompass Health (NYSE: EHC) is the re-branding of the scam and scandal-ridden HealthSouth, leveraging its 2015 acquisition of Encompass Home Health and Hospice based in Dallas.

LHC Group (NSDQ: LHCG) is one company where I haven't quite got a handle on their business model yet.

The Ensign Group (NSDQ: ENSG) is also a little difficult to figure out. It looks like they own a bunch of nursing homes and different sorts of rehab and retirement facilities, as well as a home care and hospice business of some kind. But they also refer to "affiliate entities" in a vague, unhelpful way (to me).

And, can someone please tell me what the 2:42 video on their main page (scroll) is supposed to mean?

meanwhile, back in 2005...

That's a screen snap of the abstracted results and conclusions from McCue,M. Thompson,J. (2005). Operational and Financial Performance of Publicly Traded Hospice Companies. Journal of Palliative Medicine,8(6),1196-1206. DOI: 10.1089/jpm.2005.8.1196

On PubMed.

The 2005 study by McCue and Thompson examined the performance of four publicly-traded hospice companies. 

Odyssey Healthcare - 65 hospices

VistaCare - 38 hospices

Heartland* - 89 hospices

Vitas Healthcare** - 22 hospices

Total: 214 hospices

* subsidiary of Manor Care 

** division, CHEMED Corporation (NYSE: CHE)

Since 2005, Odyssey bought VistaCare in 2009 for $147.1M, before itself being bought by Gentiva for $1B in 2010, which was subsequently bought by Kindred for $1.8B in 2015, which itself was sold to the Humana/TPG/WCAS consortium in 2017 for $4B, which had since gone on to also acquire Curo for $1.4B in 2018. 

Since 2005, Heartland/HCR Manor Care became privately-held, underwent various spinoffs, reorgs, and other financial transactions, entered bankruptcy protection in 2018, and was acquired in 2018 by ProMedica Health System.

Thanks for reading. See you next time.