Home Health, Post-Acute Care Stocks Values Continue to Gain Ground in May
After two months of uncertainty, the U.S. economy continues to show small but clear signs of stabilization. And according to the latest Home Health (HHI) and Post-Acute Care (PAI) Indices from mergers and acquisitions firm Stoneridge Partners, that’s especially true for post-acute and home health providers.
An influx of coronavirus relief funding distributed by the U.S. Department of Health and Human Services (HHS) under the CARES Act continued to lift healthcare stock values in May, particularly for home health providers, which received roughly $1.7 billion from the Act’s Provider Relief Fund.
“Home health and post-acute stocks followed up their April gains with even better performance in May,” said Stoneridge Partners President Rich Tinsley. “That’s partly because of the relief funding and regulatory waivers that Medicare providers have received, but also because of the continued focus on home-based care nationally.”
Home Health Index
The Stoneridge HHI follows the stock values of Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group Inc. (Nasdaq: LHCG). Amedisys stock values improved by more than 4% in May compared to April, and LHC Group stock soared 20% higher during that same period – resulting in an 11% improvement for the overall HHI in May. In comparison, the S&P 500 rose by just more than 4%.
Post-Acute Care Index
Stoneridge also tracks stock values for post-acute care companies in its PAI, which includes both Amedisys and LHC Group, plus Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living (NYSE: BKD).
Eagle, Idaho-based The Pennant Group saw the biggest month-over-month stock value increase in May, shooting up more than 22% over April’s results. Frisco, Texas-based Addus, and Birmingham, Alabama-based Encompass Health saw their stocks climb by 18% and nearly 10%, respectively, during that same period. Brookdale, meanwhile, saw more modest gains, as its stock rose by just more than 1% in May compared to April.
“Brookdale has some additional challenges as a senior living operator,” Tinsley said. “ They care for seniors in communal settings, and those types of providers have been hit hard by the coronavirus. Their pandemic response efforts have looked different from what we’ve seen from home-based care enterprises, and their financial recovery will likely look different as well.”