logo

An Up Stock in a Bear Market
By: Marc Courtenay   Monday, August 11, 2008 1:37 PM

Vote for next session
The next market session will close:

In this type of a market it is easy to forget that not every stock is going down. Other than Novartis (NYSE:NVS), there is another "Oxford Club Stock" that their Associate Investment Director Lou Basenese recommends that has had quite a run. 

Here's how Lou wrote about it and I share this with you because Lou gave me permission to do so (www.OxfordClub.com).

"Simply buy Amedisys Inc. (Nasdaq: AMED). Recall, the company is one of the nation’s leading home health care companies. It has more than 8,000 caregivers, working from more than 350 home health centers and hospice agencies, across more than 30 states.

And business is booming (pun intended). In the most recent quarter, revenues and earnings leapt 85% and 44%, respectively, smashing even the most aggressive analyst expectations.

Of course, the company’s not serving the Baby Boomer generation yet, either. But it will soon. And that means this already $63 billion market is bound to get bigger still.

Here’s why...We all know over the next few decades, fewer workers will be supporting more and more senior citizens. In anticipation of this increasing and imminent liability, the health care industry’s already being pressured to rein in soaring costs.

Enter Amedisys, Medicare’s dream. While it costs approximately $1,000 per day to keep a patient in the hospital for rehabilitation, Amedisys can provide the same services at the patient’s home for less than $80 per day. It’s no wonder Medicare accounts for almost 90% of the company’s business.

But Medicare’s not the only beneficiary. With home health care, patients also fare better. For one, they get to stay in the friendly and comfortable confines of home. They also get to avoid the high rate of infections associated with prolonged hospital and nursing home stays.

Naturally, there are other home health care stocks capitalizing on these same industry trends. But we’re convinced Amedisys represents the best investment.

Here’s why…

The company continues to grow both organically and through acquisitions. In fact, it was Amedisys’ $395 million acquisition of TLC Health Care Services in March that helped it perform so well in the recent quarter. And the fragmented nature of the industry, with more than 8,500 agencies, ensures Amedisys will have the opportunity to get even more earnings “booster shots” via timely acquisitions.

Then there is the company’s high-tech business model. By handling all documentation and billing electronically, Amedisys realizes 32% higher net margins than the rest of the industry.

Lastly, institutions love the stock. They own almost all of the outstanding shares. And they keep buying. In the last quarter, they upped their stake by another 1%. This last factor, combined with top-notch fundamentals, is helping Amedisys become a rare breed – a momentum stock in a bear market.

The stock hit three new 52-week highs in the last month, already. And that’s a trend worth embracing, not fighting. So keep buying." Now that is an impressive company and an impressive story


(2)
 
8/13/2008 1:22:43 AM
"Simply Buy"? by Kralizec
It seems better to check with Citron first.
Rating: (0) (0)
8/13/2008 1:22:43 AM
"Simply Buy"? by Kralizec
It seems better to check with Citron first.
Rating: (0) (0)
Post Comment
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
   
 
 
 
 
   
 

The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
Advertisement
Popular Articles
Related Press Releases
Advertisement
Partner Center
Recent Articles by Marc Courtenay



Subscribe to Email Alerts rss feed or RSS feeds rss feed for articles from more than 500 contributors, press releases, SEC filings and full text news from more than four thousand sources.
Fundamental data is provided by Zacks Investment Research, market data is provided by AlphaTrade. , and Commentary and Press Releases provided by Quotemedia