On Mar 27, 2014, we initiated coverage on health and hospice
). Crown Holdings had a tepid fourth-quarter 2013 with sustained
volume pressure. Although the company's revenues surpassed the
Zacks Consensus Estimate, the bottom line missed the same.
Amedisys' adjusted lossfrom continuing operations of 5 cents
per share in the reported quarter was wider than the Zacks
Consensus Estimate loss of 3 cents. It also marked a massive fall
from the year-ago adjusted income from continuing operations of
25 cents. Revenues of $303.5 million fared better than the
estimate of $295 million but were down 13.7% year over year.
Amedisys also failed to meet its guidance for yet another
Per management, three factors led to the decrease in earnings:
higher cost per visit in home health, higher-than-expected
employee healthcare cost and an accrual of $450,000 related to
one of the company's care centers.We believe poor segment
performance, sluggish growth trends and the adverse impact from
sequestration led to the dismal fourth-quarter results. Moreover,
the fact that no guidance was provided for the upcoming fiscal
failed to inspire confidence about any improvement in the near
term.We are also wary about competitive pressures, especially
from small local providers. Additionally, the reimbursement
headwind continues to weigh on the stock.
Nonetheless, the company continues cater to the surging demand
for its home health and Hospice services. Moreover, we are
encouraged to note that the home health industry is poised for
tremendous growth in the long term, driven by the aging U.S.
population, patients' desire for independence and home health as
a cheaper care modality. Strategic acquisitions and partnerships
are also expected to add to the company's growth.
Other Stocks to Consider
The stock currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same sector include
China Cord Blood Corporation
). While Chemed Corp. sports a Zacks Rank #1 (Strong Buy), China
Cord Blood and PharMerica carry a Zacks Rank #2 (Buy).
AMEDISYS INC (AMED): Free Stock Analysis
CHEMED CORP (CHE): Free Stock Analysis Report
CHINA CORD BLD (CO): Free Stock Analysis
PHARMERICA CORP (PMC): Free Stock Analysis
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