Markets

Is Amedisys (AMED) an Ideal Pick Among Global Sell-Offs?

The U.S. market is still undergoing massive turbulence primarily because of the instability in emerging markets, which has led to massive global sell-offs one after the other. Although the market rebounded yesterday, a view of the battered Chinese economy so far has rendered investors extremely skeptical about the sustainability of this move uphill.

An emerging markets economist in Standard Life Investment writes, "Indeed, some have even begun to question whether the Chinese government has 'lost control' of the economy." While this level of volatility can take months to overcome, economists are all the more unsure about the effect of the intimidating Fed rate hike which may cause the economy to sink even further.

Against this backdrop, we suggest you to add only such stocks to your portfolio that sport strong fundamentals and long-term growth opportunities. Amedisys Inc.AMED is one such stock that can work wonders for your investment plan.

This home health and hospice company provides services throughout the U.S. to a 360,000 and growing chronic, co-morbid and aging American population.

We hereby cite three reasons why you may want to buy this stock:

  1. Positive Earnings Estimate Revisions : Amedisys has been witnessing upward revisions of earnings estimates lately, which implies analysts' optimism regarding the stock. Over the past 60 days, the Zacks Consensus Estimate for the current fiscal has moved north by 10.3%. The estimate for the next fiscal has also witnessed a 12.4% increase over the same time period.

  2. Growth Potential : Our new Style Score System shows that Amedisys which carries a Zacks Rank #1 (Strong Buy) also sports a Growth Style Score of 'A' - indicating solid growth potential for the stock. Back-tested results show that stocks with Style Scores of 'A' or 'B' when combined with a Zacks Rank #1 or 2 (Buy) handily beat other stocks. Moreover, the company's projected earnings per share (EPS) growth rate of 89.96% for the current fiscal is much higher than the industry average of 15.96%. The company is part of the MED-OUTP/HM CRE industry which currently holds the 19 th position among overall 265 industry categories under Zacks, thus figuring in the top 7.17%. Impressive metrics such as these have earned Amedisys a favorable Growth Style Score.

  3. Positive Demographic Trends : The home health industry is poised for tremendous growth in the long term, driven by an aging U.S. population, patients' desire for independence, and home health as a cheaper care modality. The company should continue to benefit from the aging demographics of the U.S. population and the need for higher acuity patients to be taken care of in a home nursing environment. In addition, with continued pressure on the U.S. healthcare system, we believe operators such as Amedisys will continue to benefit from increased volume shift from higher-cost institutional settings to a lower-cost environment such as home health. We are also upbeat about the company's initiatives to drive organic growth as well as its search for strategically fit merger and acquisition activities.

Other Stocks to Consider

Some other stocks worth a look in the medical instruments space are AAC Holdings, Inc. AAC , AmSurg Corp. AMSG and Foundation Healthcare, Inc. FDNH . All the three stocks sport a Zacks Rank #1.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AMEDISYS INC (AMED): Free Stock Analysis Report

AMSURG CORP (AMSG): Free Stock Analysis Report

FOUNDATION HLTH (FDNH): Free Stock Analysis Report

AAC HOLDINGS (AAC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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