Headquartered in Greenwood Village, CO, Envision Healthcare Corporation EVHC, a provider of physician-led outsourced medical services to consumers, hospitals and healthcare systems in the U.S., recently announced the acquisition of Alabama Neonatal Medicine, P.C. and the extension of its Women’s and Children’s Services specialty.
We note that Envision Healthcare represents a positive return of almost 7.4% for the last one month, slightly higher than the Zacks categorized Home Care Market sub-industry’s return of roughly 7% and the S&P 500’s return of 3.4%.
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Envision Healthcare recently announced the completion of its merger deal with physician and ambulatory services provider, AmSurg Corp. Notably, the merger has been sealed at a fixed exchange ratio of 0.334 AmSurg shares for each Envision share.
In fact, post the closure of the deal on Dec 1, Envision Healthcare’s shares rallied almost 217.8% to $71.75 on Dec 5. Furthermore, the company has a long-term expected growth rate of 11.6% and lucrative earnings yield of 5.93%, better than the industry average of 4.41%.
Meanwhile, the estimate revision trend seems quite favorable for the stock, with one estimate moving up in the last seven days. Notably, the current year estimate for the stock inched up by a penny to $4.03 per share over the last seven days.
Coming back to the deal, per management, Envision’s neonatal programs in Huntsville, Mobile, and Dothan, Alabama are poised to gain from Alabama Neonatal Medicine’s facilities at Jackson Hospital, Baptist Medical Center East and Baptist Medical Center South in the Montgomery-Alabama area.
Our Take
After the completion of the AmSurg deal, Envision Healthcare has marked its entry into the S&P 500 stock index, a significant development in our view.
The latest development also holds considerable promise taking the global neonatal markets under consideration. Per a report by the Markets And Markets, the global fetal and neonatal care market is expected to reach a worth of $8.61 billion by 2020, multiplying at a CAGR of 6.5%.
Zacks Rank & Other Key Picks
Currently, Allscripts has a Zacks Rank #2 (Buy).
Other favorably ranked stocks in the broader medical sector include Addus HomeCare Corporation ADUS, LHC Group, Inc. LHCG and IDEXX Laboratories, Inc. IDXX. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of almost 57.3%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 19.8% in the last three months.
IDEXX Laboratories has a long-term expected earnings growth of 14.96%. The company posted a promising one-year return of 62.56%.
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