Vitas has great competitive advantages primarily related to being in large metro markets where hospice penetration is still limited by the oversupply of healthcare service providers looking to ring the register on patients to the bitter end. Most serious competition comes from not-for-profits who act as a low bar for Vitas to measure themselves against. Government pricing policies which hurt Vitas, act to cripple the less efficient providers.
Thus while Vitas may muddle through and look good in their legacy markets, acquisitions have been a disaster. Most notably in Phoenix where they ended giving the program back to the ex-owner. I believe the Alabama acquisition was their last...a horribly over-served hospice market, where "surprisingly" management couldn't get it to work. These deals were especially at risk of Medicare Cap, which blind-sided management. So I agree with you Free...any capital returned to shareholders is well used. Especially given the poor IR practices of the Cinci "brain trust", better to have the enhanced cushion of reducing shares to meet EPS expectations. At this junction, what CHE most needs is that the DOJ settlement will be a small draw on cash resources and provide us with a short squeeze on those share repurchases.