U.S. Payroll Report Is Hale and Hearty: 4 Top Winners
In the to-be reported quarter, the healthcare industry (here we focus on nursing homes, hospitals and medical services providers) are expected to showcase a mixed performance, with both increase in revenues as well as costs.
Players in the nursing home industry should have gained from an increase in revenues as life expectancy continues to increase in the United States and seniors account for a higher proportion of the country’s population, which push up the overall demand for the services provided by the nursing facilities. Thus players in the industry that can render cost effective and efficient services should gain from an increase in patient volumes.
Nevertheless, providing quality care requires nursing homes to have professional and skilled nurses which further leads to high personnel costs. The industry is faced with a shortage of nursing staff, which leads to high labor costs. Moreover, investments in information systems, reengineering of key business and operating processes, required to improve operating efficiency should lead to higher total costs, thereby straining margins.
For the hospital industry, increasing baby boomer population, diminishing unemployment, higher disposable income, economic strength, rising prevalence of chronic disease and increase in insured population are the catalysts that should drive demand for hospital sector services, thereby leading to patient admission volume growth.
Nevertheless, a rise in high deductible insurance plans, growing efforts to reduce unnecessary hospitalization, greater use of chronic disease management programs and a shift toward outpatient treatment must have acted as partial dampeners to volume growth.
Let’s see what’s in store for the below-mentioned three healthcare companies:
Acadia Healthcare Company, Inc. ACHC provides inpatient behavioral health care services. It provides psychiatric and chemical dependency services, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.
Acadia Health carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Nevertheless, the company boasts a fair earnings surprise history, having surpassed estimates in two of the trailing four quarters, with an average positive surprise of 2.12%. This is depicted in the chart below:
You can see the complete list of today’s Zacks #1 Rank stocks here.
Acadia Healthcare Company, Inc. Price and EPS Surprise
Acadia Healthcare Company, Inc. Price and EPS Surprise | Acadia Healthcare Company, Inc. Quote
Brookdale Senior Living Inc. BKD is a leading owner and operator of senior living facilities throughout the United States. The company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents.
Though the company carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction inconclusive.
The company does not have an impressive earnings surprise history, having missed estimates in two of the trailing four quarters, with an average negative surprise of 2.34%. This is depicted in the chart below:
Brookdale Senior Living Inc. Price and EPS Surprise
Brookdale Senior Living Inc. Price and EPS Surprise | Brookdale Senior Living Inc. Quote
Tivity Health, Inc. TVTY offers services which include chiropractic services, physical therapy, occupational therapy, speech therapy, acupuncture, massage and complementary and alternative medicine services.
The company’s Zacks Rank of 3 and Earnings ESP of 0.00% render our surprise prediction inconclusive.
Nevertheless, the company boasts a fair earnings surprise history, having surpassed estimates in two of the trailing four quarters, with an average positive surprise of 13.98%. This is depicted in the chart below:
Healthways, Inc. Price and EPS Surprise
Healthways, Inc. Price and EPS Surprise | Healthways, Inc. Quote
Tenet Healthcare Corp. THC is likely to witness decreased revenues because of lesser admissions in the to-be reported quarter. The Zacks Consensus Estimate for revenues stands at $4.3 billion, down 4.5% year over year. Also, total admissions stand at 161 million, down 11.5% from the year-ago quarter.
The company’s top line would also likely to suffer from its divestitures, which would again lower admissions. The consensus mark for adjusted patient admissions in the quarter to be reported is pegged at 271 million, down 18.4% year over year.
Though the company carries a Zacks Rank #3, its Earnings ESP of -12.70% makes surprise prediction difficult. (Read more: Tenet Healthcare Q3 Earnings: What's in the Cards?).
Nevertheless, the company boasts an impressive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 779.28%. This is depicted in the chart below:
Tenet Healthcare Corporation Price and EPS Surprise
Tenet Healthcare Corporation Price and EPS Surprise | Tenet Healthcare Corporation Quote
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
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
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
Acadia Healthcare Company, Inc. (ACHC) : Free Stock Analysis Report
Brookdale Senior Living Inc. (BKD) : Free Stock Analysis Report
Healthways, Inc. (TVTY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research