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Here's Why You Should Retain Mednax (MD) in Your Portfolio

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·3 min read
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MEDNAX Inc. MD has been in investor’s good books courtesy of its strategic initiatives, telehealth services and cost-cutting measures.

Over the past seven days, the company has witnessed its 2022 earnings estimate move north by 0.6%.

It has an impressive Value Score of A, reflecting its attractive stock value.
The leading provider of women's and children's healthcare recently teamed up with Houston-based NightLight Pediatric Urgent Care in a bid to offer enhanced pediatric services to patients in specific markets across the United States.

The company has an active inorganic growth profile. The company continues to expand its services in telemedicine, which started with the 2015 vRad buyout. In 2019, the company closed nine physician group practice acquisitions including two neonatology physician practices, two maternal-fetal physician practices, one radiology practice and four other pediatric subspecialty practices. In 2020, it bought one paediatric subspecialty practice for $2.1 million. These initiatives position the company well for growth.

MEDNAX has also been taking cost-cutting measures in order to tackle the current scenario. Some of the measures taken by the company last year include furloughing employees.

To focus on its core business, the company divested its MedData business to Frazier Healthcare Partners in 2019. Moreover, the company sold American Anesthesiology, which helped it mitigate cash losses induced by the coronavirus outbreak and lower its risk profile. MEDNAX also sold MEDNAX Radiology Solutions to focus on its core pediatrics and obstetrics business lines. It has plans to utilize the fund to pay off its debt.

MEDNAX is expanding telehealth services in a bid to ensure access to healthcare even when staying at home. It is worth mentioning that people were compelled to adopt telehealth visits as the only feasible option to seek medical help amid the COVID-19 pandemic induced stringent social-distancing measures worldwide. This led to an uptick in demand for remote medical services amid the crisis and the trend is likely to sustain in the days ahead. Given the current demand for virtual health services, we expect this business line to continue performing well.

The company’s long-term growth rate stands at 17.7%, higher than the industry's average of 10.6%.

Shares of Mednax have surged a whopping 173.8% in a year compared with the industry’s rally of 123.5%. The company has a Zacks Rank #3 (Hold).


Some better-ranked stock in the same space are Community Health Systems, Inc. CYH, Tenet Healthcare Corporation THC and HCA Healthcare, Inc. HCA, each carrying a Zacks Rank #2 (Buy). The companies have soared 246.5%, 264.2% and 116.9% in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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