The uncertainty in the healthcare services space created by the
Affordable Care Act, sequestration, Medicare policies, and the economy
has led to some interesting days for the service providers. While
there's still a lot of doom-and-gloom talk, service providers like Team Health (TMH), Mednax (MD), and AmSurg (AMSG) have actually fared quite well in the market over the past year.
In
the case of ambulatory surgery center (ASC) operator AmSurg, though, I
think the momentum has gotten ahead of itself. It's true that shifting
more procedures from hospitals to ASCs could save billions, but the
company is at risk from ongoing reimbursement cuts, tighter restrictions
on physician financial conflicts of interest, and new procedures and
technologies reducing center volumes. While these shares admittedly
don't look so expensive by popular metrics, the underlying cash flow
picture doesn't seem to support today's price.
Please follow this link for more:
AmSurg Has Surged Far Enough
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