Wednesday, July 24, 2013

Seeking Alpha: AmSurg Has Surged Far Enough

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.

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AmSurg Has Surged Far Enough

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