Seeking Alpha: Ensign Group's Model Still Works

Ensign Group (ENSG) continues to stand out as a solid operator in a difficult, highly fragmented market. The company is still looking at a long runway of acquire-and-improve prospects in the core skilled nursing facility (or SNF) business, not to mention opportunities to expand into related/complementary businesses like home health, hospice, and all-skill facilities. While reimbursement is not likely to ever be an easy or supportive part of the story, the opportunity to make money still seems valid for the company. The impending CareTrust spinoff seems to be adding a meaningful amount of support to the valuation, though, so I'm still not all that attracted to the value proposition here.

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Ensign Group's Model Still Works

Investopedia: Uncertainty Still Means Discount For WellPoint

Maybe apart from taxes on carried interest, there's nothing Wall Street hates more than uncertainty. Unfortunately, there's abounding uncertainty in the world of health insurance these days as nobody is quite sure how the Supreme Court will rule in the challenges to the Obama administration's health insurance laws, nor whether or not there will be even more pressure on premiums in the years to come. While the long-term picture on WellPoint (NYSE:WLP) may lack digital precision, there's enough apparent value here for investors to take a serious look. 

Going Through a Slow Spell  
With the economy and employment in the dumps, it is no great surprise that revenue growth has been sluggish of late at this large national insurer. Enrollment has been limited by the poor job market, while premiums have been constrained by both regulatory push-backs and competitive actions from other rival insurers like UnitedHealth (NYSE:UNH) and Aetna (NYSE:AET).

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http://stocks.investopedia.com/stock-analysis/2011/Uncertainty-Still-Means-Discount-For-WellPoint-WLP-UNH-AET-LNCR-SKH-MDT-JNJ-CI-HS-HUM1130.aspx

Seeking Alpha: Can The Government Afford To Let Skilled Healthcare Prosper?

In some respects it may seem like a good thing to have the government as a major customer for your healthcare services. After all, hospitals like HCA (NYSE: HCA) and Health Management Associates (NYSE: HMA) have to wrangle with the fact that they must treat all comers irrespective of ability to pay and bad debt expense is a major issue here. Unfortunately, Medicare and Medicaid are looming as major problem areas in the U.S. federal budget and reimbursement cutbacks threaten to limit Skilled Healthcare's (NYSE: SKH) ability to grow and prosper.

A Deceptively Good Third Quarter
Skilled Healthcare's third quarter results hint at what the company can do. Revenue was up a little less than 4% on flat occupancy. The company's core business, long term care, was down very slightly this quarter, while therapy services and hospice revenue were both up better than 20%. While Skilled Healthcare has stood out a bit from rivals like Kindred (NYSE: KND) and Sun Healthcare (Nasdaq: SUNH) on the basis of a higher mix of skilled services, the skilled mix was a little disappointing this quarter at less than 23%.


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http://seekingalpha.com/article/304388-can-the-government-afford-to-let-skilled-healthcare-prosper

Seeking Alpha: Lincare - Unreasonably Cheap For A Good Reason

On first blush, Lincare LNCR) would look like one of those great undervalued GARP companies that famous investors like Peter Lynch gush about in their memoirs. The thing is, while Lincare may well have a lot of value in it, that value is a little like a bag of gold resting atop a pedestal … in a minefield … surrounded by razorwire … and on fire. Lincare management has indeed done a great job over the years of running this business, but it seems like government price cuts are going to be an unrelenting drag on the company.

A Pretty Mixed Third Quarter
Lincare's third quarter highlights some of the challenges that the company has to deal with now and in the near future. Reported revenue growth of over 13% sounds great, as does the little note that growth would have been nearly 16% without the impact of negative Medicare changes. Unfortunately, the organic growth was more on the order of 6% and that growth was not especially profitable.

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Lincare: Unreasonably Cheap For A Good Reason