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This morning, Investor's Business Daily highlights Amedisys (AMED). This is a pretty cool company. It's a very profitable operator of several home nursing centers in the Southeast.

"Amedisys is riding a strong demographic wave right now," said analyst P. Jay Fortner of Cochran, Caronia Securities. "You have a lot of baby boomers getting into Medicare."

That wave has helped Amedisys average 39% annual sales growth the past three years. Earnings have grown an average of 42% a year over the same period.

Third-quarter sales this year rose 92% from 2004 to $112.2 million. Earnings gained 33% to 52 cents a share. Analysts polled by First Call expect full-year earnings to rise 32% to $2 a share.

Amedysis took a hit on Dec. 19 when a House-backed budget plan called for reduced reimbursements. Aside from cutting reimbursements made to home health care providers, the bill calls for a nearly $5 billion cut in Medicaid spending.

Amedisys' stock fell nearly 12% on the news. First Call analysts also lowered its 2006 earnings estimate to $2.61 a share from $2.66 previously.

Regardless of how the House plan takes shape, Amedisys will continue to expand.

The company has opened 20 of the 25 new offices slated to be added by year-end. Last year it opened 13 new offices. It expects to open 45 startup offices in 2006.

Posted by edelfenbein at December 22, 2005 4:34 AM