Emergency Medical: Ambulance service and emergency staff

In cases of medical emergency, folks across the U.S. often do much of their initial business with a Greenwood Village, Colorado firm. Not only does it run the largest private ambulance service in the country, but it also staffs emergency rooms from coast to coast.

Emergency Medical Services Corporation (NYSE: EMS) specializes in healthcare transportation and emergency department procedures. Its American Medical Response ambulance unit serves some 3,100 cities and hospitals in 36 states, with over 4,000 vehicles. Its EmCare Holdings unit provides emergency care professional staffing and related hospital-based management services to more than 340 facilities nationwide. Last year, EMSC assisted more than nine million patients, in two thousand communities.

The company pleased investors last week, when it reported Q1 EPS of 42 cents (ex-items) and revenues of $523.3 million. Analysts had been looking for 26 cents and $504.2 million. The CEO particularly noted benefits from the firm's risk mitigation program and solid ambulance transport growth, in discussing the favorable results. Management also guided FY07 EPS to $1.30-1.37, versus consensus of $1.17.

EMS shares popped on the news and subsequently moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the shares with two "strong buys", one "buy" and three "holds". Analysts expect a 20% growth rate, through the next year. The EMS Price to Book ratio (3.89) and EPS Growth rate (147.06%) compare favorably with industry, sector and S&P 500 averages.

Institutions own about 2% of the outstanding shares. Over the past twelve months, the stock has traded between $11.00 and $40.90. A stop-loss of $31.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.