This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"Amedisys (NASDAQ: AMED), a provider of home health services," notes Richard Moroney, whose Upside Stocks newsletter uses a quantitative system to select high growth, smaller cap issues.
"The company operates more than 500 locations, focuses on Medicare-eligible patients because of favorable reimbursement rates as well as a large and growing patient base.
"The U.S. Census Bureau estimates that some 8,000 Americans will become Medicare eligible each day beginning in 2011. By 2030, nearly 58 million baby boomers will be eligible for Medicare benefits.
"In 2007, nearly 90% of the company's revenue was derived from Medicare. "Acquisitions and market-share gains should fuel strong results. In addition, Amedisys should benefit from an aging population beset by chronic illnesses.
"The company has developed specialized services that focus on high-cost diseases and chronic conditions. An estimated one-half of the U.S. population will have a chronic condition in 2020, or nearly 160 million people.
"The stock has been choppy, hurt by an analyst downgrade and concerns about delays in bill collections. On Nov. 20, management reaffirmed its full-year 2008 earnings and sales targets -- and said bill collections improved in October. Revenue should be $1.15 billion to $1.17 billion.
"Per-share earnings should be $3.20 to $3.25, up from $2.32 in 2007. For 2009, the consensus per-share profit estimate is $3.84, up from an estimated $3.75 per share a month ago.
"Amedisys, which scores an impressive 98 for Earnings Estimates, has exceeded consensus profit estimates in seven of the last eight quarters. The stock is rated a Best Buy."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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