The easiest class I took in college more than 40 years ago is turning out to be very valuable these days.
It was a sociology course on aging that I rarely attended. But I did read the textbook carefully,
And I’m glad I did. It helped prepare for recent events involving my in-laws and my dad.
I’m bringing this all up because it’s part of a huge national trend. By 2030, 20% of the population will be seniors, nearly double the figure in 2009.
By 2024, this demographic will push the home healthcare market to $225 billion, up 125% from the 2016 level.
And today, I’m going to reveal a leader in this field whose stock could double in less than two years…
The Future of The Boomers
Now then, I have to say that when I enrolled in that aging class, I had a bit of a snotty attitude.
See, I was on the honors economics program at the University of Missouri, and my department looked down on sociology as a very “soft science.”
But in the last few months, the lessons I learned those years ago have helped me sketch out plans for my wife and I to deal with our aging parents.
And we are taking the lessons to heart ourselves. After all, the good Lord willing, we’ll be in the same situation as our parents in a couple of decades.
Both of us are boomers, a cohort that numbers more than 70 million. Of those, 10,000 are turning during 65 each day.
Like my dad, millions will want to stay in their homes until the very end. Meaning, they will need professional care.
People-Focused Strategy
Enter Amedisys Inc. (AMED), a leader in senior home health care. It’s one of the largest companies in the business, with about 22,000 employees taking care of more than 415,000 patients.
Amedisys stands out from the competition by the leadership of Paul Kusserow, the firm’s CEO since December 16, 2014.
Kusserow’s approach to running the company is a bit different. His focus has been on serving his employees, making sure they can do their job well, and are happy and safe.
One week a month, Kusserow joins teams out in the field to find out what his nurses, salespeople, patients, and their families really think.
This unusual approach has been working wonders. Turnover among Amedisys staff is down more than half since Kusserow took office, meaning experienced staff stay on for longer.
Patients are very pleased and rank Amedisys as beating or close-to-beating national benchmarks of quality of care, training, and so on.
It’s also paying off financially. The firm lost $100 million in 2013, the last full year before Kusserow came on. Compare that to last year, when net income came in at $119.3 million.
A CEO And A Scholar
Clearly, Kusserow’s leadership style works. His approach may come from his unusually broad background.
Before joining Amedisys. Kusserow worked at McKinsey, the global consulting giant. He also served as head of strategy for Tenet Healthcare Corp. (THC).
But perhaps his emphasis on caring for employees so they in turn care for their patients comes in part from his education and his religious background.
Kusserow graduated from Wesleyan University as an Olin Fellow and a Philip B. Brown Scholar. He was a Phi Beta Kappa member and got a degree in theology and religious studies.
He then went to study at Oxford as a Rhodes Scholar, graduating with a master’s degree in English literature and language.
So, not only can he navigate the maze that is the U.S. healthcare system, but he also knows to focus on the people that do the work – and the patients that matter most in the end.
As he said in a recent interview with Investor’s Business Daily, he took the job of Amedisys CEO “for basically one reason; I wanted to see if the Golden Rule worked in corporate America.”
And nowhere is treating people right more important than when helping our most deserving enjoy their golden years, whether it’s in home health care or in hospice care.
Generational Growth
Now, don’t get the wrong idea. Kusserow is no hippie. Not only has Amedisys became profitable and grown its revenues sharply under his leadership.
He’s also grown the company through more than 17 acquisitions. In February of last year, Kusserow doubled the company’s hospice business by acquiring Community Care Hospice.
And in late April of this year, he increased the number of hospice patients by more than 17.6% by buying AseraCare Hospice for $235 million.
He’s a shrewd dealmaker who keeps growing his revenue base through smart acquisitions, all the while making sure employee turnover stays low and patient satisfaction stays high.
Since the day Kusserow became CEO, Amedisys’s share price has skyrocketed by more than 558%. For comparison, the S&P 500 is barely up 48% since then.
Don’t worry. I still see plenty of upside ahead. Now, it’s true that the firm’s per share profits were slightly off in the first quarter of 2020.
But over the past three years, they’ve grown by an average of 42%. At that rate, the stock is set to double at an astonishing rate – every 20 months.
Even if we cut that rate in half to be conservative, Amedisys would still double in less than 3.5 years.
In other words, this is a winner that has market crusher written all over it.
It’s set up for the long haul. The huge Baby Boomer generation is quickly retiring.
And this a trend that will hand savvy tech investors profits for many years to come.
It’s one of the furthest-reaching aspects of a comprehensive healthcare investing strategy that covers everything from the long-term needs of retiring seniors to the most immediate and pressing medical challenges.
And while I’ve been looking into excellent long-term healthcare plays like Amedisys, I’ve also been keeping tabs on the companies on the leading edge of the effort to defeat America’s most pressing healthcare challenge.
These are the companies with the best chance at being the first to create a working vaccine against COVID-19, and earning the massive windfall that will go along with stopping the worldwide pandemic.
Cheers and good investing,
— Michael A. Robinson
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Source: Strategic Tech Investor