AMN Healthcare: Staffing Up

07/26/2016 7:00 am EST


Tom Bishop

Founder, BI Research

This ongoing recommendation is the market leader in helping its customers in the healthcare industry fill temporary and permanent staffing positions, explains small cap expert Tom Bishop, editor of BI Research.

AMN Healthcare (AHS) also offers higher-margined services that run the gamut from taking over a healthcare customer’s entire hiring function, to just offering consulting services, another $2 billion opportunity.

With a healthy economy, healthcare staff are moving around more (between jobs) and also more people are insured. In all, this is a $14 billion market opportunity of which AMN has about 10%.

Combining this with the aging demographic trend and the fact that there are open positions for about 100,000 physicians and 300,000 nursing and other healthcare workers at any given time.

Quite simply, AMN is in the sweet spot. The firm reported strong 1st quarter results, most notably a 100% increase in EPS to $0.60, which was also a 20% upside surprise.

Management projects $450 to $456 million in revenues (approximately 30% growth) for the seasonally slower 2nd quarter.

Management also conservatively guided to EBITDA margin of 11.5% for the 2nd quarter, though it did 12.5% in the 1st quarter. Their long term EBITDA goal is 14% (by 2020).

The company now commands the #5 spot in the elite, turbocharged Investor’s Business Daily-50; the stock is also ranked 1 by Zacks and 2 by Value Line.

In addition, the stock is ranked a strong buy by all 5 analysts who cover it so you could do worse than to invest here. Meanwhile, our proprietary BI Rank continues to rate the stock a buy.

We caution, however, that if a Republican should manage to win the election, and Obamacare gets repealed, and not replaced, this would create a headwind for the company.

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By Tom Bishop, Editor of BI Research

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