Assisted Living Concepts, Inc. (ALC) recently hit a new 52-week high as the company continues to strategically shift away from Medicaid to private payers that offer higher margins. Analysts are bullish on the company, projecting 15% earnings growth in the next-year period.
Company Description
Assisted Living Concepts, Inc. operates as a senior living residence in the United States. The company operates 211 senior living residencies, housing 9,200 residents in 20 states. Assisted Living Concepts was founded in 1994 and has a market cap of $409 million.
Fourth-Quarter Results
Revenue for the quarter was up 1.1% from last year to $57.7 million. Earnings came in at 37 cents per share, 9% ahead of the Zacks Consensus Estimate. The company has surprised in each of the last 3 quarters by an average of 14%.
CEO Laurie Bebo commented on the company’s performance, focusing on the company’s strategic shift away from Medicaid programs to private payers that offer higher margins on.
Bebo said that, ” We are now substantially out of Medicaid programs, achieving over 96% of our revenues from private pay sources. Four years ago that number was 70%. A higher percentage of revenues from private pay sources helps our margins because private pay rates in 2009 exceeded Medicaid reimbursement rates by approximately $38 per day.”
Current-Year Estimate Up
The good quarter sent the current-year estimate 5 cents higher to $1.50. The next-year estimate is holding steady at $1.72, a bullish 15% growth projection.
Shares are trading at a premium to the overall market with a forward P/E multiple of 23X.
The Chart
ALC just hit a new 52-week high of $35.63 after jumping above a short-term level of resistance at $28. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
