Skilled Healthcare Group, Inc. - Momentum

Skilled Healthcare Group, Inc. (SKH) is trading like a momentum all-star, recently hitting a new multi-year high on an 11% Q4 earnings surprise. With estimates jumping higher, and a bullish growth projection, this Zacks #1 rank stock is looking strong.

Company Description

Skilled Healthcare Group, Inc., through its subsidiaries, operates skilled nursing and assisted living facilities, hospices and specialty care facilities in the United States. The company has a market cap of $504 million.

SKH has been on a tear for the last 6 months, recently hitting a new multi-year high at $13.94 before reporting strong Q4 results on Feb 14 that handily beat expectations.

Fourth-Quarter Results

Revenue for the period was up 17% from last year to $223 million. Earnings also looked good, coming in at 31 cents, 11% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 14% over the last four quarters.

The company’s largest segment, Long-term Care Services, saw sales increase 9% from last year to $183 million. Its Hospice and Home Health Care Services segment saw the biggest gains, helped by some acquisitions, with sales climbing to $18.7 million from $3.4 million last year.

Financial Profile

In light of some of the company’s recent acquisitions and strategic investments, its balance sheet looks a bit bloated, with cash and equivalents of $4 million and total debt of $520 million.

Estimates

We’ve seen some pretty nice movement in estimates over the last few months, with the current year up 35 cents to $1.27 and the next-year estimate also up 35 cents to $1.39, a solid 9% growth projection.

Valuation

But in spite of the recent gains, the valuation picture is compelling, with a forward P/E of 10X compared to its peer average of 13X.

6-Month Chart

On the chart, shares have rebounded from a recent dip on general market volatility to trade near the 52-week high. Take a look below.