In a recent 13D filing with the Securities and Exchange Commission, it was disclosed that Christopher Shackelton and Adam Gray‘s Coliseum Capital has trimmed its stake in LHC Group, Inc. (NASDAQ:LHCG) to about 2.17 million shares from 2.27 million shares that it held previously. The current holding represents 12.05% of the company’s outstanding common stock.
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After working for Watershed Asset Management, Christopher Shackelton, a graduate from Yale, co-founded Coliseum in 2005. The investment firm makes long-term investments in both public and private companies. It has a concentrated portfolio with eight public equity holdings, the market value of which stood at $331.88 million at the end of March. The healthcare sector represented 63% of those holdings. Currently, Coliseum has about $757 million in assets under management.
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The $652.42 million provider of post-acute health care services to hospitals, physicians and families has seen its stock soar by nearly 20% year-to-date. This is even better than the strong gains of the medical care industry, which amount to 13.5% during the same period. The trailing twelve month earnings multiple of LHC Group, Inc. (NASDAQ:LHCG) stands at 25.8, and is lower than the industry’s average of 27.09. However, its beta of 1.17 is significantly higher than the industry’s 0.45.
In its financial results for the first quarter, LHC Group, Inc. (NASDAQ:LHCG) beat estimates for both the top and bottom lines. Sales for the quarter were a strong 17.96% higher than the same quarter last year. More growth can be expected from the company as Keith Myers, LHC Group, Inc. (NASDAQ:LHCG)’s co-Founder and CEO, reflected that consolidation activity has been on the rise as the company continues to focus on hospital joint ventures and small acquisition opportunities. LHC has an in-house corporate development team that analyses and evaluates such opportunities and so far this year, the team has reported record activity. After picking the best-suited ventures, LHC Group, Inc. (NASDAQ:LHCG) now has 39 opportunities in its pipeline.
Moreover, general and administrative expenses slid to amounting to 30.7% of revenue from 33.4% in the same quarter last year. This has been made possible by the organization-wide conversion to point-of-care, which has also made the company more competitive in areas of disease management, medication management and quality measurements, etc. However, debt expense rose to 2.7% of revenue in the first quarter, up from 2.1% a year earlier. The rise was because of additional reserve that was recorded for patient claims associated with two commercial companies. The management claims that it is an isolated occurrence and negotiations are underway.
The promising trends have led the healthcare company to increase its full-year guidance to the range of $765 million to $780 million in the net service revenue department from the earlier range of $755 million to $775 million. The fully diluted earnings per share were also bumped up on the lower end to a range of $1.55 to $1.70 as compared to $1.50 to $1.70 established earlier.
Among over 700 hedge funds that we track, the interest in LHC Group, Inc. (NASDAQ:LHCG) has increased during the first quarter, as 12 funds had invested a total of $94.78 million in the company at the end of March compared to ten firms with $91.88 million at the end of 2014. After Coliseum, James Dondero‘s Highland Capital Management and Jim Simons‘ Renaissance Technologies are the largest stockholders of the company in our database, with respective stakes of 210,000 shares valued at $6.94 million and 141,200 shares valued at $4.67 million.
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