When Ladenburg Thalmann, one of the country’s oldest and most respected investment banks, recently initiated coverage of AdCare Health Systems, giving the company a “buy” rating which it continues to maintain, it based its decision on the clear prospects AdCare has for future growth.
Ohio-based AdCare is a rapidly expanding owner and operator of living and care facilities in 7 states, primarily in the South. The company has been on an aggressive acquisition run, going after under-performing low-margin skilled nursing properties, and then turning the operations around, partly through transitioning them over to higher-margin acute care facilities.
The result has been a dramatic growth in revenues, up 198% from 2010, with record annual income from operations. AdCare now has approximately 44 facilities, with over 4,000 employees, supporting more than 3,000 patients. The company’s management team has been able to handle the growth, carefully scaling internal infrastructure and back office support in parallel with their expansion, and intends to move forward with what they see as a stunningly successful strategy. The management team has substantial senior living, healthcare, and real estate industry experience, and is itself incentivized to continue to build the business through their combined ownership of approximately 25.6% of common AdCare stock.
Ladenburg Thalmann is just one of the firms giving AdCare a positive review. Kinetic Investments, a subsidiary of Wilkison Financial LLC, and Stonegate Securities also recently gave the company a “buy” rating. AdCare is clearly on to something, repeatedly and successfully implementing its growth-oriented business model, making it an easy company to support. It also has a massive demographic shift on its side, with an aging boomer population, and an attractive financing option through a USDA program for rural projects.
For additional information, visit the company’s website at www.AdCareHealth.com
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