AMERIGROUP (AGP) versus AAC Holdings (AAC) Critical Review
AMERIGROUP (NYSE: AGP) and AAC Holdings (NYSE:AAC) are both hospitals, clinics & primary care services companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.
This is a breakdown of recent ratings and recommmendations for AMERIGROUP and AAC Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AAC Holdings has a consensus target price of $10.00, indicating a potential downside of 11.35%. Given AAC Holdings’ higher possible upside, analysts plainly believe AAC Holdings is more favorable than AMERIGROUP.
Earnings and Valuation
This table compares AMERIGROUP and AAC Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|AAC Holdings||$279.77 million||0.97||-$580,000.00||($0.06)||-188.00|
AMERIGROUP has higher revenue, but lower earnings than AAC Holdings. AAC Holdings is trading at a lower price-to-earnings ratio than AMERIGROUP, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
AMERIGROUP has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, AAC Holdings has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500.
Insider & Institutional Ownership
63.9% of AAC Holdings shares are owned by institutional investors. 37.3% of AAC Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares AMERIGROUP and AAC Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
AAC Holdings beats AMERIGROUP on 8 of the 10 factors compared between the two stocks.
AMERIGROUP Corporation is a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, Children’s Health Insurance Program (CHIP), Medicaid expansion programs and Medicare Advantage. The Company offers a continuum of care management, including disease management, pharmacy integration, centralized telephonic case management, in-person case management within healthcare facilities, and home visit case management for some of its members. As of December 31, 2011, the Company provided a number of healthcare products to approximately 2,024,000 members. Effective February 1, 2012, it provides managed care services in Louisiana. On May 1, 2012, it acquired Health Plus. In November 2012, the Company sold its Virginia health plan to Inova Health System Foundation. In December 2012, WellPoint Inc acquired the Company.
About AAC Holdings
AAC Holdings, Inc. is a provider of inpatient and outpatient substance abuse treatment services for individuals with drug and alcohol addiction. The Company performs drug testing and diagnostics laboratory services and provides physician services to its clients. As of June 30, 2016, the Company operated 12 residential substance abuse treatment facilities located throughout the United States, focused on delivering clinical care and treatment solutions across 1,139 beds, which includes 636 licensed detoxification beds, and 18 standalone outpatient centers. In addition, the Company focuses on expanding The Oxford Centre facility. As of June 30, 2016, the Company’s capacity at its Forterus treatment facility was 14 beds. The Company is engaged in deploying research-based treatment programs with structured curricula for detoxification, residential treatment, partial hospitalization and intensive outpatient care. The Company is also an Internet marketer in the addiction treatment industry.
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