| Stock (Symbol) | Stock Price | |
AmSurg (AMSG) |
$82 |
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| Data is as of | Expected to Report | Sector |
August 8, 2015 |
Nov 2 – Nov 6 |
Healthcare |
| Sharek’s Take | ||
 Around a decade ago I used to track AmSurg (AMSG), the largest owner and operator of ambulatory surgery centers (ASCs) in the US, but passed on the stock as the company was growing in the low-teens while I was looking for 20% growers. Then in July 2014 AmSurg had a transformation. It acquired Sheridan, a provider of outsourced physician services to hospitals, ASCs, and other healthcare facilities, combining ambulance services with physicians, paying 87% cash. The deal took the company’s addressable market from $15 billion to $70 billion. Now AMSG’ ambulance patients are utilizing its physicians as well — and profits are climbing because of this. Profits are growing around 40% now, yet AMSG has a P/E of just 23. The stock should sell for 30x earnings. This $82 stock has a Fair Value of $106 (28% upside) and a $121 Fair Value for 2016 (47%). I will add AMSG to the Growth Portfolio and Aggressive Growth Portfolio today. |
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| One-Year Chart | ||
 AMSG broke out and jumped on high volume after it reported earnings way above expectations — a very bullish sign. Profits rose 53% and Estimates show 33% and 35% coming. Since AMSG just beat estimates, the company could have 40%-50% profit growth ahead. 23x earnings is cheap for a stock of this caliber. |
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| Earnings Table | ||
 Profits soared 54% in a 128% gain in sales.AMSG cruised past profit estimates, beating the 84 cent estimate by 13 cents. Annual Profit Estimates increased, but I don’t know by how much since I haven’t been following AmSurg. Quarterly profit growth looks great for at least the rest of the year. |
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| Fair Value | ||
 AmSurg’s competitor Envision Healthcare is a 15% grower yet sells for 30x earnings. AMSG is a 20% grower and should have a P/E at least that high. I feel the stock’s undervalued and is currently climbing up to its Fair Value of $106. |
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| Ten-Year Chart | ||
 This transformation took profit growth from 9% to 30% in just one qtr. Now profits are climbing at a healthy clip. Note the slow profit growth AMSG had before 2014. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
5 of 25 |
AmSurg went through a transformation and come as a different company. Profits are now soaring yet the stock price hasn’t gone up as much as it should have. At 23x profits, AMSG is one of the cheapest growth stocks I’m aware of — and its timely so we could get gains right away. AMSG rank s 5th the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
5 of 11 |
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