The COO and CIO who were worth $360 Million of a $1.2 Billion Market Cap...
Amedisys stock had climbed almost 40% (average for the market) from it's March low through September 3. Abruptly it gave most of that climb back this morning, in one rapid movement, when it announced, before the opening bell, that the President/Chief Operating Officer and the Chief Information Officer had both resigned rather abruptly, (to pursue other interests). The share price IMMEDIATELY dropped 25% and analysts immediately lowered their ratings.
Now if there were operation issues, no doubt the CEO would have taken the hit for the team. If there were financial concerns then the CFO might be looking for an exit a step ahead of some nice new bracelets. A president/CFO and the Chief Informational Officer are very important posts in a highly visible Billion dollar company, (well it was a Billion dollar company before this morning). Neither of these key players who might signal serious concerns resigned, (well at least this morning, there is always tomorrow.....). What do a COO and a CIO do for the company that is worth 25% of market cap? What could they do to cause a loss of 25% of the market cap?
AMED has 8% operating margins, 12% ROA, and actually had revenue growth qtr/qtr. Cash on hand is weak, but some companies operate on their revolving loans and don't carry much cash. P/S less than 1, strong cash flow, and reasonable debt. Overall a strong player in the home health and hospice services to the chronic and aging. A market definitely growing. IT is a market that might be impacted by the governement health plan changes, but not anytime in the near future. At yesterday's $43 per share, it looked fairly valued. At $34 this evening, (up from the interday low of $29.71) it looks like a real bargain.
Now Mr. Larry R. Graham , Pres, Chief Operating Officer, Director and member of the Compliance Committee is reported to be 43 years old. Ms. Alice Ann Schwartz, Chief Information Officer is reported to be 42 years old.
Now I have no idea what this might have to do with anything. Two senior members of a company leaving abruptly on the same day could mean just about anything. Well, I'm sure it means "something".
At any rate, I suspect the company will bounce back. Unfortunately it's after hours before I did my "homework", but I might be intested in some short term CALLS if this stays down until before tomorrows opening bell. The $35 spread is interesting if the company survives whatever ails it.
This could be a nice textbook case of how stop loss orders can go wrong! It's hard not to tell people to use them, but in some cases it becomes a row of dominoes that topples in seconds. By the time the last one falls, no one knows what happened, and others jump. The progression can make you dizzy. I wonder what made Mr. Graham and Ms. Schwartz dizzy.......
"The above is NOT investing advice, other than the warning on STOP LOSSES". I have no position in AMED, (as of this writing)