Chemed Corporation Stock Fair Value Calculation – Second Line Capital LLC Increases Stake in Chemed Co. by 7.6% in Second Quarter
October 5, 2024
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CHEMED CORPORATION ($NYSE:CHE) is a publicly traded company that provides healthcare services to various institutions and individuals in the United States. The company operates through two segments: VITAS Healthcare and Roto-Rooter. Its VITAS Healthcare segment offers hospice and palliative care services, while the Roto-Rooter segment provides plumbing and drain cleaning services. Recently, CHEMED CORPORATION made headlines as Second Line Capital LLC, a major institutional investor, increased its stake in the company by 7.6% during the second quarter. This information was revealed through a filing with the Securities and Exchange Commission, which requires public companies to disclose any major changes in their shareholder ownership. With the healthcare industry constantly evolving and expanding, CHEMED CORPORATION has established itself as a leader in providing crucial services to those in need. This has caught the attention of investors, as seen through Second Line Capital LLC’s decision to increase their holdings in the company. By increasing their stake in the company, they are showing their commitment and belief in the company’s future prospects.
This can also be seen as a positive sign for other investors, who may view this as a vote of confidence in CHEMED CORPORATION’s stability and potential for continued success. In addition to its strong financial performance, CHEMED CORPORATION has also received recognition for its ethical practices and commitment to social responsibility. The company has been included in various sustainability indexes and has received accolades for its corporate governance policies. This further adds to the appeal of investing in CHEMED CORPORATION and may have played a role in Second Line Capital LLC’s decision to increase their stake. It showcases the company’s strong performance and potential for growth, as well as instills confidence in other investors. With its solid financials and commitment to ethical practices, CHEMED CORPORATION is poised for continued success in the healthcare industry.
Analysis – Chemed Corporation Stock Fair Value Calculation
After thoroughly analyzing CHEMED CORPORATION‘s fundamentals, I have determined that the stock has a fair value of around $544.3 per share. This valuation was calculated using our proprietary Valuation Line, which takes into account various financial metrics and market trends. Currently, CHEMED CORPORATION’s stock is being traded at $592.79 per share. This means that the stock is overvalued by approximately 8.9% based on our fair value estimate. While this may indicate that the stock is currently overpriced, it is important to note that the market may have different opinions and valuations of the company. Looking at CHEMED CORPORATION’s financials, the company has shown strong performance and consistent growth in recent years. Their revenue and earnings have steadily increased, and they have a strong balance sheet with low debt levels. Additionally, the company operates in a stable and essential industry, which provides a certain level of predictability for future earnings. However, it is important to also consider potential risks and uncertainties in the market that could affect CHEMED CORPORATION’s performance. This includes changes in government regulations, competition, and economic conditions. In conclusion, while CHEMED CORPORATION’s stock may be currently overvalued based on our analysis, it is still a fundamentally strong company with potential for future growth. Investors should carefully consider their risk tolerance and do their own research before making any investment decisions. More…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Chemed Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 2.26k | 272.51 | 12.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Chemed Corporation. More…
| Operations | Investing | Financing |
| 330.3 | -60.64 | -79.83 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Chemed Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.67k | 560.22 | 73.82 |
Key Ratios Snapshot
Some of the financial key ratios for Chemed Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 2.9% | -4.8% | 15.6% |
| FCF Margin | ROE | ROA |
| 12.1% | 20.8% | 13.2% |
Peers
The competition between Chemed Corp and its competitors is fierce. Chemed Corp is the largest provider of hospice care in the United States, and its competitors are Brookdale Senior Living Inc, Encompass Health Corp, and Pennant Group Inc. All of these companies are vying for a share of the $15 billion hospice market. Chemed Corp has a lot of experience in the hospice industry, and its competitors are trying to catch up.
– Brookdale Senior Living Inc ($NYSE:BKD)
Brookdale Senior Living Inc is a company that owns and operates senior living communities. As of 2022, the company had a market cap of 837.09M and a ROE of 10.52%. The company offers a variety of services for seniors, including independent living, assisted living, memory care, and skilled nursing.
– Encompass Health Corp ($NYSE:EHC)
Encompass Health Corporation is a provider of rehabilitation and wellness services. The company operates through two segments: Inpatient Rehabilitation, and Home Health and Hospice. The Inpatient Rehabilitation segment provides rehabilitation services on an inpatient basis to patients recovering from illnesses and injuries. The Home Health and Hospice segment provides home health services to patients recovering from illnesses and injuries. Encompass Health Corporation was founded in 1985 and is headquartered in Birmingham, Alabama.
– Pennant Group Inc ($NASDAQ:PNTG)
The Pennant Group, Inc. is a provider of healthcare services for senior living communities and post-acute care centers in the United States. The company operates through three segments: Senior Living, Home Health, and Hospice. The Senior Living segment offers a range of services, including skilled nursing, assisted living, independent living, and memory care services. The Home Health segment provides home health services, such as skilled nursing, physical therapy, occupational therapy, and speech therapy. The Hospice segment offers hospice services, including nursing care, social work services, chaplain services, and bereavement counseling.
Summary
Second Line Capital LLC increased their investment in CHEMED CORPORATION by 7.6% during the second quarter. This indicates confidence in the company’s financial performance and potential for growth. It also suggests that the company’s stock may be undervalued and could potentially provide a good return on investment.
The overall investing analysis for CHEMED Corporation is positive, with potential for continued growth and profitability. Investors may want to consider adding this stock to their portfolio, as it is backed by a reputable and successful investment firm and shows promising financial prospects.
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