Who Do You Believe Is Right on Amedisys, Inc. (AMED)?
Posted by timothysykes on Wed 13th of Aug, 2008 04:19:55 PM
Tags:
TIM Store Offer:
Andrew Left of Citron Research is one of the few good guys in this joke of an industry–while I just like profiting from the boom/bust on frauds–Left actually does the nasty digging (he’s got waaay more enemies than I do!) to get to the bottom of all the corruption/manipulation/overvaluation. And, judging by his track record/following, he’s often dead on (he said short PDO in the $40s).
Yesterday, he wrote THIS crazy post about Amedisys filled with juicy enemy-creating tidbits like this:
Citron has been interviewing Amedisys’s former employees in an attempt to confirm or disprove the implications of these accounting red flags. (All of the interviews conducted were done by a licensed private investigator who asked a standardized series of questions to former employees. The interviewees did not know why they were being asked the questions, nor did any of them have a position in the stock.
These individuals were found because Amedisys appears in their employment histories. The power of the internet makes many of these individuals locatable on websites like HotJobs.com and Monster.com.
The results were startling. These are some points that were consistently reported by former employees:
Amedisys pressured employees to manipulate OASIS scores in order to increase billings
Local offices would receive calls from headquarters to influence the scores on Medicare patients. (to justify higher billing)
According to one former management employee, who left the company in 2008 and was interviewed on August 4th : “Our old receivables were real high and were a real mess. But no one at corporate would let us try and straighten up the mess. The billing system is set up for failure and there are no checks and balances. “
I encourage you to read the whole thing because that one post knocked a few hundred million dollars off AMED’s previously just under $2 billion valuation. Impressive work, good job Left, hope you’re ready for the inevitable backlash (Since I deal in Penny Stocks so I’m not about to do that kind of digging as I value my life/legs)
Of course, ANALysts were quick to dismiss this:
Oppenheimer defends AMED; believes the Citron report is irresponsible in its innuendos of an underlying problem at AMED,
Oppenheimer notes that they reviewed a report on AMED by Citron Research. Firm says the report primarily questions the co’s accounting for receivables and its ability to generate greater internal growth than its peers. After speaking to mgmt and analyzing the supporting details of the report, they believe the report is irresponsible in its innuendos of an underlying problem at Amedisys. Furthermore, they believe the stock’s reaction to the report is significantly overblown. While clearly this will present an overhang in the short term, when the dust settles they believe the stock will offer a compelling buying opportunity.
But wait, there’s even more ANALyst rescue attempting…now we get this word:
14:38 AMED AMEDISYS: Hearing AMED upgraded to Buy at Wachovia intraday (51.19 -3.02) -Update-
Now I have no opinion/position on this cuz it’s not my specialty–see that wasn’t so hard, why can’t more finance freaks say that?–but if I were forced to choose, I’d pick Left because a.) his track record and b.) he’s not part of the corrupt Wall Street system where ANALysts must protect investment banker/fund manager interests/investments.
Who do you believe?
Check out my brand new DVD, ShortStocking - the only guide you'll ever need to profit from short selling!
Related Reading
16 Responses
Other Websites Referencing This Post
Leave a Reply
TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 11 | IIJI | $2,79 | $2.95 | $442 |
| Nov 6 | CVI | $4.42 | $4.70 | $530 |
| Nov 5 | MECA | $3.68 | $3.95 | $490 |
| Nov 4 | CVI | $5.18 | $4.94 | $472 |
| Nov 4 | CVI | $4.83 | $5.01 | $333 |
| Nov 3 | NAK | $3.30 | $3.37 | $157 |
| Oct 31 | IDAE | $2.18 | $2.18 | $20 |
| Oct 30 | HSNI | $7.37 | $7.86 | $561 |
| Oct 29 | EVC | $1.97 | $2.70 | $1439 |
| Oct 28 | HSNI | $6.92 | $7.30 | $540 |
| Oct 28 | HSNI | $6.20 | $6.00 | $320 |
Total: $34,399 (177%)
Wachovia may still be right in that it was probably pushed into undervalued range. Like you said the company is currupt and will just have to brew some more kool-aid and their price will start to recover.
I mean like Leaf said.
No, AMED is still not undervalued. Maybe at 30. Their P/E and P/B ratios are too high. Left always hits companies at a valuation peak. AMED’s business is not high margin so they do not deserve a lofty P/E ratio. If Left is right, their accounting gimmickry has inflated their earnings.
Disclosure: I own a put in AMED>
Leaf.
typeo… Left.
WALLBLOG ACTION ALERT! (yeah i am that much of a shameless self promoter)
PDO was mentiond on fbn today and fpp is being pumped, might be a good idea to watch out!
i like to play devil’s advocate sometimes.
Thanks Tim
Great post and good job Left
new post:
http://www.timothysykes.com/ti.....-inc-apii/
COIN earnings just out.
Loss of 1.67 a share for first 6 months of 08. This is one ugly 10Q.
http://xml.10kwizard.com/filin.....ge=5829841
Wachovia analysts upgraded the stock today:
“Wachovia upgrades Amedisys Inc. (Nasdaq: AMED) from Market Perform to Outperform. The firm said, “Recently published criticisms of the company’s accounting, transparency and compliance appear to be spurious at best, in our view, and in some instances inaccurate and illogical.”
Wachovia believes the earnings estimates are conservative and that upward earnings revisions will be a catalyst for the stock. The firm also said the valuation is attractive”.
http://www.streetinsider.com/T.....+Amedisys+(AMED)+to+Outperform,+Following+Sell-Off/3908844.html
I just assume every company and every CEO is a crook and they all lie and steal there way to the top. Short them all the way to prison! So I don’t give a shit either way…
AMED CEO and all other corp individuals(of AMED) are not crooked- if someone did more research than attacking they would find this out!
I like to check out option volume as an indicator and someone bought a bunch of the August 40 puts (747 have traded so far today). These options expire Friday and are pretty much the equivalent of a lottery ticket but I thought it was interesting.
I always assume EVERY medical billing company is crooked
I’m rarely wrong.
I just want to say…..I worked for a company that Amedisys bought. I was employed there for six years. I saw lots of things that I didn’t feel were right. I resigned and told the company in an exit interview some of the things I saw. Citron is dead on.