3 Opportunities in the Emergency Medical Response Space

The U.S. healthcare system is undergoing a series of significant changes, from aging patient demographics to new insurance regulations. While regulations pose a risk to many healthcare providers and insurance companies, emergency medical response and equipment makers are well positioned to profit from increasing insurance coverage and aging demographics. In this report, we’ll take a look at three companies in the emergency response space.

Envision Healthcare: Ambulatory Care

Envision Healthcare Holdings (NYSE:EVHC) is a leading operator of facility-based outsourced physician services (“EmCare”) and emergency ambulatory services (“AMR”) in the United States. Over the past 55 years, these divisions have captured a leading 12 percent share of the outsourced emergency department services market and a 15 percent share of the outsourced ambulance market, making them the largest operators in their respective industries.

On August 14, 2013, the company raised $966 million in an initial public offering at the high end of its expected $20.00 to $23.00 price range. Shares surged more than 10 percent on their first day of trading, giving the newly public entity a $4.2 billion market capitalization. With the aging U.S. population and new insurance laws set to provide broader coverage, the company is well positioned to grow over the coming years as it continues to expand its footprint.

In FY2012, the company had about 13.3 million patient encounters across 2,100 communities, resulting in about $3.3 billion in revenues and $41.2 million in net income. Over the past four years, the company’s revenues grew at a 8.2 percent CAGR and its adjusted EBITDA grew at a 13.2 percent CAGR. As a result, investors looking for a stable company that’s shown robust growth rates may want to consider this newly public large-cap stock for their portfolios.