Gentiva Health Services Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of home-health service provider Gentiva Health Services (Nasdaq: GTIV  ) caught a cold and fell 10% today after an analyst downgrade.

So what: Analyst Whit Mayo at Robert W. Baird downgraded the whole sector today, including Gentiva, Almost Family (Nasdaq: AFAM  ) , and LHC Group (Nasdaq: LHCG  ) , sending all three lower. He believes expectations are too optimistic for the stocks in 2012 and that cuts to Medicare reimbursement rates will be greater than expected.

Now what: If Mayo is right, these stocks could be put under more pressure, so these developments should be watched closely. Gentiva is his favorite of the group, with the only neutral rating, and with a 10.6 P/E ratio, shares aren't terribly expensive if conditions worsen only slightly. I don't see today's drop as a buying opportunity. But if Mayo's predictions turn out to be wrong, and financial results are strong in coming quarters, these stocks are looking awfully cheap.

Interested in more info on Gentiva Health Services? Add it to your watchlist.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1509639, ~/Articles/ArticleHandler.aspx, 10/2/2014 5:13:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement