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: Help! The Ensign Group
So what: Over in Washington, the Centers for Medicare and Medicaid Services have recommended cutting 11% off next year's Medicare and Medicaid reimbursement rates. Since Ensign's in the business of providing nursing and rehab care services, this is Ensign's bread and butter they're eyeballing. No wonder investors are nervous.
Now what: Investors are punishing health-care stocks almost equally in response to the news. Kindred Healthcare
So while I agree in principle that the stock carries more risk today than it did yesterday, the valuation at Ensign seems much more attractive than at the other companies. Seems to me, if the worries dissipate and these stocks bounce back, Ensign should bounce first, and bounce highest.
If you own The Ensign Group, you'll want to keep close tabs on developments here. Make it easier on yourself by adding the stock to your watchlist and get updates as they happen.
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