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What: Shares of air medical transportation company Air Methods
So what: For the quarter, Air Methods is forecasting earnings of $2.30-$2.40 per share, as compared to the $0.77 in earned last year, and the $1.59 Wall Street had been expecting. Air Methods attributed the rapid jump in EPS to growth in same-base transports, improved reimbursement for community-based transports, and lower maintenance costs per flight hour. Total community-based patient transports increased by 47% and were aided almost entirely by the acquisition of OF Air Holdings in August 2011, with net revenue rising 18% in the segment.
Now what: Niche service stocks are great, and Air Methods is just another example. The transport services Air Methods provides are a near necessity and aren't really affected by macroeconomic issues. Also, with high barriers to entry and little competition, Air Methods should maintain significant pricing power. One thing not to read into too much is the organic community-based patient transport growth which was only 3%, not including the OF Air transaction. However, it's hard to ignore the magnitude of the earnings beat. Needless to say, it's an interesting company that could be worth further research.
Craving more input? Start by adding Air Methods to your free and personalized Watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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