Please ensure Javascript is enabled for purposes of website accessibility

Medical Staffing's Better Prognosis

By Tom Taulli – Updated Nov 16, 2016 at 1:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Staffing has been a thankless business. But there are signs of improvement, at least for AMN Healthcare Services.

With stagnation in employment, it's been rough for staffing companies. Might it be different for companies that focus on the medical industry, with all the shortages it's said to be having? Not really. Companies like Cross Country Healthcare (NASDAQ:CCRN) and Medical Staffing Network Holdings (NYSE:MRN) have been mostly poor performers for investors since debuting several years ago.

But AMN Healthcare Services (NYSE:AHS) has shown signs of improvement, or at least of the bad news leveling off. Its recently reported revenue for the fourth quarter was $158.3 million, down just slightly from $159.6 million in the same period a year ago. During this period, though, net income took a less modest decline, dropping from $4.9 million to $4.5 million.

For 2004 as a whole, revenues were $629 million, which was down from $714.2 million in 2003. Net income declined from $37.8 million to $17.3 million.

Founded in 1985, AMN is the leading provider of travel nurse staffing services. The company recruits nurses and allied health professionals and places them on temporary assignment of variable lengths (usually the length is 13 weeks). Because of the diversity of the nursing industry, AMN has a multibrand approach. The brands include American Mobile Healthcare, Medical Express, Nurses Rx, Preferred Healthcare Staffing, O'Grady-Peyton International, and TheraTech Staffing. This has proved to be an effective way to attract qualified recruits.

As for expectations, AMN forecasts earnings per share of $0.64 to $0.68 in 2005. This compares to $0.55 per share in 2004.

On the upside, the health-care industry has been shifting its approach to include more temporary staffing, and AMN is well-positioned to capitalize on this market in the long term. Near-term success is a different matter in today's choppy markets -- both the stock market and the employment market -- and investors would do well to tread with caution before stocking up on staffing stocks.

Fool contributor Tom Taulli does not own shares mentioned in this article.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AMN Healthcare Services, Inc. Stock Quote
AMN Healthcare Services, Inc.
AMN
$103.95 (-0.15%) $0.16
Cross Country Healthcare, Inc. Stock Quote
Cross Country Healthcare, Inc.
CCRN
$27.17 (-0.40%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.