Skilled Healthcare Group (SKH) - Zacks #1 Rank Top Performers

Another soft day for the market couldn't keep Skilled Healthcare Group, Inc. (SKH) down. The nursing home operator made the Zacks #1 Rank Top Performers List on Wednesday with a gain of approximately 13%.

Also, volume came in at about 832,000 shares, a substantial improvement over the daily average of almost 305,000.

Meanwhile, the market is having a frustrating week as it put together a third straight day of losses. The Dow declined by about 19 points and the S&P slipped around 6 points.

But SKH's share price has been moving in the right direction, and so has its earnings estimates. The company's third-quarter report from early last month included a substantial EPS surprise, double-digit growth in revenue and, most importantly, an enhanced guidance for 2010.

In addition to its Zacks #1 Rank, SKH also enjoys a longer-term "Outperform" recommendation.

Skilled Healthcare Group is a holding company with subsidiary healthcare services companies that operate long-term care facilities and provide a wide range of post-acute care services, with a strategic emphasis on sub-acute specialty health care.

SKH is part of the medical – nursing homes industry. There is only 1 other name from this space on today's Zacks #1 Rank List: National HealthCare Corporation (NHC).

Earnings Estimates for Skilled Healthcare Group

Let's just cut to the chase: SKH raised its EPS outlook for the year to between 92 cents and 97 cents during its third quarter report. Previously, the company had anticipated 87 cents to 92 cents. At the time of the announcement, we were expecting 89 cents.

(By the way, the company also raised its revenue outlook for 2010 to between $805 million and $812 million, versus the prior outlook of $795 million to $805 million.)

In the aftermath, the Zacks Consensus Estimate for 2010 has moved to 95 cents per share, which is up 6.7% from 60 days ago.

As for 2011, the Zacks Consensus Estimate is at 90 cents per share right now, or nearly 10% better than the 2-month-ago outlook of 82 cents.

There are 15 total estimates on Skilled Healthcare Group for this year and next each. It's been pretty tame over the last 30 days with only 1 upward revision for each period in that time.

Third Quarter

The rest of the third quarter report was pretty good too, as the acquisition of 9 hospice and home care companies in May, along with its long-term care business, sparked a strong report that was announced on Nov 1.

Excluding items, the company earned 25 cents per share, which beat the Zacks Consensus Estimate of 20 cents by 25%.

As you can see in the chart above, this marked the fifth straight quarter with a positive earnings surprise. In addition, the company has been able to at least match quarterly expectations for several years now.

Revenue increased by 11.6% to $209.2 million from $187.5 million last year. Long-term care revenue grew by nearly 4% thanks to increased volumes and average per patient day rates.

 
NATL HEALTHCARE (NHC): Free Stock Analysis Report
 
SKILLED HLTHCR (SKH): Free Stock Analysis Report
 
Zacks Investment Research