By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, September 24, 2014

Healthcare-related reformations have been keeping Washington hopping over the past week. President Obama penned an Executive Order to step up the nation’s efforts to develop new drugs to combat antibiotic resistance that is posing a serious threat to public health now and in the future. On September 18, the Senate followed the lead of the House by passing bipartisan legislation intended to put in motion comprehensive reform for post-acute care, meaning that President Obama could sign into law any day now. Supporters of the law, such as the American Physical Therapy Association, have worked to see the legislation passed as it standardizes data used across post-acute settings. Part of the goals of this reform, as well as other policy changes on the table on Capitol Hill, are centered on better health management to prevent unnecessary hospital re-admissions and improvement of clinical outcomes that reduce health care spending in the long-term. Right now, the U.S. outpaces every other country in the world by spending about $1.7 trillion annually on health care, with that cost expected to rise as millions of new patients sign-up for insurance under the Affordable Care Act and baby boomers turn 65 at a blistering pace.

Implementing new quality measures and standardized reporting of data plays into the management and documentation offerings is Agility Health, Inc. (TSX-Venture:AHI). Headquartered in Grand Rapids, Michigan, Agility Health has been in business for 46 years, currently operating 74 outpatient or onsite rehabilitation locations in 17 states. The company also provides contracted services to hospitals, nursing homes and other institutional clients, offering custom orthotics, care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and more. Cumulatively, more than 1,000 Agility Health employees manage in excess of 1 million patients across 160 centers in the U.S.

Further, and in the vein of reformation, Agility Health provides a number of ancillary services related to physical rehabilitation, including a proprietary rehab-practice management software system branded Agile™. Agility Health spent millions developing the software and IT infrastructure, which consists of more than 100 servers. Agility Health has begun installing Agile in its own clinics (25 so far with the rest scheduled by the end of the year) and offers Agile to the other industry players. By Agility Health taking over administrative duties, such as case management, scheduling, reporting, compliance, etc., the company says it adds 3% in revenue per therapist for each client.

Even though Agility has been around for nearly five decades, it has really hit its stride in the past 10 years, around the point at which CEO Steven Davidson acquired the company, eventually bringing it public in October 2013. Agility Health was doing about $20 million in annual sales, a figure Davidson shepherded to $63 million in 2013 through organic growth and an aggressive acquisition strategy. Going forward, Davidson says that acquisitions will remain integral to growth in the highly fragmented U.S. physical therapy market that has approximately 30,000 clinics, but no single company controlling more than 3% of the market. In fact, there are only a small handful of companies with more than 1% of the market, leaving a large opportunity for companies with a roll-up mentality to capture more market share.

Davidson put his money on the line when he bought the then-private Agility Health and he, along with other executives of the company, is still showing his confidence in the future of AHI. Regulatory filings show that Davidson and other executives and board members at Agility Health have picked up over 100,000 shares in the open market over the last week. Insiders obviously know their company as well as anyone does, so an executive buying shares in the open market is a topic of focus and a strong bullish signal for some investors, especially when the stock is far from highs. Shares of AHI started trading last October at 20 cents and climbed to as high as $1.00 in April, but have now slipped back to 38 cents, obviously an opportunity that Davidson and others felt is a time to add some to their portfolio.

Copyright © 2014 AllPennyStocks.com. All rights reserved. Republication or redistribution of AllPennyStocks.com's content is expressly prohibited without the prior written consent of AllPennyStocks.com. AllPennyStocks.com shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

AllPennyStocks.com has been compensated five thousand, five hundred dollars, by a third-party, Ray Matthews & Associates for its efforts in presenting the AHI profile on its web site and distributing it to its database of subscribers as well as other services. For a complete disclaimer, investors are encouraged to click here: http://www.allpennystocks.com/aps_common/disclaimer.asp.