Tag Archives: NASDAQ:CCRN

Cross Country: Zacks’ Bull of the Day Play

An aging population and the Affordable Care Act are expected to be long term growth drivers for the healthcare industry over the next few decades.  The demand for doctors, nurses, and other medical staff has significantly risen and is expected to continue to rise over the next decade to meet the needs of the American public.  One company that is best positioned to take advantage of this trend by having the largest national network of local branch offices in the industry is Cross Country Healthcare (CCRNSnapshot Report).  This is why Cross Country Healthcare is the Zacks Bull of the day.

This Zacks Rank #1 (Strong Buy) is a provider of healthcare staffing services. They also provide staffing of clinical research professionals and allied healthcare professionals, such as radiology technicians, rehabilitation therapists and respiratory therapists. Their staffing operations are complemented by other human capital management services, including search and recruitment, consulting, education and training and resource management services.

According to William Grubbs, President and CEO, “This was another strong quarter for Cross Country Healthcare. We not only exceeded our guidance but we achieved our targeted fourth quarter goal for a 5.0% Adjusted EBITDA margin one quarter ahead of schedule. Our revenue growth, pricing improvement and cost optimization initiatives are all on track and contributed to these results. The favorable market conditions along with the addition of our recently announced acquisition of the Mediscan should further enhance our results.”

In their most recent earnings announcement, revenues rose +4% YoY, consolidated gross profit margins were up 130 basis points YoY, revenues from Nurse and Allied Staffing improved 6% YoY, and at the end of Q3, the company has $24.6 million in cash and cash equivalents on hand.  Also, the company acquired healthcare/education staffing company Mediscan, which management expects to be accretive in Q4, and will add $0.06-0.07 to 2016 EPS.  This addition will be crucial to management’s expectation of 15-20% growth for the foreseeable future.

Due to their strong Q3 15, management increased Q4 guidance, where they expect adjusted EPS to be in a range of $10.6-11.9 million, above the previously expected $9.9million.  Further, revenues are now expected to be in a range of $193-198 million.

As you can see from the table below, Cross Country has been considerably outperforming the S&P 500 over the past several months.

Increasing Estimates

Due to the increased guidance and solid revenue numbers, earnings estimates for Q4 15, FY 15, Q1 16, and FY 16 have increased over the past 30 days.  Q4 15 rose from $0.12 to $0.18, FY 15 jumped up from $0.35 to $0.49, Q1 16 improved from $0.08 to $0.12, and FY 16 leaped from $0.48 to $0.65.

Bottom Line

After posting a strong Q3 where the company shed their education business and acquired Mediscan, they are now several quarters ahead of where the street expected them to be profitability wise.  With increased guidance, and improving margins, this company has cemented itself as a market leader of the healthcare labor market.

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Cross Country: Zacks’ Bull of the Day Play

With the Dow breaking on through 18,000 it’s easy to be bullish on the market. The American consumer is back, oil prices are cheap, and we’re looking forward to a year full of winners for 2015. With today’s Bull of the Day I wanted to find a stock that can benefit from a continued rebound in the US. As unemployment continues to creep lower and higher paying jobs start popping up the country is looking forward to good times ahead. I wanted to find us a stock in an industry that would benefit from this boom.

Today’s pick is in the staffing industry that currently sits in the Top 5% of our Zacks Industry Rank. Cross Country Healthcare (CCRNSnapshot Report) is a Zacks Rank #1 (Strong Buy) with a great chart that’s breaking out to the upside. CCRN is a leader in healthcare staffing with a primary focus on providing nurse and allied and physician staffing services to the healthcare market.

Three analyst estimate revisions to the upside for the current quarter and next year are a big reason why the stock is a Zacks Rank #1 (Strong Buy). The bullish adjustments have pushed consensus for the current quarter up from 3 cents to 5 cents and for the next year up from 28 cents to 31 cents.

Adding to the revisions is the fact that the company has surprised to the upside the last two quarters. Q2 numbers saw a 2 cent beat with the company turning a 1 cent profit while Q3 beat by 5 cents at 7 cents per share. The company reports Q4 earnings on March 16th, 2015.

After reaching a fresh 52-week high of $11.54 on January 28, 2014, CCRN lost momentum and the stock retreated. The first close below the 25×5 happened on February 5th as the stock also broke $10. From there a small consolidation was followed by a disastrous sell-off on heavy volume March 6th. Over 2 million shares traded hands on what turned out to be the busiest day of the year for the stock as is shed over 20% on the session.

A steady downtrend ensued and CCRN saw any attempt to rebound thwarted below the downward sloping 25×5. Over the period from March through May CCRN remained heavily oversold. Stochastics lingered below 20 for most of that time and the Commodity Channel Index barely ever broke above zero.

That all changed in June when a three day rally broke Cross Country Healthcare out of its malaise. A rally began that’s seen the stock come down to rest the 25×5 only on a few occasions. The pullbacks have been brief and shallow along the way with the most violent of which being an intraday move August 27th that saw the stock trade down to $6.73 before rallying later in the session to close well above $8.

Good jobs data may be helping the stock along and the last couple weeks we’ve seen some remarkable moves. After getting down to $10.50 on Tuesday the 16th CCRN has rallied considerably and after the huge day it had Monday is now trading within a few ticks of its 52-week high. Volume has remained relatively light the last couple of days except Monday saw a big jump in shares traded with 900k trading hands.