NEW YORK (TheStreet) -- Shares of Gentiva Health Services Inc. (GTIV) are soaring, up 63.70% to $13.98 in pre-market trade, after Kindred Healthcare Inc. (KND) made an unsolicited offer to buy its rival for about $533 million in a cash-and-stock deal, Bloomberg reports.
Gentiva turned down the $14-a-share offer on May 13, as well as a bid last month of $13 a share, according to correspondence between the two companies published by Kindred today.
Kindred valued the transaction at $1.6 billion including assumed debt, Bloomberg noted.
TheStreet Ratings team rates GENTIVA HEALTH SERVICES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENTIVA HEALTH SERVICES INC (GTIV) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GTIV's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.15%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 43.99% is the gross profit margin for GENTIVA HEALTH SERVICES INC which we consider to be strong. Regardless of GTIV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.06% trails the industry average.
- GENTIVA HEALTH SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENTIVA HEALTH SERVICES INC swung to a loss, reporting -$17.87 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus -$17.87).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 100.2% when compared to the same quarter one year prior, rising from -$207.18 million to $0.31 million.
- Net operating cash flow has increased to -$17.74 million or 13.70% when compared to the same quarter last year. In addition, GENTIVA HEALTH SERVICES INC has also modestly surpassed the industry average cash flow growth rate of 12.01%.
- You can view the full analysis from the report here: GTIV Ratings Report