Hey boys,

I picked up some shares of Amedisys (NASDAQ - AMED), the largest home health

care company in the US, last week.  This company is one of the most undervalued
companies I've seen in a long time.  It is trading at $26.82 against 2009 earnings
of $4.89 and a 2010 management guidance of $4.20-$4.50, on a diluted basis.  That's
6.3x expected earnings, while the rest of the industry (NASDAQ - GTIV, AFAM, LHCG)
is trading at 10x.  Over the past 6 years AMED has traded at an average P/E of 15.6. 
 
Due to their substantial growth over the past 5 years, which has been 24%, 35% and
44% for revenues, cash flow and earnings, respectively, and great future prospects, I
feel they also have a great PEG ratio.  Net margins have averaged 7.65% in the past 6
years.  Over the past 7 years, ROE and Return on Total Capital has averaged 14.8%
and 11.4%, respectively.  In addition, they have around $4.02/sh in cash ($116MM),
which they will be putting to use in a recently announced $60MM share buy-back
program (about 7.6% of O/S at the current price). They would pay down debt with this
extra cash, but they have almost none (only 20% of the capital structure).  Actually, they
could eliminate their debt with only 1 year worth of cash flow. 
 
They were slammed in the press earlier this year, along with all the other home health
care companies in the industry, for gaming the medicare payment system (Medicare
accounts for almost 88% of revenues).  After doing a bunch of research I found that the
punishment this stock has suffered is completely overblown.  Frankly, based on my
readings, they may not even be found guilty of what they are being accused of.  I can
explain this in more detail, but figured I would spare you the extra reading for now.  But,
we do have a catalyst. 
 
In any event, if I had more money, I would put it into this company.  Unfortunately, I
don't, so I'll pass it on to you guys.  To give you a point of reference, I got in at $24.05
and my father got in at $23.47.
 
T
 
P.S. Even the corporate insiders have been purchasing a considerable amount of
shares at this level.  Over $300k in August alone.
Matrix