With a very weak market and other homecare results not well received (despite being really good), if is not surprising that AFAM lost 10 percent this past week.

Lingering HC reform risk and some allegedly weak growth/margins/outlook at AMED, LHCG and GTIV have baked in some low expectations to the stock.

In my mind, the biggest risk to AFAM is some mild dilution from the rolling equity offering (dribble plan) for Q3 and more dilution for Q4. The benefit of that dilution is more gunpowder for a letter of intent signed in September. Some short term pain for long term gain. And they may indeed peform well enough to overcome the dilution. Hopefully, we will get an update on the offering as well as the acquisition. They may be unable to comment on these due to SEC regs surrounding an offering.

In any event, I view this dip as an opportunity to buy the stock at the same price it saw about a year ago, despite significant growth and a much improved balance sheet. P/Es in the group are depressed by concerns over reform threats. I think we will get relief relatively soon.