Carillon Tower Advisers, an investment management company, released its fourth-quarter 2025 investor letter for the “Carillon Scout Mid Cap Fund”. A copy of the letter can be downloaded here. Major U.S. equity indices delivered positive returns in the fourth quarter, while the Russell Midcap® Index return lagged with nominal positive gains. Strong corporate earnings revisions and lower short-term interest rates supported U.S. market returns. Investors’ focus on an optimistic 2026, and consensus outperformed ...

Core Insights - Encompass Health Corporation (EHC) plans to build a new 40-bed freestanding inpatient rehabilitation hospital in Bear, Delaware, aimed at enhancing healthcare services in the region [1][8] Group 1: Facility Features - The new hospital will feature private patient rooms, a large therapy gym with advanced rehabilitation technology, a suite for daily living activities, and an on-site dialysis unit, providing comprehensive rehabilitation services [2][8] - Treatment will be administered by specialized nurses, therapists, and physicians, with 24/7 nursing care available to improve patient health outcomes and facilitate quicker recovery [3] Group 2: Strategic Motives - The establishment of the Bear facility reflects EHC's strategy to strengthen its presence in Delaware, marking its second location in the state alongside an existing facility in Middletown [4] - By expanding its network of inpatient rehabilitation hospitals, EHC aims to serve a growing patient base, which is expected to drive higher revenues [5] Group 3: Company Performance - In 2025, EHC reported revenues of $5.9 billion, representing a 10.5% increase from the previous year, indicating strong revenue performance driven by increased patient volumes [5] - Currently, EHC operates 174 rehabilitation hospitals across 39 states and Puerto Rico, showcasing a proactive growth strategy through both independent and partnership-developed facilities [6] Group 4: Market Position - EHC's share price has increased by 0.5% over the past year, compared to a 9% growth in the industry, and it currently holds a Zacks Rank of 3 (Hold) [7]

Core Viewpoint - Encompass Health Corp. plans to build a 40-bed inpatient rehabilitation hospital in Bear, Delaware, aimed at enhancing access to specialized rehabilitation care for local residents [1][4]. Group 1: Hospital Features and Services - The new hospital will cater to patients recovering from serious conditions such as strokes, neurological disorders, brain and spinal cord injuries, amputations, and complex orthopedic issues [2]. - Services will include 24-hour nursing care, physical, occupational, and speech therapies, all provided by specialized healthcare professionals [2]. - The facility will feature private patient rooms, a therapy gym with advanced rehabilitation technologies, an activities of daily living suite, an in-house dialysis suite, and additional amenities like a dining room and therapy courtyard [3]. Group 2: Company Background and Expansion - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with a network of 174 hospitals across 39 states and Puerto Rico [5]. - The new hospital will be the second location for Encompass Health in Delaware, complementing an existing facility in Middletown [4]. - The company is recognized for its high-quality rehabilitative care and has received accolades from Newsweek, Statista, and Fortune [5].

Core Insights - Encompass Health Corporation (EHC) is a leading provider of inpatient rehabilitation services in the U.S., focusing on high-quality rehabilitation care for patients recovering from serious injuries, illnesses, or surgeries [2][3] Company Overview - EHC operates 173 inpatient rehabilitation hospitals across 39 U.S. states and Puerto Rico, with a market capitalization of approximately $10 billion [3] - The company's shares have gained 2.7% over the past year, underperforming the industry's average increase of 5.9% during the same period [3] Valuation Metrics - EHC's forward P/E ratio is 16.71x, lower than the industry average of 17.51x, indicating a relatively attractive valuation [4] - The company holds a Zacks Rank 3 (Hold) and a Value Score of B [4] Earnings Estimates - The Zacks Consensus Estimate for EHC's 2026 earnings is $5.90 per share, suggesting an 8.3% year-over-year increase [5] - The consensus estimate for 2026 revenues is $6.4 billion, indicating 8.3% year-over-year growth, with expected revenues of $6.365–$6.465 billion, up from $5.9 billion in 2025 [5] Growth Drivers - EHC is focused on expanding its Inpatient Rehabilitation segment, having opened eight de novo hospitals with 395 beds in 2023 and plans for further expansions [7][10] - The company reported a 10.5% year-over-year increase in revenues in 2025, driven by an expanding patient base [11] Financial Performance - EHC generated $818 million in adjusted free cash flow in 2025, supporting expansion, buybacks, and dividends [9] - Net operating cash flow increased by 17.9% in 2024 and 17.2% in 2025, reaching $1.2 billion [11] - The company returned value to shareholders through $71.1 million in dividends and $158 million in share repurchases [12] Return on Investment - EHC boasts a trailing 12-month return on invested capital (ROIC) of 10%, surpassing the industry average of 6.3%, indicating efficient use of investments [13]

Core Viewpoint - Encompass Health Corporation is under investigation for potential violations of federal securities laws following allegations of subpar performance in safety measures at its for-profit hospitals [1][2]. Group 1: Investigation Details - Lowey Dannenberg P.C. is leading the investigation into Encompass Health Corporation for possible breaches of federal securities laws [1]. - The investigation is prompted by a New York Times article that reported on the company's below-average performance in key safety measures, including high rates of preventable readmissions [2]. Group 2: Performance Allegations - Encompass Health owns 34 facilities that Medicare rated as having statistically significantly worse rates of potentially preventable readmissions [2]. - The article highlighted alarming mistakes that have led to patient fatalities in Encompass-owned facilities [2].

Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Small Cap Fund”. A copy of the letter can be downloaded here. The fourth quarter was challenging for the fund and continued to underperform its benchmark, the Russell 2000 Index. The fund (Class I) returned -0.4%, lagging the benchmark’s 2.2% return. Sector allocation negatively impacted the Fund's performance this quarter, with healthcare being the weakest sector. The Fund remains optimistic that the s ...

Group 1 - The company has experienced three years of high execution and maintains a positive outlook for the future, driven by aging demographics and an imbalance in supply and demand for services [1] - There is a limited addition of beds in the Inpatient Rehabilitation Facility (IRF) industry, indicating a continued demand for the company's services [1] - The company is positioned to capture growth opportunities due to its scale and the ongoing demand in the market [1] Group 2 - The company is optimistic about discussions in several states regarding the repeal of the certificate of need, which could open up new market opportunities [2] - North Carolina is highlighted as a state with attractive demographics, where the company currently operates one hospital but sees potential for expansion [2]

Core Viewpoint - The Portnoy Law Firm has initiated an investigation into potential securities fraud involving Encompass Health Corporation and may file a class action on behalf of investors [1]. Group 1: Investigation and Legal Actions - The Portnoy Law Firm is encouraging investors to contact them to discuss their legal rights and options for pursuing claims to recover losses [2]. - The firm offers a complimentary case evaluation for investors affected by the alleged corporate wrongdoing [2]. Group 2: Stock Performance and Allegations - Encompass Health's stock price dropped by $12.39, or 10.4%, closing at $107.28 per share on July 15, 2025, following allegations of poor performance on safety measures in for-profit hospitals [3]. - A New York Times article reported that Encompass's hospitals had "alarming mistakes" leading to patient fatalities and highlighted that 34 facilities had significantly worse rates of potentially preventable readmissions according to Medicare [3].

Core Insights - Encompass Health has opened the Encompass Health Rehabilitation Hospital of Irmo in South Carolina, which is a 49-bed facility designed to provide rehabilitation services for patients recovering from serious conditions such as strokes, brain injuries, and spinal cord injuries [1][1][1] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a total of 174 hospitals across 39 states and Puerto Rico [1][1] - The company is recognized as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista, and is ranked among Fortune's World's Most Admired Companies and Forbes' America's Best Companies [1][1] Facility Features - The new hospital spans over 53,000 square feet and includes 49 private patient rooms, a spacious therapy gym with advanced rehabilitation technologies, an activities of daily living suite, an in-house dialysis suite, and landscaped therapy courtyards [1][1][1] - Patients will receive a minimum of three hours of intensive therapy five days a week, along with 24-hour nursing care and frequent physician visits [1][1] Community Impact - The opening of the Irmo facility allows patients in the local community to recover from serious illnesses and injuries closer to home, enhancing access to essential rehabilitation services [1][1]

Core Insights - Encompass Health Corp. will participate in the Barclays Global Healthcare Conference from March 10-12, 2026, with a fireside chat scheduled for March 11, 2026, from 9-9:25 a.m. ET [1][2] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a network of 173 hospitals across 39 states and Puerto Rico [3] - The company is recognized for providing high-quality rehabilitative care, utilizing advanced technology and innovative treatments to aid patient recovery [3] - Encompass Health has received accolades such as being named America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista, and is ranked among Fortune's World's Most Admired Companies and Forbes' America's Best Companies [3]