Key Takeaways Chemed's Q3 adjusted EPS fell 6.6% year over year, missing analyst expectations.CHE's revenues grew 3.1% to $624.9M, with VITAS up 4.2% and Roto-Rooter rising 1.1%.CHE's gross margin contracted 313 bps to 31.5% as service costs increased 8% year over year.Chemed Corporation (CHE) reported third-quarter 2025 adjusted earnings per share (EPS) of $5.27, which declined 6.6% year over year. The figure lagged the Zacks Consensus Estimate by 2.2%. The company’s GAAP EPS was $4.46, down 10.8% from las ...

CINCINNATI, Oct. 28, 2025 (GLOBE NEWSWIRE) -- Chemed Corporation (Chemed) (NYSE: CHE), which operates VITAS Healthcare Corporation (VITAS), the nation’s largest provider of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, reported financial results for its third quarter ended September 30, 2025, versus the comparable prior-year period. Results for Quarter Ended September 30, 2025 Consolidated operating results: Revenue increase ...

Investment Strategy Overview - LRT Global Opportunities strategy returned -8.00% in September and -0.17% year-to-date as of October 1, 2025 [4][5] - The strategy focuses on long positions in high-quality companies and short positions in broad market indexes, viewing September's performance as a temporary setback [6] - Current market valuations are at extreme levels, with a trailing P/E ratio over 30x, P/B ratio over 5.6x, and cyclical P/E over 40x, indicating potential future return challenges [7] Company Highlights StoneX Group Inc. (SNEX) - StoneX operates as a diversified financial services network, providing execution, clearing, payment, and advisory services across various asset classes [12][13] - The company focuses on underserved client segments, leveraging deep institutional knowledge and a robust global infrastructure [13][14] - StoneX's growth strategy combines organic expansion with strategic acquisitions, enhancing capabilities and geographic reach [14][15] Simpson Manufacturing Co., Inc. (SSD) - Simpson is a leader in engineered structural connectors, with products specified in building codes, creating high switching costs for customers [16][17] - The company benefits from a strong distribution network and technical support, reinforcing its market position [18][19] - Demand for Simpson's products is driven by housing construction and stricter building codes due to extreme weather events [19][20] Asbury Automotive Group, Inc. (ABG) - Asbury operates a diverse portfolio of dealerships, focusing on high-margin parts and service operations for revenue stability [21][22] - The company has a proven track record in strategic acquisitions, enhancing its operational footprint and earnings power [23][24] - Asbury's digital retailing platform, Clicklane, integrates online and in-store experiences, providing a competitive advantage [24][25] Chemed Corp. (CHE) - Chemed operates VITAS Healthcare and Roto-Rooter, benefiting from strong demand in hospice care and plumbing services [26][27] - VITAS is positioned to capitalize on the aging U.S. population, while Roto-Rooter offers recession-resistant services [28][29] - The company has a disciplined capital allocation strategy, returning significant capital to shareholders [29] The Toronto-Dominion Bank (TD) - TD is a major player in North America's banking sector, with a focus on retail and commercial banking [30][31] - The bank's U.S. retail segment has been a primary growth engine, supported by strategic acquisitions [32] - TD's conservative risk culture and strong capital management contribute to its competitive advantage [34] RLI Corp. (RLI) - RLI is a specialty insurance company known for its underwriting discipline and focus on niche markets [35][36] - The company prioritizes profitability over growth, maintaining a strong alignment of interests through employee ownership [37][38] - RLI has a history of returning excess capital to shareholders, demonstrating a commitment to shareholder value [38] The Toro Company (TTC) - Toro is a leader in turf and landscape solutions, known for its quality and innovation [39][40] - The company has a strong distribution network and a disciplined growth strategy, including strategic acquisitions [41][42] - Toro consistently generates strong free cash flow, which is reinvested in product development and shareholder returns [42] Crown Castle International Corp. (CCI) - Crown Castle owns the largest portfolio of shared communications infrastructure in the U.S., primarily macro cell towers [43][44] - The company benefits from long-term lease agreements, providing predictable revenue streams [44][45] - Crown Castle is divesting non-core businesses to focus on its tower portfolio, enhancing shareholder value [46] Corporación América Airports S.A. (CAAP) - CAAP operates 53 airports across six countries, generating revenue from aeronautical and commercial activities [48][49] - The company invests in airport infrastructure to enhance operational efficiency and passenger experience [51] - CAAP is well-positioned to benefit from the recovery in global air travel [52] Colliers International Group Inc. (CIGI) - Colliers is a global leader in commercial real estate services, distinguished by its decentralized structure and entrepreneurial culture [53][54] - The company pursues a balanced growth strategy, focusing on high-margin business lines [56] - Colliers' ownership culture aligns interests with long-term shareholders, enhancing its competitive advantage [54] The Travelers Companies, Inc. (TRV) - Travelers is a leading provider of property and casualty insurance, organized into three primary segments [57][58] - The company benefits from a vast distribution network and strong relationships with independent agents [58][62] - Travelers leverages its scale and data advantages to maintain profitability and manage risks effectively [62] Petróleo Brasileiro S.A. - Petrobras (PBR-A) - Petrobras is a major integrated energy producer, controlling significant pre-salt oil reserves [63][64] - The company focuses on maximizing value from its most profitable exploration and production activities [65][66] - Petrobras' performance is closely tied to its operational execution in the pre-salt basins [66] Fabrinet (FN) - Fabrinet specializes in advanced optical packaging and precision manufacturing, serving leading OEMs [67][68] - The company's engineering expertise and focus on complex manufacturing create high switching costs [68][69] - Fabrinet benefits from secular tailwinds in the optical communications market, driven by data traffic growth [69][70] UnitedHealth Group Incorporated (UNH) - UnitedHealth is a leading healthcare enterprise, combining health benefits with diversified health services [71][72] - The company's scale provides cost advantages and superior negotiating power in the healthcare market [73][74] - UnitedHealth's integrated model enhances efficiency and patient outcomes, positioning it for continued growth [74] Charter Communications, Inc. (CHTR) - Charter is a major connectivity provider in the U.S., focusing on high-speed broadband services [76][77] - The company is upgrading its network to meet increasing bandwidth demands and expanding into underserved areas [79] - Charter's convergence of services, including mobile offerings, enhances customer loyalty and reduces churn [78][79] Group 1 Automotive, Inc. (GPI) - Group 1 operates a diversified automotive retail business, focusing on luxury and import brands [80][81] - The company's disciplined acquisition strategy enhances performance and profitability [82] - Group 1's digital retailing platform improves customer experience and operational efficiency [82][83] Exxon Mobil Corp (XOM) - Exxon Mobil is a leading integrated energy and chemical manufacturer with a vertically integrated business model [85]

Financial Data and Key Metrics Changes - VITAS net revenue was $396.2 million in 2025, an increase of 5.8% compared to the prior year period, driven by a 6.1% increase in days of care and a 4.2% increase in Medicare reimbursement rates [12] - Adjusted EBITDA excluding Medicare Cap totaled $66.8 million in the quarter, essentially flat with 2024, with an adjusted EBITDA margin of 16.2%, down 163 basis points from the prior year [15][16] - Roto Rooter revenue increased by 6% in 2025 compared to the same period in 2024, falling short of internal expectations [8] Business Line Data and Key Metrics Changes - Admissions at DITAS totaled 17,545, a 1.2% improvement from the same period in 2024, with a 4.9% increase when excluding patient transfers from VITAS [5] - Roto Rooter branch residential revenue totaled $156.4 million, a 9% increase from the prior year, driven by a 16.9% increase in water restoration [17] - Roto Rooter branch commercial revenue totaled $53.2 million, a 4.4% increase from the prior year, with a 24.4% increase in excavation revenue [17] Market Data and Key Metrics Changes - Hospital-directed admissions increased by 9.1%, while home-based patient admissions declined by 6.2%, nursing home admissions declined by 2.9%, and assisted living facilities admissions declined by 1.4% compared to the prior year [6] - The consolidated Florida program is estimated to end the 2025 Medicare cap year with a $19 million billing limitation, with management expecting no significant Medicare cap billing limitation for the 2026 cap year [6][7] Company Strategy and Development Direction - The company remains confident in the growth potential and strategic direction of both businesses despite underperformance in 2025 [5] - VITAS is adjusting its patient mix in Florida to mitigate Medicare cap issues, which may cause some disruption in operating metrics but is expected to lead to higher growth rates in the long term [10] - Roto Rooter is focusing on improving its competitive advantages to return to a steadier growth trajectory [11] Management's Comments on Operating Environment and Future Outlook - Management commented on the impact of the Liberation Day tariff announcement on consumer confidence and spending, which affected Roto Rooter's performance in April and May [9] - The company is optimistic about the overall prospects for both businesses, with VITAS working on initiatives to improve admissions and Roto Rooter focusing on enhancing its service offerings [10][11] Other Important Information - The company estimates $28.2 million in Medicare cap billing limitations for calendar 2025, with $19 million related to the Florida combined program [23] - Roto Rooter's adjusted EBITDA totaled $48.6 million, a decrease of 18.7% compared to the prior year quarter, with a margin of 21.8% [18] Q&A Session Summary Question: Impact of Medicare cap and future margins - Management discussed the levers being pulled to ensure no carryover impact from the Medicare cap after Q3, emphasizing hospital admissions and the moderation of the patient mix bubble created by the Community Access Program [28][29] Question: Factors driving underperformance in admissions - Management noted that the increase in admissions was intentionally moderated to avoid providing services without reimbursement, focusing on hospital admissions instead [38][40] Question: Roto Rooter management issues and recovery - Management indicated that local management issues have been resolved, and the recovery seen in June and July is attributed to improved operational performance rather than management changes [49][50] Question: Tax rate favorability in Q2 - The decline in the effective tax rate was attributed to accounting factors related to stock option exercises, with fewer exercises in the quarter leading to a larger tax deduction [65][66] Question: Confidence in short stay patient mix - Management expressed confidence in achieving a higher mix of short stay patients through improved operational emphasis and reputation [70][71] Question: Capital deployment and acquisition strategy - The company remains open to acquisitions at the right valuation and location, with no change in strategy despite current business challenges [98]

Financial Data and Key Metrics Changes - VITAS net revenue was $396.2 million in Q2 2025, representing a 5.8% increase compared to the prior year period, driven by a 6.1% increase in days of care and a 4.2% increase in Medicare reimbursement rates [13][14] - Adjusted EBITDA excluding Medicare Cap totaled $66.8 million in the quarter, essentially flat with 2024, with an adjusted EBITDA margin of 16.2%, down 163 basis points from the prior year [16][17] - Roto Rooter revenue increased 6% in 2025 compared to the same period in 2024, falling short of internal expectations [8][9] Business Line Data and Key Metrics Changes - DITAS admissions totaled 17,545, a 1.2% improvement from the same period in 2024, with a 4.9% increase when excluding patient transfers to VITAS [5][6] - Roto Rooter branch residential revenue was $156.4 million, a 9% increase from the prior year, driven by a 16.9% increase in water restoration [20] - Roto Rooter adjusted EBITDA decreased by 18.7% to $48.6 million, with an adjusted EBITDA margin of 21.8%, reflecting inefficiencies in the labor force due to lower residential revenues [21][22] Market Data and Key Metrics Changes - Hospital-directed admissions increased by 9.1%, while home-based patient admissions declined by 6.2%, nursing home admissions declined by 2.9%, and assisted living facilities admissions declined by 1.4% compared to the prior year [6][10] - The consolidated Florida program is projected to end the 2025 Medicare cap year with a $19 million billing limitation, with management expecting no significant Medicare cap billing limitation for the 2026 cap year [6][7] Company Strategy and Development Direction - The company remains confident in the growth potential and strategic direction of both businesses despite underperformance in Q2 2025 [5][11] - VITAS is adjusting its patient mix in Florida to mitigate Medicare cap issues, which may cause some disruption in operating metrics but positions the company for long-term growth [11][12] - Roto Rooter is focusing on improving its competitive advantages and is optimistic about returning to a steadier growth trajectory [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the weak admissions in April and May were influenced by external factors affecting consumer confidence and spending [10][11] - The company is optimistic about the overall prospects for both businesses, with VITAS management actively reviewing expenses to offset lower EBITDA margins [17][21] - Management expects to update assumptions regarding rates and the overall outlook for the 2026 Medicare cap year in the third quarter earnings release [7][26] Other Important Information - The company estimates $28.2 million in Medicare cap billing limitations for calendar 2025, with no limitations expected in the fourth quarter related to the Florida combined program [26] - Roto Rooter is forecasted to have a revenue increase of 1.25% to 1.75% in 2025 compared to 2024, with an adjusted EBITDA margin expected to be 23.5% to 24.5% [27] Q&A Session Summary Question: What measures are being taken to avoid Medicare cap issues in 2026? - Management emphasized hospital admissions and the moderation of the patient mix bubble created by the Community Access Program as key levers to avoid cap issues [31][32] Question: What is the outlook for admissions and revenue growth? - Management indicated that while admissions were slightly below expectations, they are confident in achieving a higher mix of short-stay patients moving forward [70][72] Question: How are local management issues affecting Roto Rooter's recovery? - Management stated that past local management issues have been resolved, and the focus is now on improving conversion rates and addressing market challenges [51][56] Question: What is the impact of the recent tax rate changes? - The effective tax rate decline was attributed to accounting factors related to stock option exercises, which are not expected to persist [67][68] Question: Is there a change in the company's acquisition strategy? - The company remains open to acquisitions at the right valuation and location, with no change in overall strategy despite current challenges [100][102]