3 Reasons to Avoid MD and 1 Stock to Buy Instead
Pediatrix Medical Group has followed the market's trajectory closely. The stock is down 5.2% to $14.23 per share over the past six months while the S&P 500 has lost 2.2%. This may have investors wondering how to approach the situation.
Is now the time to buy Pediatrix Medical Group, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free.
Even with the cheaper entry price, we're sitting this one out for now. Here are three reasons why MD doesn't excite us and a stock we'd rather own.
In addition to reported revenue, same-store sales are a useful data point for analyzing Specialized Medical & Nursing Services companies. This metric measures the change in sales at brick-and-mortar locations that have existed for at least a year, giving visibility into Pediatrix Medical Group's underlying demand characteristics.
Over the last two years, Pediatrix Medical Group's same-store sales averaged 3.9% year-on-year growth. This performance slightly lagged the sector and suggests it might have to change its strategy or pricing, which can disrupt operations.
We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable.
Sadly for Pediatrix Medical Group, its EPS declined by 1.8% annually over the last five years while its revenue grew by 2%. This tells us the company became less profitable on a per-share basis as it expanded.
A company's ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Unfortunately, Pediatrix Medical Group's ROIC has decreased significantly over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.
Pediatrix Medical Group doesn't pass our quality test. After the recent drawdown, the stock trades at 9.2× forward P/E (or $14.23 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better stocks to buy right now. Let us point you toward one of Charlie Munger's all-time favorite businesses.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
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Yahoo
15 minutes ago
- Yahoo
The latest GOP push to cut waste and spending: Work requirements
The Trump administration and congressional Republicans are increasingly turning to work requirements as part of a wide-ranging effort to slash spending on welfare benefits - extending GOP messaging around waste and fraud to argue that many people who get federal aid don't deserve it. In late May, the House passed a sweeping tax and budget bill that would impose new work requirements as part of a plan to cut Medicaid. The Agriculture Department is poised to broaden work requirements that already condition access to the nation's largest food assistance program. And the Department of Housing and Urban Development sees work requirements as an 'absolute priority' for rental assistance programs - possibly within President Donald Trump's first year in office - according to an official briefed on the matter, who spoke on the condition of anonymity to discuss plans that aren't finalized. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. Specific policies could change as the bill heads to the Senate, where multiple Republicans have expressed concerns over work requirements for Medicaid. Yet the proposals reflect a shifting view among Republicans in Washington about who should receive federal benefits. In a New York Times op-ed last month, four top Trump officials overseeing housing, health and food programs wrote that welfare programs were created to help the neediest but have 'deviated from their original mission both by drift and by design.' Even able-bodied adults should look to welfare as a 'short-term hand-up, not a lifetime handout,' wrote Health and Human Services Secretary Robert F. Kennedy Jr., Centers for Medicare and Medicaid Services Administrator Mehmet Oz, Agriculture Secretary Brooke Rollins and Department of Housing and Urban Development Secretary Scott Turner. Meanwhile, Republican House leaders are also linking work requirements to broader efforts to root out fraud and abuse, and prevent undocumented immigrants from accessing public benefits. 'There are vulnerable citizens of this country who depend on the safety net,' House Budget Committee Chairman Jodey Arrington (R-Texas) told The Washington Post last month. 'The safety net is weakened and is less sustainable when you are allowing these monies to go to people or to stakeholders … and used in other ways outside of supporting those who need it, depend on it and qualify for it.' The proposals have drawn sharp criticism from Democrats and left-leaning economists, who argue that work requirements are the wrong tool for this economy. They say the policies risk dropping some of the most vulnerable benefits recipients - such as people who work inconsistent hours, go through bouts of unemployment, struggle with health issues that don't qualify as disabilities or do unpaid work caring for relatives. 'We have never required a 64-year-old single widow who's taking care of her grandchild to work in order to be able to receive SNAP benefits,' said Lauren Bauer, a fellow in economic studies at the Brookings Institution, referring to the food assistance program for low-income families. 'And I guess that's going to change.' Work requirements for benefits programs have been pushed at various times over decades. President Bill Clinton campaigned on a promise to 'end welfare as we know it' and in 1996 worked with the Republican-controlled Congress to overhaul benefits in a landmark law. The measure ended Aid to Families with Dependent Children - which effectively entitled the poorest Americans to federal help - and introduced Temporary Assistance for Needy Families, known more commonly as TANF. The number of people receiving federal welfare payments fell by half in four years, to 6.3 million in 2000. And the past few decades have given rise to debates over whether the changes worked, especially since measures of poverty fluctuate with recessions and other economic forces. The new policies under consideration could be even more far-reaching. Under the Affordable Care Act, adults with low incomes and no children or disabilities qualified for Medicaid for the first time, marking a significant expansion of the safety net insurance program. The new Republican plan would require beneficiaries to spend at least 80 hours a month working, training for a job, in school or volunteering to qualify for Medicaid. In May, Kennedy, the health and human services secretary, told the Senate that the changes would primarily affect people fraudulently receiving benefits and 'able-bodied male workers, males, who refuse to get a job.' Work requirements are meant to reduce the number of people on the program: Roughly a third of the $800 billion in health-care savings in the GOP's sweeping tax bill would come from the work rules, which would result in 4.8 million people becoming uninsured, according to an estimate from the nonpartisan Congressional Budget Office reported by The Washington Post's Fact Checker. SNAP, the nation's largest food assistance program, already carries work requirements. Able-bodied adults between 18 and 54 who don't have dependents must work at least 80 hours a month to be eligible. Those who don't qualify can only receive food assistance for three months in a three-year period. People can be exempt because of homelessness, being in foster care or for other reasons, or states can apply for waivers if there aren't enough jobs in a region. Research is split on whether SNAP's existing work requirements have the intended effects. Bauer, the Brookings fellow, cited a 2021 study of Virginia food stamp recipients that found work requirements caused a large decline in SNAP participation without a corresponding boost in employment. The food stamp benefits 'are not binding disincentives against labor force participation for a population that overwhelmingly has no income,' the researchers wrote. Republicans have said current policies allow states to exempt too many people from work requirements. The GOP bill would alter the rules, raising the cutoff age to 64. It also newly subjects parents with dependent children ages 7 or older to work requirements, though a spouse in a two-parent household can still be exempt. The bill would also restrict place-based waivers to counties with an unemployment rate of over 10 percent: a bar many areas receiving waivers would not meet. A CBO analysis estimates the changes would reduce direct spending for SNAP by $92 billion over 10 years and push 3.2 million people out of the program. Work requirements are the 'right policy at the right time' for those in need and will stop able-bodied adults from being 'idle and disengaged,' Rollins, the agriculture secretary, said in a statement. The path for shifting housing policies is less clear. Most of the nation's 3,600 public housing agencies do not have work requirements. But about 140 are part of a narrow program called Moving to Work that gives local authorities room to test a range of rules that are not usually permitted, including those to boost self-sufficiency. Housing authorities, nonprofit groups, property managers and tenants are eager for details on whether work requirements will be mandatory, how many hours of work would be required and who would be exempt. The HUD official briefed on the matter told The Post that 'everything is on the table' and noted that the White House's proposal for a new two-year cap on rental assistance was another way of preventing long-term dependency. In 2024, nearly half of non-elderly, nondisabled households receiving HUD assistance did not include anyone who worked, said the official, citing internal data. Other research differs. The Center on Budget and Policy Priorities found that based on 2022 data, 60 percent of working-age, nondisabled households receiving HUD rental assistance in 2022 included at least one worker. The HUD official said the administration also supports policies that shift power to local authorities and lets them decide which approaches are best. Within the Moving to Work cohort, the official said around 40 public housing agencies already have work requirements, are implementing them or plan to soon, and that such requirements often improve household incomes and employment. Opponents say an increase in work requirements would fall heavily on people who already have a harder time getting work, keeping steady housing or accessing health care. And they say the loss of benefits would be even more extensive given planned cuts to major services. For example, the White House budget proposal would significantly cut rental assistance programs for the fiscal year beginning in October, in part to shift more power to the states. It is unclear whether those cuts would be achieved through work requirements, since HUD's plans are still in flux. That could amount to millions of people losing aid whether they work or not, since many states won't be able to cover those losses. 'What this indicates is that the driver behind this policy isn't this goal of helping people to advance economically,' said Will Fischer, senior fellow and director of housing policy at the Center on Budget and Policy Priorities. 'The driver is they're trying to cut what they are spending on these programs.' A large share of welfare recipients have jobs. About 32 million people who worked in 2023 got health coverage through Medicaid or food assistance through SNAP, according to a CBPP analysis of census data. In theory, new work requirements shouldn't jeopardize benefits for these recipients. But advocates and left-leaning economists say such requirements do sometimes have that effect - in part because enforcing the rules means enough new administrative burdens that people fall through the cracks. In Georgia, for example, just 12,000 of nearly 250,000 newly eligible recipients received Medicaid after the state implemented work requirements. That was in part because people who worked had a tough time proving it to state officials or their work didn't meet certain qualifications. Finally, those against the policies say even people with jobs sometimes need help making ends meet - so pushing recipients to work wouldn't necessarily solve their household budget problems. Homelessness is worsening among the employed, and inflation often falls hardest on poorer people. At Los Angeles's Downtown Women's Center, which works to end homelessness, regular job training programs are some of the most popular offerings, chief executive Amy Turk said. But even those with jobs need help. A report found that in 2022, nearly 30 percent of homeless women in Los Angeles County were working for pay. Monthly incomes averaged $1,186. In Los Angeles County, though, the average rent is more than $2,000. Analysts at left-leaning think tanks, and some researchers who have studied work requirements, say supporters of the policy have it backward: Health insurance, stable housing and access to food make it possible for people to find work and remain employed. They point to Arkansas, the first state to enact work requirements for Medicaid, as a key example. In 2018, the state implemented its work mandate, which led to 18,000 people losing insurance before a judge in 2019 struck down the requirements in a lawsuit brought by three nonprofits on behalf of some Medicaid recipients. One 40-year-old man lost health coverage after incorrectly reporting the details of his employment and could no longer afford his medication. He suffered complications from chronic obstructive pulmonary disease, lost his job and struggled to find work again. Others worked odd jobs that did not always allow them to meet the 80-hour-a-month requirement, like a landscaper who struggled to get work in rainy months. 'You cannot conclude that work makes people healthier,' said MaryBeth Musumeci, an associate professor of health policy and management at George Washington University's Milken Institute School of Public Health. 'You need to be physically and mentally healthy enough to work, and particularly for poor people, the types of jobs they are doing can create health problems.' Leaders of Opportunity Arkansas, a conservative policy group, said the state's data shows that most people who lost insurance did so because their incomes rose - exactly the goal of requiring work. 'If Congress is serious about restoring Medicaid as a safety net for the truly needy - not a long-term program for able-bodied adults - then policies that encourage work and self-sufficiency, like the one Arkansas implemented, need to be part of the conversation,' J. Robertson, the organization's public affairs director, said in an email. - - - Jacob Bogage contributed to this report. 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Pre-Markets Slightly Lower Ahead of Open; JOLTS, Earnings to Come
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Fox News
20 minutes ago
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CNN polling expert marvels at collapse of Democratic advantage with middle class in Trump era
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