Investing

Medevac Gets a Lift

With luck, you’ll never require the services of Air Methods (symbol AIRM), an Englewood, Colo., company that provides airlifts for people in medical emergencies who can’t be reached by ambulance.

With luck, you’ll never require the services of Air Methods (symbol AIRM), an Englewood, Colo., company that provides airlifts for people in medical emergencies who can’t be reached by ambulance. The company, which does about $500 million in annual sales, doesn’t discriminate between the insured and the uninsured when it’s dispatching a helicopter or plane. About 15% of its business comes from patients with no insurance -- patients from whom Air Methods typically collects next to nothing.

As William Blair analyst Ryan Daniels explains it, every cent that goes to plug that 15% hole, as the number of uninsured Americans decreases, “will go straight to Air Methods’ bottom line.” At $35 in early December, the stock was up 162% from its March 2009 low and traded for 13 times estimated 2010 profits of $2.76 per share. Daniels thinks that trimming the number of uninsured patients could add as much as $1 per share to Air Methods’ earnings.

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