Chemed Corp (CHE) isn't a company that gets a lot of press. Today is April Fools Day, and I wanted to work in a joke here, bu I just can't. Chemed is a Zacks Rank #1 (Strong Buy) and is the Bull of the Day.

Down the Drain

I have to admit, when I saw the name Chemd, I thought to myself this must be a specialty chemicals company. Instead, I was fascinated to learn that this is the corporate parent of Roto-Router as well as a hospice company.

The synergies didn't make too much sense to me, but I was too excited to write about Roto-Router to take a pass. Plus, I could always make a pun about something or another. The thing that pushed it over the top for me was that it was based on Ohio, and I am, by birth-rite, a Buckeye.

Company Description

Chemed Corporation provides hospice and palliative care services in the United States. It operates in two segments, VITAS and Roto-Rooter. The company offers its services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers. It also provides plumbing and drain cleaning services to residential and commercial customers. Chemed Corporation was founded in 1970 and is based in Cincinnati, Ohio.

5 Straight Beats

CHE has beat the Zacks Consensus Estimate for 5 straight quarters. As I look back the last few beats, they have all been strong beats. The average beat was more than 11% ahead of the Zacks Consensus Estimate in each of the last five quarters but the stock has only moved higher in three of the five beats. The biggest move for the stock came after the 2/17 earnings report as the stock moved higher by 10.5%.

CHE Sees Estimates Moving Higher

CHE became a newly minted Zacks Rank #1 (Strong Buy) on February 20, 2014. As I look back though, I see the stock was only a Zacks Rank #3 (Hold), a #4 (Sell) and a #5 (Strong Sell) over the last several months. Why the move higher to a #1? Earnings estimate revisions.

The Zacks Consensus Estimate for 2014 was sliding lower pretty much all year. As stocks boomed, this conservative play was being circling the drain. The 2014 Zacks Consensus Estimate in April of 2013 was at $5.62, but that was the peak. The number drifted lower to $5.15 in August and then finished the year at $4.84. Only recently has the estimate kicked higher to $5.22.

2015 estimates have only been out for a few months, and analysts haven't really had that long to think about wher the numbers should be. Still we have seen a dramatic increase at the same time as the 2014 estimates popped higher. The 2015 Zacks Consensus Estimate is calling for $5.67.