QPD In Action – 2Q23

QPD In Action – 2Q23

We put our Quality | Price | Discipline process in motion. This quarter we feature a small cap healthcare stock that fits the bill.

AMN Healthcare Services (AMN)

AMN is a healthcare staffing company. AMN’s core franchise is being the largest provider of temporary nurse staffing (75% of revenues, 17% market share)1. Hospitals are their largest customer base, and they also cater to other provider types such as skilled nursing facilities, rehabilitation centers, outpatient facilities, and schools.


Key Facts

  • AMN is a healthcare services company with the #1 position in healthcare staffing2. AMN also offers temporary physician staffing, professional recruiting, language translation, and vendor management software services.
  • Outsourced staffing (est. $50b market size) is growing faster than overall healthcare spending2, driven by labor shortages across the US and the need for broader hiring solutions. This became especially evident in nursing during the pandemic.
  • In recent years, AMN has also successfully expanded beyond temporary nurse staffing and now offers customers additional essential outsourced services. We believe recurring revenue and operating margins are both sustainably higher than pre-pandemic.





  • Company adheres to Cambiar’s stringent quality underwriting policy, including:
  • Mid-teens returns on capital
  • Excellent free cash flow conversion
  • Low financial leverage
  • Above-average operating margin vs peers



  • Cambiar identified an attractive entry point and valuation characterized as:
  • Stock trading near decade-low forward P/E ratio.
  • Forward EV/Sales ratio of 1x, with a free cash flow yield of +8%.



  • AMN has underperformed over recent months, primarily driven by a normalization in the extraordinary demand in travel nursing created by the pandemic, making forecasting 2023 financials more uncertain.
  • We view AMN’s long-term value proposition as intact; additional service offerings should allow for increased earnings visibility over a cycle.
  • Market structure (e.g., competitive dynamics) remains healthy


Rich Carney, CFA




Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar.  Due to market risk and uncertainties, actual events, results or performance may differ materially from that reflected or contemplated in such forward-looking statements. The information provided is not intended to be, and should not be construed as, investment, legal or tax advice.  Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation.  Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook and are not intended to represent the performance or be an indicator for how the accounts have performed or may perform in the future. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time.

Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts may be based upon third-party sources that are deemed to be reliable; however, Cambiar does not guarantee its accuracy or completeness.  Past performance is no indication of future results.  All material is provided for informational purposes only, and there is no guarantee that the opinions expressed herein will be valid beyond the date of this communication.

1Source: AMN Healthcare 
2Source: Staffing Industry Analysts (SIA)