We were supposed to see stocks rise this month, but so far the market is down as are seniors housing stocks.
So what happened to the Santa rally? While we still have a few weeks to go before the end of the year, the markets have been sinking, and almost all seniors housing and care stocks have dropped, with Brookdale Senior Living falling the most, with a loss in value of 12% since November 30. It has now dropped below the psychologically important $20 threshold, and any bad news could add insult to injury. The others are closer to a mid-single-digit decline this month, but with one glaring exception. That is The Ensign Group, which is up just over 2% this month as it keeps chugging along with its small acquisitions of underperforming properties, a game plan most public companies don’t like to follow. But it is one that Ensign seems to excel at.
And despite all the talk of an interest rate rise, the healthcare REITs have actually improved in price. Why? Most likely the expected 25 basis point interest rate increase is already priced in, but the price of oil, and all the ramifications of that, especially if it stays relatively low for several years, will eventually work its way into the economy, and perhaps not in a beneficial way. At least not yet. But it will help keep operating costs down as we head into the winter heating season. And that could be a nice stocking stuffer.
