60 Seconds with Steve

Senior Care Stocks Swoon….Again

The 2017 Trump rally has left senior care and healthcare REIT stocks behind.

It looks like the so-called Trump stock market rally is continuing into 2018. Weirdly, several senior care stocks shot up in the first day of trading yesterday. Where were investors last year?

Unfortunately, 2017 was about as bad as it gets for our sector. Only one company posted an increase in price, and that was Kindred Healthcare, which is actually exiting our sector with its last sales of its SNFs. So, everyone else declined, and almost all of them by double digits, in a year when the rest of the market posted extraordinary returns. The NASDAQ Composite was up 28.2%, the Dow was up 25.1% and the S&P 500 was up 19.4%.

We had Brookdale Senior Living down 22%, Capital Senior Living down 16%, Five Star Senior Living down 44% and Genesis Healthcare way down by 82%.

The REITs were marginally better, with just MedEquities Realty Trust and Senior Housing Properties Trust eking out marginal price increases. Most of the REITs are trading very close to their 52-week lows, as are most of the providers. Yet many industry professionals remain bullish on the sector’s prospects for 2018 and beyond. Happy New Year, another year of the great value disconnect.  

 

 

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