Capital Senior Living and Brookdale Still In Price Tank

Stock values still hitting lows, but not cheap enough for big buyers to come in.

I am not sure if you have been following it, but Capital Senior Living’s share price just hit a new low yesterday. In fact, the market value of the company is just $110 million. Think about it, some individual assets have traded at prices above this, and while the $110 million does not include the debt on its books, there have got to be buyers putting pencil to paper. Brookdale Senior Living is not faring too well either.

But they aren’t buying into the low valuations, at least for now. The question remains, if things are not going to be much better six months from now, why buy shares now? You may as well wait, and if the company does not perform, instead of a $3.67 share price, you may be able to snap them up for $2.67. Unless a Dan Baty type comes in and says enough is enough.

Everyone seems to be trying to predict when we will see a meaningful uptick in the seniors housing and care market. Two years ago, it was second half of 2018, then it became second half of 2019, then “sometime” in 2020. What everyone has forgotten is that we are still in the longest economic recovery ever, with a stock market still near its all-time highs. Not to be a Debbie Downer, but what happens if, or when, a major recession hits, and takes the stock market down with it? I guess we will find out how recession resistant we really are.


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