As we have mostly finished with the third quarter earnings results, it does appear that the market continues to bifurcate between the winners and losers. Or, at least, between those who are successfully coming out of the pandemic and those who are maybe struggling to recover more than their peers.
One example is CareTrust REIT which believes that its tenants will be above pre-pandemic occupancy levels by summer 2022, while others are looking at a year or two beyond that, or longer, and that is if they can successfully deal with the labor shortages and increasing wages. If they can’t deal with the labor problems, then their census issues will most likely remain a major headwind.
Look, all publicly traded companies like to put a positive spin on what is happening, they have to. And while some of the numbers coming out are heading in the right direction, there is still a long road to travel before we are back to “normal,” as ill-defined as that may be. And it is not just census. It is margin, runaway costs, and the fear of the next shoe to drop, or whether the creditor will finally lose patience.
More than any other time in the 35 years I have worked in this sector, there will be more separation between those who succeed and those who will continue to struggle. Perhaps it is time to learn from the successes, and then mimic them.
