Public-Private Market Disconnect Continues
Record prices again for skilled nursing facilities in 2015, while some of the larger players still struggle. You know I have been talking about the disconnect in the public equity markets for a few months. Some of the largest skilled nursing companies have seen a rough patch recently, and rougher for some than others. One would think that this would also translate into the acquisition market, where buyers might become more conservative as Medicare lengths of stay shorten amid reimbursement pressure, especially with Medicare Advantage plans. But no, the skilled nursing acquisition market is as strong as ever. After setting a record in 2014, the average price per bed soared again in 2015 to... Read More »Senior Care Valuation Market Weirdness
Asset valuations are out of whack amid continued investor appetite for properties but not companies. I will be honest, sometimes I just don’t get it. I know some of you think I do, but the level of weirdness out there is greater than I have seen in my 30 years covering this sector. In today’s world, you have a group of investors that will pay a publicly traded company $325 million for their owned properties, but the entire company, including the owned properties, has a market value of only $100 million. Healthcare REITs, the most efficient buyers and owners of real estate, are trading at yields that would make a junk bond salesman blush, even though in most cases they have a lot of good... Read More »Senior Care and REIT Stocks Collapse
Brookdale Senior Living and HCP, Inc. were the first to report on fourth quarter earnings, and investors did not like what they heard. I really don’t know what to say about the news that came out yesterday, other than it had a disastrous impact on the market. Investors were hoping for something positive out of Brookdale Senior Living’s earnings call, but what they got was that a sale of the company was off the table, they may do a stock buyback, and slow growth is what can be expected now. The reaction? The stock plunged by 25% in two hours. HCP, Inc. announced its fourth quarter results, which included announcing they were writing down their HCR ManorCare investment by $817 million, and... Read More »Where You Live Matters
The American Seniors Housing Association just launched its www.whereyoulivematters.org website. Last week, the American Seniors Housing Association launched its “Where You Live Matters” campaign (www.whereyoulivematters.org). The website offers an incredible menu of information to help guide seniors and their families to make the right decision for them with regards to senior living options. Independent living, assisted living, memory care, CCRCs? It’s all covered, plus a resource guide with 75 links to other helpful websites. To many of us, seniors housing options are second nature, because we live and breathe it. But for potential residents and their families, it is often a confusing... Read More »Genesis HealthCare Plunges
After falling by 60% in 2015, Genesis shares plunge on revised revenue and earnings forecasts. Talk about a disaster. Just when we thought all senior care stocks had bottomed out, Genesis HealthCare wasn’t done. All the others are now well above their recent lows, but Genesis plunged 32% on Monday and late yesterday was down another 12% when the overall market was up over 200 points. Why? Management revised downward its revenue and EBITDA estimates for 2015, and also revised downward their forecast for 2016. This was the second negative earnings surprise in less than a year, for which values get crucified. But here’s the rub. The share price had already dropped by 31% in December, and had... Read More »Schedule a demo
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