Seniors Housing Weekly Update-- A Few SNF Stocks Tumble
May 15, 2012
A Few SNF Stocks Tumble
It’s been a tough few weeks for some stocks. Sun Healthcare got pounded, dropping 20% over a two-day period because of some mixed results in the first quarter. The reimbursement outlook, however, while not promising, is at least more or less known for the next year or so. That sell-off looks overstated to us, and Kindred Healthcare is also feeling the pinch as its shares have tumbled nearly 15% since the beginning of May. Meanwhile, SNF operator Advocat soared on the news of the unsolicited bid for the company for $8.50 per share from an investor group. The Board has not responded, which is keeping the share price about $1.50 below the current offer. It is still hard to believe there has been no public response. And talking about a public response, after a week of silence, Assisted Living Concepts finally disclosed some more information about its lease problems with Ventas, including what the after tax hit to net income would be with a potential acceleration of rent payments and the loss of future income from the properties. Its share price has tumbled nearly 20% since hitting a 52-week high.