Seniors Housing Weekly Update - Capital Senior Living Outperforms

November 13, 2012


 

November 13, 2012. 60 Seconds with Steve Monroe. With stellar third quarter results, there is a reason why its share price is outperforming the market....

Capital Senior Living Outperforms

Does anyone remember a few years ago when a dissident shareholder of Capital Senior Living was unhappy with the progress of the company and wanted to force a sale?  He fought his way on the board, and a funny thing happened, he actually liked what he saw, and we suspect he is glad management didn’t sell out too early.  Other than the two companies being sold, Capital Senior Living is the best performing seniors housing and care stock in 2012, and keeps on hitting new 52-week highs. Why? Just look at the third quarter, where same community occupancy increased by an industry-leading 180 basis points from a year ago and a whopping 80 basis points from the second quarter this year. G&A expense is below 5% of revenues, and declined to 4.3% in the third quarter. Cash on the balance sheet has doubled since the beginning of the year, and there are no debt maturities until late in 2015. Perhaps they are operating under the KISS theory, keep it simple, stupid, as they are just plodding along, doing what they said they would do. Nothing fancy, except for the results, and they are real.

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