Has anybody noticed the price change in the last week? I bought this this stock one week ago because of a yahoo' originated report suggesting that this stock was underpriced. Since then it has gone up about 8% on heavy volume. Yet, nobody has noticed as far as I can tell.
It's definitely under-followed. I have a very large position in OHI. One concern that Wall Street has is that once Congress starts doing budget cuts, that they will go after Medicare and Medicaid. No one knows if they will, or how the cuts would take place if they did. But all long term care facilities get some portion of their revenue from Medicare and Meicaid patients. So the REITs that specialize in long term care will not be fully valued until that is resolved.
But the deomgraphics are so favorable - and most patients in an ltc facility are not paying with either Medicare nor Medicaid. And my guess is that Congress will be more likely to do something like "reduce the rate of growth" in Medicare-Medicaid financing, than eliminate it. So imo the concern is overblown. I think anything under 30 is a "strong buy."
I think that you are wrong about most patients in a long term care facility not depending on Medicare & Medicaid. In my State about 50% of LTC patients are getting heavily reduced rates from these facilities and those rates are paid by Medicaid. They do have to give up most of their SS benefit leaving a modest allowance for incidentals, but just the same, those patients produce little to no profit for the LTC while enjoying a nice place to live with 24 hour nursing availability, 3 meals a day, transportation and entertainment. They live in relative luxury compared to many low income people in the same age category. Much less costly and more spartan facilities would be more appropriate for folks who never did or could provide for their later years.