Msears ... FVE has performed extraordinarily well this year!!!
I'm not worried about the market... On the u.s side as long as bernake and Obama stay....Mitt would raise interest rates and cut taxes on the top side... Private pay Fve.. Would do o.k on both sides ... Fiscal cliff is a non issue unless mitt wins.... Then anything with Medicare.medicaid... Could get hit harder.... If Obama wins the rally will continue....
Also, I would expect the housing tailwinds and improving fundamentals to more than offset any macro global risk. Domestic focus will be increasingly important. That focus with tight supply, improving occupancy, increasing ADRs, discount to book value, and terrific demographics will drive FVE and the rest of the sector higher. Analysts will also start giving FVE more credit for their leased and managed business as occupancy improves. This business is a cash flow machine over 90% occupancy, and FVE will get there. It is not a question of if, but when.
Deutsche Bank made a bullish call that the sector is still early in the cycle and getting ready to experience improving fundamentals for a prolonged duration. He is 100% right. The turn in the housing sector has been a multi-year event, and the improving fundamentals will grow progressively over the next 5 to 10 years. This tailwind will certainly drive us ahead for at least the next 18 to 36 months. When FVE is over 2x book and trading at a mid-sector EBITDA multiple with the stock in the mid to high-teens, we can start discussing next steps.
Even at $7.50, FVE would still be at a significant discount to the peer group. Mackey & Hoagland have been delivering consistent execution, paring non-core assets, focusing on EBITDA growth, and enhancing balance sheet strength while improving book value. M&H are going to create tremendous shareholder value over 2013 and 2014. I think we will look back at Q3 2012 as the first meaningful quarter of an 8 to 12 quarter run. M&H have started increasingly demonstrating that they are top operators in a great sector.