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Welltower Inc. Message Board

  • FunnieBucket FunnieBucket Jun 20, 2009 4:07 PM Flag

    FunnieBucket Short Thesis

    ok boys and girls, and especially you conjob, pay attention, you asked for it -- it is obvious you longs never do your homework

    before i Shorted this POS, i visited and called competitors of HCN -- there has been a significant drop in occupancy among all the senior housing facilities -- up until June 2008, rents were rising annually at 3-5% -- if you uneducated longs, especially conjob, do your research correctly, you would see that rents are declining significantly

    HCN is a highly leveraged company, so you guys do the math when it comes to calculating its ability to maintain cash flow and dividend -- if the Obama Health Care Plan passes, then the company's three primary businesses are TOAST

    see you all in BK court, so conjob, i will save a seat for you in the front row

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    • i am also short all insurance companies

    • Too much misinformation, funniebucket. Let's look at the facts about HCN, from their 1Q09 Conference Call:

      * As of May 5, 2009, HCN had a $321M cash surplus available to handle all of their remaining unfunded development cost +m their debt maturity in 2010.
      * Unfunded development cost = $593M; 2010 debt: $53M
      * HCN had $19M cash plus $815M available on their line of credit + $133M secured loan from Freddie Mac (already closed in April)

      * Leverage is <39% (debt to undepreciated book value
      * Interest coverage = 4X
      * Fixed Charge coverage = 3.4X
      * Secured debt = 7% of total assets; HCN has lots of additional senior housing that is unsecured and plans to obtain loan proceeds of $200M to $300M this summer

      * Performance:
      * Senior housing, skilled nursing and speciality care had same store revenues that increased 2.5% in 1Q09 versus 1Q08;
      * Independent living same store occupancy was 91% at end of 1Q09 and payment coverage of 1.29X.
      * Assisted living same store occupancy increased 0.4% in 1Q09 to a level of 89%. Payment coverage was 1.56X.
      * Skilled nursing occupancy at the end of 1Q09 was flat at 84%. Payment coverage was 2.25X.
      Medical office building ended 1Q09 with occupancy of 90.2%.
      * Financial:
      Normalized FFO for 1Q09 was $0.81/share, a 3% increase over 1Q08
      Normalized Funds available for distribution (FAD) was $0.76/share, a 1% increase over 1Q08.
      Forecast normalized FFO for the year '09 to be in the range of $3.10 to $3.20 and normalized FAD to be in the range of $2.96-$3.06.

      Last point: No one knows what the health care plan is going to look like but it is highly likely that more money will be spent on health care in the future vs the current level.

      Conclusion: Funniebucket has little basis for his or her comments about HCN being toast.
      With regard to the general REIT market and ownership of common shares of any REITs, I agree with him or her that being long is not such a good idea right now. However, his or her earlier comment about HCN's leverage and potential bankruptcy is total nonsense. Don't believe it for a minute. I highly recommend purchase shares of HCN preferred stock on any pullback.

      • 3 Replies to bairdgs
      • i say we ignore those facts you posted since stock markets trade 9-12 months into the future -- and since i am always ahead of the game, i think we should do what funniebucket says and save ourselves from this catastrophe

        when you buy this stock, you are betting on the future performance of this company -- and there is no future for this company -- and that is why this stock is once again not up on a day that the entire stock market index is up

        you guys gotta be asking yourself, does this guy funniebucket have this stock figured out or not, and so far each time i come on and post something of an opinion, i am met with such resistance, and yet i am the one making the money? -- ok, something ain't right, and it should be sending you a message, but don't take my word for it, take the market's word for it, and that is why the institutions are not accumulating HCN and if anything they are disposing the stock in small enough pieces so that you do not suspect anything

        the con job is in place, and unless you are a member of the elite club, you will not be in on the front runners lunch meeting

        ok folks, try to have a nice day despite your stock is not rallying

        and no i am not going to post any more reasons of why i dislike this company as an investment, i have presented enough information that is public knowledge in which nobody has checked my homework i have done -- this industry is in broad size serious trouble and nobody will be excluded on the next go around to the downside

      • Funny is short the common, obviously, and Stephen is long the preferred.

        Maybe that's a reasonable straddle of sorts.

        I'm short commecial REITs in general, but would be concerned about passage of a massive health care program that would crush taxpayers and potentially benefit health care REITs. It's all speculation, though, whether or not such a bill could get passed.

      • another rough day with HCN? -- you better hope the index rallies so you can sell it at the high around the top we top out before the crash

    • dear funny. Doesn't HCN rent to healthcare services? Aren't they always depedable payers?

      • 1 Reply to okvelland
      • hey ok --

        if the health care service companies have diminishing rent and lower occupancy, how do you expect them to pay HCN the end -- they are only dependable if the their tenants pay

        HCN's ongoing cash flow will not be enough to pay the dividend, so i expect a cut in the dividend as the first line of defense to save the company's balance sheet -- but you know what that leads toward, and that is selling of the common stock -- if you are like conjob, who wants to hang onto his stock and ignore the warnings signs, then maybe it's time to find another person to run your investment portfolio

        with all the new development projects coming on line at the most inopportune time, they will be draining the balance sheet even faster than, and the "dependable payers" will not be able to pay

        i believe this stock will be under 10 dollars in less than a year

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