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Five Star Quality Care Inc. Message Board

  • mktstudent2 mktstudent2 Apr 2, 2013 5:06 PM Flag

    Question to RT to regarding article mentioned by wyldfun

    Hi RT
    As a follower to your posts since SRZ era, I would very much like to hear your thoughts on the article mentioned by wyldfun titled "Five Star Quality Care Gets No Stars (For Shareholder Friendliness)".

    Please note that this is an article published back in 2010. But I am afraid most of the issues are unchanged. for everyone's convenience I will attempt to copy/paste its contents here:
    Five Star Quality Care Gets No Stars (For Shareholder Friendliness)
    Passive minority stock investors can realize value in a few different ways. These include the payment of dividends, share repurchases, debt reduction, acquisitions, business growth, resource conversion, mergers, buyouts, change in control and market price appreciation.
    A corporation's primary obligation is to its owners, the shareholders. In privately held businesses, any free cash flows are available to the owners in a very real, tangible way. However, passive minority investors must rely on management to realize investment value through one of the methods listed above.
    Five Star Quality Care (FVE) is in the sweet spot of the senior living communities industry, with approximately 69% of its 2009 revenues coming from private payment resources and the balance from Medicare and Medicaid. It should benefit from favorable demographic trends, but without being substantially dependent upon politically-sensitive government programs that put constant pressure on margins.
    It is important to understand the history of FVE. FVE was spun-off from Senior Housing Properties Trust (SNH) in 2000. SNH is managed by REIT Management & Research, or RMR, which is majority-owned by Barry Portnoy. Portnoy has significant ownership and involvement in a web of real estate entities. Portnoy and RMR have ownership and/or management in FVE,

    Sentiment: Buy

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    • RT to mkstudent2:

      With regards to the article that you have referenced, you need to know there is a purpose to the comments as posted here by wydfun. What I'm saying is that wyldfun tends to play both sides of this game, the shorting game and the short term investing game - - - and its done in a timely manner to promote his advantage. In truth and from my vantage point, FVE does well when it comes to shareholder friendliness. I see no problem there that would discourage investors from taking a good solid position in the company either from a short term or long term standpoint. The bottom line here is that you have to be very careful what you read and assume here. If you do your own due diligence on FVE as it applies to shareholder friendliness, I'm quite sure you will see my point of view.

      Cheers and good investing,

      Sentiment: Strong Buy

      • 1 Reply to retiredtechie
      • RT, We both know I play the short term, but please do not think I am trying to manipulate a stock by posting on a yahoo message board. There are not enough readers on here to even budge this stock. There is a reason FVE has taken a long time to realize what would appear to be it's value. When this happens, it is more than just an oversight. Part of doing one's "due diligence" is knowing why.

        Oh and by the way, has it ever crossed your mind that I may not be a "he"? As always, be careful with your assumptions because it exposes your bias and prejudices.

    • The concluding statement was: Taking all of these factors into consideration, it's difficult to see how passive minority investors can expect to realize any value creation in shares of Five Star Quality Care. Unfortunately, it might be a situation in which Five Star exists only to serve its landlord, Senior Housing Properties Trust, and Barry Portnoy's REIT Management & Research.

    • You need to add to your post to get to the concerns presented in the article.

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