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Brookdale Senior Living Inc. Message Board

  • rjmthe1 rjmthe1 Mar 21, 2006 2:23 PM Flag

    Is this for real?

    How can a company that losses money hand over fists, depletes its cash by paying dividends, and is pays way too much for new properties be trading at 3 times revenue?

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    • I remember SRZ took a hit when Bushie started talking Medicare cuts. But they snapped back when it was clarified that SRZ only gets a small % of business through this channel.

    • You know, the insurance reimbursement is a good point. Its so new for us that I cannot make an agrument for or against it... Although it just adds a layer of reimbursement and what an insurance provider pays and what is charged can be two different things.

    • isn't there long term care insurance once can buy that will help pay the bills? I know bkd doesn't rely on medical, but there should be option available for people who can't pay $3,000 per month out of pocket.

      in any case, the quote about the company not releasing gudiance but the sign of a higher dividend is a good one speaks volumes and that is the reason for the 30% increase.

      i should read the sec filings this weekend.

    • Its a sales pitch...We were offered the same when we pursued taking our small little company public if we used XYZ company as the underwriter. These guys make millions taking a company public that they can afford to set up the credit facility. But $330 million is nothing to sneeze at!

    • Completely agree... I've heard that some of units on the top floor of an ALF in New York sold for $2M each! That's just to get in the door and does not include the monthly fee!
      In these instances, its the developers making the $$$, not the operator.

    • We get about $3000/month per unit...we are in small rural communities. I'm sure its a lot higher in the large markets BKD operates in. We experience a 18-24 month fill up and payback in 6-8 years.
      You're right on with the short position. I only looking for a 3-5 dollar drop. I'll cover at $35, maybe sooner if I get a quick $1 or $2.
      There is no doubt BKD is in a growing business via the baby boomers. I just question the funding from those baby boomers in the future. Must people can't afford $3000 month for an extended period, nor will their children be willing to fund. It will also be difficult to increase the monthly rate. There is no doubt the Long investor in BKD is paying for its growth prospects...I just question how it will convert the growth in physical bodies into profit when there will be a funding issue.

    • This tends to make me feel better about this issue:

      "CHICAGO, Feb. 10 /PRNewswire-FirstCall/ -- Brookdale Senior Living Inc. (NYSE: BKD - News) announced today that it established a $330 million credit facility with Lehman Brothers Inc., Goldman Sachs, Citigroup and LaSalle Bank. The facility is comprised of an $80 million working capital line and a $250 million acquisition line."

      These underwriters had the confidence to fund their acquisition spree. I would suspect they poured over the books, etc before doing so.

    • Yes, but that's not a yes to your comments which are IYO. WS focuses on the future not the past:

      Growth + div sounds like a good combo IMO.

      • 1 Reply to floydage76137
      • BKD needs to turn its growth into profit... Right now it looks like a growth trap to me. This is not sustainable and thus I have a short position at $39.10. I also think BKD will do a secondary offering. I don�t blame them; double the IPO price in less then 6 months and need to pay off some of the debt for the grossly overvalued purchases the past few months. But a secondary offering will pressure the current stock price.... Just my opinion, what do I know?

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