thanks good observations. reckless prior management has left a lot of work to be done....on the positive side , this management seems ideal to protect the lenders investment. Tehy seem to be on a direct path of repair while maintaining high standards... I plan to give them more time and like to hold over a year for lower tax benefits
Not necessarily Katie.
All the bad news are not on the table and let's not forget BK will be back on the agenda if things worsen in the next few months and December approaches.
Let's look at the pros and cons:
- Revaluations would reveal that SRZ real estate prices are below the booked values (this is clear from the recent sales of communities). Lending banks usually do revaluation of properties at least once a year to see if their loan is impaired.
- Equity stands at less than $50 million in the balance sheet and the company can not sustain another quarterly loss of the magnitude of Q1 and Q2. However, Q3 ends a month and a half from now and I don't see what they can change operationally to make sure there is a profit. I still think they will make an operating loss in the current quarter. Property sales may not help for the reason listed above - cash for those will not offset the bigger fall in assets in the balance sheet.
- HCP litigation - not neccessary to succeed but enough to stir a controversy and potentialy make other JV partners reconsider doing something similar. Clearly, with all its problems, SRZ I would imagine is not the ideal JV partner, so plenty of room for partners to complain and threaten. And that usually doesn't play well with the share price going up even if it's only a threat.
- Macro environment - indices went up 20% in the past few weeks and will have to consolidate as profits are being taken. SRZ will not be able to go up if the markets are going down.
- Settling debt issue would trigger a share price spike.
- If 1 happens, the shorts will have to cover and will artificially increase prices even more.
- Some property sales might yield more than their book value = positive result in the balance sheet.
I hold several nursing home stocks from long ago purchase and see there is activity and comments about the health care bill and hospice which is viewed as beneficial to them. have you looked at this??. as for srz most all of the bad news is on the table and we are stuck with a likly big jump in shorts after the 15 million vlolume surge.
its been a great market however.
My view is that SRZ should consolidate the US market and move out of Europe altogether. Clearly, they've decided to move out of Germany (or were forced out) and I don't think that the UK is running all that great. The problem there is not the perception of SRZ as in Germany but some operational problems - potentially the inability to fill the communities because of the crisis in the UK.
Most of their US communities have occupancies of 87% and above, which is clearly not the case in Europe.
However, the sale of the non-performing communities could prove to be negative news if the sale price is beneath the price they acquired it for with the JV partners.
I am turning bearish on SRZ short term as the results have been disappointing for me. I will wait till September to re-enter as I want to see how the sale of the German properties is portrayed. Some investors here are under the impression that there will be some money coming SRZ' way, whereas I am more inclined to think that the banks are actually selling those and SRZ will see $0 from the sale but will officially announce they've completely lost all the equity there as soon as the sale is finalized.
Of all the posters here, you seem to have the most insight. Thanks for the
the overview of the overseas operations.
Question, do you see a sale in the near future for this company? Debt aside, which is a huge problem, their branding is second to none and I do think that has a lot of value. I also think that while Euro ops are a problem, thy can extridite themselve from those and perhaps sell some of their properties here to payoff the line of credit, and then move forward with a sale.
Same goes for Europe - UK and Germany (although SRZ will soon exit the market and it really doesn't matter what the policies are).
In the UK, the NHS (the national health board) deems SRZ extremely expensive. There are much cheaper versions of SRZ in the country - Southern Cross and BUPA. Inferior in service but much cheaper assisted living rates and care rates. They do get referals from the NHS and do get a lot of patients from the state. Their occupancy is much higher than SRZ because of that.
The problem with SRZ is that they need to maintain their image as a premium brand (and naturally charge a premium for the service) and can't afford to take state patients at lower rates just to fill in the communities.
I suppose the situation is similar in each market they function. During times of crisis all premium goods and brands suffer as there is less people likely to continue paying a premium for a certain service.
In the meantime, I think with indices consolidating in August and with the backdrop of no positive news, my view is that SRZ would drop to about $1.50 and probably recover to over $2.00 once the Q3 report time approaches.
I'm planning to enter again at a much lower price then after taking some profit.
Clearly this is a longer term play but with a significant overhang - the debt issue.
I don't think anything will be agreed on that before end of year and I fear that news of the sale of German properties will not have a positive impact on the SP.
Anyway, GL to those who continue to hold.
My father's monthly care taking bill from Sunrise Senior Living has been around $7500.00/month. I can confirm that Medicare will not pay any portion of that fee unless the resident is under hospice care in which case they will cover certain specified but very minor costs. I know that for a fact as it was one of the first things I checked upon prior to putting him into one of their facilities. Medicare does pay "to the amount allowed" for medical related expenses when needed such as hospital, doctor and clinical services - - - and they do pick up a certain portion of the expenses, again as allowed, under the prescription drug program. So yes, I agree with you, some people here really do need to get themselves educated relative to what Medicare will do for residents in a setting like Sunrise Senior Living. Its basically a "private pay" situation for those that can afford it.
Cheers and good investing,
Wow what a lot of misinformation about who pays for what! Thanks for setting the record straight kwcna. Seriously.
I think you and canarywharf are the only two people on this board that have an honest understanding of the situation at hand.
People -Read up on your Elderlaw to understand the complex strategies required to successfully get any government funding after the first 100 days of Medicare. Even still - there are tons of places that will not accept a Medicare patient for those first 100 days. Understandably - once they are in its a bitch to get them out.
Completely naive to think ANY healthcare reform is going to pay for every boomer to get old & die in a comfortable SRZ home. Ain't going to happen. Period.
With dimwits like these evaluating SRZ's future profit potential, its no wonder that people don't understand the current healthcare debate. Stupid uniformed "authority" figures.
If you can get Medicaid for indigents to pay for Sunrise you really working magic. Medicare has nothing to do with assisted living. Long term care insurance will only pay for the actual care portion and not the expensive room and board rates. You could stay at home and have care come to you for less money than the daily rate at SRZ.
well its going back there real fast everybody is looking at knd srz snh fve right now as the next massive bull market
obama is going to fund these companies with health care reform as americans will never be able to pay for the massive amount of baby boomers going in to the special homes
get on board now if SRZ survives and it moves up in the next couple of months with the group we go to 1000.00 dollars a share and not 1.00