THC expecting $1 billion in cash inflow from asset sales, including 600M from GA hospital sales. With EBITDA of $2.5 billion, THC has flexibility to either delever or do stock buy back. Since market is slamming the stock for being too levered, probably makes more sense for them to delever and postpone buybacks.
BKD falling off a cliff just as oil/nat gas prices plunge. Doesn't the warmer weather mean less use of heat, which is already cheap from the mild winter? In prior years, brutal winters and high flu season hurts occupancy rates, so does this warm winter now benefit occupancy rates? Overall, I would think energy costs would be drastically lower this year along with better occupancy helped by the mild weather.
There is a rate adjustment for oil prices, but not sure 100% is passed on. However, the oil price decline should provide more room to raise electricity prices without being incrementally burdensome for the consumer. Either way, lower oil prices are a benefit to the discussions of options for PREPA going forward.
PREPA's input for electricity is oil and with oil plunging like this, that means hundreds of millions in savings. This can only be good for PREPA finances and with a small price hike on electricity rates, the combination of the two should go a long way to alleviate liquidity concerns.
With such a low CFFO and trading below real estate value, share buyback will likely be announced over any acquisitions of other senior nursing facilities. The returns they can get by buying their own stock is more compelling then growing via buying smaller operators...
No news and BKD is in a fairly safe and steady business not impacted by oil prices or rate hike. Why would it fall off a cliff like this. Expected to have cash flow per share of in the high $2 range so trading at like 7X cash flow. I can see oil stocks plunging day after day but a stable senior living play that is focused on the US, where the economy is strong and demographics are favorable, makes no sense to me.
Every analyst out there is in agreement that the real estate alone is worth $20+ per share, not to mention the operations of the business.
Is there something I'm missing? Tax loss selling or hedge fund forced liquidation?