A Wall Street Transcript Interview with Dana Hambly, CFA, Research Associate on the Health Care Services Team with Stephens Inc.: Obamacare Delivers Value to Senior Housing REITs

Wall Street Transcript

67 WALL STREET, New York - August 1, 2014 - The Wall Street Transcript has just published its Medical Real Estate Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: REIT Access to Capital - Affordable Care Act and Reimbursements - Hospitals, Senior Housing, Skilled Nursing and Acute Care - Medicare and Medicaid Reimbursements - Consolidation Activity - Health Care REITs - Medical Office Real Estate

Companies include: Brookdale Senior Living Inc. (BKD), Emeritus Corp. (ESC), The Ensign Group, Inc. (ENSG), Five Star Quality Care Inc. (FVE), Capital Senior Living Corp. (CSU), HCP, Inc. (HCP), Air Methods Corp. (AIRM), Hanger Orthopedic Group Inc. (HGR) and many others.

In the following excerpt from the Medical Real Estate Report, an expert analyst discusses the outlook for the Healthcare REIT and other healthcare sectors for investors:

TWST: Let's start with an overview of your coverage universe.

Mr. Hambly: Broadly speaking, I cover health care providers and services. My particular group is a little eclectic; we'll cover anything from physician practices to air ambulance to inpatient behavioral health, and then we do, of course, cover the senior housing operators as well as a couple of a skilled nursing operators.

TWST: Since we last spoke a year ago, has anything significant changed for the industry, such as new trends or a shift in investor interest in the space?

Mr. Hambly: I would say health care in general has had a lot of investor interest the past couple of years. Health care was one of the best, if not the best, performing S&P sectors last year, and we're seeing that trend continue again into this year. I think not that much has changed from last year.

When we look at some of our coverage universe, of course the Affordable Care Act is driving some investor interest, the theory being that as more people gain insurance it's a double benefit for some providers; one, where previously they weren't being paid for their services, now they'll get some sort of reimbursement, and two, those who may not have been using services in the past, if they've gained insurance, are more likely to become consumers of health care. So those are both positive trends for providers.

Of course, we knew about that last year, but there was a lot of uncertainty still with how the exchanges would unfold and how many people would gain insurance through Medicaid. It's still up in the air, and you'll see conflicting estimates of the number that have received insurance. The Administration's initial goal was 6 million to 7 million people. A new survey comes out every day, but the trend seems pretty clear that millions of new people have gained access to insurance, and so there's a little more certainty now for investors on that front, and I think that will continue to be a multiyear tailwind for the providers.

On the senior housing front, especially in the publicly traded world, I think you've had a couple of big changes from a year ago. One is Brookdale (BKD) announcing the pending acquisition of Emeritus (ESC), and in skilled nursing you had Ensign (ENSG) recently complete the spinoff of its real estate into a separately traded REIT...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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