VTR

Ventas Inc

Finance/Real Estate


Presented:08/07/2019
Price:$70.87
Cap:$26.41B
Current Price:$64.29
Cap:$26.66B

Presented

Date08/07/2019
Price$70.87
Market Cap$26.41B
Ent Value$35.62B
P/E Ratio51.3x
Book Value$29.13
Div Yield3.92%
Shares O/S372.59M
Ave Daily Vol2,297,362
Short Int2.29%

Current

Price$64.29
Market Cap$26.66B
Ventas, Inc. engages in the acquisition and ownership of seniors housing and healthcare properties. The company invests in seniors housing and healthcare properties through acquisitions and leases its properties to unaffiliated tenants or operate them through independent third-party managers. It operates through the following segments: Triple-Net Leased Properties, Senior Living Operations, and Office Operations. The company was founded in 1983 and is headquartered in Chicago, IL.

Publicly traded companies mentioned herein: HCP Inc (HCP), Ventas Inc (VTR), Welltower Inc (WELL)

Highlights

The presenter is bearish on Ventas Inc (VTR), the healthcare REIT with high exposure to senior living facilities. Most of the skepticism from those bearish on senior living facilities has centered around oversupply, while bullish investors point to demographic factors that could yield sustained demand growth. The presenter agrees with the bearish perspective that oversupply will persist as companies continue to build, but further notes that the consensus demand story is overly optimistic. Based on the disconnect between supply and demand, he expects VTR and comparable REITs (e.g., WELL, HCP) to continue deteriorating fundamentally. From a technical perspective, investors must realize that short stories in the REIT segment “take years to develop,” which often causes the shorts to give up and cover their positions. He views the risk/reward profile of his short position as attractive if an investor is patient, as the REIT’s upside is already priced into its ~$70 share price and he estimates ~20% downside to ~$56 per share. The catalyst to downward pressure on the stock will be the company lowering guidance, possibly as soon as the next twelve months. 

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Idea Discussion

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