BKD
Brookdale Senior Living Inc
Healthcare, Finance/Real Estate
11/13/2017
Presented
| Date | 11/08/2017 |
| Price | $9.58 |
| Market Cap | $1.78B |
| Ent Value | $6.91B |
| P/E Ratio | N/A |
| Book Value | $7.88 |
| Div Yield | 0% |
| Shares O/S | 186.30M |
| Ave Daily Vol | 3,031,281 |
| Short Int | N/A |
Current
| Price | $6.07 |
| Market Cap | $1.20B |
| Brookdale Senior Living, Inc. engages in the operation of senior living communities. It manages independent living, assisted living, and dementia-care communities, and continuing care retirement centers. It operates through the following segments: Retirement Centers, Assisted Living, CCRCs-Rental, Brookdale Ancillary Services, and Management Services. The Retirement Centers segment includes owned or leased communities that are primarily designed for middle to upper income senior citizens age 75 and older who desire an upscale residential environment. The Assisted Living segment offers owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. The CCRCs-Rental segment consists of large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. The Brookdale Ancillary Services segment comprises of the outpatient therapy, home health, and hospice services provided to residents of many of the firm's communities, to other senior living communities that the company does not own or operate, and to seniors living outside of the company's communities. The Management Services segment composes of communities operated by the company pursuant to management agreements. The company was founded on June 28, 2005 and is headquartered in Brentwood, TN. |
Publicly traded companies mentioned herein: Brookdale Senior Living Inc (BKD), HCP Inc (HCP), Ventas Inc (VTR)
Highlights
With shares of Brookdale Senior Living (BKD) trading down ~20% year-to-date (38% below 2017 highs), the presenter believes the risk/ reward finally favors bulls. BKD management took guidance down when it released 3Q 2017 earnings on November 6th, and this was after it was reported that the Chinese buyer - Zhonghong Zhuoye - who was set to pay $20 per share to acquire the company decided to walk away at the end of October. While the situation is still “messy”, activist investor Land & Buildings remains involved and a number of factors give him confidence that BKD could yield “real returns” over the next 12-18 months. Aside from BKD being the largest publicly traded senior living company and demographic trends favoring its business, there is at least one recent private market value (PMV) data point in the market at $20, there is not a risk of bankruptcy, the strategic review that has been underway could result in an attractive outcome, and based on reasonable multiples to AFFO the stock could trade back to the mid-teens.
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