Stocks & Investing
Fri, August 19, 2011ALC, ADK, SKH, NHC, SRZ, ENSG, Medical-Nursing Homes Stocks Undervalued
Published in Stocks and Investing on Friday, August 19th 2011 at 7:31 GMT by WOPRAI
August 19, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Medical-Nursing Homes sector and these stocks are the most undervalued as of today. ASSISTED LIVING CONCEPTS I-A (NYSE:ALC), ADCARE HEALTH SYSTEMS INC (AMEX:ADK), SKILLED HEALTHCARE GROU-CL A (NYSE:SKH), NATIONAL HEALTHCARE CORP (AMEX:NHC), SUNRISE SENIOR LIVING INC (NYSE:SRZ), ENSIGN GROUP INC/THE (NASDAQ:ENSG) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
ALC ASSISTED LIVING CONCEPTS I-A 12.58 22.31 43.60% Undervalued Medical-Nursing Homes
ADK ADCARE HEALTH SYSTEMS INC 5.09 5.82 12.50% Undervalued Medical-Nursing Homes
SKH SKILLED HEALTHCARE GROU-CL A 4.87 12.06 59.60% Undervalued Medical-Nursing Homes
NHC NATIONAL HEALTHCARE CORP 32.06 59.33 46.00% Undervalued Medical-Nursing Homes
SRZ SUNRISE SENIOR LIVING INC 6.64 16 58.50% Undervalued Medical-Nursing Homes
ENSG ENSIGN GROUP INC/THE 21.62 31.39 31.10% Undervalued Medical-Nursing Homes
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
ASSISTED LIVING CONCEPTS I-A (NYSE:ALC) - Assisted Living Concepts, Inc. operates senior living residences in the United States. It offers general services, such as meals, activities, laundry, and housekeeping; support services, including assistance with medication, monitoring health status, co-ordination of transportation, and co-ordination with physician offices; and personal care services, such as dressing, grooming, and bathing. The company also arranges access to additional services from third-party providers, including physical, occupational, and respiratory therapy; home health; hospice; and pharmacy services. As of January 1, 2010, it operated 211 senior living residences comprising 9,280 units in 20 states. The company was founded in 1994 and is headquartered in Menomonee Falls, Wisconsin. Assisted Living Concepts, Inc. operates independently of Extendicare, Inc., as of November 10, 2006.
ADCARE HEALTH SYSTEMS INC (AMEX:ADK) - AdCare Health Systems, Inc. engages in the development, ownership, and management of retirement communities, assisted living facilities, and skilled nursing facilities, as well as provides home health care services in the state of Ohio. It operates in two segments, Management and Facility-Based Care, and Home-Based Care. The Management and Facility-Based Care segment owns and operates eight facilities; and manages assisted living facilities and nursing homes owned by third parties. This segment also offers development, consulting, and accounting services to third parties. It primarily owns and operates assisted living facilities under the name of Hearth & Home. The Home-Based Care segment provides home health care services to patients while they are living in their own homes. As of December 31, 2009, the company managed 14 facilities comprising 6 skilled nursing facilities, 6 assisted living facilities, and 2 independent living/senior housing facilities, totaling approximately 824 units. AdCare Health Systems, Inc. was founded in 1989 and is based in Springfield, Ohio.
SKILLED HEALTHCARE GROU-CL A (NYSE:SKH) - Skilled Healthcare Group, Inc., through its subsidiaries, operates skilled nursing facilities, assisted living facilities, hospices, and a rehabilitation therapy business. Its skilled nursing facilities provide specialty care, such as chemotherapy, enteral/parenteral nutrition, tracheotomy care, and ventilator care, as well as offers various services, including room and board, special nutritional programs, social services, recreational activities, and related healthcare and other services. These skilled nursing facilities include Express Recovery, a unit that provides skilled nursing care and rehabilitation therapy for patients recovering from conditions, such as joint replacement surgery, and cardiac and respiratory ailments. The companys assisted living facilities provide residential accommodations, activities, meals, security, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support, but not the level of nursing care provided in a skilled nursing facility. Skilled Healthcare Group also offers ancillary services, such as physical, occupational, and speech therapy, as well as rehabilitation therapy service to third-party skilled nursing operators. In addition, the company offers hospice services comprising palliative and clinical care, education, and counseling with a focus on the physical, spiritual, and psychosocial needs of terminally ill individuals and their families. As of December 31, 2009, it owned or leased 78 skilled nursing facilities and 22 assisted living facilities, together comprising 10,954 licensed beds in California, Texas, Iowa, Kansas, Missouri, Nevada, and New Mexico. The company has a joint venture with APS Acquisition, LLC. that operates a pharmacy in Austin, Texas. Skilled Healthcare Group is based in Foothill Ranch, California.
NATIONAL HEALTHCARE CORP (AMEX:NHC) - National HealthCare Corporation, together with its subsidiaries, operates and manages long-term health care centers and associated assisted living centers, retirement centers, home health care programs in the United States. It primarily provides subacute skilled and intermediate nursing and rehabilitative care, senior living services, home health care services, management services, hospice services, accounting and financial services, and insurance services. The company also operates specialized care units in its healthcare centers, such as Alzheimer's disease care units, sub-acute nursing units, and various in-house pharmacies. As of December 31, 2008, it operated or managed 76 long-term health care centers with a total of approximately 9,772 licensed beds; 23 assisted living centers; and 7 independent living centers, as well as 32 homecare programs. National HealthCare Corporation was founded in 1971 and is based in Murfreesboro, Tennessee.
SUNRISE SENIOR LIVING INC (NYSE:SRZ) - Sunrise Senior Living, Inc. provides senior living services in the United States, Canada, the United Kingdom, and Germany. It offers independent living services, which include housing, meals, transportation, activities, and housekeeping, as well as licensed skilled nursing services for residents who require 24-hour skilled nursing care; and determination of the appropriate level of care and service for such resident. The companys assisted living communities also offer a reminiscence neighborhood that provides specially designed accommodations, service, and care to support cognitively impaired residents, including residents with Alzheimers disease and other forms of memory loss. In addition, it provides medication management program, which includes the storage of medications, the distribution of medications as directed by the residents physician, and compliance monitoring. As of December 31, 2009, the company operated 384 communities, including 335 communities in the United States, 15 communities in Canada, 27 communities in the United Kingdom, and 7 communities in Germany, with a total unit capacity of 40,400 units. Sunrise Senior Living, Inc. was founded in 1981 and is headquartered in McLean, Virginia.
ENSIGN GROUP INC/THE (NASDAQ:ENSG) - The Ensign Group, Inc., through its subsidiaries, provides nursing and rehabilitative care services in California, Arizona, Texas, Washington, Utah, Colorado, and Idaho. The company offers nursing and assisted living services; physical, occupational, and speech therapies; and other rehabilitative and healthcare services for long-term residents and short-stay rehabilitation patients. As of December 31, 2009, it owned or leased 77 facilities. The company was founded in 1999 and is based in Mission Viejo, California.
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