Retirement and Nursing Homes

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This sector has taken a hit during the pandemic, and that on many levels. Some of the companies such as Sienna SIA and Extendicare EXE are down significantly compared to pre pandemic levels (there may be others too) They also pay a dividend.
Have you looked at this sector and/or any of the companies?
The population is continuing to age. These services will still be required. Medium to long term, this could represent a good opportunity.
Thoughts folks?

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Asked on March 6, 2021 6:35 am
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Run away as fast as you can.... Mat is dead on right about these stocks.

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Posted by Mike Nicholson
Answered on March 8, 2021 3:42 pm
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Hi Eric,

While yes, it may look like an attractive opportunity, it is not one I am currently interested in. There are still many outstanding lawsuits that the industry is dealing with in regards to their handling of COVID and there is a really big push to move away from privatization (LTCH especially) and put them in the hands of governments - much like hospitals. Secondly, they will all be dealing with additional costs in light of the pandemic and it would not surprise me to see more and more regulation that will inevitably eat into their bottom line.

While yes, with an aging population these services will be required and demand will increase, I see many headwinds ahead. Given this, it is one I'm avoiding. And hey, I can be wrong and they may soar but if you look at SIA and EXE's chart before covid, its not like they were great investments beforehand. If anything, the pandemic has weakened their appeal, not strengthened it.

Obviously these are but my own opinions on that industry and I do think there could be some short-term attractiveness, I don't invest in companies i'm not willing to hold for the long term.

Mat

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Posted by Mathieu Litalien
Answered on March 6, 2021 6:51 am