Senior Care investor: Dec 2008 Report (My views)

"Charles" one of the readers of the blog has forwarded the link for Senior care Dec 2008 Report
(not that old) and is supposedly has a negative bias to SRZ.

I personally dont feel that way if you read the report (Link). As they say beauty is in the eye of the beholder... Here are my reasons.

1. There are a number of acquisitions that are reported in the newsletter which is positive for the industry and SRZ (financing is available & there is interest in the investor community).
2. Valuations have dropped for senior care industry (but most of the SRZ properties are managed by SRZ and self ownership levels is at around 20 %) so valuation drop actually should be positive for SRZ and bad for other senior care providers .. this also convinced me that management of properties with minimal ownership levels is the ideal way forward - identification of core competency)
3. This is really interesting.. discounted price has been stated as "50,000 USD" per unit
- SRZ has 54,000 units (as per Reuters) and 52,000 units as per SRZ company website.
- 100% ownership value USD 50,000 x 52,000 = 2.6Billion
- 20% ownership value: 520 million.
- company owns atleast 10% of the communities ( I am sure its more than 10% but its better to be conservative) that would be:
260 million + 468 million (20% ownership for 90% of the units at 50,000 per unit)
- Thats 728 million market capitalization. Current Market Cap is just 81.54 million (CMP:1.60)
- To achieve 728 million market capitalization the stock price should be: USD 14.28 thats a 792.5% return from current prices..

I think my valuation of SRZ as a USD 10 stock is an ultra conservative valuation and anyway you cut it.. SRZ is much more than USD 10 for sure.

We are living in "Interesting Times" and SRZ here is an example of an open opportunity to make some real good long term investment providing great returns for years to come.

Here is the "Link" to the senior care investor Dec 2008 Report. Thanks Charles!!