Extendicare Inc (EXE.TO)

Seniors housing. They have done some divestitures in the US. Profitability has really gone up, and they are in a really good space; demographics. The breakout queued his interest. He has taken a small position of about a 3^rd. A good space to be in.

(A Top Pick Sept 18/15. Up 20.03%.) Sold off their US assets for $1.2 billion, and they still have a little more to sell off, which is going to happen soon. Expanding in Canada in 2 ways. Have done a lot of takeovers and are doing a lot of organic growth. Management is doing a good job. It could pretty much double from the current price. Good dividend yield.

(Market Call Minute) Care for the aged with a real estate component.

(A Top Pick Aug 4/15. Down 0.45%.) He still likes this, and thinks it can double. A major problem was that the payout ratio was over 80% this past quarter, and they have to get that down. At the same time, revenues went up smartly, same-store sales went up about 4%, and the elderly population is growing. They’ve been building facilities and doing some takeovers. Thinks the dividend is sustainable. Yield of almost 6%.

He does not own it because although they have a lot of cash on the balance sheet, it was because of a divestiture. It looks like they are in a position to deploy the cash. He does not know what they are going to buy so he is waiting to see. He prefers CSH.UN-T.

It broke a trend line to the downside. He thinks it will come up and test the bottom of that trend line and then roll over and fail.

Senior Housing. There is a lot of concern, in Ontario especially, on how governments are handling seniors housing going forward. There is a recent report of reducing levels of inspection, and not releasing information, which is all a little bit worrisome. This company seems to be on the entry level, so he prefers others, such as Chartwell (CSH.UN-T) that are on the upper level of quality care. However, there is still a need for entry level care, which this company provides. The stock is cheap and has underperformed its peers.

Has started to take a look at this. An interesting business, but hasn’t dug into any detail on it. Underperformed to a lot of its peers in the last little while. He would classify this as a Hold, possibly a Buy.

(A Top Pick June 19/15. Up 15.49%.) Pays a nice dividend. Stock recently got hit, because the payout ratio last quarter was about 86%, much higher than normal. Recently revenues and the bottom line went up very, very smartly. They’ve withdrawn from the US market and got $1.2 billion. They are expanding in the Canadian market. A demographic play because it is health and Senior citizens’ homes, etc.

Has acted much worse than the other 2 bigger players in the group. Given the dip, this is not a bad entry point.

They are well positioned. The problem is regulations and reimbursements. There will be the dismantling of Obamacare. It is not a bad long term story. There is no trigger in the short term. There is not a lot of near term growth.

Nursing home provider. This has been a great long-term performer. If you have a long-term perspective, this will grow into that.

(Market Call Minute.) A great company. Have sold almost all their operations in the US. Demographically this is a great play.

Extendicare (EXE-T) or Chartwell (CSH.UN-T)? Chartwell has been a very good performing stock, and thinks it is going to continue to do well. It is based on an aging demographics trend, and is the one he prefers.

There was the ‘09 advance, but it did not get to the old high, meaning a relative weakness. He does not think you will get hurt, but he does not see any downside, or upside. It is dead money as far as he can see. At $9.60, it has already topped out.