Extendicare Inc (EXE.TO)

Finally sold their US operations getting over $1 billion, which lowered the risk quite a bit. Still has quite a bit of debt. A leader in the senior care industry, making it a great demographic play. Has a lot of upside. Dividend yield of 5.23%.

Extendicare (EXE-T) or Chartwell (CSH.UN-T)? This has holdings both in Canada and the US, but have been selling some of their US assets. Chartwell has a higher percentage of independent living and would be his preference.

Stock vs. Stock. EXE-T vs. CHR.UN-T. EXE-T is more into nursing homes. CSH.UN-T is more focused on retirement care, which is privately funded. He would not be adding to it right now. EXE-T looks like it is trading at a slight premium to its NAV. CSH.UN-T is affected by the 4.5% cap rate that another was taken out at. It would have room to move in the case of a takeover, but is trading rich relative to other REITs otherwise.

Pulled back and sold their operations from the US for about $1 billion. Thinks it has a fair bit of upside plus it has a lovely dividend. Not crazy about the sector.

(Market Call Minute) He likes the business long term and now you have the activitist investors in there stirring things up to gain more shareholder value.

A good business. It has had a bit of lack luster performance over the last couple of years until now when an activist investor has emerged. Seniors housing and nursing homes have been consolidated significantly. Increased share value could surface.

Senior citizens housing. Demographics are good in this whole field as people would be using more and more drugs. They have pulled back out of US and got $1 billion for that.

Didn’t quite fit his portfolio standards, because it didn’t quite have 100% upside. Sold their US operations for $1.1 billion. They are looking to expand in Canada. Thinks management has a pretty good idea of what they are doing. Debt load is still a bit higher than what he likes. He can see this going up to about $14, and perhaps surpassing that. A great play on demographics because the population is getting older. Dividend yield of 6.02%.

Recently sold some US assets, so they are sitting on a lot of cash. They are going to redeploy that cash hopefully to make an acquisition, which will bump up their net operating income. There should be dividend growth after that is done. The stock is probably going to get stuck here until management effectively lays out a plan. He prefers Chartwell (CSH.UN-T) and Amica Mature Lifestyles (ACC-T). He is not worried about the dividend or the balance sheet, just the lack of certainty on their vision.

From a demographic perspective, this is really in the right spot providing assisted-living and nursing home facilities across Canada. They liquidated their US holdings and are focusing strictly on Canada. Has a steady dividend and there is going to be a growth profile here. At some point in time they will make an acquisition with the money they got from the US.

He likes healthcare and the demographics. Population is getting older and this is a leader in the market. Until recently, they were also in the US marketplace, but sold their holdings for $1.1 billion. They redeployed some Canadian assets and recently acquired another company for about $81 million. Also, looking to possibly do some other takeovers. The Ontario government is looking to increase the fees that they pay for the redevelopment of beds, going from $13+ to $16+. The financial statements are pretty good. Pays a dividend of $.04 a month. He could see this potentially doubling. Oxford Park has moved in as activist shareholders buying over 5%, which might light a bit of a fire under management.

Sold off most of their US operations. They’re down to 7 nursing homes and are looking to sell those. Likes this company. It is moving up and pays a nice dividend. Really morphing into a different company since they sold off the US operations.

Exited his position when they sold their US holdings. His concern is that Canada is in a slow growth period, which is putting enormous pressure on governments across the country. The federal government is going to cut the healthcare transfer from 6% a year to a figure that is based on GDP growth with a 3% floor. This means that companies like this that get money through the public purse may be squeezed a little by government cost cutting. Not sure this is a good time to Buy.

It is a positive that they sold the US business. There are still some remaining risks, so be cautious. There is execution risk in redeploying their capital. She doesn’t see a ton of upside.

They are in the process of selling their US operations (closes at the end of this month). They are expanding in Canada. They are a leader in the market. They have a debt load that is a little more than he likes to see. A good payout. He can see it doubling.