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Opinions Stephen Takacsy, B. Eng, MBA
Extendicare IncEXE.TODON'T BUYApr 28, 2020
$6.75
Stock price when the opinion was issued
$33.84
As of Jun 19, 2026. Market Open.
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DON'T BUY
There's always something that stops him from entering the seniors space in REITs: labour, regulator issues, though again demographics are a positive. That isn't a good enough, though. How will governments with huge debts supplement the entire seniors home space? However, EXE is cheap. This space is too volatile.
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COMMENT
Extendicare has a better chart than Chartwell. It has a head-and-shoulder chart movement. If you take into account the general market sell-off, investors need to be forgiving.
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WATCH
He likes the aging demographics. It has been clawing itself back after problems in the US and high level debt. They are focused on their home care and supply chain businesses. They are trying to now go capital light. He is starting to look at it. It is trading at a discount, relative to peers.
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HOLD
A great demographic pick. He bought in at $7.01 in 2014 and bought in again at $6.62. He liked how they paid down debt and reduced operations in the US. He likes the dividend and thinks there is still good upside -- maybe another 50%. They have been growing organically and by takeover. He would like to see them pay down more debt. Yield 5%
Benj GallanderOwned
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HOLD
He bought more in December. They do have some debt -- a little higher than he likes. The payout ratio is such that the dividend is stable, but won't grow. The demographics are in their favour within senior housing. He is happy to keep holding it. Yield 5.7%
Benj GallanderOwned
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BUY
The activist investor? The activist investor owns 9%. It's a leader in Canada. A great demographic play. Good dividend. This could hit $12-14. He's pleased that EXE has come to an agreement with the activist.
Benj GallanderOwned
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DON'T BUY
This sector is almost as bad as airplanes, because there are government regulations and labour issues (minimum wage) and it's labour-intensive. Also. EXE missed their numbers and hasn't done much in two years. They blew their brains out in the U.S. where they got it. Also--his theory--technological advances and government incentives encourage seniors to stay in home and not enter nursing homes. The whole sector falls shorts.
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BUY
He bought it years ago. Pays 4-cents each month in dividends. He's doubled-down and averaged down. It doesn't have the normal upside for him, but it's a fine demographic play. People are getting older. He sees 50-100% upside. Safe to buy more here, but he wants them to pay down its debt more.
Benj GallanderOwned
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How COVID will effect this industry, retirement homes? He owns Sienna instead. EXE is much more involved in government-funded LTCs. Along with Chartwell, these two companies are under government scrutiny, so they likely do a much better job than private LTCs. Good question how COVID will affect these homes: there may be increased costs to manage the LTCs, and he expects the government to do more oversight, particularly the incompetent LTCs. He prefers Sienna to EXE, because Sienna is a mix of LTCs and retirement homes, while Chartwell is mostly retirement homes, which has more upside but more competitive. Don't buy purely LTCs, like EXE.