Extendicare Inc (EXE.TO)

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 They’ve withdrawn from the US market and got $1.2 billion.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.

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.