Extendicare Inc (EXE.TO)

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.

He has no concerns about the split and the cash coming into the company. It has to re-find its Canadian investor audience. He has a low rating on it. The income is solid, but the growth is not really there. Give it a few months.

(Market Call Minute) Thinks it is going higher. They sold their US operations.

Sold their US holdings, so now it is a cleaner story. Has always thought that in the senior space, the simpler the better. They just acquired Rivera Homes which will help stabilize, as it is accretive to cash flow. As long as they continue executing, there is a chance this will continue going further. Valuation is cheap. They can certainly pay the 7%-8% dividend and there is probably some upside potential. He wouldn’t be surprised if institutions start gravitating towards this sector.

Has been very disappointing. CSH.UN-T or LW-T are better bets. There is nothing really wrong except it pales in comparison to others in the sector.

Not a fan. It is a very complex company. They sold their US division at cost and the market did not like it. They are going to start buying back stock with the cash they got in the deal so hold on to it before getting out.

Selling its US businesses and the markets were anticipating a higher price. He would worry a little bit, with essentially a sale of half their business, as he is not sure they are over half the overheads. He would also worry US sale would take away a major upside in the share price. He would be looking at more to selling rather than buying.

This had formed a base from 2012 on and is trying to break through its lid of around $8.50. Volume was also strong indicating that it was a genuine breakout. Looks very healthy. Any kind of a pullback might be a pretty good entry point.