Extendicare Inc (EXE.TO) Buy, Sell or Hold

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Extendicare Inc (EXE.TO)

33.84

+0.04 (0.12%)

as of Jun 19, 2026, 8:00:01 pm Market Open.

136 watching

SELL

(Market Call Minute.) A confusing balance sheet.

COMMENT

Nursing homes. Long-term, with the demographics, it should be an awfully good business. Have run into some problems. Have had too much financial leverage. Also recently got out of their big business in the US. Should do well over time. 11% payout is high.

SELL

(Market Called Minute.) Regulatory risks is a big concern.

COMMENT

You don't have to be overly concerned with the US lawsuits. This has long-term care facilities in Canada and skilled nursing facilities in the US. Medicare recently cut reimbursement rates for a lot of the procedures by 11% on their nursing facilities. At these levels, it offers about a 15% return but he wouldn't be interested until it offered him at least 20%-25%. Worth about $8.50.

COMMENT

Has being a poor performer for a long time. Have skilled nursing facilities and short term care in the US and seniors facilities in Canada. Ran into problems last year when the government cut a lot of their funding but they cut their costs and did a good job. Also cut their funding costs significantly.

DON'T BUY

He used to follow it really closely and then decided not to buy it. Usually there is not much difference when they convert unless they cut distributions. This is a great demographic play.

DON'T BUY

In seniors lodging space in US and Canada. They are having difficulties with US portfolio due to regulations and legislation. Prefers Leisure World. If EXE has any more hiccups, the dividend could come into question.

BUY

(Market Call Minute.) Looks like they have turned the corner here.

DON'T BUY

Long-term care facilities in Canada and skilled nursing facilities in the US. Has never been a big holder of this one. You are exposed to risks that you cannot quantify or anticipate.

COMMENT

Had warned they might do something about the government payout ratios and then cut it by 15% or so. Very hard to be comfortable with the US pricing. His guess is that they will sustain the yield.

DON'T BUY

Trades at about 12X AFFO (After Funds from Operations), which is reasonable. The problem is that the payout is about 95%. Of both US and Canadian assets and it is very hard to understand the US regulatory rules. He prefers Leisureworld (LW-T) in this sector, which is all in Ontario and has long-term care facilities with some retirement homes.

COMMENT

Doesn't follow this activity because they have a huge exposure to the US nursing home sector, which has been a minefield of problems over a 15 year period. They are at the vagaries of government policy, which changes rapidly. He is also less favourably inclined to the US. A much better bet would be Leisureworld (LW-T).

DON'T BUY

Nursing homes in Canada and US. This is a very difficult business to operate in. Costs are constantly rising and moving the revenue stream higher is extremely difficult. Management has done a great job in turning this business around. Have cut costs and sold some assets. 10.5% yield is probably sustainable over the next couple of years. Doesn't expect the industry will be seeing any growth pattern over the next couple of years.

BUY

Forming a basic pattern which looks to be a pretty good thing. Healthcare is a good sector to be in. If you buy, put a Stop in below the $7 range.

PAST TOP PICK

(A Top Pick Nov 12/10. Down 28.03%.) Got hit when the US changed their Medicaid policy. Well managed. Now yielding 11%. Good entry point.

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Extendicare Inc (EXE.TO)