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Strategies & Market Trends : Value Investing

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To: Arthur Radley who wrote (35146)	8/17/2009 5:01:53 PM
From: Grommit	1 Recommendation Read Replies (1) of 78698

FVE. I added some more last week and again today. I have enough now. TDude -- cutting rates is different from cutting revenue (or revenue potential). They are clearly trying to keep occy rates up. So try to find another reason not to buy this one (I am serious.) "The primary reason for the decline in this quarter’s net income from continuing operations is our decline in occupancy. Occupancy for the second quarter of 2009 was 86.0%, compared with 86.5% a quarter ago.... Occupancy is still the key here. The occupancy drops that we and the industry have experienced in the past two years appear to be stabilizing... And it looks like health care is the culprit in the admin expenses... "In reviewing our medical cost for the quarter, we found that two-thirds of the increase was due to an unusually large number of health claims exceeding $50,000. We believe that discretionary spending on elective procedures has jumped in 2009 because of employees concerns about the economy, job market and uncertainty about proposed changes to the healthcare system. These costs should decline to normal lower levels during the coming months. Encouragingly, you are seeing a greater utilization of preventive care among our employees with our adoption last year of a consumer-driven health plan. In the coming plan year, commencing in October, we will lower our health plan administration cost by roughly $2.5 million annually offsetting an expected 10% rise in health claim costs related to medical inflation. You have to have a certain amount of trust in mgmt to invest in anything... thanks grommit

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