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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Micah Lance who wrote (57802)	8/17/2016 3:07:07 PM
From: Graham Osborn	Read Replies (2) \| Respond to of 78688

Where are you getting that THC trades at <3x FCF? I have EV around 17B and CFO around 1B, so the ratio has to be at least 17x.

To: Micah Lance who wrote (57802)	8/17/2016 3:38:38 PM
From: E_K_S	1 Recommendation Recommended By Schnullie Respond to of 78688

You might try looking at some of these medical REITs. I have been buying these over the last 18 months They own many types of medical buildings including: Outpatient treatment facilities, Outpatient diagnostic facilities, Urgent care centers, Acute care hospitals, Ambulatory surgery centers, Assisted living facilities, Long-term care facilities, Medical office buildings, Physician’s clinics, Post-acute care hospitals and Specialty hospitals and treatment centers. You need to values these based on Price/FFO (Funds From Operation) and/or Price/AFFO (Adjusted Fund From Operation). I focus on the small caps (less than $500mln) as these have the potential for the largest growth (ie CHCT). I want either Price/FFO or Price/AFFO to be less than the $SPX Forward PE (now around 17x), I also want growth in Revenues and/or FFO to be >= to the Price/FFO. For a more stable and much larger REIT you might look at OHI. The company expects full-year funds from operations in the range of $3.36 to $3.40 per share. $37.00/$3.40 = 10.88x and covers their 6.5% dividend. The problem is they are not growing at 10% but they cover their dividend by over 1.5x (last time I checked). I recently sold DOC as their Price/FFO was over 23x and their growth in revenues was only at 21% (QoQ) and did not think their 4.2% dividend was competitive w/ others that had similar growth yielding over 6%.. If there is a Clinton president and new monies are targeted to to this sector both Price/FFO and Revenues s/d continue to grow. You need to watch out for exposure to SNF (skilled nursing Facilities) as Gov. reimbursements might not be as liberal in the future. OHI has some exposure to SFR's and that may be why it is only selling at 10x Price/FFO. I like the sector as values are easy to determine, FFO's are published in every earnings call, and the smaller REITs describe their new investment projects (including expected Cap rates) so you can estimate future growth if/when they complete their new projects. It's very transparent to determine value and all revenue streams. Good investing EKS