Sun Healthcare Should Prosper on Baby Boomers' Retirement (SUNH)

Jun.29.06 | About: Sun Healthcare (SUNH)

Barry Gitarts submits : Not too far off, the first wave of baby boomers will start to retire, and that will help fuel Sun Healthcare Group's (NASDAQ:SUNH) growth in the long term. That, in conjunction with the growth in long term care insurance products, should really help SUNH take off.

This is a smallcap long term healthcare provider which recently went through a restructure. It seems to have worked, because the earnings are growing again. Trading at $8.88, they are currently doing $48 in revenue per share. That means it's trading at 0.28 x sales.

I think margins should expand as demand for these services grows, allowing SUNH to convert more of that revenue into earnings. The main catalyst for that growth is an older population, which now has the means for pay for that care (long term care insurance).

SUNH 1-yr chart with rolling EPS:

SUNH 1-yr