W. Walker Jr.

W. Walker Jr.
Contributor since: 2012
I don't think we will see it go below 70
I've been long VTR for a long time and the peeling off of CCP will now make VTR 90%+ private pay and no longer subject to the headwinds of dealing with government payment/payout. From my perspective CON states will have limited growth due to regulated government payment. It will also be at the mercy of each state as they change their systems year in and out.
While I like the idea of CCP I see VTR as the bigger longer term growth play. On average people only spend about two years in a nursing home, or utilize them for short term rehab visits. The bulk of the baby boomers will be entering Independent and Assisted Living or what remains in VTR.
Don't get me wrong I'll be building on my new position in CCP, just with caution.
It's pretty typical for a nursing facility on average; and also represents good upside potential. One issue with the low occupancy is a majority of the facilities are in CON states. The states issue a bed "license" that they pay for regardless if that bed is occupied.
that's actually not a bad idea -- could brand it something like McD's Farm Fresh - organic, non GMO...could be a hit
As a McDonald's lover, eating more than a person should for the past 16 years, I think the idea that changing something will give them better results...may not be the best goal here...
They need to stop trying to reinvent themselves and be who they are, what happened to Coke when they changed?...sometimes things are better left alone.
I continue to return to McDonald's frequently these days, my problem in QUALITY, SERVICE and CLEANLINESS.
I can't find one in Chicago where I get fresh fries, or food, often get sub par service, and it's always filthy.
When I worked there for 7 years, I would have been fired for running such a mess. McDonald's needs to quit screwing around with wraps and all these failed "arch deluxes" (how many stay on the regular menu???) and focus on what they were built on QSC - Quality - Service - Cleanliness.;
Why I don't go to McDonald's more...because I know I either won't get fresh fries, they will forget my sauce, they are borderline rude, the bathrooms are trashed, and when I do get fresh food, usually a double cheeseburger, it's sopping wet with grease because the burger flipper didn't drain the grease before putting it in the tray, (forget to season the burger or over season, oh yea it happens a lot).
McD's is loosing business for these reasons only. Revamping and such nonsense is just spinning wheels. What good is anything covered in crap...
I'll keep on sayin it "GET BACK TO THE BASICS" -
It use to be FAST ACCURATE AND FRIENDLY - I've not seen that since I've managed a store 10 years ago.
Any managers reading this should be walking the store every hour and BATHROOMS are 1st on that list! I don't care how busy you are, you are not that important- check the bathroom and indoor/outdoor garbage #2, then mop for god sake! It takes less than 5 min and you delagate the tasks if your too imporant to do it yourself.
Just my thoughts as a 2-3x a week McD's customer...and share holder - were spinning our wheels because of QSC not the products.
It's important to remember that VTR buys properties from Operators, then turns around and leases it back to them under some of the strictest terms in the industry. The value of the buildings is not at all like the housing market, it's almost 90% based on operational value. So long as there are residents in the community paying rent, VTR will get its lease payment. Should said operator mess up the consequences are swift and harsh. There are 10 other operators more than willing to take over operations, and there are 100 other owner/investors clamoring to buy these properties. That demand isn't going anywhere. If you look at the actual properties that VTR owns...they are usually some of the best in the industry, and there is a reason for that...
I'm not saying VTR is perfect, but Deb certainly has a really good model worked out, and over the last few years took advantage of still historically low rates... Much of the concern is how the capital is stacked, and given how well VTR keeps its ship up to snuff, I have no question that the dozens of senior analysts inside the company itself have hundreds of scenarios worked out to plan their next steps...
Cap Ex issues are going to be the concern of VTR about 5-10 years down the road, but I highly doubt they will over look this issue or trim the hedges.
Just my 2 cents :-)
I have to respectfully disagree, VTR is NOT an operator. Due to the RIDEA structure they are able to own PART of an operations company. VTR does not operate itself, but partners up with trusted and tested operators and then buys part of their company. This way they are able to increase their returns.
In the 7 years I worked in senior housing brokerage I've never seen any property that VTR manages itself.
there never was democracy, the United States of America is a Constitutional Republic. The founding fathers were more than aware of how democracy works and how dangerous it is, simply put, mob rule.
I disagree, we haven't eaten our meal yet, we are still in the process of ordering our next course, and overpaying for that...
Raising the debt ceiling to pay "past bills" is utter nonsense. The only reason they can say that is because they won't cut back on what we are ordering for our next course.
If we did cut back, not raise the ceiling, cut 33% of our budget right away, we would risk taking out nearly $1T from the economy. Awesome right? Our government is so big, that if we even try to shrink it, it will implode the entire country. You guys in office sure have made a mess of things for us.
Not very much, I would argue the VTR is primarily private pay with very little if any exposure to Medicare; same with most it's operators that lease it's buildings.
It is important to remember that VTR does not Manage any of its real estate or profit from the operations outside of the RIDEA model. They buy real estate, lease it at very favorable terms to VTR, and move on to their next acquisition.
I've worked very closely with VTR over the past 5 years and have the ultimate faith in Deb. The recent pullback in conjunction with the Yellen appointment give me hope about the short term share price increasing.
Should we fix our economic problem and rates really do rise, and the Fed stops printing money, then you should be much more concerned with the share price moving lower. Personally I don't believe we will see lower fed fund rates until 2015 and we wont even taper MBS until late 2014, and that's if we don't have to increase QE.
I am Long VTR, I recommend it to my clients, and I have no other connection with the company or stock.
Digi, I think you are spot on, however the "American People" won't do anything about it. You have a much higher chance of seeing the emergence of a one world currency. I think you know somewhere deep down that the Rothschild reach is far beyond the USA and the creation of a global currency would be the final step is their century+ long plan to dominate the world.
Last I checked the rest of the world still buys our bonds, they still buy our goods, and they allow the Federal Reserve Dollar to continue to be the reserve currency. The moment that status is in jeopardy you can count on a huge disaster that will require the world government to issue a global currency, to "save us".
This is not just an "American" problem, the rest of the world, like it or not, is tied to our waist. So long as countries continue to sell us goods in exchange for our $, so long as countries buy our bonds, in exchange for our $, so long as you are required to buy OIL in the Federal $, the world will continue to spin, and we will continue our eventual climb to the fail of all fiat currency. (I think it's possible to kick this can for another 5-20 years,depending on about 1000 different factors)
Anyone who is paying attention will see that a secret war behind the curtain has been raging. China continues to distance itself from the US, recently signing a free trade agreement with Russia, and Switzerland. Laws that disallow the sale of Gold outside the country. China buys oil from Iran in gold, India is buying oil from Iran in gold. African nations have been preparing, EU nations have been preparing.
There is a reason Central Banks are buying Gold like gangbusters. At least that's my thought/opinion.
Interesting that while Goldman continues to advise selling gold, they have been buying up everything their clients are willing to sell. In Q2 Goldman added 3.7M shares of GLD. They are now supposedly the 6th or 7th largest holder.
Right, they were the same company and split, US (MO) and international (PM) companies. As far as financial ties, I am not aware of any but I certainly am not an expert. I would assume there are ties with production etc somehow.
Great article. Personally I prefer PM simply because of constant increasing cig taxes and regulation in US. The growth story for PM in emerging markets is very attractive to me.
I would add that Gorilla Glass in not the end all be all of GLW. Their future products are also thinner, stronger. Willow Glass is not only thinner and stronger, but it's flexible.
Disclosure: I am long GLW
Not to mention it's a sign of affluence if you are smoking Marlboro vs. "el cheapo" brand.
I will consider that, I also have been working on one regarding the rise in student loan interest rates.
IF you think about it, the government can raise the interest rates on the student loans to the moon. Most borrowers are on the "income repayment plan", no matter how much the interest goes up, they borrower pays the same amount as before. Then in 20 years it's forgiven.
Can we say bad practice and our next unfunded liability?
Didn't deflation use to be a good thing? I never thought I heard the day the people would bi**ch about prices falling. Deflation means our goods get cheaper, right? We are becoming more advanced and producing better products, right? It means our dollars buy more goods right?
Well I guess when the US began focusing on promoting inflation as a good thing, the rest simply followed like sheep. Now deflation is the bad guy? hmm
Price does not equal Value.
I'd love to buy more silver, @22$ spot. APMEX is selling 1oz for 26-27$ over spot, a 15% premium... ugh.
Wow, I never imagined it was that bad. I grew up on a dairy farm and it wasn't long before larger "modern" dairy operations crushed all local farmers. The manipulation of "milk checks" caused most smaller family operations to sell out. I go back home today and you continue to see consolidation. Once ag land owned and operated by family and friends has become littered with corporate signage.
If they do sell their gold, it will only be because they have to...
meanwhile central banks around the globe continue to buy gold at record rates...
the decoupling between real gold prices and GLD is just incredible. Have you tried to actually buy gold or silver bullion? I can't buy it for any less than I paid for the past 2-3-4 years (within reason).
Seems to me the only real crash coming is in paper GLD not physical gold. Don't forget there is two mentalities around gold, people who hold forever (preserve their wealth) and others who want to make a quick buck.
1oz of gold would buy you a handmade Italian suit today, 2 years ago, 5 years ago, 10 years ago, 100 years ago, 1000 years ago.... say what you want, gold holds value.
i just got an email from Apmex - "Available Inventory", Friday I could buy a Silver American Eagle for approx $29 a troy oz, today $31....
No warnings, or alarm bells, just an observation. When looking at the Volume, MACD, KDJ, RSI, FSTO, and share prices...well it looks eerily similar to that period before the last bubble bust.
XLU looks a lot like it did in 2007-2008...
try and buy physical, there is a huge disconnect in the paper and physical market... I can't find any physical metals selling anywhere near their paper prices...
sorry ** buying thousands of SFH every MONTH
single family homes...the investment funds of the world are buying thousands of single family homes. One in particular also owns Home Depot. When they buy a home they only refurb it with all HD products. This stock has been on fire since late last year.
There is no slow in sight for investors buying homes and renting them, followed by pooling, and selling off the cash flow to overseas investors....can we say early formation of a bubble?, perhaps. The backlog of foreclosures will push millions more out of their homes in the coming years, they will need a place to rent.
I tell you this, investors are not buying homes to flip, they are buying and renting at record levels. The flight of $$$ seems to be into cash and cash flowing assets. the biggest opportunity WAS/is in single family homes.
Check out Innovation Homes, they are buying absurd amounts of the foreclosures on the market.
If you are in Chicago and trying to buy a home, its next to impossible to compete with these institutions for REOs.
SNFs are extremely difficult to operate. In addition the smaller the building the more difficult it is since the staffing requirements by the state are similar to those of larger communities. It is important to note that ALC does not operate SNFs, they operate Assisted Living Communities some with memory care components. These are two distinctly different types of care.
Since private pay rates are often double that of Medicaid rates it becomes much easier to provide a higher level of care.
The transition from Medicaid to Private can not be forced upon anybody. As operating margins get squeezed any business needs to look at how to unlock value. In the Assisted Living Industry there is a greater potential for greater profits in a private pay setting. Many people are overwhelmed by the state regulations in place for Medicaid patients, so they choose to avoid that completely and offer only private pay. Another downside for communities offering Medicaid is that State budgets are always being squeezed. For example in Illinois there are numerous communities that are still waiting for their reimbursment from the State. In many cases it can take anywhere from 6 months to a year to get paid, meanwhile they still need to provide care. What do they do, they use their reserves, borrow as much as they can, and eventually if they can't keep up they fail.
You feel that this company is in trouble and I can appreciate your concern. The underlying assets of the company far exceed any liabilities they have... So even in a worst case scenario where the company had to liquidate everything, shareholders would still come out ahead, at least according to my analysis.
when covered in mold it's hard to tell the difference ...
I understand your concerns, it is important to point out they had higher occupancy when they accepted Medicaid residents. When they converted to private pay only (which gets much higher rents) their occupancy dipped significantly.
I think slum lord is strong, they don't really have bad care, their biggest problem was meeting the staffing requirements set forth by states. I'm speaking in general of course.
The assisted living business is relatively new (maybe the last 20 years). Back then there was no REITs or national operators, it was all mom and pops. Each company had a model that worked for their operations and built communities that worked for their model. Fast forward to today the industry has significantly consolidated. A majority of these communities are owned by REITs and operated by national operators. Each timeperiod over the last 20 years has seen certain designs in certain states. As states and provides collaborate these designs get consolidated and state regulations look similar (think fire codes).
For ALC the if you look at their NW US communities (OR, WA) you will see what they built was much different than their acquired TX facilities. Those properties were much bigger and appear to have been designed to cater to both Independent Living and Assisted Living. With the crash of 08 Independent living has had a tougher time keeping occupancy up since baby boomers are living in their homes longer. In order to keep the community profitable they convert the IL units into AL units, and add memory care components.