Seeking Alpha

Jefferies: Doc Fix a boon for health care REITs

  • Already approved by the House and expected to be approved today by the Senate, the Doc Fix delays Medicare payment cuts - originally scheduled to take effect on April 1 - to doctors for a year.
  • "The temporary patch is a near-term win for healthcare providers that have meaningful exposure to Medicare (i.e. Hospitals/SNFs) which should reduce reimbursement related risk in healthcare REIT stocks such as Medical Properties Trust (MPW), Omega Healthcare Investors (OHI), Sabra Healthcare (SBRA), Aviv REIT (AVIV) & HCP," says analyst Omotayo Okusanya. "That said, the temporary patch is just for a year, so conversation about a permanent solution is likely to re-emerge in 2015 Q1."
  • Okusanya also notes HCP is reportedly readying mezzanine financing for Formation Capital's purchase of HC-One in the U.K. four about $900M. This would be the first deal for the company since Lauralee Martin came on as CEO, "and is likely to be a catalyst for the stock given the typically highly accretive nature of mezz financing to HCP’s earnings.”
Comments (1)
  • mjtroll1
    , contributor
    Comments (679) | Send Message
    hcp has definitely outperformed its index (vnq) I liquidated my hcp/vnq long at trendline resistance..will consider reentering on more strength as stock is definitely cheap vs its index on 3yr study
    8 Apr, 09:53 AM Reply Like
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