Summary
- Seeking Alpha contributor Beyond Saving recently posted a very bearish case for OHI, based on its fundamentals.
- My site, using a different approach, estimates a positive, but below-market, return for OHI over the next six months.
- In the event my site is wrong and Beyond Saving is right, I present ways bullish OHI shareholders can stay long while limiting their risk.
- Looking for more? I update all of my investing ideas and strategies to members of Bulletproof Investing. Get started today ยป
The site of OHI operator Maplewood Senior Living's new Manhattan retirement home (via City Realty).
Omega Healthcare: Beyond Saving?
Seeking Alpha contributor Beyond Saving warned recently that, given the levels at which Omega Healthcare's (OHI) shares are trading, they are at significant risk due to the company's fundamentals. His article is worth reading in full, but his conclusion in particular put his bearish case in stark terms:
"Make no mistake, the government's interest is not in making sure that SNF landlords have pockets full of cash. The government is trying to get higher-quality care without having to spend additional money.
Specifically for OHI's tenants, we know that three of its top-10 tenants have huge problems. Two are behind in their rent, and GEN is a publicly-traded company, so we can see the problems for ourselves.
Despite these issues, OHI is trading like all of its problems are in the past and it has clear skies ahead. I continue to urge investors to proceed with caution, the coast is not clear, and there is no evidence that the "Silver Tsunami" is rushing in to save the day."
My site, Portfolio Armor, doesn't look at fundamentals at all, instead analyzing securities based on their total returns and options market sentiment about them. It's had some success with analyzing OHI in the past, and it currently estimates that OHI will have a positive return over the next six months, as you can see in the circled figure below.
