Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, senior home operator Sunrise Senior Living (NYSE: SRZ ) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Sunrise's business and see what CAPS investors are saying about the stock right now.
Sunrise facts
|
Headquarters (Founded)
|
McLean, Va. (1981)
|
|
Market Cap
|
$213.4 million
|
|
Industry
|
Health-care facilities
|
|
Trailing-12-Month Revenue
|
$1.4 billion
|
|
Management
|
CEO Mark Ordan (since 2008)
CFO Julie Pangelinan (since 2009)
|
|
Return on Equity (Average, Past 2 Years)
|
(4.9%)
|
|
Compound Annual Revenue Growth (Over Past 2 Years)
|
(5%)
|
|
Cash/Debt
|
$46.5 million / $424.2 million
|
|
1-Year Return
|
39%
|
|
Competitors
|
Brookdale Senior Living (NYSE: BKD )
Assisted Living Concepts (NYSE: ALC )
|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 14% of the 499 members who have rated Sunrise believe the stock will underperform the S&P 500 going forward. These bears include cashsage and TMF10KChallenge.
A few months ago, cashsage warned our community about Sunrise's scary financial position:
[Sunrise] has an illiquid balance sheet. ... It is also loss making. Its stock price may be worthless, even if it becomes profitable again. Debt holders already know that they lost some of their principal. All in all, its expected profitability level is inconsistent with pretending to reimburse the debt load standing on the balance sheet.
As the biggest and most regionally diversified senior home operator, Brookdale Senior Living is one of Sunrise's toughest rivals. The senior living space encompasses a wide range of care options such as independent living, assisted-living communities, and continuing-care retirement communities. Brookdale is a big player in all three. Assisted Living Concepts isn't as large, but specializes in supportive care for seniors requiring 24-hour medical assistance.
According to TMF10KChallenge, Sunrise, and its focus on upscale residential living, may not be the best place for your retirement money:
They have defaulted on their debt and have significant chunks due in 2010 and 2011. In addition, they have fired several key personnel, have suspended all development, and have been hurt by the economic crisis. It could potentially be a turnaround story, but this is a high-risk investment at this point. It seems to me like a well-run skilled nursing (most specialized) chain of nursing homes would be a much better business model, so I will have to explore for one.
What do you think about Sunrise, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
RSS Headlines
Fool UK