Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Don't write off Sunrise Senior Living
So what: Operating revenues at the company dropped by about $100 million last year as the company ditched a bunch of Deutsche retirement communities, restructured its land holdings, and made other restructuring moves. The restructuring helped boost 2010 income to $1.72 per share, but as the company readily admits, this happened largely because of "non-recurring factors."
Now what: As far as recurring factors go, analysts are predicting Sunrise will turn around and lose $0.59 per share this year before returning to the growth path in years to come. Estimates call for 18% annual profits growth over the next five years, but it's not clear what number exactly the analysts expect it to be growing from.
That being the case, maybe the best thing investors can do in considering the company is comparing the stock's valuation to that of its peers. At a price-to-sales ratio of 0.35 today, Sunrise looks considerably undervalued relative to peers Assisted Living Concepts
If you're looking to cash out your Sunrise winnings, though, and reinvest them in a company with greater earnings visibility, I'd say the best bet may be little Five Star Quality Care
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Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.