Skilled nursing facility operator Ensign Group (ENSG)
is a good example of a good property in what can be a rough
neighborhood. Almost any healthcare service provider that has to rely
upon Medicare and/or Medicaid will find itself faced with significant
challenges from time to time, as the government tries to contain
healthcare spending while healthcare costs continue to rise. Through
acquisitions and a differentiated decentralized management approach,
though, Ensign has been able to show better growth and profitability
relative to many other skilled nursing service providers.
Now the
question would seem to be whether management can keep up the momentum.
The announced separation of Ensign into two new companies (one focused
on the skilled nursing/assisted living operations, the other a REIT that
will own the facilities) could unlock some value, but it's a one-time
opportunity and Ensign will still be dealing with the challenges of
rising costs and stingy reimbursement in an environment where demand
ought to be growing in the coming years. With that, the shares don't
look like the greatest bargain anymore.
Please follow this link to the full article:
Can Core Ops Take Ensign Group Much Higher?
No comments:
Post a Comment