Sunrise Senior Living Inc. (NYSE: SRZ)
Sunrise Senior Living Inc. (SRZ) manages more than 415 communities located in the United States, Canada, Germany and the United Kingdom. The Company’s combined capacity of approximately 42,000 units includes facilities of independent living, assisted living, care for individuals with Alzheimer’s, as well as nursing and rehabilitative services facilities.
Founded in 1981, the Company is headquartered in McLean, Virginia.
|
Share Statistics (20-Oct-09) |
|
FY 2007 |
FY 2008 |
% Chg |
Q2 2008 |
Q2 2009 |
% Chg |
|
| Symbol |
SRZ |
Revenue, $Mn |
1,583 |
1,702 |
7.5% |
411.3 |
380.9 |
-7.4% |
| Current price |
$5.31 |
Gross marg. |
8.10% |
-9.11% |
-221% |
11.8% |
9.69% |
-24.1% |
| 52wk Range: |
$0.27 – 6.63 |
Oper. margin |
-14.2% |
-22.9% |
73.5% |
-6.9% |
-11.3% |
52.1% |
| Avg Vol (3m): |
2,005,710 |
Net margin |
-4.44% |
-25.8% |
525% |
-7.7% |
-21.5% |
157.2% |
| Market Cap. |
262.25M |
|
|
|
|
|
|
|
| Dil. Shares Outst. |
50.62M |
EPS, $ |
1.066 |
-3.574 |
-435% |
-0.122 |
-0.222 |
82.0% |
Source: Reuters.com, SEC Filings.
Financial Summary
| Financial Strength (16-Oct-2009) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 0.42 | 1.52 | 2.52 | 0.76 |
| Current Ratio (MRQ) | 0.42 | 1.64 | 3.03 | 0.91 |
| Long-Term Debt to Equity(MRQ) | 42.73 | 77.24 | 25.27 | 104.42 |
| Total Debt to Equity (MRQ) | 1,284.67 | 92.40 | 33.11 | 151.00 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
One analyst polled by Thomson Reuters rate shares of SRZ a “Hold.”
Analyst Recommendations and Revisions
| 1-5 Linear Scale | Current |
1 Month |
2 Month |
3 Month |
| (1) BUY | 0 | 0 | 0 | 0 |
| (2) OUTPERFORM | 0 | 0 | 0 | 0 |
| (3) HOLD | 1 | 1 | 1 | 1 |
| (4) UNDERPERFORM | 0 | 0 | 0 | 0 |
| (5) SELL | 0 | 0 | 0 | 0 |
| No Opinion | 1 | 1 | 1 | 1 |
| Mean Rating | 3.00 | 3.00 | 3.00 | 3.00 |
Source: Reuters.com
Investment Highlights
During the first two quarters of 2009, Company management has continued to execute its strategy of the past two years of selling non-core assets, unprofitable properties, as well as widening gross and net margins through efficiencies and reduced administration functions.
The Company had $37 million in cash for the quarter ended June 30, 2009, compared with $29.5 million for the equivalent quarter last year. Management expects its cash balances and cash flow to be sufficient to fund operation through December 2; however, scheduled maturities of $138.9 million due within 12 months, of which $79.1 million is due in the second half of 2009 and $59.8 million in the first six months of 2010, will necessitate the sale of additional assets to raise the needed funds.
Some of the Company’s long-term debt, totaling $386.0 million, is presently in default, including $190.2 million relating to the Company’s German communities and $195.8 million in other covenants elsewhere. Management is seeking buyers of some assets through venture partners and other third parties to remain solvent.
The Company also intends to divest from 16 land parcels estimated to be worth $62.7 million with related debt obligations totaling $34.3 million—some of which is in default. Moreover, the Company intends to sell a building and two construction sites at an estimated carrying value of $25.0 million.
The Company is presently seeking buyers of a portfolio of 22 assets with an estimated total value of $185.4 million and associated debt of $173.6 million.
In January of 2009, the Company defaulted on its debt relating to its Fountains portfolio, and expects to be terminated as managers of the property of these 16 communities.
The Company announced a plan in May 2009 to reorganize its corporate cost structure, including cutting costs in administration, vendors, consultants and headquarter space. Under the plan, a total of $20 million will be cut and require 150 positions to be eliminated. SRZ reported that 71 positions have been since eliminated, with 77 positions left to be cut by the first quarter of 2010.
Most Recent Company News
On October 16, the Company announced that it intends to sell 21 assisted living communities in 11 states for $204 million to BLC Acquisitions (NYSE: BKD), the largest capitalized operator of assisted living homes for the elderly.
The Company anticipates receiving $60 million, which will be used to pay down some debt and for working capital to fund continued operations. The transaction is scheduled for November 16.
Technical Analysis
Source: http://stockcharts.com/h-sc/ui?s=srz
SRZ trades above its 13-day moving average. This bullish sign is significant because the 13-day moving average is trending up as well following a breakout at the $2.50 level.
The MACD for SRZ currently indicates a moderately bearish signal. Although, the MACD is below the signal line, a 9-day moving average, the MACD is above the critical level of 0, which implies that the underlying moving averages are trending higher. Overall, the chart is bullish.
Comparative Analysis
|
Company Name |
Ticker |
Price per |
Mrkt. Cap. |
P/E |
P/S |
||
|
Oct-20-2009 |
symbol |
Share, $ |
$ Mn |
2009 |
2010 |
2009 |
2010 |
|
|
|
|
|
|
|
|
|
| Assisted Living Concepts Inc. |
ALC |
22.24 |
264.87 |
n/a |
15.31 |
1.17 |
n/a |
| Brookdale Senior Living Inc. |
BKD |
19.96 |
2,340 |
n/a |
n/a |
1.20 |
n/a |
| Five Star Quality Care Inc. |
FVE |
4.00 |
142.81 |
5.52 |
7.46 |
0.12 |
n/a |
| Long-term Care Median |
|
|
|
14.62 |
n/a |
0.41 |
n/a |
| Sunrise Senior Living Inc. |
SRZ |
5.31 |
262.25 |
n/a |
n/a |
0.16 |
n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARE PURCHASE ACTIVITY
Inside Purchases – Last 6 Months Shares Transaction Purchases n/a 0 Sales n/a 0 Net Shares Purchased (Sold) n/a 0 Total Insiders Shares Held 5.46M n/a % Net Shares Purchased (Sold) 0.0% n/a Source: Thomson Financial Net Institutional Purchases – Prior Qtr to Latest Qtr Shares Net Shares Purchased (Sold) (25,500,000) % Change in Institutional Shares Held 488.4% Source: Thomson Financial Report DisclaimerDO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them. Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research. Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing. Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements. We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable. To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information). We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org. |
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