I really wonder whether we will get anywhere even close to $80 even with a takeover. Apart from the low yield and high PE, there seems to be increased tension between the insurers and hospitals, strong wage demands from nurses, and there is an increased push to treat patients at home rather than in expensive hospital beds. People always mention the tail wind from an ageing demographic, but tend to forget the number of day care and overnight clinics which have been built in recent years. Whether private equity would come along and do a deal involving some sort of property leaseback/sale I’m not sure but I suspect the premium paid would be closer to the present rather than the price offered a few years ago. The board has not shown significant change over past years so unfortunately I cannot see them adding any great momentum forward despite the new CEO.
RHC Price at posting:
$40.12 Sentiment: Hold Disclosure: Held
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