If you believe the ARC is allowable, what was the rationale for...

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Bundy

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25/07/17

12:02

Post #: 26061360
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Originally posted by vmos ↑

Bundy, I am afraid I disagree with your analysis that JHC is going down in price because of the problems with AOG. They are different industries with AOG operating retirement villages while JHC owns aged care facilities caring for people who cannot manage on their own. Aged care facilities are more similar to private hospitals than anything else.

In my view the listed age care companies are falling in price due to the pending Federal Court case dealing with the Asset Replacement Charge. REG and JHC charge this fee but EHE does not. REG and JHC share prices are falling due to fears the Federal Court may uphold the Department of Health position that this fee is not allowed. Then not only will REG and JHC have to drop this fee but they will also have to give back the revenue they have received from the Asset Replacement Charge since its introduction about 18 months age.

Due to market ignorance EHE share price is also falling in line with REG and JHC even though, as I said, it does not charge an Asset Replacement Charge.

I understand the Asset Replacement Charge with REG is around $16 per day on non concessional incoming residents. The court case is listed for October 2017 with a judgement expected a few months later.

I believe (after reading legal opinion) the court will decide the Asset Replacement Charge is allowable and so REG and JHC will continue with this fee. EHE will then introduce this fee giving a nice boost to its earnings.

Depending on the court judgement I consider REG and EHE a win/lose situation. But I consider EHE a win/no lose situation. Consequently I have sold all my JHC but not any EHE

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If you believe the ARC is allowable, what was the rationale for selling JHC?

JHC Price at posting: $2.03 Sentiment: None Disclosure: Not Held
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If you believe the ARC is allowable, what was the rationale for...

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