Monday, June 13, 2011

Ventas Inc. (NYSE: VTR) Q3 2011 Price Target

Recent price: 52.20$
P/E Ratio: 37.73
3 Months Target Price: 57$

Company Description
According to data provided by Reuters, Ventas, Inc. is a real estate investment trust with a portfolio of seniors housing and healthcare properties in the United States and Canada. Its primary business consists of acquiring, financing and owning seniors housing and healthcare properties and leasing those properties to third parties or operating those properties through independent third-party managers. Through its Lillibridge Healthcare Services, Inc. subsidiary, it also provides management, leasing, marketing, facility development and advisory services to hospitals and health systems throughout the United States. As of December 31, 2010, its portfolio consisted of 602 assets, 240 seniors housing communities, 187 skilled nursing facilities, 40 hospitals and 135 medical office buildings (MOBs) and other properties in 43 United States’ states, the District of Columbia and two Canadian provinces. It has three segments: triple-net leased properties, senior living operations and MOB operations.

Confidence Margins
Strong resistance $57.45 (+10%)
Light resistance $56.48 (+8%)
Light support $48.53 (-7%)
Strong support $43.14 (-17%)

As a sector, REITs are currently undervalued by the market and the current dividend yield dampens the fall of the stock. As soon as the broad market recovers, investors should see an increased interest in these stocks. Ventas is profitable and this will allow the stock to sustain it's healthy dividend in the near term.

Entry strategy
For the cautious investor:
Buy the stock for 53$ or less.

For the risk-taking trader:
The November 2011 55$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 145$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 57$.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 57$.

No comments:

Post a Comment