Worried About Stock Market Crisis? Buy Call Options In Sabra Stock
Sep, 11th 04:53
REITs were priced handsomely through the second half of 2014 and the beginning of 2015. In the last few months, REITs have been re-priced due to the broad market malaise caused by China’s softening economy and the threat of an increase in the Federal Funds Rate by the Federal Reserve.
Healthcare equity REITs should not be impacted by a slowdown in China’s economy and should easily weather any reasonable increase in the Federal Funds Rate.
Sabra Health Care REIT is a Maryland corporation and operates as a self-administered, self-managed real estate investment trust (REIT). Through its subsidiaries, SBRA owns and invests in real estate serving the healthcare industry. SBRA primarily generates revenues by leasing properties to tenants and operators throughout the United States and Canada.
The number of facilities SBRA owns has more than doubled and Funds From Operations (FFO) has more than doubled from $43.9M in 2011 to $103.8M (estimated) as of the end of 2015.
As SBRA continues to grow, we expect acquisition pursuit costs, G&A, and operating expenses will drop as a percentage of FFO and SBRA will be able to increase its dividend at a faster pace.
Considering the overall technical and fundamental outlook, buying call options for this stock appears to be a good strategy in medium to long term.