UBS wants you to buy senior housing and skilled nursing facility stocks before earnings. They call the fundamentals "healthy." The irony writes itself.
These are the companies that house people who can no longer remember their own children's names. The business model is straightforward. Sign a lease. Wait. Collect the estate. UBS looked at this cycle and thought yeah, this deserves your retirement account.
The analyst note praised occupancy rates and pricing power. Pricing power. That's what we call it when you raise rent on someone who physically cannot leave the building without assistance. The free market at its finest.
Skilled nursing facilities are particularly attractive right now according to the report. Skilled nursing. A term that exists only to distinguish itself from unskilled nursing, which I assume is just pointing at the bathroom and hoping for the best.
But here's where it gets good for shareholders. Demand is inelastic. People need these beds whether the stock is up or down. Whether the CEO is competent or not. Whether you bought at the top or not. Grandpa's hip isn't waiting for a technical bounce off the 200-day moving average.
UBS says buy before earnings. This implies earnings will be good. Good earnings in senior care means one of two things. They filled more beds or they cut more staff. Either way someone's family is about to get a call they've been dreading.
The real genius here is targeting retail traders. Some guy who still thinks Robinhood notifications are alpha is about to put his Roth IRA into publicly-traded nursing homes. He'll tell his friends he's investing in demographic trends. He won't tell them he's long the structural deterioration of the human body.
The dividend yield is impressive though. Nothing says passive income like monthly checks funded by someone else's grandma forgetting to chew.
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