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JimVanMeerten (58.37)

Sunrise Senior Living improves balance sheet



March 04, 2011 – Comments (0) | RELATED TICKERS: SRZ.DL2

I found Sunrise Senior Living (SZR) when looking for companies recommended by Value Line and screened them on Barchart to find those showing recent price momentum.  Sunrise Senior Living is the nation's largest provider of senior living services. Sunrise communities offer a full range of personalized senior living services, from independent living, to assisted living, to care for individuals with Alzheimer's and other forms of memory loss and nursing and rehabilitative care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents.

The reasons for the price momentum may be explained in the Fundamental Factors below.

Technical Factors:

1 - 96% Barchart technical buy signal

2 - Trend Spotter (tm) buy signal

3 - 6 new highs and up 39.45% in the last month

4 - Relative Strength Index 73.55% and climbing

5 - Trades around 11.53 with a 50 day moving average of 7.99

Fundamental Factors:

1 - SRZ is reducing debt in a big way.  They are doing this by selling facilities but entering into management contracts with the new owners.  They use the sales proceeds to retire debt.  This shift from a ownership to a management of senior living facilities will free it from the risks of  floating debt.

2 - Wall Street brokerage analysts have 1 strong buy and a hold recommendation published

3 - Although revenue is not expected to increase in the near future earnings are expected to rise for the reasons given above

4 - Earning are projected to increase by 53.20% this year, 64.40% next year and continue by 18.00% annually for the next 5 years

5 - Beginning 1/31 the company was put on Stifel's buy list when they initiated coverage

Investor Sentiment:

1 - Motley Fool CAPS members vote 486 to 65 that the stock will beat the market

2 - The more experienced All Stars also vote 182 to 10 in agreement

My view is this is a special situation that takes advantage of the company's debt restructure.

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