The last five years have also been real nice. That average total return looks really good against a market that has a negative return over the last five years! That works out to an average of 17 points of alpha during that timeframe.
That three-year return also looks better than a corned beef sandwich: 27.2% per year should have put a nice smile on your face.
Also, nothing wrong with another 18.4% over the last 12 months. How about the fact that the stock was actually up 0.2% in 2008? That was the year the market was down a gut-wrenching 38.5%.
When I compare the stock's performance against just over 2,800 other stocks, it gets very nice "A-" grade.Now, so far we have done nothing but look in the rear-view mirror with this stock. In my book, looking at performance of a stock is very, very important. It gives me a good idea of how capable management is at lining the pockets of the shareholders. We have learned time and time again, however, that valuation is also a very important consideration when analyzing a stock.
OK, so it is not the cheapest stock in the market. A forward PE ratio of 15 is not unbearable. When you consider that you are also getting a 5% dividend, I think you can justify the current valuation of being tolerable. When all is said and done, you have a stock that combines two of the hottest sectors in the market. You have a stock that has delivered great returns to shareholders over the years. Lastly, you have a stock that is not trading at a ridiculous valuation. Out of 2,813 stocks in my database, this stock currently ranks number 330. Make mine corned beef on rye!
At the time of publication Gunderson Capital Management was long HCN. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.