NEW YORK (TheStreet) -- Brookdale Senior Living (BKD) was gaining 0.9% to $33.47 Wednesday after announcing pricing of a 19.42 million share spot secondary offering by certain affiliates of Fortress Investment Group.
The company announced the 19.42 million share offering will be priced at $33.00 a share. Following the offering Fortress will no longer own any shares of Brookdale Senior Living. As it isn't offering any shares in the offering, Brookdale won't receive any proceeds from the offering.
Morgan Stanley (MS) will act as the sole underwriter of the offering.
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TheStreet Ratings team rates BROOKDALE SENIOR LIVING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BROOKDALE SENIOR LIVING INC (BKD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BKD's revenue growth trails the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 164.6% when compared to the same quarter one year ago, falling from $3.56 million to -$2.30 million.
- The debt-to-equity ratio is very high at 2.50 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.26, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: BKD Ratings Report