Clark Street Value is bullish on Five Star Senior Living Inc. (NASDAQ:FVE) stock. Clark Street Value is an individual investor that is focused on finding value and special situation investments. Five Star Senior Living Inc. (NASDAQ:FVE) owns and operates a senior living communities. In the last one year, Five Star Senior Living Inc. (NASDAQ:FVE) stock gained 77.4% and on December 31st it had a closing price of $6.90.
Clark Street Value believes that Five Star Senior Living Inc. (NASDAQ:FVE) stock is currently inexpensive despite a surge in 2020. Five Star Senior Living Inc. (NASDAQ:FVE) has an enterprise value of $150 million and nearly $96 million of owned real estate on its balance sheet, “against $30-35MM of EBITDA, trading under 4.5x EBITDA for a company that is now mostly an asset-lite management company.” FVE’s rehabilitation and wellness services segment, Ageility, is growing rapidly and just needs $20-30k of upfront start-up expenses for each new location, and could be quick to scale.
Clark Street Value added, “What happens to all the cash? Management clearly has their hands full operating the business this year, but once covid passes, what will be the capital allocation plan? It hasn’t been well articulated at this point.”
In Q3 2020, the number of bullish hedge fund positions on Five Star Senior Living Inc. (NASDAQ:FVE) stock increased by about 20% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in FVE’s growth potential. Our calculations showed that Five Star Senior Living Inc. (NASDAQ:FVE) isn’t ranked among the 30 most popular stocks among hedge funds.
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