Wednesday, June 28, 2006

The Growth From Long Term Care

Not too far off, the first wave of baby boomer will start to retire, and of course that will help fuel Sun Healthcare Group's (NasdaqNM:SUNH) growth in the long term, that in conjunction with the growth in long term care insurance products.
This is a smallcap long term healthcare provider which recently went through a restructure. It seems to have worked because the earnings are growing again. Trading at $8.88, they are currently doing $48 in revenue per share. That means its trading at 0.28 x sales. I think margins should expand as demand for these services grows, allowing SUNH to convert more of that revenue into earnings. The main catalysts for that growth being an older population which now has the means for pay for that care (long term care insurance).

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