by The Investment U Research Team

We’ve been talking about Sunrise Assisted Living (NYSE: SRZ) recently, and the potential for some of its competitors to become major threats in this sector. There are only a couple of contenders likely to step up and do just that…

Emeritus (NYSE: ESC) and Five Star Quality Care (NYSE: FVE) are the most likely candidates. These companies run assisted living and nursing home communities for the elderly.

Based on the market capitalization, Five Star is the most undervalued prospect here followed by Sunrise and Emeritus. But all are profitable organizations making their principals quite happy. And like sunrise, the biggest issues these companies face is control of their debt loads.

Now what you need to look at carefully is the number of Alzheimer’s care units that these companies operate. These communities are some of the most needed and profitable divisions of the healthcare facilities sector. And the reason is sadly simple.

In an expensive, assisted-care facility many of the services could be done by a relative or family member. If costs became too much, these individuals could move elsewhere.

Whereas, with Alzheimer’s, these patients require full-time care and don’t have as many options. And that’s not getting into dementia and other unfortunate aspects that come with Alzheimer’s and growing older.

You’ll see more and more communities of all Alzheimer’s-care as our population grows older. And in the regard to our investment prospects above, the company with the largest amount of these could become the industry leader.

View original at: Investment Advice and Investment Research with a Contrarian Point of View

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