Shares of real estate investment trust (REIT) Welltower, Inc. (WELL) have climbed 7.9% over the past month. Its property portfolio includes seniors housing, post-acute communities, and outpatient medical properties in growth markets across the U.S., Canada and the U.K.
WELL’s recent fourth-quarter performance was a mixed bag, with its top-line outperforming estimates.
Revenue increased 16.7% year-over-year to $1.31 billion, beating estimates by $43.8 million. Earnings per share at $0.13, on the other hand, fell short of Street’s expectations by $0.02. During this period, the company witnessed 77.7% spot occupancy in its Seniors Housing Operating (SHO) portfolio.
Further, on March 6, WELL announced an expansion of its strategic partnership with StoryPoint Senior Living. The latter is a senior living operator in Brighton, Michigan. WELL has agreed to acquire three distinct senior living portfolios consisting of 2,787 units for a total investment of ~$548 million. StoryPoint will be the operating partner for these properties.
WELL expects these additions to generate significant occupancy, margin, and cash flow growth in 2023 and beyond.
With these developments in mind, let us take a look at the changes in WELL’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Welltower’s top risk category is Legal & Regulatory, contributing 14 of the total 44 risks identified for the stock, compared to a sector average of 8 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Legal & Regulatory risk category.
WELL highlighted that privacy regulations regarding data protection are evolving across the globe and the company may have to incur additional expenses as a result. Additionally, despite best efforts, the risk remains that if WELL is not successful in compliance either due to internal or external factors, then it may be subject to regulatory proceedings, could face administrative and monetary sanctions, or reputational damage. Any of these events could have an adverse impact on WELL’s operations and financials.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in Welltower by 614.3 thousand shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 10 hedge funds. Notably, Ray Dalio’s Bridgewater Associates has a holding worth $3.03 million in WELL.
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