Chartwell (Symbol-CSH.UN)

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donnamcc
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Chartwell (Symbol-CSH.UN)

Post by donnamcc »

Need some advice as to best way to recoup losses on this stock (CSH.UN). Have 800 or so bought at 12 dollars.

It's now $3.50 approximately.

The options that have occurred to me are: I could sell, take the loss and buy something else. Or, buy more at current price, keep collecting the dividend, sell when/if it goes up in value. Or, just hold what I have.

Any advice? Other options?

Thanks, this is my first post, I'm a total amateur at the stock thing, but trying to learn.
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Post by investor99 »

When do you need the money?
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donnamcc
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Post by donnamcc »

investor99 wrote:When do you need the money?
Hopefully, barring any disasterous circumstance, about ten years. Oh, and it's in a non-registered account.
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augustabound
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Post by augustabound »

Do the same reasons you bought the stock (trust) hold true today?
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Post by donnamcc »

augustabound wrote:Do the same reasons you bought the stock (trust) hold true today?
Actually, I had no reasons for buying it. It was inherited.

I guess, in actuality, I haven't taken a loss yet unless I "crystallize" by selling.

Thanks for your thoughtful replies. It's an education to be asked these questions.
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Post by SilverVette »

One thing in favour of this and its rival Extendicare (EXE.UN) is the fact that business is not going to suddenly dry up as it might with a shopping centre or an office REIT. Everybody is getting older, last thing I heard, and many of us will be needing those care homes. EXE.UN is down 75 per cent, but rate of occupancy has not dropped. This seems like a good time to buy more.
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Shakespeare
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Post by Shakespeare »

ISTR there was some question whether Extendicare or Chartwell would qualify under the modified REIT rules. Has than been resolved?
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Post by mpav »

I would dump it, as the model is a tough one. People hate to lock in the loss, but in truth you have to think about where you want your money to grow.

The question is if you see growth in the REIT space, or want to pop the money out into another segment.
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Post by SilverVette »

[quote="mpav"]I would dump it, as the model is a tough one. People hate to lock in the loss, but in truth you have to think about where you want your money to grow.

The question is if you see growth in the REIT space, or want to pop the money out into another segment.[/quote]

Like what?
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Post by Arby »

Shakespeare wrote:ISTR there was some question whether Extendicare or Chartwell would qualify under the modified REIT rules. Has than been resolved?
According to the following quotes from their quarterly reports, Chartwell and Extendicare do not qualify for the REIT tax exemption, (and therefore they will both be subject to the trust tax in 2011).
As currently structured, Chartwell does not meet the REIT Conditions and therefore is a SIFT.
Extendicare REIT does not meet the conditions to qualify as a REIT under the SIFT Rules and is therefore considered a SIFT.
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Post by donnamcc »

SilverVette wrote:
mpav wrote:I would dump it, as the model is a tough one. People hate to lock in the loss, but in truth you have to think about where you want your money to grow.

The question is if you see growth in the REIT space, or want to pop the money out into another segment.
Like what?
My question, too. Looks like today isn't the day to make any moves whatsoever!!

Maybe Empire or Metro.
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Post by glennchan »

I've taken a look at the annual report and there are (IMO) some red flags.

Chartwell's website says that Spectrum is an "independent" company. Yet the annual report lists transactions with Spectrum under related party transactions. (It's pretty much the same people running Chartwell and Spectrum.) Hmm....

So, by its own books, Chartwell is *losing* money. Yet it has earned ever increasing management fees. Who would pay so much for management that loses money? Spectrum. Heh. It looks to me like Chartwell is using Spectrum as a vehicle for creating phantom profits.

- Maintenance expenditures are being capitalized as opposed to being an expense. These should be an expense!!! Otherwise phantom profits will be created.


Be careful out there, and do your own homework.
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Re: Chartwell (Symbol-CSH.UN)

Post by nisser »

A lot of people recommend this REIT but it's P/B value is exorbitantly higher than any other REIT out there. It started getting out of hand in 2011 and it is now sitting at 4.6. In the same time frame, it's operating cash flow is only up 30% total and debt to equity has gone from 0 to ~3.5. I do like the space but it seems ridiculously expensive. Any thoughts out there?
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Re: Chartwell (Symbol-CSH.UN)

Post by AltaRed »

I agree with your assessment. Have had this on my watchlist for some time but it is not moving in the right direction any time soon.

It is a classic case of investors running to safety as they have done with other 'safe havens'. This too will pass but it might take another year or two. Once interest rates move up, they will be in a margin squeeze because...... a REIT like this has only so much pricing power (perhaps CPI) in a space fairly crowded with retirement units. Occupancy rates are not as high as they could be.

Added later: There may be something odd about P/B for Chartwell when I compare it to Regal RLC.UN. I cannot imagine Chartwell's assets are that old to have such low book values. NB: Book value is not necessarily a good measure for REITs unless, of course, it is very mature. Per Investopedia:
Our hypothetical balance sheet can help us understand the other common REIT metric, net asset value (NAV). In year 10, the book value of our building was only $500,000 because half of the original cost was depreciated. So, book value and related ratios like price-to-book - often dubious in regard to general equities analysis - are pretty much useless for REITs. NAV attempts to replace book value of property with a better estimate of market value.
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Re: Chartwell (Symbol-CSH.UN)

Post by Wallace »

Chartwell rewards "DRIP" investors with free shares. This seems to me to be a red flag for investors. Most people buy REITS for the dividend. Is this a normal practice for DRIP companies?
Unitholders can participate in Chartwell's Distribution Reinvestment Plan ("DRIP"). Eligible investors registered in the DRIP will have their monthly cash distributions used to purchase Trust Units, and will also receive bonus units equal to 3% of their monthly cash distributions. DRIP offers unitholders the opportunity to steadily increase their ownership in Chartwell without incurring any commission or brokerage fees.
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Re: Chartwell (Symbol-CSH.UN)

Post by pmj »

DRIP discounts are not uncommon for REITs.
Not common for non-REITs, but not unknown - eg BMO gives a discount.
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Re: Chartwell (Symbol-CSH.UN)

Post by FinEcon »

Wallace wrote: 16 Aug 2017 12:38 Chartwell rewards "DRIP" investors with free shares. This seems to me to be a red flag for investors. Most people buy REITS for the dividend. Is this a normal practice for DRIP companies?
Unitholders can participate in Chartwell's Distribution Reinvestment Plan ("DRIP"). Eligible investors registered in the DRIP will have their monthly cash distributions used to purchase Trust Units, and will also receive bonus units equal to 3% of their monthly cash distributions. DRIP offers unitholders the opportunity to steadily increase their ownership in Chartwell without incurring any commission or brokerage fees.
It's an abomination and way to common IMO. Here's a list: https://sites.google.com/site/cdndrips/canadiandriplist
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Re: Chartwell (Symbol-CSH.UN)

Post by 2 yen »

So, is Chartwell still a good hold in the REIT sector? They do have COVID-19 in some of their homes. Their occupancy has decreased this year by about 1% to 89% or so and during the pandemic they are not having potential clients into their facilities for a look around at all. There are two ways I see this playing out once the pandemic is over. One is that new stricter regulations regarding staffing and measures to be ready for disease outbreak will raise their costs not insignificantly to the point that maintaining current dividends may not be possible. Or that they will simply pass on the new expenses to their clients and it will be a wash. I own Chartwell. It is my only REIT holding.

Thoughts?

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Re: Chartwell (Symbol-CSH.UN)

Post by OnlyMyOpinion »

Chartwell has both long term care homes and retirement residences. Long term care costs are regulated and about 50% paid for by the government, while retirement residences are 100% paid by the resident. So Chartwell's ability to easily pass on higher costs is limited to the retirement residences. I'm not sure how many of each they have though.

Added: found it here.
They own largely retirement beds (26,109) versus long term care (3,683).
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Re: Chartwell (Symbol-CSH.UN)

Post by 2 yen »

OnlyMyOpinion wrote: 18 Apr 2020 12:40 Chartwell has both long term care homes and retirement residences. Long term care costs are regulated and about 50% paid for by the government, while retirement residences are 100% paid by the resident. So Chartwell's ability to easily pass on higher costs is limited to the retirement residences. I'm not sure how many of each they have though.

Added: found it here.
They own largely retirement beds (26,109) versus long term care (3,683).
I guess part of my thinking was that the people in retirement beds may be better healed than the general population and might be able to absorb higher fees.

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Re: Chartwell (Symbol-CSH.UN)

Post by Clason »

2 yen wrote: 18 Apr 2020 14:59
OnlyMyOpinion wrote: 18 Apr 2020 12:40 Chartwell has both long term care homes and retirement residences. Long term care costs are regulated and about 50% paid for by the government, while retirement residences are 100% paid by the resident. So Chartwell's ability to easily pass on higher costs is limited to the retirement residences. I'm not sure how many of each they have though.

Added: found it here.
They own largely retirement beds (26,109) versus long term care (3,683).
I guess part of my thinking was that the people in retirement beds may be better healed than the general population and might be able to absorb higher fees.

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Anecdotally, my parents where exploring options for independent living. They are thankful to still be in their own house and now plan to kick the can down the road as long as they can. They aren't differentiating the Covid-19 impact between independent living, semi IL and LTC. Independent living residences have generally been spared, so it is psychological for them. They feel safe isolating at home.

LTC demand should remain somewhat unaffected due to waiting lists, but I know IL and semi IL didn't have long or any waiting lists. If anything, there may be just minor downward pricing pressure for residences.
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Shakespeare
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Re: Chartwell (Symbol-CSH.UN)

Post by Shakespeare »

I'm going to stay in my house as long as I can. My sister feels the same way.
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Re: Chartwell (Symbol-CSH.UN)

Post by par4 »

Me too! I have never found LTC homes to be a good investment from a shareholder's point of view. Maybe for the owners!
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Re: Chartwell (Symbol-CSH.UN)

Post by SQRT »

Shakespeare wrote: 18 Apr 2020 15:53 I'm going to stay in my house as long as I can. My sister feels the same way.
Us too. My mother was in a fairly good, quite expensive “retirement” home for about 6 years until her death last year. I hated the place. It would be a drastic reduction in our lifestyle for sure. Maybe at the “end” I won’t care but I doubt it.

Current thinking is to move into a very large condo with “nurses quarters”. Hopefully we have quite a while to effect this plan.
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Re: Chartwell (Symbol-CSH.UN)

Post by 2 yen »

par4 wrote: 19 Apr 2020 02:46 Me too! I have never found LTC homes to be a good investment from a shareholder's point of view. Maybe for the owners!
Unfortunately, for a number of years, Chartwell was considered (in the business press) a darling for its dividend. I don't recall much chatter at all about raw growth, but they have been slowly growing. My position is small so I'm not overly concerned, but they've already eliminated their DRIP and I would not be hugely surprised if a dividend cut came. A full on suspension would surprise me.

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