On the second "Executive Decision" segment of Tuesday night's Mad Money program on CNBC, Jim Cramer sat down with Debra Cafaro, chairman and CEO of Ventas (VTR) . This healthcare REIT just reported a good quarter and has an attractive dividend yield, so Cramer wanted to talk with management to get a better feel for what's going on.
Cafaro said that this year will be a pivotal year to return Ventas to growth. The company is relying on several building blocks to do so: "powerful upside" in the senior housing market, a strong balance sheet for potential M&A and the company's research and development pipeline. It helps that it has a very steady and consistent business from its medical offices unit.
The company's 75 to 81 demographic will grow 4% per year and its 82 to 86 group should grow 3% annually starting in 2020. The company saw this spike in demand coming and the industry embarked on new construction several years ago as a result. VTR is working through that inventory now and there's a powerful cyclical upside coming for the senior housing market. We looked at the charts of VTR earlier this month but another look can only help.
In this daily bar chart of VTR, below, we can see a little softness in the indicators. Prices have traded sideways so far this month but remain above the rising 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has curled over in recent days and suggests that sellers of VTR have been a little more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has narrowed and could cross to the downside for a take profits sell signal.
In this weekly bar chart of VTR, below, we see a more positive view. Prices are above the rising 40-week moving average line.
The weekly OBV line is bullish and the MACD oscillator is too.
In this Point and Figure chart of VTR, below, we can see that an upside price target has been reached. A trade at $65.43 will be another double top breakout and should refresh the uptrend.
Bottom line strategy: Longs should consider raising stop protection to below $61 from below $60.
