7/4/2023 0 Comments Stock skyrocket![]() ![]() Those levels just might set the stage for a short squeeze if MPT has some especially positive news on the way. Nearly 19% of MPT's shares outstanding and almost 26% of the stock float were sold short as of April 28. The financial outlook for its tenants also appears to be improving. The stock trades at a historically low multiple to its normalized funds from operations. I agree that the margin of safety for MPT looks attractive. My view is that Hughes and Reddy make some good points. They think these deals "will effectively 'reset' the MPW portfolio" even though the full resolution of matters related to Prospect could take 12 or more months to wrap up. The analysts also predict that investors could regain confidence in MPT once it completes a couple of transactions: the sale of its Healthscope hospitals in Australia, and the sale of three Connecticut hospitals to Prospect Medical Holdings. With its yield topping 15% at the current share price, it is definitely turning some investors' heads. Importantly, the Raymond James analysts think that MPT's dividend is safe. Hughes and research associate Ravin Reddy recently wrote to clients that they believe MPT's "'margin of safety' at current valuations is attractive and has led/will lead to more interest." They noted that short interest remains at an all-time high even after MPT's shares have fallen quite a bit so far this year. His take on the REIT could provide some insight into what the bulls on Wall Street are thinking. Raymond James' Jonathan Hughes ranks as one of the more upbeat analysts when it comes to MPT. Here's a real shocker: The lowest of those analysts' 12-month price targets for MPT is still higher than the current price (albeit by only around 4%.) And the most bullish analyst thinks the stock can soar more than 130% to $18 per share. However, four of those 14 analysts recommend buying MPT right now, and two others have strong buy ratings on the stock. Another six think MPT is a stock to hold. Of the 14 analysts surveyed by Refinitiv in May, one recommends selling the stock, with two others rating it as underperform. To be sure, there is not a broad consensus about MPT on Wall Street. That might seem to be a surprising degree of optimism about a company facing some serious challenges. With its share price hovering around $7.70, that target reflects upside potential of roughly 51%. The average analysts' 12-month price target for Medical Properties Trust (MPT) is $11.62. Yet Wall Street expects this ultra-high-yield dividend stock to soar by 51% in the next 12 months. Short-sellers are betting a lot of money that it's going to fall even more. The stock is down nearly 60% from its 52-week high. The healthcare REIT's revenue and earnings are declining. And I'm talking about one of those truck-broke-down-wife-left-me-and-there-ain't-no-beer-left kinds of country songs. Medical Properties Trust (NYSE: MPW) might provide great material for a country song. ![]()
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