The Business of Value Investing.pdf

198 The Business of Value Investing

earlier chapter. While the aim of the case studies is to be as simple

as possible (the best valuations tend to be those easiest to under-

stand), they delve into detail when necessary in order to offer value

to both beginners and advanced students of value investing.

Case Study #1: Finding Value in an Unloved Industry

Sunrise Senior Living ( SRZ )

In late 2002 and 2003, shares of Sunrise Senior Living were trading

in the high 20s and low 30s. Many competitors in the assisted

living industry were disappearing due to poor balance sheets and

high costs of capital. Unlike the others, Sunrise appeared to be

well run and in the hands of good management. Not surprisingly,

Mr. Market was disappointed with the entire industry, and Sunrise

Senior Living was being punished as well.

One day when I was driving back home from the airport, I spot-

ted a Sunrise facility in Atlanta, Georgia, and decided to take a look.

I was impressed with the quality of the facility and the people in it.

Once you stepped inside, you had no idea you were in an assisted

living facility. It felt more like a mansion. I began to take a much

closer look at the company to see if any value was to be found.

Note

This case study is based on an investment that occurred in 2002 and

2003. As with all case studies in value investing, the goal is to illustrate
      by concrete facts and examples the value approach at work and
      how it relates to the philosophies set forth in this book. Unless exactly
      specifi ed, the investment qualifi cations of the past are not necessarily
      indicative of investment suitability now. All data used was accurate
      at time of analysis.

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