The Japara Healthcare Ltd (ASX: JHC) share price is rocketing today, up 23.39% to 76 cents a share at the time of writing. Japara shares closed at 62 cents yesterday, but opened at 71 cents a share this morning and have since risen to the current level, giving this company a market capitalisation of $199 million on current prices.
Today’s moves will no doubt offer some relief for Japara shareholders, who have had to watch the Japara share price relentlessly slide over the past 5 years. Back in late 2015, this company was commanding a share price of $3.40, but it has been very much downhill from there.
Japara shares are still down 25% year to date in 2020 on the current share price, and down more than 78% from the 2015 highs. Even so, you only have to go back to September this year to find this company at an all-time low of 34 cents a share. That also means Japara is up 112% since 25 September.
A closer look at Japara
Japara describes itself as “one of the largest and most respected providers of residential aged care and retirement living in Australia” as well as “a leader in the specialist field of dementia care.”
Japara has more around 4,000 people in its care, and more than 6,000 staff employed. The company has a portfolio of 50 homes/centres across 5 states.
Like many aged care providers in 2020, Japara has had a tough year. Its annual general meeting was held last month, in which the company told investors that it reported a net loss of $292.1 million for the second half of FY2020, compared to a profit of $16 million over the same period last year.
In the meeting, Japara also declined to provide guidance for FY21, noting the ongoing uncertainties of the coronavirus pandemic. The company noted that short-term expenses are expected to continue to climb as Japara shells out on staff training, protective equipment and sanitation. It also stated that no further property developments will commence until the pandemic outlook improves.
However, it wasn’t all bad news. Japara also reported that its occupancy rate (as at 25 October) was sitting at 87.6% – the highest occupancy in the industry right now, according to the company.
Why is the Japara share price rocketing today?
It’s been an interesting day for Japara, given there is no major ASX releases or news out of the company. In fact, the last official release from Japara came out a week ago, and told us that one of the company’s directors had just picked up a large tranche of shares.
So what’s going on?
Well, another aged care provider has been in the news yesterday and today – Regis Healthcare Ltd (ASX: REG). Regis shares attracted some attention this morning when they opened 18.3% higher. The catalyst? A takeover bid from Washington H. Soul Pattinson & Co Ltd (ASX: SOL) announced after market close yesterday.
Although the bid (offering $1.85 a share) for Regis was rejected by the company this morning, it appears it has also triggered a sector-wide re-rating. That view was discussed by my Fool colleague Brendon Lau earlier today, who noted that Regis, Japara, and Estia Health Ltd (ASX: EHE) shares have all exploded on this news following some positive broker notes on the subject.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- Why this ASX tech ETF is in the buy zone – February 26, 2021 3:48pm
- Top Shelf (ASX:TSI) share price pops on first earnings report – February 26, 2021 2:15pm
- Why Limeade (ASX:LME) shares are bouncing around today – February 26, 2021 12:37pm