2024-03-18 11:29:28 ET
Summary
- Medical Properties Trust faces complications with Steward. Mr. market has overblown the risks.
- Lease rejection after a period of inflation is usually favorable to a company like this.
- The biggest risk lies in negotiating away the superior position.
- Steward is roughly 20% of the company business. But the chances of a loss of more than 1% of the overall portfolio assets are slim.
- Companies like Steward with mostly secured properties will usually reorganize outside of bankruptcy.
Medical Properties Trust ( MPW ) is a company where I previously noted that I sold the stock. The reason is that the stock entered a period where I did not believe that the stock price would "run away" from me. So far that has been the case. I wanted to get past the 30-day wash sale and have clearly done so. A credit on the taxes for the loss does not eliminate the loss but it is better than nothing. But having followed other companies in a situation like this, it is very likely that the company gets most if not all of what it is owed as long as management evaluated the security properly and did the liens correctly. That, in and of itself is not a big risk. But knowing that the market waits for certainty gives me time to do more investigation of the current situation so that I will be ready to get back in when the time comes....
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Medical Properties Trust: Stock Price Is Not Going Anywhere