Physicians Realty Trust (DOC) is nearing a key resistance level. If this level is surpassed, a breakout could occur.
DOC is a real estate investment trust in the U.S. healthcare sector. It acquires, develops, and leases healthcare properties to physicians, hospitals, and healthcare delivery systems.
Since healthcare is an essential service, and its tenants lease medical offices for long periods of time, DOC has been able to withstand the stay at home protocols of the pandemic. It currently owns $5 billion worth of medical office real estate and has an addressable market of $250 billion to $300 billion.
The company reported its latest financial results earlier this month. While earnings underperformed estimates, and was down 12.5% year over year, revenue outperformed and was up 2% year over year. Prior to this quarter, the company had a strong history of EPS growth and is expected to resume its growth next year.
DOC has long-term debt of $1.1 billion and cash of only $4 million as of the end of its latest quarter. Its current ratio is also only 0.7. While its net profit margin is 21.6%, its return on equity is quite low at 3.3%.
The stock is also considered overvalued with a P/E of 39.7 and a Price to Sales ratio of 8.9. It has shown relatively flat near and mid-term momentum. It has a “Buy” rating in our POWR Ratings system.
Take a look at the 1-year chart of DOC below with my added notations:
Chart of DOC provided by TradingView
During the past several months, DOC has formed a key level of resistance at the $19 (red) mark. The stock has tested that level a couple of times after its spring rally and has now fallen back down from $19 again. A solid close above $19 should lead to higher prices for DOC.
A long trade could be entered on a breakthrough of the $19 resistance level.
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DOC shares were trading at $17.81 per share on Wednesday morning, down $0.04 (-0.22%). Year-to-date, DOC has declined -0.65%, versus a 14.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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