Since July, shares of Healthpeak Properties (PEAK) have been trending sideways and a key resistance level has formed.
PEAK is a real estate investment trust, which owns a diversified healthcare portfolio of over 650 in-place properties spread across senior housing, medical office, life science, hospital, and skilled nursing/post-acute care.
The company’s life science and medical office segments are seeing strong leasing, primarily driven by higher demand for biotech research and outpatient procedures that have resumed across the country. PEAK also has a strong senior housing portfolio in wealthy markets, so it should benefit from rising healthcare spending amid an aging population.
PEAK had $731 million in cash on hand at the end of the last quarter, which is 458% higher than last year. Its net debt was down slightly from $6.4 billion to $6.3 billion and its current ratio is 1.8, indicating it has plenty of cash to handle any short-term liabilities.
The company had solid revenue growth last year, up 17.6%, but earnings were down 63.8% year over year, and are forecasted to plunge 71.7% next year. The stock also has a pretty high valuation with a P/E of 45.9 and a Price to Sales ratio of 6.5.
In terms of momentum, the stock is up over the last week and month, but is negative year to date and over the last year.
Take a look at the 1-year chart of PEAK below with my added notations:
Chart of PEAK provided by TradingView
During the past several months, PEAK has formed a key level of resistance at the $29 (red) area. The stock has tested that level many times since July, and now seems to be headed back up that way again.
A solid close above $29 should lead to higher prices for PEAK. Therefore a trader could buy PEAK on a breakthrough of that level.
Keep a close eye on PEAK next week, as the stock reports its latest quarterly results on October 28th.
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PEAK shares were trading at $28.82 per share on Friday morning, up $0.35 (+1.23%). Year-to-date, PEAK has declined N/A%, versus a 8.78% 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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