Clark Street Value: “Regional Health Properties (RHE) is in a Tough Spot”

Clark Street Value, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. An annual portfolio return of 74.99% was recorded by the fund for the year 2021, versus 28.71% for the S&P 500, and an IRR since the inception of 29.12%.  over the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Clark Street Value, in its Q4 2021 investor letter, mentioned Regional Health Properties, Inc. (NYSE: RHE) and discussed its stance on the firm. Regional Health Properties, Inc. is a Suwanee, Georgia-based self-managed healthcare real estate investment company with a $6.8 million market capitalization. RHE delivered a -14.86% return since the beginning of the year, while its 12-month returns are up by 0.52%. The stock closed at $3.84 per share on January 12, 2022.

Here is what Clark Street Value has to say about Regional Health Properties, Inc. in its Q4 2021 investor letter:

“My other senior housing play is the preferred stock of Regional Health Properties (RHE-A), which briefly attempted a similar out of court restructuring by proposing to exchange the preferred stock for common.  The largest preferred shareholder comically shot it down.  This company is a bit of a mess, they recently had the State of Alabama pull the license of one of their biggest tenants a couple weeks ago, looks like RHE might be taking over the management of another one of their facilities here shortly.  That temporary measure appears to becoming more permanent in their other managed facilities.  The company is in a tough spot, it is not bankrupt but the capital structure doesn’t work and there’s no easy way to fix it since the worthless common stock need to approve of an exchange.”

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Our calculations show that Regional Health Properties, Inc. (NYSE: RHE) failed to obtain a mark in our list of the 30 Most Popular Stocks Among Hedge Funds. RHE was in 1 hedge fund portfolio at the end of the third quarter of 2021. Regional Health Properties, Inc. (NYSE: RHE) delivered a -49.74% return in the past 3 months.

You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.