While the pace of change at Turnaround Letter Buy-rated Brookdale Senior Living (BKD) has been disappointingly slow, reflected in the weak share price, we are encouraged by the recent news that long-time (over 13 years) board member Jackie Clegg will not stand for re-election at the upcoming 2019 shareholder meeting.
Pressure from respected REIT activist Jonathan Litt, who owns 3% of Brookdale through his Land & Buildings investment fund, appears to be working, as Clegg likely stood in the way of meaningful change. With her departure, there is now a greater chance that the company will sell more real estate and make more aggressive operating improvements, which are part of our investment thesis and a driver of a higher share price.
We continue to rate BKD shares a BUY with a price target of $16.
Disclosure Note: An employee of the Publisher owns BKD shares.