Morgan Keegan Discusses Healthcare REITS

Morgan Keegan is out with a research report on the healthcare REITs, like National HealthCare Corporation NHC. In a note sent to clients, Morgan Keegan writes, "We believe 2011 is shaping up as a strong year for nursing homes. We believe that the new Medicare reimbursement system, RUG-IV, will provide solid revenue growth in a fairly benign cost environment, and we don't see any looming reimbursement cuts. For nursing home operators, we believe current valuations generally below midpoint of the long-term average forward EV/EBITDA multiple range of 6x-9x represents an attractive entry point despite recent share price appreciation. For healthcare REITs, we believe that the discount the market assigns to nursing home assets is likely overdone." Shares of NHC closed at $46.64 yesterday, down 25 cents.