Well positioned to deliver growth? – Diversified Healthcare Trust (DHC), Nordstrom Inc. (JWN)

Diversified Healthcare Trust (NASDAQ: DHC) shares are -53.82% down in the year-to-date (YTD) period and have moved -1.96% or -$0.08 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +88.00% lower. Comparatively, the stock is -57.87% down YTD and -4.57% over the trailing 3-month period. If we look at the shorter duration, its week performance is -0.27% and -5.53% over the month.

Analyst Recommendations

On January 17, 2020, Wells Fargo recommended the DHC stock is a Equal Weight, while earlier, JMP Securities had Resumed the stock as a Mkt Perform on June 08, 2020. 7 analysts offering the recommendations for the stock have a consensus rating of 3.10 to suggest that the DHC stock is a “Hold. 1 of the 7 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 1 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $3.76 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $3.90. The forecasts give the Diversified Healthcare Trust stock a price target range of $7.00 on the higher side while at least one analyst think the stock could plunge to a low of $2.75. The two limits represent an upside potential of 46.29% or -36.73%.

Earnings Forecast

Analysts estimate the earnings to decrease 0.00% in the current quarter to -$0.11, up from the -$0.12 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.26, up 59.70% from -$0.37 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.14 and -$0.02. Wall Street estimates earnings per share to be at an average of -$0.35 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 10 over the last 12 months, while SEC filings reveal that there have been 4 insider sales over the same period. Insiders have purchases 115,000 shares while those sold by company executives and officers stand at 18,227. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

Nordstrom Inc. (NYSE:JWN), on the other hand, is trading around $14.69 with a market cap of $2.35B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $19.50 and spell out a more modest performance – a 24.67% return. Some analysts are even forecasting -$3.89 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Nordstrom Inc. (JWN) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

JWN’s operating margin was negative on the trailing 12 months basis, remaining steady at -0.70%, while the operating expenses over the recent quarter were at $1.12 billion. This represented a 47.05% of the company’s total revenues which amounted $2.12 billion. With this in place, we can see that the company’s diluted EPS declined -$3.33 on the year-over-year period, growing to $0.23 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Oct 2020), the total assets figure advanced to $9.97 billion from $9.74 billion over the previous quarter. The cash flow from operating activities totaled -$778.0 million, significantly lower than the -$31.0 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$909.0 million.

Insider activity

Insiders have transacted a total of 33 times at Nordstrom Inc. over the last 6 months, with insider purchases undertaken 20 times and accounting for 297,188 shares. Insider sales totaled 43,258 shares over the same period, with these deals completed in 13 transactions. Looking at these numbers, we realize that net purchases over that period are 7.0 shares. Insiders now hold a total of 51.44M shares after the latest sales, with 0.60% net shares purchased.

Major holders

Insiders own 4.20% of the company shares, while shares held by institutions stand at 71.00% with a share float percentage of 105.71M. Investors are also buoyed by the number of investors in a company, with Nordstrom Inc. having a total of 714 institutions that hold shares in the company. The top two institutional holders are Vanguard Group, Inc. (The) with over 10.08 million shares worth more than $156.21 million. As of Jun 29, 2020, Vanguard Group, Inc. (The) held 6.45% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 9.96 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $154.24 million and represent 6.37% of shares outstanding.