I have gone through an exercise adjusting occupancy for the last three years to occupancy in 2006 of 90.9%, annualizing the 2009 data, with results ranging between $.76 and $.85 for operating earnings per share. Nonoperating stuff has been we hope of the very unusual type. Also, FVE had $165mil in operating loss carryforwards at the end of 2008. These observations suggest a normalized EPS for several years of normal occupancy would be around the $.80 per sh level. My estimate of a market multiplier during such a period would be in the 10-12 range; ergo, an $8 to $10 stock. This would fall within the trading range prior to the calamity and seems a reasonable prospect within 5 years. At today's prices, this would be a 3 bagger. Seems attractive to me for an economic period of growth, where industry enthusiasm for overbuilding is muted and where this particular company is the tail that gets wagged in an upturn - in other words, it should be FVE, not SNH, that gets the benefit of the operating/financial leverage of increased occupancy.
I assumed expenses would be 80% variable, leaving 20% fixed consisting of rent, G&A and depreciation. It's not a lengthy exercise, and I suggest you play around with it and see if you can get comfortable with a set of numbers close to mine. I think the probability is quite high for this stock to have a price between $8 and $10 within 3 to 5 years with little downside risk at $3 today.