As I mentioned in a previous post, Five Star Quality Care (FVE) is probably best suited for bankruptcy, as the company’s pre-existing liquidation value should net shareholders at least $3 a share, above its current $2.05 price. The company will need to greatly improve its operating performance if it wishes to survive as a going concern. Under the assumptions of $1.4B in FY2016 revenue (and no growth going forward), 3% EBITDA margins (that sounds bad, but is better than what the company is currently doing), depreciation at 2.5% of sales, capex at just 2% of sales, and no change to working capital, I have the company trading a negative share price (between -$3 and -$4). However, FVE is neither a short nor a long in my estimation. As a going concern, I find that the company faces difficult prospects of remaining in healthy operating condition. Nonetheless, if the company can somehow wing a sale or successfully liquidate to create value over today’s share price, it would make for a compelling long. It’s all contingent on management’s actions, which are unclear, but more seemingly in favor of the going concern approach.