Stocks in Ryman Healthcare, Metlifecare and Summerset have risen in value in a range between 10% and more than 30% during the past 30 trading days.
Craigs Investment Partners broker Peter McIntyre said the aged-care sector was proving popular with investors as it was easily understood, there was growth in the demographics it catered to, there was an element of ''bricks and mortar'' involved and each company had a good land-banking portfolio for future growth.
He said that in general there was a shortage of ''quality'' stocks at present and investors had the cash and were actively looking for quality stocks.
Forsyth Barr broker Haley Van Leeuwen noted Ryman had 2400 beds while Metlifecare and Summerset were still in growth mode and quite small, with 359 and 370 aged-care beds respectively.
''The aged-care sector is fragmented compared to the retirement village sector, with new investment within this space not quite keeping up to pace with the ageing population,'' she said.
Mr McIntyre highlighted that while the sector was well understood, the three companies were at different stages of development.
Ryman, with its shares up 12.4% and trading around $7.76 yesterday, was the more mature company of the three and its ''softly softly'' foray into setting up a rest-homes in Australia was attractive to investors.
''They've seen so many other New Zealand companies go to Australia and end in failure,'' Mr McIntyre said.
Ms Van Leeuwen said Ryman was unique in that it had structured its business and grown it to a scale which recycled its own capital and did not require regular funding from investors. It had also consistently performed since listing.
While Metlifecare and Summerset were at different growth stages to Ryman, they had similar opportunities but it would
take time for them to build up business scalability and show continued success with their development projects. If Ryman was successful in Australia, it would open up an new avenue of growth, she said.
In late October, the NZ Super Fund and Infratil paid $270 million to acquire the 37.7% stake in Metlifecare, which was sold by Retirement Villages New Zealand.
Metlifecare, with its shares up 36.3% to trade around $4.20 yesterday, had successfully restructured and changed its debt profile and was looking to expand operations within a central North Island ''golden triangle'', Mr McIntyre said.
Ms Van Leeuwen said changes in share ownership, such as Infratil's buy into Metlifecare, led to increased liquidity and also larger, more supportive shareholders - a mix of wealthy individuals and institutions. Mr McIntyre said Summerset, with its shares up 10.5% and trading around $3.36 yesterday, was ''the new kid on the block'', but had been successful in getting resource consents for a North Shore rest-home. It had many years of growth ahead, he said.
