OCA - Oceania Group - retirement villages

[Bikeguy]

I didn't say OCA can, or that either of them can, but yes purely on SP, I think OCA would be a better chance of a ten-bagger from here, than RYM. From the SP here and now, not about multiples to their ATH, that's your strawman.

Assuming SP is all you're into.

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

This is a very well written post,

[Daytr]

I didn't say OCA can, or that either of them can, but yes purely on SP, I think OCA would be a better chance of a ten-bagger from here, than RYM. From the SP here and now, not about multiples to their ATH, that's your strawman.

Assuming SP is all you're into.

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

I'm sure everyone wants there investments to turn into cash generating machines.
With debt much higher than the value of stock it's going to be a while before they could get into that position just from DMF & resales & obviously resale returns depends on the property market, nothing to do with company performance.

Paying out dividends goes against the compounding investment vehicle SailorBoy dreams about. But I would suggest you are right, that's very likely what they will do but only once they have reduced debt & if they keep expanding, that's going to be difficult to do for some time.

It's certainly a long term play, but anything good or bad could happen between now & then.
The payout really is around the sector's modus operandi & the property market rather than any individual company necessarily. Some operate better than others such as RYM as per the metrics I supplied earlier.

But why when a sector is the investment vehicle rather than the just OCA or just RYM etc, wouldn't you spread your investment across the sector?
This definitely would diversify the risk of management's ability to duck it up.

[SailorRob]

I'm sure everyone wants there investments to turn into cash generating machines.
With debt much higher than the value of stock it's going to be a while before they could get into that position

It is already a cash generating machine.

Baa_Baa is just suggesting that cash directed out of the company rather than reinvested.

Debt and 'value' of the stock have nothing to do with each other...

Debt is measured against the ability to service it from cash flows.

Asset values mean nothing outside of their cash generating ability.

[Daytr]

It is already a cash generating machine.

Baa_Baa is just suggesting that cash directed out of the company rather than reinvested.

Debt and 'value' of the stock have nothing to do with each other...

Debt is measured against the ability to service it from cash flows.

Asset values mean nothing outside of their cash generating ability.

Really is that what he was suggesting? No kidding.

Value of housing stock has everything to do with debt. Perhaps in your eagerness to defend OCA and cut off any questions at the pass, you read stock as the stock price.

You didn't answer the question, why wouldn't you diversify your investment, particularly as you are relying on such a long term payoff.

[SailorRob]

Really is that what he was suggesting? No kidding.

Value of housing stock has everything to do with debt. Perhaps in your eagerness to defend OCA and cut off any questions at the pass, you read stock as the stock price.

You didn't answer the question, why wouldn't you diversify your investment, particularly as you are relying on such a long term payoff.

Value of housing stock nothing to do with it, whoever values it will be wrong.

Remember these morons value the billion dollar float as a liability!

It's the net future cash flows the asset produces that matters.

I don't disagree with the theory but I know OCA far better and it's very likely cheaper and as Baa_Baa pointed out, smaller.

[Mrbuyit]

It is already a cash generating machine.

.

not for shareholders it isn't.

[ValueNZ]

not for shareholders it isn't.

You're confusing the market quoted price with the businesses cashflows.

[SailorRob]

not for shareholders it isn't.

See ValueNZ post

[Balance]

You're confusing the market quoted price with the businesses cashflows.

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-websit...074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.

[mistaTea]

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-websit...074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.

Yes, ultimately the CF statement tells the story.

With debt (excluding ORA's) sitting a touch over $600M and the market cap hovering around $400M... all other things considered with the economy, staff shortages, regulatory risk, higher interest rates etc etc...

With the company being valued at an EV of around $1B, I don't think one can argue that OCA is way undervalued.