OCA - Oceania Group - retirement villages

[X-men]

I said the truth....only U here expecting the SP 👇👇👇👇

[SailorRob]

I said the truth....only U here expecting the SP 

X-man, I think you will find that ValueNZ, Cupsy and a few others would like a lower price.

However I am not 'expecting it' I have no idea what will happen in the short or medium term.

What I am trying to do is buy as much future cash flow as I can, rather than own the same amount of future cash flow but see the market value of its present value rise.

[SailorRob]

Attachment 14950
All this talk of “floats “ , are they real , imagined and even useable?
Heres the picture to tell the story from 1hy24.

I apologise for my childish graphics , but stumpy fingures on an iPad will do that…but it does make it clear to deferentiate what I’ve added over the offical release.

There it is ..the float…. Right now it is $950m tied up in property development with $364m now currently ready for sale.

It does exist and being used to handsomely achieve assets CAGR 18 % ( over 6 years. )

Hopefully this picture saves a thousand words.

I forgot that Mav even drew a picture. Amazing that it's impossible to teach some people this and that's what makes a market.

[SailorRob]

Now I've tidied up all my work after reporting season, just for fun I thought I would see where OCA might roughly be, should it stop reinvesting in more land and developments, and just call it a day and finish their current pipeline.

Here's the parameters.
A. All values are at today's expenses and revenue rates.
B. No allowance for resales is included. I am fully in agreement with Sailor Rob that average house price movements simply reflect inflation of the era, no more. There is no real profit. This is a concept that most won't accept. History demonstrates property resale profits simply match inflation in the long run. So RESALE PROFIT is just inflation proofing of the assets- incredibly valuable for the long term investing aspect…but it isn't profit.
C. Clearly, no new sales margins
D. Villages are all completed and sold down to normal occupancy rates over the next 8 years.
E. I don't know what corporate costs will be as many staff won't be needed. I have retained the current expense ratios for this exercise which will no doubt be too high.

So in about 8 years when all this is finished and sold what are we left with?

Underlying Profit should be around $71m ( to compare today's annual unpat with resales removed is $31m - but this obviously includes new sales profit).

To make the numbers real simple… 2032that's $10c EPS + inflation value. So again, because this concept is so important, the $.10c is ON TOP OF inflation.

Here's the kicker …2032 …OCA now has no debt and a $2.4B cash float !

If OCA were to achieve a return of 5% net on this free cash float that's $.20c EPS extra! Yep , 200% more than what they will be making on their properties.

The only 2 questions to ask;

1. What would you pay for a share making $0.30 EPS ( that is inflation indexed) ?
2. What kind of mega industry would want to buy this return and access to this source of cash the most?

You can love or hate Sailor as much as you like but he is the one correctly banging on about the “float” , trying to get people to see the ultimate real value of these companies.

He's right , these future numbers are incredible and have feck all to do with what nurses are paid.

Great post from Maverick from December.

Highlighting what would happen should OCA decide to stop growing....

So in 7.5 years time you would be looking at an over 50% return PER YEAR in CASH from current prices. Inflation protected.

Paying less than 60c a share for a return of 30c every year.

This is why I get so upset with you saying you have to 'Endure' a few more weeks of low share prices Mav, this should be the greatest moment in your investing life, not something you are hating.

[bull....]

this has to be the greatest thread on hope she will be right in the long term lol

[mistaTea]

A couple of thoughts.

We must be careful not to think that the resident loans will be invested in new property forever. There will be a critical mass of retirement villages, of which OCA will only get a certain amount in this competitive market.

I think that is important to note because it determines the cashflow profile for the business (which is all that really matters in the end) and when more of the cash can be returned to shareholders (and NZ shareholders are obsessed with dividends for some reason).

Also, the whole discussion about not wanting the SP to rise (and in fact preferring it would fall…)

Yes that makes absolute sense if your analysis on the business and sector is solid and your estimate of IV is reasonably close. No arguments there.

I think the timeframe on when Mr Market finally sees the light and corrects the error of his ways is importantly though.

If the market value of OCA doubles to $800M odd they is wonderful. But if it takes 20 years then that is 3.5% CAGR. Throw in some divvies and after tax you maybe have 4.5%.

I think the sailor, value et al have some solid points about OCA. But as I have stated before, I think dismissing Mr Market altogether creates a kind of blind spot.

Not trying to p1ss anyone off or provoke any harsh replies … just saying that I don’t think it is all quite as black and white as some seem to think. It seldom is.

[Daytr]

So just another fabrication. It wasn't about STU was it and he did bring it up didn't he, it was about an imaginary take over offer of OCA, which he blamed on you?

Frankly, nothing he says here imo has ever had any credibility whatsoever and is not worth our time rebutting it; reinventing the business model and economics of OCA; reinterpreting the accounting financials reported in plain sight (that he doesn't read); arguing incessantly with numerous logical fallacies. Even when the facts are patiently and painfully pointed out, explained rationally and reasonably, with references to source, by very well informed and very clever investors.

I actually think he just dislikes you SailorRob, probably others as well myself included, and has conjured an ill-informed argument to try and refute everything you and we all have said. He reckons he can get a rise from you and others by making ridiculous statements and arguing them incessantly, albeit eventually tying himself in knots. Sadly so far its been working for him.

Definition of a troll, ill-informed, misinformation, disinformation, arguing logical fallacies, baiting, baiting, baiting. For what purpose who knows, but it seems as we have no moderation here, 'ignore' is the only solution?

If that makes you feel better Baa_Baa.

I'm not the one who was banned. Was it once or twice? For incessant trolling and insults etc which is par for the course on this thread for anyone who dares question the 'secret sauce' that has seen the share price down to 35% of its peak value. Apparently anyone who doesn't are idiots & they just don't understand. 😅

Apparently the accounts are also straight forward and easy to follow. If that's the case have you ever thought the market has been right? It may not be right forever, I.e the market might change but that will because the situation has changed, not because of free loans and float BS. The free loans is the funniest one. The float I get, it's just not a big thing as some make it out to be.

If anybody had bothered to notice, I haven't down ramped, quite the opposite.
I just don't believe in fairytales and only those desperate to get their money back seem to do so unquestionably.

Hey, by the way, just in case you are interested. I have some magic beans...

All the best on your holding & good luck for the results released in a few weeks.
I might be joining you once I am done in the resources sector.

PS I looked back at the NTL thread & I see you were one of the first to call BS on that, way before most people & you were criticised heavily. It's now lost 85% of its value so well done.

[ValueNZ]

If that makes you feel better Baa_Baa.

I'm not the one who was banned. Was it once or twice? For incessant trolling and insults etc which is par for the course on this thread for anyone who dares question the 'secret sauce' that has seen the share price down to 35% of its peak value. Apparently anyone who doesn't are idiots & they just don't understand. ��

Apparently the accounts ate also straight forward and easy to follow. If that's the case have you ever thought the market has been right? It may not be right forever, I.e the market might change but that will because the situation has changed, not because of free loans and float BS. The free loans is the funniest one. The float I get, it's just not a big thing as some make out.

If anybody had bothered to notice, I haven't down ramped, quite the opposite.
I just don't believe in fairytales and only those desperate to get their money back seem to do so unquestionably.

Hey, by the way, just in case you are interested. I have some magic beans...

All the best on your holding & good luck for the results released in a few weeks.
I might be joining you once I am done in the resources sector.

PS I looked back at the NTL thread & I see you were one of the first to call BS on that, way before most people & you were criticised heavily. It's now lost 85% of its value so well done.

Daytr here thinks the interest free loans and the float are seperate concepts.

No Daytr, you do not get it. You've shown that in this post alone.

Go read some of SailorRobs/Baa_Baa's earlier posts + the report I reposted a while back.

[Cupsy]

A couple of thoughts.

We must be careful not to think that the resident loans will be invested in new property forever. There will be a critical mass of retirement villages, of which OCA will only get a certain amount in this competitive market.

.

Where money is invested (provided value is not being destroyed) is irrelevant isn't it?

[ValueNZ]

@ValueNZ, you should calculate how long it would take one to get on the NZ rich list assuming they had 50k already in OCA and a further 50k a year to deploy and OCA float and equity continued to compound like it has over the last few years while the share price declined like it has, circa 50% over the last 2 years.

How long would it be before you had enough share in the equity to get you on the rich list.

And before anyone even thinks about posting that the SP cannot fall more than 50% for long before it hits zero... It can decline by 50% a year indefinitely....

Be a good exercise for a first year finance student.

You should be setting the assignments for my finance class! So much BS is taught at my uni it's unreal.
Screen Shot 2024-05-11 at 9.49.48 AM.jpg

I think this should be about right, probably 18 years.

Everyone should be praying for Oceania's share price to collapse whilst intrinsically growing it's worth.