SUM - Summerset Group

[macduffy]

Low volume, small holders doing the selling, probably old school thinkers who think any increase in debt is a bad thing/sign. A bond offer a bit outside of the square for SUM. PS-I was in that category myself a few years ago, until I realized it was flawed thinking. PPS-Take note, no big holders selling down, no Insto's selling either.

I don't follow you there, couta. Old school thinkers usually prefer bonds and term deposits rather than shares. More likely, it's punters who were hoping for some attractive rights issues to fund expansion.

[couta1]

I don't follow you there, couta. Old school thinkers usually prefer bonds and term deposits rather than shares. More likely, it's punters who were hoping for some attractive rights issues to fund expansion. Many in my age group and older were taught that all debt is a negative thing and unless you can pay for it, then you shouldn't have it, hence my referral to old school.

[Beagle]

winner69, I see ARV is up?
People selling SUM shares before the $2.50 take over offer by SUM other retirement company?

Its OLD already tj, as is the overt negativity. The directors are FAR too smart to saddle themselves with a slow growing company and FAR more likely to be buying SUM shares, their own, with an on market buy-back ! Julian a much smarter guy than sum on here give him credit for, myself included sometimes.

[Joshuatree]

I make it 4,216,732 shares sold since the arguable peak on 11/4/ ; some may say the downtrend started in march. While that number is tiny compared with the mkt cap of re $1 billion its still worth noting. Quite a lot of 100 to 200 thousand vol selling into the mkt some days as the price drops. What does this mean ; i don't really know but its int. Are the banks taking a more risk on approach; have they said go elsewhere?. Elections and property value question marks atm. Also concerns over the ditch with prop values and I'm hearing more bearish sentiments here and there, there are always permabears around; a fund in Aus has liquidated everything because they believe there is an increased risk of a big correction coming( will try and find that article). Any guesses on what the margin will be pitched at;Peat?

[Beagle]

I make it 4,216,732 shares sold since the arguable peak on 11/4/ ; some may say the downtrend started in march. While that number is tiny compared with the mkt cap of re $1 billion its still worth noting. Quite a lot of 100 to 200 thousand vol selling into the mkt each day. What does this mean ; i don't really know but its int. Are the banks taking a more risk on approach; have they said go elsewhere?. Elections and property value question marks atm. Also concerns over the ditch with prop values and I'm hearing more bearish sentiments here and there; a fund in Aus has liquidated everything because they believe there is an increased risk of a big correction coming( will try and find that article). Any guesses on what the margin will be pitched at;Peat?

That question has already been asked and answered. SUM very recently expanded their main banking facility from $450m to $600m..try and keep up :)

[Joshuatree]

So the banks have turned SUM down for more?

[couta1]

So the banks have turned SUM down for more? Companies don't always want all their funding coming from banks, have a look at IFT for an example. Diversity of funding streams is positive.

[Beagle]

GMT, KIP and a VERY significant number of other sound well managed companies use corporate bonds...but then I think certain posters already know that... so their intention becomes crystal clear.

[couta1]

GMT, KIP and a VERY significant number of other sound well managed companies use corporate bonds...but then I think certain posters already know that... so their intention becomes crystal clear. Apparently they often come in pairs.:D

[Joshuatree]

[QUOTE=Roger;668235...but then I think certain posters already know that... so their intention becomes crystal clear.[/QUOTE]

Roger can you be transparent instead of opaque; what are you actually saying here?:confused::ohmy:

[Joshuatree]

Apparently they often come in pairs.:D

You too Couta clarity now thanks instead of know it all negtive insinuation.:confused::eek2:

[couta1]

You too Couta clarity now thanks instead of know it all negtive insinuation.:confused::eek2: You may need to do a sense of humour check there JT, notice I said pairs, not pair.

[Carpenterjoe]

Very smart move by SUM. Julian Cook obviously using his investment banking background to diversify the funding base and locking in further funding for strong ongoing growth at close to 50 year interest rate lows. This together with the recently expanded $600m bank facility will provide a LOT OF HEADROOM for opportunities for land banking purchases at low prices if the market turns down.
The irony is this opportunity will probably appeal a lot to existing residents.

Yup, reckon your right on this one. Interest rate rises are on the way in NZ. I've received two in as many years, circa a tenth of a percent each time.
Correct me if I'm wrong but bonds simply allow management too manage debt. If you are managing lots of dough every ounce counts.
Its time for Sum to jump the ditch, otherwise growth will end.

[Elles]

Would you expect people interested in the bond offer could be selling their SUM shares (to reduce exposure to the same company) or would this not have much effect?

[percy]

Would you expect people interested in the bond offer could be selling their SUM shares (to reduce exposure to the same company) or would this not have much effect?

No,and no effect.
What I think may surprise people, is the number of SUM residents who will buy SUM bonds.

[Beagle]

Yup, reckon your right on this one. Interest rate rises are on the way in NZ. I've received two in as many years, circa a tenth of a percent each time.
Correct me if I'm wrong but bonds simply allow management too manage debt. If you are managing lots of dough every ounce counts.
Its time for Sum to jump the ditch, otherwise growth will end.
Absolutely right. This is simply a debt management tool and diversifying their funding base and locking in funding at low rates. https://www.nbr.co.nz/article/summerset-group-sell-100m-six-year-retail-bonds-b-203580?utm_source=newsletter&utm_medium=email&utm_campaign=NBR%252520Heads%252520Up
On the Australian thing...they have PLENTY of headroom for growth here with 6 years of land banked. They're giving themselves heaps of headroom for more land acquisitions which could become available in any market downturn at very attractive prices. Bare land typically has a much higher beta coefficient than houses so if the market corrects 5% overall bare land could go down by a factor of several times that which could throw up some outstanding opportunities for further site acquisitions.


No,and no effect.
What I think may surprise people, is the number of SUM residents who will buy SUM bonds.
Agree 100%, they know the brand well and with a very strong 94% satisfaction rating will relish the opportunity to invest in a well known brand they know and love and get a return on their money that's higher than bank term deposits and trade-able on the NZX market in case they need urgent funds for an operation.

[Bjauck]

...
Agree 100%, they know the brand well and with a very strong 94% satisfaction rating will relish the opportunity to invest in a well known brand they know and love and get a return on their money that's higher than bank term deposits and trade-able on the NZX market in case they need urgent funds for an operation. True so many so-called "elective" medical procedures are available only if you go privately or unless you wait in pain on ever lengthening public waiting lists (if you make it that far). Maybe the SUM residents should invest the net interest from their SUM bonds into private health insurance, if they can afford the expensive rates for oldies...

As for buying SUM shares or SUM bonds. I had been thinking of topping up my SUM shareholding but as it is already a good size I well may opt for the bonds if the interest rate is around 6.5%+

[BlackPeter]

...
As for buying SUM shares or SUM bonds. I had been thinking of topping up my SUM shareholding but as it is already a good size I well may opt for the bonds if the interest rate is around 6.5%+

Similar position. Only problem with that approach is that we probably need to commit the money before we know about the interest rate. Sounds like they are going through an institutional book building process. Yes, 6.5% would be sweet, but not sure we get there. Listed IFT bonds (probably similar security) are currently traded around 5.6 - 5.7%;

[macduffy]

I'm far from overweight in SUM so rather than buying the bonds I'll be looking at SUM more shares when the shareprice "consolidates". Less income, but the growth prospects have more appeal - for me.

:)

[mcdongle]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone?

[macduffy]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone?

In terms of gross div yield plus capital appreciation - yes.

[mcdongle]

In terms of gross div yield plus capital appreciation - yes.

Yes think i will give the bonds a miss and watch the shares..

[Elles]

Similar position. Only problem with that approach is that we probably need to commit the money before we know about the interest rate. Sounds like they are going through an institutional book building process. Yes, 6.5% would be sweet, but not sure we get there. Listed IFT bonds (probably similar security) are currently traded around 5.6 - 5.7%;

From the announcement:



Opening Date: 15 June 2017





Closing Date: 5pm, 6 July 2017





Interest Rate: The Interest Rate will be set and announced via NZX on


Wednesday, 14 June 2017.



So we'll know the interest rate before it opens.

[couta1]

According to the Herald article this morning, house values up 9.7% Nationwide on average over the last year and a normalising of Auckland values (Not a bad thing) I see nothing concrete that will have any affect on SUM's continued growth or an elderly persons ability to sell their house and move into a retirement unit. Buy the shares cheap while Mr Market continues to throw a hissy fit.

[BlackPeter]

From the announcement:



Opening Date: 15 June 2017





Closing Date: 5pm, 6 July 2017





Interest Rate: The Interest Rate will be set and announced via NZX on


Wednesday, 14 June 2017.



So we'll know the interest rate before it opens.

You are right - my bad.

[winner69]

Bonds lower cost of capital than equity

That's good

[Beagle]

According to the Herald article this morning, house values up 9.7% Nationwide on average over the last year and a normalising of Auckland values (Not a bad thing) I see nothing concrete that will have any affect on SUM's continued growth or an elderly persons ability to sell their house and move into a retirement unit. Buy the shares cheap while Mr Market continues to throw a hissy fit.

Agree 100%. Some people have forgotten that of SUM"s present 21 villages only 4 are in Auckland. East Auckland house prices which even I admit are outrageous fell a "whopping" 1.1% in recent months while other parts of Auckland's market are still increasing...anything but a dramatic downturn I would have thought especially at a National level. I noted in the Government budget the other day that Treasury is still expecting national house price growth of over 7% in the year ahead ! I will start adding to my position shortly if the price continues to decline as the long term the demographic tailwinds make this well managed company trading on its lowest ever forward PE, (even lower than the market forward PE average), a most compelling long term investment proposition.

[macduffy]

I agree with all of that, Roger. Now, let's just drop the subject before we set off a premature buying surge in SUM shares!

:cool:

[Joshuatree]

We've already had that:D

I have been feeling very bearish lately about the global situ hence my cautious thinking about SUM . Hope I'm wrong about the above and thanks for all the info and opinions guys. I do remain well placed on the side watching the Macro situ and SUM.

[Bjauck]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone? On reflection, I think the likely interest rate for the bonds will probably not tempt me to buy them rather than increase my shareholding. I think the bond issue at the likely interest rate is a good move and increases the appeal to top up my shareholding.

[Beagle]

In answer to your request for me to be clear JT. The facts as best as I recall them. We saw an absolute barrage of negativity towards AIR late last year when in and around the $1.70-$1.80 mark and prior to that which very suddenly completely dried up shortly afterwards. Subsequent SP action of AIR shares speaks for itself and anyone who listened to that negativity has cost themselves plenty. I see a similar level of negativity expressed here by many, some of whom have replicated their earlier behavior. Whether some of those people hold / held a short position in AIR and now SUM is perhaps something people might want to consider. I'll leave it at that. People should absolutely DYOR.

[winner69]

On reflection, I think the likely interest rate for the bonds will probably not tempt me to buy them rather than increase my shareholding. I think the bond issue at the likely interest rate is a good move and increases the appeal to top up my shareholding.

Better off owning a retirement village than depositing money (a bond) in a retirement village

Same goes for banks




Most of the time that is

[Joshuatree]

In answer to your request for me to be clear JT. The facts as best as I recall them. We saw an absolute barrage of negativity towards AIR late last year when in and around the $1.70-$1.80 mark and prior to that which very suddenly completely dried up shortly afterwards. Subsequent SP action of AIR shares speaks for itself and anyone who listened to that negativity has cost themselves plenty. I see a similar level of negativity expressed here by many, some of whom have replicated their earlier behavior. Whether some of those people hold / held a short position in AIR and now SUM is perhaps something people might want to consider. I'll leave it at that. People should absolutely DYOR.

That has been the one thing I've fought for years ;others attempting to influence, manipulate, sound like a qualified financial adviser, Buy now;" follow me youll be right mate" then posters finding they've quietly sold out etc etc. and vice versa. Im glad it doesn't happen here as much like on H/C but there is always a few without morals when it comes to money and liquidity can be an issue on NZX so one has to always make their own decisions and not allow themselves to be influenced by ANY frequent repetitive influencers.
Being passionate and sharing facts and opinions are appreciated and very different. Manipulators are usually pretty transparent to me and i will make a stand against them. we are pretty fortunate most of the time on share trader.:t_up: Hope to be in when the T/A etc tells me.

[BlackPeter]

In answer to your request for me to be clear JT. The facts as best as I recall them. We saw an absolute barrage of negativity towards AIR late last year when in and around the $1.70-$1.80 mark and prior to that which very suddenly completely dried up shortly afterwards. Subsequent SP action of AIR shares speaks for itself and anyone who listened to that negativity has cost themselves plenty. I see a similar level of negativity expressed here by many, some of whom have replicated their earlier behavior. Whether some of those people hold / held a short position in AIR and now SUM is perhaps something people might want to consider. I'll leave it at that. People should absolutely DYOR.

Roger, I think you overestimate the impact of this forum on the market. Particularly for AIR have retail investors basically no material impact on the SP - and I doubt the situation for SUM is different. I would be very surprised if institutional investors are reading this forum (other than for entertainment purposes) and they are certainly not buying or selling based on the views disseminated here (actually - nobody should do that). Maybe they use some of the info as trigger to DYOR - and this is, as it should be. So yes, your reminder to DYOR is absolutely appropriate.

Posts, whether positive (up ramping?) or negative (down ramping?) are just that ... in the best case some individuals opinion on the stock and in the worst case somebody's (hopefully) futile attempts to influence others.

The current weakness of REITs and particularly retirement stocks (but then - look at e.g. ARG - and this is not limited to the NZX) is in my view just a general concern about the (overall rather dear) property market and the possibility of rising interest rates. No matter what we individually believe - the market perception does count! However in my view no reason for long term investors to lose sleep.

Discl: hold (L)

[Beagle]

Not at all BP. Retail investors only own 4% of AIR and opinion expressed on here would have no impact whatsoever on the SP, the down-ramping I allege is more annoying than anything else. SUM mainly owned by institutions. GMT has been coming back into form a bit lately on actual and perceived demand for warehouse space, (I hold plenty and have hardly ever talked about them) so the perception of property market weakness is certainly not across the board and as mentioned Treasury's perception is real estate prices across the country will continue to grow. Happy to be long on SUM, long term :)

[winner69]

When city real estate markets like Vancouver, Toronto, Sydney and Melbourne start showing the same patterns and are source of real concern re impending crashes it’s highly likely you are seeing a major trend emerging ......

.........and then add Auckland to the list

SUM better keep building things fast to mitigate any damage a decent decline in property prices might have.

[000831]

SUM has a project at Wigram Skies in Christchurch. It started two years ago and still have not completed yet. The competitors at this area all started to sell, I remember that they started to build at the same period. Such as Lady Wigram Retirement sold nearly half of the stock and half of the uncompleted stock with contracts.


I have no idea SUM's project. It seems that they just sitting there near the main road empty. Have no idea how bad the project manager is and what's going on with the development????

Wigram Skies is a hot spot in Christchurch property market, at least it still increasing in price with huge demand for local middle class.

[Joshuatree]

[QUOTE=winner69;668554]When city real estate markets like Vancouver, Toronto, Sydney and Melbourne start showing the same patterns and are source of real concern re impending crashes it’s highly likely you are seeing a major trend emerging ......

.........and then add Auckland to the list W69

Yes good point w69,so true; these are some of the things making me a slightly grumpy bear about the big global picture. I know NZ is in a pretty good cycle still but we make up what 0.2% ? of global mkts we would get hit in a big correction/ property crash etc. I was told today (haven't verified)re the debt levels here with the older population was getting very high; i thought that was mainly a younger persons prob.

[Bjauck]

[QUOTE=winner69;668554]When city real estate markets like Vancouver, Toronto, Sydney and Melbourne start showing the same patterns and are source of real concern re impending crashes it’s highly likely you are seeing a major trend emerging ......

.........and then add Auckland to the list W69

Yes good point w69,so true; these are some of the things making me a slightly grumpy bear about the big global picture. I know NZ is in a pretty good cycle still but we make up what 0.2% ? of global mkts we would get hit in a big correction/ property crash etc. I was told today (haven't verified)re the debt levels here with the older population was getting very high; i thought that was mainly a younger persons prob.

2016 Article (paywalled) about increasing debt in American over 50's: https://www.wsj.com/articles/new-york-fed-finds-large-increase-in-debts-held-by-those-over-age-50-1455289257

I would expect NZ over 50's to to have similar debt problems especially with NZ housing being more expensive (relative to income.) If the bank of M&D are expected to help their kids into a house, then they may be tempted to mortgage their ever more valuable mortgageable home (which in NZ tends to be their largest asset by far) to help them get a deposit. I think the volume of residential debt is a cloud on the horizon for companies involved in real estate. As always DYOR.

[percy]

A recent article I read stated the number of people over 50 who were in financial trouble, because they had either gone broke or had a mariage break up was rather high.
Then last night I picked up a property press, listing houses for sale around ChCh.Surprised me every second one was over $650,000.
So as always some people have dough,others don't. SUM villages are full of people who decide to move their.As my brother said to me, when it comes to moving into a retirement village, he will put their house on the market, and meet the market.
As I have often pointed out ,when Nana needs to go into care she needs to go straight away,no matter what the property market is doing.I have also pointed out there are a great number of people who could afford three retirement units ,but only require one.
I should also point out retirement villages sell some units a bit cheaper at the start of construction.This way the buyers can't complain about the noise or disruption caused while the village is being built.We must also remember both SUM and RYM make a good margin by employing their own design and construction staff.A side benefit of this was shown by the fact RYM did not need to bring in outside help, coping with ChCh earthquakes,as they had the right people already onboard.
Both SUM and RYM are the full package.The huge tailwinds in this sector will not alter,no matter what house prices do,Donald Trump tweets ,or the price of fish in Zanzibar is.It is in governments worldwide interest ,for the private sector to help supply residency for the aged.All the noise we make on ST will not stop people aging.
I should also point out the idea of offfering help to people to stay in their own home sounds great,but any one who has experienced this, will know that Nana spends her time talking to the cleaner/care giver,and making him/her a cup of tea and so the work does not get done.Then relations are left to worry whether Nana left the front door open, and the stove on when she went to bed,!
My mother told them she showered every day.Funny, how do you get dust in the shower if you shower everyday.?Did anyone ever check her fridge.All food was past its use by date.!
There is a huge difference between talking about this sector,and having experience of having to put a parent into care.The talk and fine ideas go out the window,Nana needs care NOW.

[iceman]

A great matter of fact type post Percy. I agree with you.

[Lewylewylewy]

I'm this authors opinion, the factors that affect this SP are property price, ability to make money without capital gains from property, future demand and market sentiment.

Obvious.

The questions we should be asking are also therefore obvious.

1. Projections for future of property market. Helps value company.
2. How much would they make in a stagnant property market? How would this affect the PE? Helps value company.
3. What is the future demand, given the changing spectrum of age range of the populace vs population growth of nz. Helps value future of the company (which reflects current value, somewhat).
4. How will this effects market sentiment? Helps predict loss and profit opportunities.

Hope that helps anyone feeling confused. At least something good had come from all this carnage, it's ended the discussion about whether house price effects the value of the share.

Personally, I'm watching House prices like a hawk, doing my sums (help / opinions would be great), researching she ranges and growth stats (which also affect property market predictions) and keeping an eye on the news and forums for opinions.

[percy]

I think the people who go on about the affect of property prices on this sector have never had to put Nana into care.
Nana's health has never been affected by property prices.Never will.So watch Nana's health and her friends'.They are getting older every day.
Then to confirm this, read what SUM and RYM say about the affect property cycle prices have had on their earnings during the past 20 years,NONE,bearing in mind the huge increases of late of people reaching the age of 70.This is set to further increase over the next 20 years.This sector is the sector that has the biggest tailwinds,which will reach hurricane force in a few years.No stopping it.

[Lewylewylewy]

But when prices go up, they make more money and the business is worth more. No?

[percy]

They make money clipping the ticket.Each part of the ticket just keeps getting bigger.
More villages,more development margin,more villages more resales etc.
RYM are now issuing big tickets in Aussie.I expect SUM will too at some stage.
Think about the biggest legal ponzi scheme,and you will come up with SUM and RYM.Both will most probably double within the next 5 to 6 years.
Go and look at a RYM or SUM village and then think about resales.There will be resales going on, long after you and I are dead.

[BlackPeter]

I think the people who go on about the affect of property prices on this sector have never had to put Nana into care.
Nana's health has never been affected by property prices.Never will.So watch Nana's health and her friends'.They are getting older every day.
Then to confirm this, read what SUM and RYM say about the affect property cycle prices have had on their earnings during the past 20 years,NONE,bearing in mind the huge increases of late of people reaching the age of 70.This is set to further increase over the next 20 years.This sector is the sector that has the biggest tailwinds,which will reach hurricane force in a few years.No stopping it.

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.

[percy]

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.
Forget property prices.Just think of falling off a mountain.Your decent may be slowed down if you hit a bluff,but just slowed down ,not stopped.
RYM and SUM at present have strong tailwinds which I said were developing into hurricane forces.Any slow down, such as another GFC, or the price of fish in Zanzibar, will be just "the lull before the storm."

[winner69]

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.

It was market sentiment that caused the RYM share price to fall after the GFC - their ongoing profitability was rewarded with a lower PE by the market.

RYM, SUM et al will continue to build new units and resell older units and make heaps of money - it's just a matter of what punters want to pay for those earnings.

Over the last 3 years we have seen indecent rises in property prices .....and RYM share price gone nowhere. Could one say RYM share price doesn't move with property prices? Or could one say RYM is a dog stock?

Spose moral of story is either trade (short to medium term) the market sentiment or just put your RYM shares in the bottom drawer and don't fret about the ups and downs of the market and get rich over time.

[Bjauck]

...I should also point out the idea of offfering help to people to stay in their own home sounds great,but any one who has experienced this, will know that Nana spends her time talking to the cleaner/care giver,and making him/her a cup of tea and so the work does not get done.Then relations are left to worry whether Nana left the front door open, and the stove on when she went to bed,!... Interesting to hear your experiences. Much depends on individual circumstances. How much social and familial support, the degree of public and/or private support that would be available (or that they could afford) should the Senior stay in their own home. I know of many (without serious conditions) who have wanted and have been able to stay comfortably (afaik) at home until the end.

However many kiwi seniors do have skype families - families who have migrated for higher wages, prospects or affordable housing. So this could also limit their options.

[percy]

Interesting to hear your experiences. Much depends on individual circumstances. How much social and familial support, the degree of public and/or private support that would be available (or that they could afford) should the Senior stay in their own home. I know of many (without serious conditions) who have wanted and have been able to stay comfortably (afaik) at home until the end.

However many kiwi seniors do have skype families - families who have migrated for higher wages, prospects or affordable housing. So this could also limit their options.

My mother lived in a retirement unit in Buderim north of Brisbane.My brother lives in Hobart,while I live in ChCh.
As per most oldies she told huge lies.
Yes I shower every day......lie .shower had dust on the floor.
Yes I cook myself meals..... lie,fridge only contained food past its use by date
Yes I clean my unit.It is spotless.lie,Vaccum needed emptying twice.Small unit.
We have had similar experiences with my wife's mother and her aunt and uncle.
They tell you and assessors every thing is fine,but unless you visit them, and check it out for yourself it is all lies.
Then the worry is about their safety,oven left on,heaters left on,doors unlocked,falls etc conmen handymen.
Better not mention how she nearly collected cyclists when driving, because she had poor vision in her left eye.
It is exactly the same for people living in Auckland, who have old parents living out of Auckland.
ps.Mate of mine found over 50 pair of his mother's undies in the wardrobe,before he put her into care.She just used to throw them in there and go out and buy new ones.!
I am talking about nice respectable people who lived in good houses,who just happened to grow old.

[Xerof]

percy, we have one on the go at the moment - those exact same traits, but I'll need to have my wife check the wardrobe!

[Beagle]

I think the people who go on about the affect of property prices on this sector have never had to put Nana into care.
Nana's health has never been affected by property prices.Never will.So watch Nana's health and her friends'.They are getting older every day.
Then to confirm this, read what SUM and RYM say about the affect property cycle prices have had on their earnings during the past 20 years,NONE,bearing in mind the huge increases of late of people reaching the age of 70.This is set to further increase over the next 20 years.This sector is the sector that has the biggest tailwinds,which will reach hurricane force in a few years.No stopping it.
100% agree. God's honest truth right there !

[Ggcc]

The demand far outstrips the supply, dependant on where you live I have been told by someone within the industry. For that reason I know there are so many needed for retirement/care sector units. Their villiage caters for more than just the oldies. Their youngest tenant is I believe 25 years old. For that reason I know it is a massive growth industry. I think people will be kicking themselves waiting for the right time to invest in this business. If you are looking long term the right time I thought it would be now. Of course this is in no way advice it is just my thoughts. Go to a broker and they will tell you to invest in this industry. They even advised to go for PEB, so do your own research before you invest a penny.

Thanks for for your words roger I appreciate your valuable information.

bought another 2000 shares today so I am happy either if it goes up or down, long term it will go up I am sure of that. ��

[Harley]

Forget property prices.Just think of falling off a mountain.Your decent may be slowed down if you hit a bluff,but just slowed down ,not stopped.
RYM and SUM at present have strong tailwinds which I said were developing into hurricane forces.Any slow down, such as another GFC, or the price of fish in Zanzibar, will be just "the lull before the storm."

http://news.xinhuanet.com/english/2017-03/05/c_136104896.htm

[percy]

http://news.xinhuanet.com/english/2017-03/05/c_136104896.htm

"To be forewarned is to be forearmed",
Therefore, the illegal dynamite,gun and spear fishing in Zanibar comes as no surprise to us,as we have been expecting this "Black Swan".
The ripple affect causing a rise in the price of fish,may only mean fish is off the menu at RYM and SUM villages.
I see this benefitting long suffering TGH shareholders, as RYM and SUM replace fish, with chicken on their menus.
The share prices of RYM and SUM will rebound very quickly.With NZ market being closed on Monday, there may even be no effect at all.
We therefore remain "well positioned."

[peat]

"To be forewarned is to be forearmed",

Full on lol at your post percy.

[Joshuatree]

This paragraph from my brokers monthly summary i find of int

"At the same time, REINZ data for April provided further evidence the housing market is slowing,particularly in Auckland. The Auckland median house price fell 5.6% in April, which saw theannual gain decline to 3.0%, well below the strength of recent years. The number of Aucklandproperties for sale was 39% higher than a year ago, while the number of days to sell alsoincreased. This time, it feels like the weakness in house prices will continue, rather than be a blip."

[Elles]

This paragraph from my brokers monthly summary i find of int

"At the same time, REINZ data for April provided further evidence the housing market is slowing,particularly in Auckland. The Auckland median house price fell 5.6% in April, which saw theannual gain decline to 3.0%, well below the strength of recent years. The number of Aucklandproperties for sale was 39% higher than a year ago, while the number of days to sell alsoincreased. This time, it feels like the weakness in house prices will continue, rather than be a blip."



How does this relate to SUM though? Pretty sure this has been discussed already.

[Beagle]

Property market has flattened in Auckland at this point which in my opinion and has already been discussed ad nauseum. Article in the herald today referencing minor 1-2% moves one way or the other in various area's of the Auckland market over the last 3 months. No massive falls as some are trying to sensationalize. Speculation on future price movements is exactly that, pure speculation. A reminder, SUM has just 4 out of 21 villages (completed or in the process of being completed), in Auckland.
I have them on a forward PE of just over 15.

[hamish]

Looking at the 5 year chart for Ryman, it's clear the Org/stock went from grow quickly pre 2014 to the current mature stage of growth and optomisation for scale. SP since 2014 has fluctuated around the 8.20 pricepoint +-30 relatively consistently.

So, I have been wondering about SUM and whether it's going to follow a similar trajectory and level out $5 to $5.50 range for next 24 months. Yes, I'm a holder so I hope for more. I appreciate sector tailwinds, I can see their past 5 years business performance... I just wonder if there is a market confidence & maturity/bedding in for this type of stock.

What's also on my mind is the effect that the competition and growth within the sector participants is having on each other. What if Ryman had continued to be the scale operator and the other operators had remained at status quo circa 2014. Would have expected Ryman SP to be greater than it is now under that scenario. The fact that all operators are essentially expanding green and brown fields by and large...maybe a dampener across them all to expand in similar step / rhythm?

[Joshuatree]

How does this relate to SUM though? Pretty sure this has been discussed already.

You do know SUM is a property stock.? Naturally ,property valuations will be an ongoing discussion.

[Snow Leopard]

Looking at the 5 year chart for Ryman, it's clear the Org/stock went from grow quickly pre 2014 to the current mature stage of growth and optomisation for scale. SP since 2014 has fluctuated around the 8.20 pricepoint +-30 relatively consistently...

The share price and the financial performance of any company are not necessarily that well correlated.

Essentially Ryman has been achieving reasonably consistent year on year growth for many, many years.
However the share price got well ahead of itself several years ago and the two are still re-syncing themselves.

Keep on with the 'Always Learning' and read the company reports.

Best Wishes
Paper Tiger

Meanwhile back at Summerset the all night pool parties are about to start....

[Beagle]

Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone? Posted 31 May.
Thank you for sharing and it seems your information was good. Margin will be 1.85 - 2.0% over 6 year swap rate subject to minimum of 4.7%.
Interesting that this is substantially below Infratil's 5.5 year market offer of (if I remember correctly 5.65%) giving something of an insight into how the market perceives the relative merits of these two companies and their debt profiles. https://www.nzx.com/companies/SUM/announcements/302171

I will answer your question with another...Is the Pope a Catholic :)

[winner69]

Posted 31 May.
Thank you for sharing and it seems your information was good. Margin will be 1.85 - 2.0% over 6 year swap rate subject to minimum of 4.7%.
Interesting that this is substantially below Infratil's 5.5 year market offer of (if I remember correctly 5.65%) giving something of an insight into how the market perceives the relative merits of these two companies and their debt profiles. https://www.nzx.com/companies/SUM/announcements/302171

I will answer your question with another...Is the Pope a Catholic :)

That 4.7% bit mean when ANZ offers 4.3% 5 year term deposit

Hope SUM don't go much above that number - as shareholder don't want them paying any more interest than need to eh

[Beagle]

Auckland house prices rise 2.8% in May. Wonder what straw those with a negative view on this sector will try and grasp at next ? http://www.sharechat.co.nz/article/81465457/auckland-average-house-price-rises-2-8-in-may-from-april-as-sales-listings-rise.html?utm_medium=email&utm_campaign=Auckland%20average%20house%20price%20 rises%2028%20in%20May%20from%20April%20as%20sales% 20listings%20rise&utm_content=Auckland%20average%20house%20price%20r ises%2028%20in%20May%20from%20April%20as%20sales%2 0listings%20rise+CID_7741c7d1947734f5b7763c2fb7ecd 47e&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle81465457auckla nd-average-house-price-rises-2-8-in-may-from-april-as-sales-listings-risehtml

I am modelling flat Auckland house prices in real inflation adjusted terms going forward and 3% real growth throughout the rest of the country for the foreseeable future. This gives me underlying EPS of 32 cps for 2017 (using a steady as per last year) development margin of 22% on 450 units. SUM confirmed at the recent annual meeting their build rate and development margin are tracking in line with expectations and I note they have an excellent multi year history of slightly beating build rate guidance.

Very wise strategy locking in some of their funding at under 5% for 6 years.

So now its clear that real estate isn't falling off the edge of a cliff, (in fact Treasury in their annual budget are expecting a 7.8% increase for the year ahead at a national level) we are left to ponder why people are so keen to keep selling this stock on a forward PE of just on 15 ?
Possible reasons
1. Obviously a lot are not cognisant of expected growth this year, I expect SUM will issue guidance for Fy17 around a similar time as last year so that solves that issue in due course
2. Its a second half story more than first half, (company says more developed units in second half), so maybe people are selling to invest in something else and will get back in later in the year ?
3. Concerns over their business model in terms of Auckland developments and costs of construction. This appears likely to be the villain of the piece but maybe those concerns are a little overdone...

[peat]

Interesting that this is substantially below Infratil's 5.5 year market offer of (if I remember correctly 5.65%) giving something of an insight into how the market perceives the relative merits of these two companies and their debt profiles.



The differential will largely relate to their being secured, and unsubordinated cf IFT the opposite of those. The SUM bonds actually rank pari passu with bank debt, which, although a 2nd mortgage , falls only behind the Public Trusts 1st mortgage holding security for the residents with their 'right to occupy'.
So it sort of all adds up... in my view, anyway.

[macduffy]

The differential will largely relate to their being secured, and unsubordinated cf IFT the opposite of those. The SUM bonds actually rank pari passu with bank debt, which, although a 2nd mortgage , falls only behind the Public Trusts 1st mortgage holding security for the residents with their 'right to occupy'.
So it sort of all adds up... in my view, anyway.

Yes, that makes sense to me. Still prefer the shares though so I'll hang out for the trend to reverse before buying a few more.

:cool:

[dabsman]

Just drove past the Ryman development in One Tree Hill and it reminded me to buy more SUM. This and RYM are in the best position the next 5 years or so with SUM in NZ and RYM in NZ/AUS I feel. Then again I am no expert but this sector will take me from 40 to 60 and give me a massive retirement income. Not concerned at price at present - only matters for my Margin account! No ne has talked about takeovers in this sector. Surely it is ripe for someone to jump in at these multiples and get some consolidation of costs going?

[Beagle]

The differential will largely relate to their being secured, and unsubordinated cf IFT the opposite of those. The SUM bonds actually rank pari passu with bank debt, which, although a 2nd mortgage , falls only behind the Public Trusts 1st mortgage holding security for the residents with their 'right to occupy'.
So it sort of all adds up... in my view, anyway.
Nil brokerage payable by SUM, (makes life a bit harder for you), but IFT offering 1.5%, not too shabby seeing as most clients fill out the forms and do the work themselves :)

[peat]

Nil brokerage payable by investors is my understanding.
So everyone can be a winner. :t_up:

The feeling is that the recent flurry of bonds might lessen the takeup of these but in some ways they are a good bond , with something behind them that kiwis love, namely bricks and mortar.
There's still a chance the rate might be set a little higher if demand is low
I feel they would do pretty well if they had set the minimum at 5.0%

[Beagle]

Agree with that Peat. 5% from a well known brand would resonate well with fixed interest investors for the security on offer. No interest from me though with the shares offering such a compelling investment proposition at the current price.

[percy]

Agree with that Peat. 5% from a well known brand would resonate well with fixed interest investors for the security on offer. No interest from me though with the shares offering such a compelling investment proposition at the current price.

Agreeeeeeeeeeeeeeeeeeeeeeeeeeee.

[JeremyALD]

Man this stock is taking a battering. Heading towards support at $4.50?

[macduffy]

Man this stock is taking a battering. Heading towards support at $4.50?

It's a bit of a soggy day in a lot of stocks so I wouldn't panic just yet - nor be in a hurry to buy.

[JoeGrogan]

Man this stock is taking a battering. Heading towards support at $4.50?


How low can it go, not looking good , it has now entered the blue box from the chart i posted a few weeks ago.
8889

[couta1]

How low can it go, not looking good , it has now entered the blue box from the chart i posted a few weeks ago.
8889 Its acting like a real Woofer, low volume though, no big holders selling, that gives you a better picture, very frustrating nevertheless.

[Xerof]

shares offering such a compelling investment proposition at the current price.

It keeps getting more and more compelling doesn't it.

Is there SUM switching to Smilin' Simon going on?

[couta1]

It keeps getting more and more compelling doesn't it.

Is there SUM switching to Smilin' Simon going on? Ryman shedding a 9.4c divvy tommorow could explain why it's not down today, so not sure about the switching. The cue the SUM board gave at the meeting re AK headwinds has spooked SUM of the reef fish IMO.

[JayRiggs]

It keeps getting more and more compelling doesn't it.

Is there SUM switching to Smilin' Simon going on?

The other way round for me.
Sold my RYM for SUM more :)

[Beagle]

It keeps getting more and more compelling doesn't it.
Hard to understand. Might be compelled to get SUM more soon.

[couta1]

The other way round for me.
Sold my RYM for SUM more :) Ryman will struggle to hit their 15% target over the coming year, SUM others won't.

[jmsnz]

Ryman will struggle to hit their 15% target over the coming year, SUM others won't.

Couta1,

Why do you say that?
What information do you have to support that assertion?

The 15% growth target they have long held, and met, seems to be a key focus for them, I can't imagine the market would react kindly if they missed it by a significant margin. I certainly don't know that they will hit that target, but history would suggest they will so genuinely interested in why you are so adamant they won't.

[couta1]

Couta1,

Why do you say that?
What information do you have to support that assertion?

The 15% growth target they have long held, and met, seems to be a key focus for them, I can't imagine the market would react kindly if they missed it by a significant margin. I certainly don't know that they will hit that target, but history would suggest they will so genuinely interested in why you are so adamant they won't. They missed it in the year just gone and although they have a large pipeline of projects, those projects won't contribute enough over the next year to ensure them hitting or exceeding the 15% growth target IMO.However the year following that, now that's another story, but DYOR.

[trader_jackson]

They missed it in the year just gone and although they have a large pipeline of projects, those projects won't contribute enough over the next year to ensure them hitting or exceeding the 15% growth target IMO.However the year following that, now that's another story, but DYOR.

Have you ever considered that SUM other companies may also not hit their target build rates?
The market clear has...

[percy]

Have you ever considered that SUM other companies may also not hit their target build rates?
The market clear has...

With both RYM and SUM having design,and development team inhouse, I would expect on average they are most probably likely to exceed their build rate projections,and "score" higher development margins than others in the sector.

[trader_jackson]

With both RYM and SUM having design,and development team inhouse, I would expect on average they are most probably likely to exceed their build rate projections,and "score" higher development margins than others in the sector.

Agree with the higher development margins, not so sure about exceeding build rate projections, at least in the coming year or two

[percy]

Agree with the higher development margins, not so sure about exceeding build rate projections, at least in the coming year or two

What's a year or two, when the ground work has been laid, for upward trajectory to move up into yet another higher gear.
Gaining momemtum,however the build rate will be lucky to keep up with the demand,as each week around 50 seniors decide to make a retirement village their new home.There are now 37,000 New Zealanders living in retirement villages.
The huge wall of seniors is increasing rapidly, providing huge tailwinds for the sector.
Some in the sector have a proven model, which means they are "well positioned," while others have some catching up to do.

[trader_jackson]

What's a year or two, when the ground work has been laid, for upward trajectory to move up into yet another higher gear.
Gaining momemtum,however the build rate will be lucky to keep up with the demand,as each week around 50 seniors decide to make a retirement village their new home.There are now 37,000 New Zealanders living in retirement villages.
The huge wall of seniors is increasing rapidly, providing huge tailwinds for the sector.
Some in the sector have a proven model, which means they are "well positioned," while others have some catching up to do.

Totally agree... and with an aging population, more care/hospital like services/beds will be required, and sum operators are better positioned than others, regarding full continuum of care. However, regarding summerset, in the short term, I believe there is a chance targets could be missed, and the market is clearly pricing this in. I am nearly tempted to grab SUM myself, and might 'force' myself to if it gets to an even more reasonable price, like the low $4... whether it goes that low is another question.

[Beagle]

Please Sir, can I have SUM more (Oliver Twist), sorry couldn't help myself :) However the analogy is a good one. For a lot of lonely old people this is a needs based business and due to population demographics, has tremendous tailwinds for the next 20-25 years. The average forward PE of the S&P 500 is 18, (source CNBC commentator this morning). The forward PE of this company that's grown at an average of 48% per annum since listing is by my reckoning just 14.8 at $4.73. Hmmm...not long until I do an Oliver Twist myself...

[silu]

With a market growing like this I'm happy to have cornerstone holdings in most Aged Care Providers and buying more on short term weakness. My unofficial plan is to hold on to these holdings until I'm retired myself. It's a very simplistic view but I can see a lot of babyboomers retiring into a retirement village over the next decade.
8892

[winner69]

At least SUM multiples are less than RYMs are.

Sort of reassuring

If the market continues to mark done the sector SUM got less to fall than RYMS

But any blip will be short term .....in a few years time (or sooner) we'll wonder what all the fuss was about

No worries

[couta1]

At least SUM multiples are less than RYMs are.

Sort of reassuring

If the market continues to mark done the sector SUM got less to fall than RYMS

But any blip will be short term .....in a few years time (or sooner) we'll wonder what all the fuss was about

No worries A bit like Air a year ago aye winner, now all ancient history. Another classic example, look at what CNU is trading at now, most never would have believed it 3 years ago, including myself.

[couta1]

Have you ever considered that SUM other companies may also not hit their target build rates?
The market clear has... May also not hit is not the same as actually not hitting as in Rymans last result. Have you ever considered that the market can be both irrational and unintelligent at times?

[fish]

A bit like Air a year ago aye winner, now all ancient history. Another classic example, look at what CNU is trading at now, most never would have believed it 3 years ago, including myself.

Too true-I tried hard to convince you about CNU 3 years ago.
Now I am sold out at a good profit{more than double the sp paid)
Looking at SUM but not yet convinced-I have the feeling directors are overpaid and so are probably management.
Will probably buy if the sp falls enough.
I like dividends and growth
At what level would people buy?

[couta1]

You did well there fish, it's hard to convince inexperience coupled with fear.

[trader_jackson]

May also not hit is not the same as actually not hitting as in Rymans last result. Have you ever considered that the market can be both irrational and unintelligent at times?

Yes, absolutely, look no further than Flexigroup in Australia... record profit every year, nice dividend to match, yet now trades at a PE of 7.0 and the share price is less than a third it was in 2013... anyway other issues could be at play there. (I am sure there are many other stocks that some people would consider "both irrational and unintelligent" at times... this probably warrants an entire other thread!!)

Just find it interesting how the market seems to be miss pricing SUM stocks for a pretty long period of time... (assuming Efficient Market Hypothesis is totally irrelevant in SUM or FXL's case of course)

As for Ryman, the biggest share price fall occurred right before results... and the share price today isn't much different to that on results day (few cents I think)... ie it was already priced in... one might then say, a good guess that they are going to miss something, may just be right.

[Baa_Baa]

Yes, absolutely, look no further than Flexigroup in Australia... record profit every year, nice dividend to match, yet now trades at a PE of 7.0 and the share price is less than a third it was in 2013... anyway other issues could be at play there. (I am sure there are many other stocks that some people would consider "both irrational and unintelligent" at times... this probably warrants an entire other thread!!)

Just find it interesting how the market seems to be miss pricing SUM stocks for a pretty long period of time... (assuming Efficient Market Hypothesis is totally irrelevant in SUM or FXL's case of course)

As for Ryman, the biggest share price fall occurred right before results... and the share price today isn't much different to that on results day (few cents I think)... ie it was already priced in... one might then say, a good guess that they are going to miss something, may just be right.

Is that not the definition of 'opportunity', in the market? When one has insights that one considers the market has not, ergo intrinsic value is discounted, is fair value, or is over-valued, by the market, the informed and confident can act, by buying, holding or selling shares.

It is a futile exercise pondering or wondering why the market does what it does, the great amorphous mass of independent opinions swinging a share price. Better is to ignore trying to find reason in the share price and just be informed about the company, the state of the market, develop a strategy, execute the strategy - be it trading or investment, and reap the rewards of getting it right, or the ignominy of getting it wrong.

jmho. It's been a long time since I was interested in the market's perception of value, except whether it presents opportunity to get in, hold or get out. Since losing that preoccupation with 'why' the market does what it does, investing and trading have become a lot more satisfying and rewarding.

[trader_jackson]

Is that not the definition of 'opportunity', in the market? When one has insights that one considers the market has not, ergo intrinsic value is discounted, is fair value, or is over-valued, by the market, the informed and confident can act, by buying, holding or selling shares.

It is a futile exercise pondering or wondering why the market does what it does, the great amorphous mass of independent opinions swinging a share price. Better is to ignore trying to find reason in the share price and just be informed about the company, the state of the market, develop a strategy, execute the strategy - be it trading or investment, and reap the rewards of getting it right, or the ignominy of getting it wrong.

jmho. It's been a long time since I was interested in the market's perception of value, except whether it presents opportunity to get in, hold or get out. Since losing that preoccupation with 'why' the market does what it does, investing and trading have become a lot more satisfying and rewarding.

Completely agree - and I am getting more tempted by SUM everyday (despite the chart looking worse and worse)... just trying to get my head around why a company like SUM has been seeminly undervalued for months... and only getting cheaper... (so far) Sum on here indicated it was a great deal at $5, its now nearly 30 cents lower in a few weeks... maybe in a months time it will be another 30 cents cheaper, maybe not...

[winner69]

Completely agree - and I am getting more tempted by SUM everyday (despite the chart looking worse and worse)... just trying to get my head around why a company like SUM has been seeminly undervalued for months... and only getting cheaper... (so far) Sum on here indicated it was a great deal at $5, its now nearly 30 cents lower in a few weeks... maybe in a months time it will be another 30 cents cheaper, maybe not...

t_J have you considered that SUM maybe is not 'undervalued' at the moment (or at least not by much)

RYM PE (underlying earnings) period 2002 to 2017 has averaged 20 (trailing basis) ....but if you exclude the stupidity of the PEs like 37 and 29 in 2014 and 2015 it has averaged about 18 ....and currently about 24

One could therefore say that a 'normal' PE in this sector is about 18 ....maybe add 1 to take account of a low interest rate environment so lets say 19 is todays norm

Currently SUM is at 17.9 and ARV at 19.5 (trailing underlying earnings)

So are SUM / ARV 'valued' about right in a 'normal' market (whatever that is) and RYM still has to be rerated down a bit?

Maybe the market isn't as unintelligent as some amke it out to be


(But SUM is worth at least $6 but I won't argue with the market - she'll see the light of day soon enough)

[Baa_Baa]

Completely agree - and I am getting more tempted by SUM everyday (despite the chart looking worse and worse)... just trying to get my head around why a company like SUM has been seeminly undervalued for months... and only getting cheaper... (so far) Sum on here indicated it was a great deal at $5, its now nearly 30 cents lower in a few weeks... maybe in a months time it will be another 30 cents cheaper, maybe not...

When the SP has gone beyond reasonable value, either over or under, and one wants to decide where and when to take a position, hold, or exit (partially or wholly), the charts are very helpful. They discount emotion and present facts, albeit historic. Nothing can say precisely what will happen tomorrow.

1. For those who sit on the sidelines and may want to buy, or want to accumulate, when SUM upticks past typical indicators like the DMA's or trend lines, or other combinations, one can buy the reversal of trend. Not before.

2. For those who hold, it's way way past wondering. Better to revert to 1. above, or do nothing. Or capitulate for no good reason. Intrinsic value is sound, future value is also sound, and current share price is irrational and irrelevant, except for 1. above.

3. For those who want to sell strength, revert to 2. It's too late, the damage is done, tomorrow may just be ignominy day if it reverts upwards. Just hold, strength will come again in time.

So what's the strategy? It depends on ones situation. We all make our own decisions. Use the SP only to inform the strategy, not to define the strategy.

[fish]

When the SP has gone beyond reasonable value, either over or under, and one wants to decide where and when to take a position, hold, or exit (partially or wholly), the charts are very helpful. They discount emotion and present facts, albeit historic. Nothing can say precisely what will happen tomorrow.

revert to 2. It's too late, the damage is done, tomorrow may just be ignominy day if it reverts upwards. Just hold, strength will come again in time.

So what's the strategy? It depends on ones situation. We all make our own decisions. Use the SP only to inform the strategy, not to define the strategy.

Yet another insightful post from so many insightful people..
You cant beat experience and lively interested minds
My situation-approaching retirement and a large amount I could invest through margin lending leaves me sitting on my hands why I wait to see what is going to happen.
The sp will be much better in the future even if it drops lots more shrt-term but thats no good for me as I might not be here then-conversely it could be after the next election-no one knows.

[Entrep]

Yep great words Baa_Baa

[Snow Leopard]

...So what's the strategy? It depends on ones situation. We all make our own decisions. Use the SP only to inform the strategy, not to define the strategy.

Some friends of mine first said this way back in '79, and have repeated it many times since:


https://www.youtube.com/watch?v=krK7Q49o6uA

Best Wishes
Paper Tiger

[airedale]

With a Latin name like Status Quo I thought that I would hear an Italian tenor singing perhaps Nessun Dorma. But alas:confused:

[winner69]

With a Latin name like Status Quo I thought that I would hear an Italian tenor singing perhaps Nessun Dorma. But alas:confused:

Not Italian but Jeff Beck does amazing version of Nessun Dorma

Alas - no words


https://www.youtube.com/watch?v=CZXIVMdXsVU

[Snow Leopard]

With a Latin name like Status Quo I thought that I would hear an Italian tenor singing perhaps Nessun Dorma. But alas:confused:

Ignoring the fact that Francis Rossi (of Status Quo) had an Italian father, here, just for you:


https://www.youtube.com/watch?v=RdTBml4oOZ8

Though what this has to do with the Summerset share price beats me, unless you are thinking:

"Il nome suo nessun saprà! e noi dovrem, ahime, morir!"

Best Wishes
Paper Tiger

[Beagle]

Taking the emotion out of it and looking at whether this is a SUM problem or a sector problem
52 week high vs current price
RYM $9.86 / $8.44 down 14.4%
MET $6.46 / $5.47 down 15.3%
SUM $5.62 / $4.69 down 16.5%

Conclusion, for most of the listed operators that make most of their money through development on new units and resale's of same, this is a sector wide correction.
It appears to be predicated upon a general concern regarding a slowing of real estate prices, (the evidence suggests this isn't nearly as problematic as some might imagine, perhaps a case of perceived future risk ?), and to some extent in SUM's case, exacerbated by their articulation of construction cost challenges in Auckland at the recent annual meeting. Worth noting that they confirmed at that meeting they're on track this year regarding development margin and build rate target.
I believe management are working hard on strategies to overcome the challenges they outlined.

[BlackPeter]

As far as I am concerned it looks like there are some real buying opportunities coming up. Question is just ... when?

[macduffy]

As far as I am concerned it looks like there are some real buying opportunities coming up. Question is just ... when?

No hurry. Just be patient and wait for the tide to turn.

:cool:

[couta1]

As far as I am concerned it looks like there are some real buying opportunities coming up. Question is just ... when? Consult with the Trumpet.:eek2:

[ratkin]

Maybe it is the posters that are irrational, not the market

[percy]

Maybe it is the posters that are irrational, not the market

What a wonderful post.

[Lewylewylewy]

I was sure it wasn't going to go below 4.80... now I feel sure it won't go below 4.60...

Honestly I'm surprised it's gotten so cheap. I'm waiting for evidence of a turn, or a change in news before buying in again.

Looking at the housing market stats from May, I don't think the market is doing that badly.

[winner69]

I was sure it wasn't going to go below 4.80... now I feel sure it won't go below 4.60...

Honestly I'm surprised it's gotten so cheap. I'm waiting for evidence of a turn, or a change in news before buying in again.

Looking at the housing market stats from May, I don't think the market is doing that badly.

Many say SUM is just a property company (don't make money out of looking after oldies - profits from property)

Most listed property trusts seem to trade at around book value

Is book value a fair price for SUM then?

If so its share price would be about $2.50

After all at SUMs current price one is paying $1.1 billion for $0.5 billion of assets

So lewy - is SUM 'cheap' after all.

[Beagle]

The value lies in the business model Winner...but I'm certain you already know that...:) Taking your devil's advocate example to the logical extreme you could easily argue that Evolve is merely a property company that owns property for the purposes of running early childhood care centers except that might present quite a problem seeing as their NTA is negative 26 cps, (going off memory). P.S. Like EVO's NTA illustrates I am not nearly as sure of the veracity of their business model as I am of SUM other companies :)

[percy]

Many say SUM is just a property company (don't make money out of looking after oldies - profits from property)

Most listed property trusts seem to trade at around book value

Is book value a fair price for SUM then?

If so its share price would be about $2.50

After all at SUMs current price one is paying $1.1 billion for $0.5 billion of assets

So lewy - is SUM 'cheap' after all.

Really W69,you let yourself down.
Bit more effort please.

[Beagle]

I think he was just playing devil's advocate Percy.

[percy]

I hope so, but with over 16,000 posts ,some may not understand,his sense of fun. ?
Does not suit him,as I think of him more as a savvy "faithfull" investor,rather than a devil's advocate .?....lol.

[winner69]

I hope so, but with over 16,000 posts ,some may not understand,his sense of fun. ?
Does not suit him,as I think of him more as a savvy "faithfull" investor,rather than a devil's advocate .?....lol.

Percy - pease keep Pushpay out of this discussion

I was told that a bit like SUM it had a great business model .......but alas its giving me heaps of grief

A savvy faithful investor not a good description if one has an interest in Pushpay

[percy]

Percy - pease keep Pushpay out of this discussion

I was told that a bit like SUM it had a great business model .......but alas its giving me heaps of grief

A savvy faithful investor not a good description if one has an interest in Pushpay

I guess I should not really comment on Pushpay, as I find I can not value any share that is not yet profitable,but like you, I believe their business model is laying the foundations for a vey successful business.The first sight of break even,and I think they will be up up and away.Hopefully with me onboard too at that time.!!!!..lol.

[winner69]

I guess I should not really comment on Pushpay, as I find I can not value any share that is not yet profitable,but like you, I believe their business model is laying the foundations for a vey successful business.The first sight of break even,and I think they will be up up and away.Hopefully with me onboard too at that time.!!!!..lol.

With Pushpay I'll keep the faith then

And as long as SUM keep on building the business model will enrich us all .....probably wont be around if the merry go round ever stops.

Looks like we are well positioned on both fronts.

[percy]

With Pushpay I'll keep the faith then

And as long as SUM keep on building the business model will enrich us all .....probably wont be around if the merry go round ever stops.

Looks like we are well positioned on both fronts.

Yes we will miss seeing what happens when the merry go round stops.I will be pushing up daisies,while you will be looking down from above.? lol.
Maybe it will continue for 40 years? Who knows?
At that time I would expect the model will become like a normal property company,and instead of profits from resales of right to occupy ,they may have to lease/rent units.
I would expect by that time,SUM will own thousands of units.
Maybe units will be leased/rented to young people.?
Then the companies will be vaued on rental income,rather resales profits.
I doubt any one will be building such villages,as I don't think there would be a development margin to make it worthwhile.
In the meantime trying to correlate SUM to a property company, or property valus is totally misleading.

[Lewylewylewy]

Something I've considered about SUMs (very far away) future. The units would suit young people.

[dobby41]

Something I've considered about SUMs (very far away) future. The units would suit young people.

Breaks the business model big time.
Young people would be in for far too long and the company wouldn't be able to recycle the unit quickly enough.
I'm sure that's why RYM have a age limit of 70 to get in - less time in. Ideally you want people to stay just as long as the time for the maximum 'deferred maintenance' fee to kick in - less refurbishment costs and quicker turnover.

[Joshuatree]

In the meantime trying to correlate SUM to a property company, or property valus is totally misleading.

Other choices for what sector SUM is in if not the Property sector
Resource sector.? SUM is mining for Gold teeth nah:eek2:
Industrial? Are they using the retirees as slave labour making widgets; maybe but don't think so;)
Entertainment sector? The set for a new "Prisoner " TV series; that would work:t_up:

Commodities sector, well i guess a lot of inhabitants go fishing a lot so maybe.:p

[Bjauck]

Something I've considered about SUMs (very far away) future. The units would suit young people. You would think there would be a market for 55-70's age group. Perhaps empty nesters, still working, who want a low hassle and lock up and leave place in a secure area with similar residents.

[percy]

Yes we will miss seeing what happens when the merry go round stops.I will be pushing up daisies,while you will be looking down from above.? lol.
Maybe it will continue for 40 years? Who knows?
At that time I would expect the model will become like a normal property company,and instead of profits from resales of right to occupy ,they may have to lease/rent units.
I would expect by that time,SUM will own thousands of units.
Maybe units will be leased/rented to young people.?
Then the companies will be vaued on rental income,rather resales profits.
I doubt any one will be building such villages,as I don't think there would be a development margin to make it worthwhile.
In the meantime trying to correlate SUM to a property company, or property valus is totally misleading.

For JT.
Retirement Sector.

[Joshuatree]

No retirement sector on the NZX.

[trader_jackson]

I thought Oceania and Arvida were the only 'true' retirement/care like companies (that are listed)... and the rest were all property development companies?

[percy]

I thought Oceania and Arvida were the only 'true' retirement/care like companies (that are listed)... and the rest were all property development companies?

Easy mistake to make......lol.

[couta1]

I thought Oceania and Arvida were the only 'true' retirement/care like companies (that are listed)... and the rest were all property development companies? They all deal in property, it's just that SUM have more exposure, hence more potential.

[Oliver Mander]

They all deal in property, it's just that SUM have more exposure, hence more potential.

...or more risk.

[couta1]

...or more risk. Goes hand in hand. PS-More care centre as a proportion of total beds is even riskier.

[Oliver Mander]

Goes hand in hand. PS-More care centre as a proportion of total beds is even riskier.

interesting couta. Why is it riskier? would have thought an underlying business fed by a constant stream of people getting older and living longer is less risky...

[couta1]

interesting couta. Why is it riskier? would have thought an underlying business fed by a constant stream of people getting older and living longer is less risky... The only advantage of having care centres for the likes of SUM is that it offers the attraction of the continuum of care model. By and large care centres are loss making, or at best break even ventures, especially with the recent pay equity settlement, which contrary to popular belief on this forum is only adding to sector woes for the majority of players. PS-A recent survey on the pay equity settlement, asking the question, Does funding cover the extra wages? Thirty providers responded, 10% said yes(One with the proviso of 100% occupancy) 90% said NO.

[Elles]

Nice to see the SP up today. It sounds like a few on here are waiting to buy in or top up once the downtrend reverses. What criteria do you use to determine when to buy?

[Joshuatree]

Basically when everyone is happy to be buying and saying things like "i loaded up on this baby today" and "me too toot toot" and "back up the truck" and "$6.00 soon "etc. That could be a signal to.......... sell.

[macduffy]

The only advantage of having care centres for the likes of SUM is that it offers the attraction of the continuum of care model. By and large care centres are loss making, or at best break even ventures, especially with the recent pay equity settlement, which contrary to popular belief on this forum is only adding to sector woes for the majority of players. PS-A recent survey on the pay equity settlement, asking the question, Does funding cover the extra wages? Thirty providers responded, 10% said yes(One with the proviso of 100% occupancy) 90% said NO.

Is there also an additional risk factor in that the care centre part of the business is more exposed to future govt policy/funding decisions?

[couta1]

Is there also an additional risk factor in that the care centre part of the business is more exposed to future govt policy/funding decisions? Absolutely, when you consider the sector was underfunded to the tune of 600mill before the pay equity settlement, you can see the effect any further underfunding would have on the viability of pure care centres.

[Lewylewylewy]

Breaks the business model big time.
Young people would be in for far too long and the company wouldn't be able to recycle the unit quickly enough.
I'm sure that's why RYM have a age limit of 70 to get in - less time in. Ideally you want people to stay just as long as the time for the maximum 'deferred maintenance' fee to kick in - less refurbishment costs and quicker turnover.

I'm thinking when baby boomers die off and the next generation of old people are fewer. Years away, as I suggested, but a possibility depending on immigration policy, industry saturation, etc. Lots of property required for this use, then suddenly lots of redundant homes.

[trader_jackson]

The only advantage of having care centres for the likes of SUM is that it offers the attraction of the continuum of care model. By and large care centres are loss making, or at best break even ventures, especially with the recent pay equity settlement, which contrary to popular belief on this forum is only adding to sector woes for the majority of players. PS-A recent survey on the pay equity settlement, asking the question, Does funding cover the extra wages? Thirty providers responded, 10% said yes(One with the proviso of 100% occupancy) 90% said NO.

Interesting you say this... Arvida, who has a large care operation, must have been part of the 10% that said yes... as was Oceania who I believe repeated a similar thing in their prospectus. As you also know, Arvida and Oceania account for thousands of care beds.

It is not so much a popular belief, but rather a fact: Page 9 of the recently released Arvida annual report:
"The recently announced settlement of equal pay negotiations for caregivers was welcomed. This is a tangible recognition of the important contribution caregivers make to the wellbeing of residents. We expect the increase in pay will improve recruitment and retention of caregivers as well as enhance continuity of care. This settlement agreement is expected to be ratified in June, with an effective commencement date of 1 July 2017. Our expectation is that the increased wage cost will be offset by an increase in funding from government and private sources."

Benefits of retention (which itself has a cost attached - ie the cost of finding new people, training etc) aside, I suppose, it depends on how the beds are funded, if they are like Oceania and Arvida, and increasing moving towards an ORA being placed over the bed, then its no wonder shareholders in those companies are likely not fazed by rising wages (also interesting how they said government first - as if they will provide most of the required 'top up').

As you'll also see in Arvida's annual report, although I admit it is a bit hard to tell which elements of income and expenses are care, and which elements aren't, Arvida's care offering side of the business, which makes up 74% of the portfolio (page 16, annual report) seems to be doing pretty ok (not as good as the property development side ['turbo charged side'] of the business of course, but still quite ok - ie likely profitable).

Its no wonder why Arvida's share price is near all time highs! :t_up:;)

It would be great if you could provide a source document of some kind for the recent survey you have mentioned

Sorry for turning this into an Arvida thread, just thought I'd try put some facts out there, and here's another one: having a care centre is not widely regarded as a risk, rather the complete opposite due to stability of government funding, among other reasons (well at least forsyth barr say this)

[couta1]

The big players will be okay tj but remember there are hundreds of smaller fish providing high quality care to thousands of elderly residents.These are the ones that make up the 90% that said no, many of whom will be lucky to survive. I could fill several pages trying to explain all the details of the behind the scenes workings of the funding model and the ageing in place model, but I'd have to do it all again next week as more posters ask the same questions. I think the conclusion sentence of the above survey SUM's it up nicely for me "Government claim of fully funding the settlement is propaganda"

[trader_jackson]

The big players will be okay tj but remember there are hundreds of smaller fish providing high quality care to thousands of elderly residents.These are the ones that make up the 90% that said no, many of whom will be lucky to survive. I could fill several pages trying to explain all the details of the behind the scenes workings of the funding model and the ageing in place model, but I'd have to do it all again next week as more posters ask the same questions. I think the conclusion sentence of the above survey SUM's it up nicely for me "Government claim of fully funding the settlement is propaganda"

Yes, understand is is likely complicated behind the scenes... anything related to the government is!
And yes, that claim that the government fully funding the settlement is propaganda... Arvida has reiterated this by mentioned "... and private sources"

I thought there was some not for profit village (who you'd think would be hit hardest) saying this wage rise was great and would only help them?

(I do find this whole bringing up the wages thing funny because we have definitely discussed this already, a month or so ago, I am sure of it!... at least now Arvida's annual report has been released and provides a bit more insight)
I think someone shared a link on this very form, but I could be wrong.

Hmm... got me thinking.... Arvida could have a busy few months/years cherry picking quality EPS accretive villages, and bring their expertise, scale, models, and [potentially] brownfield developments!

[Ggcc]

Just spoke to a friend who works as a nurse for Ryman. The nurses find it fair that caregivers get paid more, but they find it unfair about how close their wages are to a nurses. Some caregivers will over time receive $27 per hour....... this is very very close to wages nurses receive approximately $30 per hour..... we will see what happens in the future. She did mention that caregivers were paid more than the market average prior to the announcement.

[couta1]

The thing is tj is the impact of the pay equity settlement has not yet started, and must be combined with the ageing in place policy to fully understand the forthcoming impact on the smaller fish and the not for profits. A stricter assessment criteria being applied in some regions combined with extra money needed to pay for increasing the wages for Nurses/Activities staff/Cleaners/ Cooks to maintain relative parity with caregivers means a lower occupancy level, yet an increased wage bill. Looks like a perfect storm forming for many providers. PS-As an example, a friend of mine who owns and manages a rest home with a capacity of around 55, currently running at around 35 residents, said he would be gone if he had any remaining mortgage on his facility once the wage increase kicks in.

[trader_jackson]

The thing is tj is the impact of the pay equity settlement has not yet started, and must be combined with the ageing in place policy to fully understand the forthcoming impact on the smaller fish and the not for profits. A stricter assessment criteria being applied in some regions combined with extra money needed to pay for increasing the wages for Nurses/Activities staff/Cleaners/ Cooks to maintain relative parity with caregivers means a lower occupancy level, yet an increased wage bill. Looks like a perfect storm forming for many providers. PS-As an example, a friend of mine who owns and manages a rest home with a capacity of around 55, currently running at around 35 residents, said he would be gone if he had any remaining mortgage on his facility once the wage increase kicks in.

Hmm this rest home does sound very concerning... I am surprised, given it is not much above half full, even without a wage rise, it is still operating. I wish your friend all the best and hope he is able to get through this.

Rest homes with appropriate scale, models, management and occupancy will survive this, and potentially even come out the other end better off. The impacts of high staff turnover (and cost associated with this) will, unfortunately, not be immediately realizable, but over the long term, will benefit those who can work with it, and through it, such as (in my view) Arvida and Oceania

[Joshuatree]

Is there also an additional risk factor in that the care centre part of the business is more exposed to future govt policy/funding decisions?

Yep this is what happened in Aus with Estia EHE as pointed out by Bull and experienced by me :scared:. S/P crashed.

[Oliver Mander]

Thanks for all the comments...I guess I started out thinking that the care part equated to less risk, partly because of systemic underlying growth and partly due to part-govt funding.

From memory, RYM and ARV are more heavily weighted towards care (can't remember the figures tho).

Yet sector share prices have gone nowhere - regardless of weighting to property, and in spite of property increases - for 2 years.

I saw a commentor reflect on the GFC and downward impact on PE's of the companies...as a reflection of their property exposure. That comment made a lot of sense - I guess this is the potential counter-argument.

[BlackPeter]

... and follow the red dotted line ....

8900

Obviously - the trend is your friend until the bend at the end, but so far it looks like it is bouncing nicely at the lower boundary. Looks like an unbroken uptrend to me.

[winner69]

... and follow the red dotted line ....

8900

Obviously - the trend is your friend until the bend at the end, but so far it looks like it is bouncing nicely at the lower boundary. Looks like an unbroken uptrend to me.

Good trend eh

Be 6 bucks one day (soon) eh

[Beagle]

... and follow the red dotted line ....

8900

Obviously - the trend is your friend until the bend at the end, but so far it looks like it is bouncing nicely at the lower boundary. Looks like an unbroken uptrend to me.
Picture says a thousand words. I am sure SUM management are working extremely hard to face the challenges that lie ahead. Long term the demographics make for a compelling investment case.

[Entrep]

... and follow the red dotted line ....

8900

Obviously - the trend is your friend until the bend at the end, but so far it looks like it is bouncing nicely at the lower boundary. Looks like an unbroken uptrend to me.

Aren't trend lines meant to be straight? That's also a pretty thick line. I added a new one. Looks broke to me

http://i.imgur.com/6qxyUuy.jpg

[Baa_Baa]

Aren't trend lines meant to be straight? That's also a pretty thick line. I added a new one. Looks broke to me

Log scale it is. Not catastrophic but definitely below the long term rising trend line i.e. a short term down trend is in play

[winner69]

Long term regression channel looks like this (sorry not a log scale and the top and bottom channels are hand drawn and not calculated. I could do the calculation see how many std devs away the highs and lows are from the regression line but the chart (long term) is so compelling its not worth the effort)

I have also taken the liberty not to stretch the channel lines to include the period it below it - but as fundamentals were so strong at that time that was only a blip and normal activity resumed. And the time it was above it probably was an euphoric time and as we know euphoric people don't recognise euphoria when they see it

[Beagle]

Long term regression channel looks like this (sorry not a log scale and the top and bottom channels are hand drawn and not calculated. I could do the calculation see how many std devs away the highs and lows are from the regression line but the chart (long term) is so compelling its not worth the effort)

I have also taken the liberty not to stretch the channel lines to include the period it was below it - but as fundamentals so strong at that time that was only a blip and normal activity resumed.

Thanks mate. When you look at that, it looks like a compelling buy at some stage pretty soon doesn't it ! Fundamentally its never been cheaper on a forward PE basis since it listed.

[percy]

Another week, and another 50 seniors will decide to make a retirement village their new home.
We wish them,and like those last week,and those next week, and every week in the future, we wish them well.

[BlackPeter]

Aren't trend lines meant to be straight? That's also a pretty thick line. I added a new one. Looks broke to me

http://i.imgur.com/6qxyUuy.jpg

Hmm - not my fault if you add lines which look broke to you ;). Unless you like it broken, otherwise you better shift the right end of your line one mm down :p! In this case it looks again like a perfect uptrend ...

And no - trend lines are not supposed to be straight, though the red line is (on a linear scale). Some people draw trend lines on a logarithmic scale (turning trend lines into hyperbolas if you linearise the scale) ... and if you look at the somewhat bent lines on my graph - they are MA's - hardly ever straight but quite legitimate trend indicators.

Anyway - time will tell how the trend develops, whatever shape or scale you choose to use.

Discl: happy holder

[Joshuatree]

[QUOTE=Joshuatree;668226]I make it 4,216,732 shares sold since the arguable peak on 11/4/ ; some may say the downtrend started in march. While that number is tiny compared with the mkt cap of re $1 billion its still worth noting. Quite a lot of 100 to 200 thousand vol selling into the mkt some days as the price drops. What does this mean ; i don't really know but its int.

Be nice to see a notice soon of a major shareholder ceasing to be a major holder/reducing holdings etc.That could explain things. Been no SSH notices going back to jan on NZX(thats as far as they go on NZX) , very stable seemingly. Tried to put % holdings in but too much clutter.

TOP 20 SHAREHOLDERS AS AT 31 DECEMBER 2016




1 New Zealand Central Securities Depository Limited
2 FNZ Custodians Limited
3 Custodial Services Limited
4 Forsyth Barr Custodians Ltd
5 Custodial Services Limited
6 Summerset LTI Trustee Limited
7 Custodial Services Limited
8 Investment Custodial Services Limited
9 Custodial Services Limited
10 Custodial Services Limited
11 JBWERE (NZ) Nominees Limited
12 Paul Stanley Morris & Clive Stephen Morris
13 Custodial Services Limited
14 BNP Paribas Nominees Pty Ltd
15 New Zealand Depository Nominee Limited
16 ASB Nominees Limited
17 PT Booster Investments Nominees Limited
18 FNZ Custodians Limited
19 Motutapu Investments Limited
20 Custodial Services Limited


RANK SHAREHOLDER
1 Tea Custodians Limited
2 HSBC Nominees (New Zealand) Limited
3 JPMorgan Chase Bank
4 National Nominees New Zealand Limited
5 New Zealand Superannuation Fund Nominees Limited
6 Citibank Nominees (NZ) Limited
7 HSBC Nominees (New Zealand) Limited
8 Cogent Nominees Limited
9 Accident Compensation Corporation
10 Guardian Nominees No2 Limited

]

[macduffy]

Top 20 shareholders doesn't tell us anything when they're all nominee companies! Absence of SSH notices would indicate that no major shareholders are selling out/reducing, although such notices are notoriously slow to appear in the NZ market.

[Joshuatree]

I'm pretty ignorant there re time frames of reporting SSH except when one goes over or under 5% don't they have to announce straight away?

[couta1]

Top 20 shareholders doesn't tell us anything when they're all nominee companies! Absence of SSH notices would indicate that no major shareholders are selling out/reducing, although such notices are notoriously slow to appear in the NZ market. Most Major shareholders are long termers, studying the sell pattern over the last few weeks, it's predominantly small holders selling, have a look at the depth chart today as an example.

[macduffy]

[QUOTE=Joshuatree;669735]I'm pretty ignorant there re time frames of reporting SSH except when one goes over or under 5% don't they have to announce straight away

Notices are required to be lodged "immediately" the information becomes available. Interpretation of this term seems to vary!

https://fma.govt.nz/assets/Reports/141201-fma-review-of-market-disclosures.pdf

[cyclist]

Most Major shareholders are long termers, studying the sell pattern over the last few weeks, it's predominantly small holders selling, have a look at the depth chart today as an example.

But is it really possible to spot a big buyer/seller doing things in small chunks (and in no particular hurry), versus us minnows?

(Edit: And if so, interested in knowing how to spot the signs)

[Joshuatree]

Im thinking an Insto maybe feeding them in in small odd parcels and has been for some time. Maybe the only way they can quietly, slowly exit . Liquidity isn't great for a big stock on the NZX. If its small holders selling down well are they smarter than us:)? Just a thought ; no real evidence there.

[Beagle]

http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/ Average broker valuation $5.60

[winner69]

Im thinking an Insto maybe feeding them in in small odd parcels and has been for some time. Maybe the only way they can quietly, slowly exit . Liquidity isn't great for a big stock on the NZX. If its small holders selling down well are they smarter than us:)? Just a thought ; no real evidence there.

maybe those etf thingies / funds that track the index need to sell as the price goes down

interesting studies what these etfs will do the market if it starts going down

but with SUM nobody is bailing - at least thats what I think

[QOH]

Just curious, should something go wrong with the plumbing in your Summerset unit, who pays for the repairs, had a plumber here today , he told me they do a lot of work for Summerset. Assuming it's repairs as no new Summerset building going on here.

[couta1]

Just curious, should something go wrong with the plumbing in your Summerset unit, who pays for the repairs, had a plumber here today , he told me they do a lot of work for Summerset. Assuming it's repairs as no new Summerset building going on here. The company pays.

[Beagle]

I think they need to recruit in-house plumbers. Cost to hire a plumber in Auckland is atrocious.

[macduffy]

I think they need to recruit in-house plumbers. Cost to hire a plumber in Auckland is atrocious.

Is that because Auckland plumbers have to meet the costs of living and travelling, in Auckland?

(He said from a galaxy far, far away.)

:)

[QOH]

I think they need to recruit in-house plumbers. Cost to hire a plumber in Auckland is atrocious.

What bugs me is when you have two plumbers and they both go off together to buy "gear" and come back 45 mins later.

[Joshuatree]

Ok be honest now , own up, are there any smart money mums and dads (or small investors)on here selling down/out?.If so whats your reasoning and why do you think you're smarter than most of the SUM shareholders on here and invisible guests who read this everyday but never contribute? Disclose, still on the sidelines; is that smart?

[winner69]

http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/ Average broker valuation $5.60

I prefer the Financial Times -

The 5 analysts offering 12 month price targets for Summerset Group Holdings Ltd have a median target of 5.85, with a high estimate of 6.18 and a low estimate of 4.70. The median estimate represents a 22.90% increase from the last price of 4.76.

[percy]

What bugs me is when you have two plumbers and they both go off together to buy "gear" and come back 45 mins later.

I do not remember ever having a plumber who has not "had" to go off and buy/source/make a part.!
Bet they just go off and have a coffee.!

[winner69]

RSI went into the red oversold area today

Time to get in JT

Or should I say choo choo and just take a position now .....but wait until there's been a few positive days before backing the truck up .....but then the train might have left the station eh.

[couta1]

What bugs me is when you have two plumbers and they both go off together to buy "gear" and come back 45 mins later. Yeah, and of course that time is charged out at the same rate as the hands on work.

[JeremyALD]

Ok be honest now , own up, are there any smart money mums and dads (or small investors)on here selling down/out?.If so whats your reasoning and why do you think you're smarter than most of the SUM shareholders on here and invisible guests who read this everyday but never contribute? Disclose, still on the sidelines; is that smart?

I just wouldn't consider selling at this price. I have a large holding in SUM and I'm holding out! The only price id consider selling out if i went below $4.30. Then someone must know something. I've decided that's when I'll take another look, or in the next SUM update which I'm sure will be positive. There may be some pains with Auckland housing and construction but I see that as something in the long term that will subside.

[winner69]

An article in the SMH
http://www.smh.com.au/business/markets/hyperions-tim-samway-says-shorttermism-is-destroying-shareholder-wealth-20170613-gwpwg4.html

"It does frustrate me to see the market focusing on the short term – it destroys capital"


No worries with SUM long term - maybe not even short term

[h2so4]

I do not remember ever having a plumber who has not "had" to go off and buy/source/make a part.!
Bet they just go off and have a coffee.!

Not just coffee its sustenance! The other plumber well that's his father. You need someone to hold the coffee when you go through the drive thru.LOL!

[percy]

Not just coffee its sustenance! The other plumber well that's his father. You need someone to hold the coffee when you go through the drive thru.LOL!

Yes well......LOL.

[Leftfield]

Ok be honest now , own up, are there any smart money mums and dads (or small investors)on here selling down/out?.If so whats your reasoning and why do you think you're smarter than most of the SUM shareholders on here and invisible guests who read this everyday but never contribute? Disclose, still on the sidelines; is that smart?

While I wouldn't claim to be a 'smart money' person, I see SUM people gnashing their teeth at the recent lows, while others see it as an opportunity in the making. My portfolio is biased to riskier stocks and the present low SUM price gives me an opportunity to de-risk elsewhere and acquire a nice longer term div yield stock. That said, it is election year in NZ and I get the feeling that a higher cash allocation in portfolios is wise as I see SUM stocks slipping lower or going sideways for a while yet.

[Entrep]

Dropping due to Winston Peters possibly getting in, immigration down, and property taking a hammering?

[sb9]

Dropping due to Winston Peters possibly getting in, immigration down, and property taking a hammering?

Well put...

[777]

Strange then that the LPT's seem to have been rising over the past weeks.

[dobby41]

Strange then that the LPT's seem to have been rising over the past weeks.

LPTs don't have a relationship to residential prices.

[winner69]

Totally irrelevant to this thread (and SUM performance) but as some of you seem interested it appears as if house prices are still going - even in Auckland

From the REINZ

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2017/Residential/May/REINZ%20Residential%20Press%20Release%20-%20May%202017.pdf

[Zaphod]

While I wouldn't claim to be a 'smart money' person, I see SUM people gnashing their teeth at the recent lows, while others see it as an opportunity in the making. My portfolio is biased to riskier stocks and the present low SUM price gives me an opportunity to de-risk elsewhere and acquire a nice longer term div yield stock. That said, it is election year in NZ and I get the feeling that a higher cash allocation in portfolios is wise as I see SUM stocks slipping lower or going sideways for a while yet.

Depending upon your investment horizon, SUM is still - in my opinion - a good LT hold stock, esp at current levels. I'm currently trying to worth through my cognitive dissonance about buying more of SUM given I'm already overweight in this.

[Beagle]

Totally irrelevant to this thread (and SUM performance) but as some of you seem interested it appears as if house prices are still going - even in Auckland

From the REINZ

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2017/Residential/May/REINZ%20Residential%20Press%20Release%20-%20May%202017.pdf

This must be "fake news", real estate prices are supposed to be collapsing :)

[sb9]

Big volume crossing..


3
35
1:08:22 pm
473
900,000
$4,257,000
Off Market

[Leftfield]

Depending upon your investment horizon, SUM is still - in my opinion - a good LT hold stock, esp at current levels. I'm currently trying to worth through my cognitive dissonance about buying more of SUM given I'm already overweight in this.

Agree, the long term potential is good.
As I said "....SUM people gnashing their teeth at recent lows...while others see it as an opportunity..." I've been nibbling and adding SUM in the recent lows. I think it's just a question of time till the short term decline ends and the long term trend returns. However, it is also election year.....

[Beagle]

https://www.nzx.com/companies/SUM/announcements/302543
Congrats to the team at SUM. Makes compelling sense to diversify the funding source and lock in some of their funding costs for six years at close to a fifty year low in interest rates. Nearly $400m in headroom in their main funding facility now gives them ample headroom to pursue growth opportunities.

[Zaphod]

Agree, the long term potential is good.
As I said "....SUM people gnashing their teeth at recent lows...while others see it as an opportunity..." I've been nibbling and adding SUM in the recent lows. I think it's just a question of time till the short term decline ends and the long term trend returns. However, it is also election year.....

Don't worry, I'm definitely not disagreeing with you. Just adding some thoughts to what you've said :)

[777]

LPTs don't have a relationship to residential prices.

If residential prices were to drop by 50% I think you will find that there is a relationship.

[lawson]

If residential prices drop by 50% we'll all be able to compare notes as we queue up for the great NZ soup line :)

I am tempted to top up on SUM but also tempted to diversify and add some MET to the mix. I need to get on and make up my mind or they'll both rebound before I pick any up.

[dobby41]

If residential prices were to drop by 50% I think you will find that there is a relationship.

You would be hard placed to establish a relationship because there would be a lot of other things in play.
People see what they want to see and discount the rest - confirmation bias.

[Lewylewylewy]

It's sooo hard to know what to do.

I have more access to property information than most, but not all the data.

From what I can tell, prices seem to be generally up, but not as high as they previously were some months ago at their peak. for me, the question is WHY are they up a little? (what's the driver that's mildly overcome the previous causes for a drop?). If we can know this, we will be able to predict a trend going forward.

If I could know this, I could have more confidence that SUM are currently at a bottom.

I believe that SUM have reached the bottom for now, but an extended stagnancy in property prices or a drop could cause a further drop. I do believe that there will be an increase on the next news scheduled announcement because it will be positive (or an increase that comes a month or two afterwards). But the question will then be, will it drop after that euphoria based on property price stagnancy. Also, will they drop from the current bottom more than the increase in confidence another good result will get.

I think if I can see another month or two of property price growth, and it's still hanging around the $4.80 or below, I'll be selling my RBD (target price $6.44) and making SUM my largest holding.

... So, that's where I'm at.

[Lewylewylewy]

I'll also be watching immigration figures, building consent rates (to some degree) and political policy changes relating to immigration (and thread from the Labour party).

[Beagle]

It's sooo hard to know what to do.

I have more access to property information than most, but not all the data.

From what I can tell, prices seem to be generally up, but not as high as they previously were some months ago at their peak. for me, the question is WHY are they up a little? (what's the driver that's mildly overcome the previous causes for a drop?). If we can know this, we will be able to predict a trend going forward.

If I could know this, I could have more confidence that SUM are currently at a bottom.

I believe that SUM have reached the bottom for now, but an extended stagnancy in property prices or a drop could cause a further drop. I do believe that there will be an increase on the next news scheduled announcement because it will be positive (or an increase that comes a month or two afterwards). But the question will then be, will it drop after that euphoria based on property price stagnancy. Also, will they drop from the current bottom more than the increase in confidence another good result will get.

I think if I can see another month or two of property price growth, and it's still hanging around the $4.80 or below, I'll be selling my RBD (target price $6.44) and making SUM my largest holding.

... So, that's where I'm at.

Good post, appreciate your honest feedback. For my money we're close to the bottom but there is political risk at present around a possible change to immigration policy. Even if that eventuates and we see some moderation to around 50,000 immigrants per year the thing that's supporting the real estate market is simply that new demand from immigrants is presently outstripping the building industry's ability to supply. If immigration was reduced demand / supply would probably become more equally balanced and we'd possibly see a period of zero house price growth nationwide in real inflation adjusted terms for a few years. My forecast model is based around zero growth in real inflation adjusted prices in Auckland for several years and 3% real price growth throughout the rest of the country.
On those assumptions fundamentally I believe the stock is very, very cheap...but we have to wait three months for the election and about another month before SUM will probably come out and update FY17 guidance. No way I will sell at this level but I am happy to exercise a little patience when it comes to upping the ante.

[Hoop]

SUM is in a medium term down trend (2.5 months) ...You have to have a good reason to buy in a downtrend....There are only a few reasons using bear market strategies e.g Dead cat bounces, S&R tools with sucker rallies, etc..In SUM's case there doesn't seem to be any reasons buying SUM with less risk atm..

There are indicator hints that SUM is attempting to form a bottom pattern, The stochastic is positive for a breakout but this only one very fast leading indicator which could turn negative very quickly...There are no price signs that the down trend has ended yet, so buying in at the moment hoping to find the bottom or near bottom is gambling with your money..
The first breakout sign is very close to the bottom at $4.77+..If you have very itchy fingers and thinking it's the bottom then it make sense to wait.. So far SUM has been testing this area and has failed..

https://www.tradingview.com/x/6gQvlirX/

[Entrep]

Thanks Hoop, always appreciate your input

[peat]

.In SUM's case there doesn't seem to be any reasons buying SUM with less risk atm..

There are indicator hints that SUM is attempting to form a bottom pattern,.................There are no price signs that the down trend has ended yet,

The first breakout sign is very close to the bottom at $4.77+..If you have very itchy fingers and thinking it's the bottom then it make sense to wait.. So far SUM has been testing this area and has failed..



As a comment on the above
There is a hammer candle on the 9th June..... these sometimes indicate a bottom
8909
Traders could use the low on that as a stop loss to minimize risk.

[Hoop]

As a comment on the above
There is a hammer candle on the 9th June..... these sometimes indicate a bottom
8909
Traders could use the low on that as a stop loss to minimize risk.
Good point Peat...I didn't see the hammer..I'm still getting use to visualising the tradingview charts..Now I see the hammer I can't figure out how I missed not seeing it, it's plain as day...Yep so that's another positive sign (makes it a slightly lesser risk when buying)..still need more for confirmations to lower the risk of entry...

[Baa_Baa]

As a comment on the above
There is a hammer candle on the 9th June..... these sometimes indicate a bottom
8909
Traders could use the low on that as a stop loss to minimize risk.

Nice observation peat, and the suggested stop loss. But who here uses stops? Very rarely mentioned despite being the capital sensitive trader/investors best hedge against buying decisions. Sadly in NZ we have to maintain stops manually but it's worth the effort, better than an OMG moment when the SP goes against us.

[Joshuatree]

[QUOTE=Joshuatree;668226]I make it 4,216,732 shares sold since the arguable peak on 11/4/ ; some may say the downtrend started in march. While that number is tiny compared with the mkt cap of re $1 billion its still worth noting. Quite a lot of 100 to 200 thousand vol selling into the mkt some days as the price drops. What does this mean ; i don't really know but its int. quote

Vol increased daily this week and took off today, 550,494 , biggest vol in nearly 2 years, s/p down 2 more cents . I make it 6,048,560 shares sold into this down trend now. Be a relief if we do get a SSH , maybe a signal an overhang has gone.

[winner69]

A week close at 469 - this is really getting bad isn't it

SUM has become unloved and unwanted. Can't fight market sentiment so have to grin and bear it eh.

Won't be selling though.

Another week next week .....and you never know might be some window dressing before the end of the month.

[777]

Yeah 369 would be bad but 469 is bad enough.

[trader_jackson]

[QUOTE=Joshuatree;668226]I make it 4,216,732 shares sold since the arguable peak on 11/4/ ; some may say the downtrend started in march. While that number is tiny compared with the mkt cap of re $1 billion its still worth noting. Quite a lot of 100 to 200 thousand vol selling into the mkt some days as the price drops. What does this mean ; i don't really know but its int. quote

Vol increased daily this week and took off today, 550,494 , biggest vol in nearly 2 years, s/p down 2 more cents . I make it 6,048,560 shares sold into this down trend now. Be a relief if we do get a SSH , maybe a signal an overhang has gone.



Big guys shifting money out of sum shares and putting it into others you think? (OCA has had some heavy volume lately... and the price has gone up modestly...)

[Hoop]

Yeah 369 would be bad but 469 is bad enough.


Winner is posting from his time machine again:D...I hope he was back in the past this time..
Quote..." Another week next week .....and you never know might be some window dressing before the end of the month"...A lot of stocks got moved around at market close today SUM got dragged down as did MEL SKC and WHS......AIR and GNE benefited...There are a lot of other Stocks in the 5pm play I haven't looked at yet..Any idea who the major player was (is)???...

[Yoda]

Let's hope the Q2 results are good . Out first week of July ? Seems like everyone is moving to ATM? :) ,

[Beagle]

Winner is posting from his time machine again:D...I hope he was back in the past this time..
Quote..." Another week next week .....and you never know might be some window dressing before the end of the month"...A lot of stocks got moved around at market close today SUM got dragged down as did MEL SKC and WHS......AIR and GNE benefited...There are a lot of other Stocks in the 5pm play I haven't looked at yet..Any idea who the major player was (is)???...
Index rebalancing.

[troyvdh]

SUM is a retirement entity....it may be advantageous if folk focus in the same long term mind set than react to daily/weekly fluctuations.....cheers

[Hoop]

SUM is a retirement entity....it may be advantageous if folk focus in the same long term mind set than react to daily/weekly fluctuations.....cheers

My reason for the daily/weekly watch/lurk/post on SUM is to help "time" my next lot of accumulations..(portfolio efficiency)

Many say price doesn't matter when one buys in for the very long term....but imo.. many years of hand wringing when I was a long term investor I believe it does matter..Buying just before a correction (mistime) and watch it go down 15% (normal bull market correction) takes away one's confidence...sometimes when things don't go according to the fundamental plan one could be sitting on an investment for many months watching it going nowhere while the other stocks you chose not to buy + the market rockets up..this mistiming results in poor portfolio efficiency and can damage your ego causing rash/riskier decision making (speculative catch -up)..

Using SUM for example....mistiming a buy at the end of May 2014 @ 3.40 only to watch it fall -25% and you had to wait 13 months before your investment went from red to green (catch-up) and in the meantime have to suffer how happy other posters were, making money hands over fists in the on going Bull Market..and your are -11%

Using SUM again...More recently mistiming a buy back in September 2016 when it fell a couple of percent thinking you're buying "cheap" shares in the dip only to see your investment today is still in the red by -11%...Now these 1 year catch-up time examples I've mentioned have (is) happening during a bull market correction (minor) and could've been prevented using TA to time those buys/accumulations..How would that make you feel if media commentators commented that SUM share price has gained +400%** in 5years up to today's price...eh...and...telling you that chimps with dartboards are make lots of money during this bull market cycle...
** timing from IPO would have given your stock portfolio better efficiency >+400% probably+600%

We know from history that Bear market cycles (Major) can cause 2,3,4 years of catch-up time...SUM has not experienced a NZ index Bear Market cycle yet but we have seen what damage corrections can do...

In theory buy and hold for a long time in a growth stock sounds good..but its easier said than done...When sounding the virtues of LT B&H discipline no -one mentions the 6 to 12 months damage a Bear Market can do ...they are portfolio killers and especially damaging when an LT investors started or accumulates investing near a top of a cycle ,,,,,,,,,,,,,,,,,,,Just think how much more portfolio efficiency can be gained by being in the stocks for 3,4,5,6+ years (bull cycle) and being out of that stock for 6.12.15months (bear cycle) then back in again for another 3,4,5,6+ years...

TA helps in decision making.. not the ideal (perfect world), but a better chance to time ones buys and sells...Investors/Layman/ordinary people are misled when thinking TA.. TA is not a short term investing discipline used by frequent traders (although it can used this way).. TA is used by all sorts of investors and is considered a variable term investing discipline..eg If a stock continues to rise forever that TA investor will be invested in that stock forever..

Variables change all the time and affects investor behaviour and TA responds to investors changing behavioural sentiments....so us investors on this forum thread discuss SUM's changing investing environment looking/waiting for opportunities.....It's all about being aware and use timing timing timing

[Joshuatree]

Thanks Hoop.Timing is key alright.
"Many say price doesn't matter when one buys in for the very long term." I think the Investment adviser industry are responsible for this brainwashing. Someone is recommended a balanced portfolio to buy and the advisors have their standard go to stocks like RYM,FBU ,Vector etc which they buy at the current mkt price regardless of value,saying the above to the client. They also cultivate "its too hard to manage your investments leave it to us," take their annual fees out and let Investors dangle with RYM for example; gone nowhere for 3 YEARS! iF one had been placed in FBU 10 years ago one would be down $4 a share and the management fee gets taken out regardless. Buying and holding one of those relics unfortunately; if only it was that easy!:mellow:

[JeremyALD]

Question Hoop when this was $5.40 a few months ago would this of triggered a buy signal using TA? It seemed like it was going onwards and upwards at that point as I and many others here thought.

[JeremyALD]

Thanks Hoop.Timing is key alright.
"Many say price doesn't matter when one buys in for the very long term." I think the Investment adviser industry are responsible for this brainwashing. Someone is recommended a balanced portfolio to buy and the advisors have their standard go to stocks like RYM,FBU ,Vector etc which they buy at the current mkt price regardless of value,saying the above to the client. They also cultivate "its too hard to manage your investments leave it to us," take their annual fees out and let Investors dangle with RYM for example; gone nowhere for 3 YEARS! iF one had been placed in FBU 10 years ago one would be down $4 a share and the management fee gets taken out regardless. Buying and holding one of those relics unfortunately; if only it was that easy!:mellow:

I guess a lot of them pay good dividends though, so I do see the case in point of hanging in for the long term. For example let's say you bought HLG 5 years ago and it returned 11% dividend but zero capital gain you'd still of done pretty well - in high dividend stocks I can see the point of not trying to 'time' the market. With stocks like RYM and SUM timing is more important because essentially if it drops over a year it's wasted money with pretty limited income flow back.

[Joshuatree]

Fair point; if income is a high priority.

[Hoop]

Question Hoop when this was $5.40 a few months ago would this of triggered a buy signal using TA? It seemed like it was going onwards and upwards at that point as I and many others here thought.


I thought so too, the media was very positive..eh Jeremy

However the TA fired buy signals 6 weeks before then when it broke the ~4.80 resistance. When it reached 5.40 in March and again in April and failed to go higher to reach a new high that 5.40 double top or slanted H&S (take your pick) both bearish patterns became a TA warning sign that something was wrong as it showed there was conflicting behaviour, the media behaviour showed SUM had overcome its correction and was exuberant in it's outlook yet mass investor behaviour had turned bearish..

Have a look at the chart link here (https://www.tradingview.com/x/5z7vQucm/)...I kept it very simple using EMA100 as a proxy trend line.. Using medium term TA and using ideal theoretical activity (allowing a little leeway with false EMA100 breaks) If you bought SUM at IPO using TA would have you "in" for 32 months.."out" for 6 months...."in" again for the next 22 months up until October 2016...since then SUM behaviour has changed its lost its upward trend momentum and got volatile making it a more risky stock to invest in using this simple method..

Portfolio efficiency shows up with that important one "in" and "out" and back "in" long term (LT) activity mentioned above
For example holding 100,000 shares from just after IPO say average value of 1.40/share..selling at 3.30 after 32 months realising $333,000 ...buying back in 6 months later at 3.00 using that 333,000 realised money, you have 110,000 shares..you are now 10,000 shares better off than the LT B&H investor..

My all time classic portfolio efficiency example using simple TA was with MFT a few years ago..I actually did this for real but not from the theoretical beginning (it took me a little while to cotton on that MFT was being MA30 friendly) ..Phaedrus didn't believe me at the time...but that example was quote.."At the end of trade 8 that $7800 has turned into $14780... +89% profit during a Bear market cycle on a share with had lost nearly 2/3's of its share value ( 810c high to 340c low).... Damn good eh..." In other words using a buy and hold discipline during that time would have seen that investor being ~60% down..a very poor portfolio efficiency rating.
MFT post #280, page 19, 5th May 2009 LINK (http://www.sharetrader.co.nz/showthread.php?760-MFT/page19&highlight=mft)

[Lewylewylewy]

I think sum changed direction because of industry news on wages and property prices. I don't think it had anything to do with how the chicken bones landed or tea leaves. #NotABelieverInTA

[Elles]

I think sum changed direction because of industry news on wages and property prices. I don't think it had anything to do with how the chicken bones landed or tea leaves. #NotABelieverInTA

I don't think TA is trying to explain why the change happened, but gives ways to time entries and exits into the market, rather than sitting through the ups and downs.

[Joshuatree]

Well put Elles and thanks again Hoop. I keep the T/A as simple as i can trying to follow KW's user friendly advice, but don't always have the discipline. My ego and lazy brain can be a problem. To call T/A superstitious like reading tealeaves is so far out as its very precise and mathematical.If one doesn't understand something how can one rubbish it. Taking the best opportunities from these threads to learn and get better at investing is a gift freely offered . I will refresh KW's wisdom.

[couta1]

I think sum changed direction because of industry news on wages and property prices. I don't think it had anything to do with how the chicken bones landed or tea leaves. #NotABelieverInTA
Yep, the triple whammy of the warning of headwinds in Auckland at the AGM combined with the data on property prices, and to top it off, the not to be underestimated effect of the pay equity settlement have all come together to form the perfect storm of negative sentiment at the moment. It will all come out in the wash given time as the gale force tailwinds overwhelm the current sentiment.

[Joshuatree]

From KW
Using TA to time entries and exits


I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4517)


2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.

MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)

Attachment 4518 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4518)

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519 (http://www.sharetrader.co.nz/attachment.php?attachmentid=4519)

3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).

ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
ALQ.jpg (http://www.sharetrader.co.nz/attachment.php?attachmentid=4520&d=1368505716)

I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.

[RupertBear]

TA 'measures' market sentiment - nothing more, nothing less

And at the moment market sentiment towards SUM is ****. Why is anybody's guess.

Can't fight that and until sentiment improves SUM will be a 'laggard'

Another half gets disposed of next week - should've sold the lot last time instead of only half. Come to think of it selling half at a time seems rather stupid if the intent is to get back in in the future .....so probably sell the lot I have left

Hmm its sods law for me because as soon as I sell the lot they invariably shoot back up again, so i now keep a few and buy and sell around them. Probably a silly novice way of doing it ;)

[BlackPeter]

KW is summarizing well known TA rules - and as long as only a small number of people observe these rules, they are (in my view) likely to improve their investment records.

However - just imagine what would happen if everybody would follow these simple rules. Just try a simple scenario: All shareholders following (not just her) advise to sell after the "cross of death" and never buy in a downtrend. Result: All (and I mean ALL) SUM shares on offer, but nobody buying any. Result: market is dead and will stay dead forever. Stupid.

So - it is easy to see that this set of rules can't be the whole truth. There must be people following some other strategy - and while there are obviously always some bigger fools splashing their funds around, there are many who follow a more fundamental investment strategy and do well using it. Haven't heard yet that Warren Buffet made his money using TA. NZ Superfund (and any other successful and big enough fund) are not using TA either - they can't. You can't ride the waves you are making yourself.

While it is good to talk about the various strategies - I don't think that (properly applied) there are right and wrong ones. They all have their ups and downs depending on the context - and I don't think that we have so far talked enough about this very context. So - lets come back to SUM and the retirement industry:

True - there are some threats:

- For some funny reason it does sound like that building resources are strained (and this despite a number of posters claiming (on other threads) that doomsday for the property market is approaching (given a in my view pure seasonal low). Looks like people can have it both ways ... Whatever this is - it sounds like a problem nice to have (if you are employing your own building team) and it will not last forever. Certainly not an issue for a long-term investor.

- Salaries for care personnel are rising, which inevitably means higher cost for somebody. Summerset as well as other retirement villages are embracing this trend, highlight the benefits in higher staff retention and easier staff recruitment (which both safes them money). They expect as well that all stakeholders (clients, state) will contribute to these higher salaries (as they must). At he end of the day it is never the industry paying and always the customer - unless there are competitors who can supply the same service for less money. Anybody seeing this competition?

More important however in my view is the strong tailwind for the industry:

- The grey avalanche keeps moving and accelerating - and not many conceivable external events will or can take the pressure from the retirement sector. Sure - some old people might decide to spend their sunset years in a warmer and lower wage environment (Malaysia, Indonesia, Philippines anybody? ....), but this would mean giving up NZ Super and all the other state subsidies, so probably not a big cost saver for many. The increasing demand on our retirement sector is actually very inflexible - people in most cases don't have a choice to wait ... the only real option they might have is to reduce the quality of life for their sunset years in order to safe money. Would you do that if you have got the money? Any other alternative (like care at home) is subject to the same context (higher salaries for care personal).

Having said all this -
Do I know whether SUM is for the next month / quarter / year / decade the best investment opportunity? No, I don't. My (and your) money might well do better (or worse) invested in RAK, PPH, OHE, WHS or FPH instead (I know - this list is not meant as investment recommendation ...).

Do I think that now is the best time to sell them? Well, it depends - if we assume the SP will drop for another 15%, than may be, though realistically ... if it really does, than it will take some time for the indicators to look happy after the bottom again, meaning that we probably would buy back at a similar level like now - so why sell out in the first place?

I think the only justifiable reason to sell out now is if we assume that the retirement industry is fundamentally screwed and the company will do a WYN on us. If you however believe that this industry (and this company) is a winner long term, than why would anybody sell out at a time the shares are cheap? I always found it more profitable to sell stuff which is dear ...

Anyway - my 2 cents.

Discl: holder;

[Joshuatree]

I never understood T/A until KW posted her user friendly version, changed my views and informed me about helping with entry and exits strategies.Keep it simple stupid ;i say to myself.
Being human we just don't do the same thing (thank goodness ,although the bot era is upon us:eek2:)especially when our competitive egos get in the way, maybe thats why women do better then men at investing.
Sometime in the future i think the govt will move the goalposts as they have in Aus and returns won't be as juicy.

Im seriously thinking of buying some SUM for the first time; when the trend changes; but closely watching the property mkt too.

[Jantar]

Hmm its sods law for me because as soon as I sell the lot they invariably shoot back up again, so i now keep a few and buy and sell around them. Probably a silly novice way of doing it ;)


KW is summarizing well known TA rules - and as long as only a small number of people observe these rules, they are (in my view) likely to improve their investment records.

However - just imagine what would happen if everybody would follow these simple rules. Just try a simple scenario: All shareholders following (not just her) advise to sell after the "cross of death" and never buy in a downtrend. Result: All (and I mean ALL) SUM shares on offer, but nobody buying any. Result: market is dead and will stay dead forever. Stupid.......

BlackPeter is absolutely right. If TA were the way to go then the market would collapse. And there are others who are very successful at doing just the opposite. I think it was Bob Jones who advised that when everyone else is selling, then buy, and when everyone else is buying, then sell.

I am not a wizard at investing, so I do the same as RupertBear. Most of my decisions are based on the fundamentals, but if I see a definite down trend developing I sell some, but not all. Then when I believe the to market turn around I'll buy them back at a cheaper price.

Yes, I sometimes catch the falling knife, but often it is by the handle, not the blade.

[Joshuatree]

Simply; T/A is another investing tool to use ;especially for entries and exits; just need to sharpen it occasionally. No wrongs or rights and if you don't want to use that tool; thats better for the people that do use it. You must be an octopus jantar:)

[peat]

interesting to arrive and find all the TA discussion which I hadnt seen before drawing this chart.
Two bullish gartleys are drawn. The vicinity of the purple line is strong support /resistance
I'd like to see confirmation of a turn at this point , but if it happens there is good bullish potential.

8916

[Hoop]

BlackPeter is absolutely right. If TA were the way to go then the market would collapse.

Beware of the part-argument....Lets add another part....If FA were the way to go then the market would collapse.....

What do I mean?....Simple logic...If all traders were of one make-up and only used one discipline whether it is FA, TA, Contrarian, Momentum, tea leaves, whatever they would all want to buy in at the same time creating buying chaos and very sharp movement up into overpriced territory (supply/demand).. ditto in reverse...Volatility to the max, or if no-one cared, boredom to the max..

Now lets be sensible guys this never happens in a free market apart from the rare panics...We are dealing with a marketplace..In the short and medium term FA can be worthless as sentiment rules..In the long term FA is very valuable as it can either confirm earlier negative sentiment was correct (company going to the dogs) or confirm earlier negative sentiment was misplaced (e.g AIR last year)...Share investors may be buying shares in a company but they have to realise they are also buying into a marketplace...The market place dictates and it can ruin you..e.g A FA disciple buying DIL at a high price deciding to ride out a bad bear cycle knowing that eventually the price will reflect the favourable forward FA, only to see it bought out and de-listed from the market...ditto investing in Frucor as along term "superannution" buy and hold forever, the market delisted it and you the shareholder had no say in the matter so much for that B&H strategy....The marketplace is made up of all sorts of people with differing ideals,attitudes, personal strengths and weaknesses,temperament, and beliefs, some have moral attitudes and will never buy SKC or RAK some will never buy cyclical stocks e.g AIR.....TA discipline ain't tea leaves or the holy grail of knowing everything.. it just measures (and uses tools to analyse) the sentiment of all the people within the marketplace at specific times from the past up to the last trading moment of present day..Like FA TA does not know the future as it is impossible to collect and analyse data that doesn't yet exist..but we all love to predict the future using our "expert" knowledge and it doesn't matter if we are FAers, TAers or believers of groundhogs, we all love to share our opinions, debate about it and shake around our crystal balls..It's us that makes up the marketplace (and these forums)...May it continue for centuries to come..:cool::t_up:

So today, what does all this mean .....TA says market sentiment towards SUM sucks at the moment.....that is all......

[Joshuatree]

Yeah or until the bots takeover:ohmy:

[RupertBear]

Beware of the part-argument....Lets add another part....If FA were the way to go then the market would collapse.....

What do I mean?....Simple logic...If all traders were of one make-up and only used one discipline whether it is FA, TA, Contrarian, Momentum, tea leaves, whatever they would all want to buy in at the same time creating buying chaos and very sharp movement up into overpriced territory (supply/demand).. ditto in reverse...Volatility to the max, or if no-one cared, boredom to the max..

Now lets be sensible guys this never happens in a free market apart from the rare panics...We are dealing with a marketplace..In the short and medium term FA can be worthless as sentiment rules..In the long term FA is very valuable as it can either confirm earlier negative sentiment was correct (company going to the dogs) or confirm earlier negative sentiment was misplaced (e.g AIR last year)...Share investors may be buying shares in a company but they have to realise they are also buying into a marketplace...The market place dictates and it can ruin you..e.g A FA disciple buying DIL at a high price deciding to ride out a bad bear cycle knowing that eventually the price will reflect the favourable forward FA, only to see it bought out and de-listed from the market...ditto investing in Frucor as along term "superannution" buy and hold forever, the market delisted it and you the shareholder had no say in the matter so much for that B&H strategy....The marketplace is made up of all sorts of people with differing ideals,attitudes, personal strengths and weaknesses,temperament, and beliefs, some have moral attitudes and will never buy SKC or RAK some will never buy cyclical stocks e.g AIR.....TA discipline ain't tea leaves or the holy grail of knowing everything.. it just measures (and uses tools to analyse) the sentiment of all the people within the marketplace at specific times from the past up to the last trading moment of present day..Like FA TA does not know the future as it is impossible to collect and analyse data that doesn't yet exist..but we all love to predict the future using our "expert" knowledge and it doesn't matter if we are FAers, TAers or believers of groundhogs, we all love to share our opinions, debate about it and shake around our crystal balls..It's us that makes up the marketplace (and these forums)...May it continue for centuries to come..:cool::t_up:

So today, what does all this mean .....TA says market sentiment towards SUM sucks at the moment.....that is all......

Great post Hoop thanks

[Jay]

Yes ,a great few posts of late Hoop - Thank you
Would add to your reputation if I could, but seems have to spread it around a bit more first!

[Beagle]

Last week we had index rebalancing and we saw consistent downward pressure on SUM as index tracking funds reduced their holding during the week. Following closely and looking for the right time to double down.

[couta1]

Last week we had index rebalancing and we saw consistent downward pressure on SUM as index tracking funds reduced their holding during the week. Following closely and looking for the right time to double down. Why don't you just triple down mate, so we can both have equal sized holdings.:D

[Food4Thought]

Roger you are now Beagle... how a few weeks change so much. yet so little.
On another note... I love these prices :eek2: SUM one or two coming my way.
Still see it dropping a little further, yet how little is always hard to guess.

It's like the seasons, the leaves are falling, share prices are mostly going down... she'll be right mates

[macduffy]

Roger you are now Beagle... how a few weeks change so much. yet so little.
On another note... I love these prices :eek2: SUM one or two coming my way.
Still see it dropping a little further, yet how little is always hard to guess.

It's like the seasons, the leaves are falling, share prices are mostly going down... she'll be right mates

No need to guess, just wait for the tide to turn. There'll be sum good buying there in due course.

NB. I promise not to use that corny "sum" again!

:cool:

[Raz]

Roger you are now Beagle... how a few weeks change so much. yet so little.
On another note... I love these prices :eek2: SUM one or two coming my way.
Still see it dropping a little further, yet how little is always hard to guess.

It's like the seasons, the leaves are falling, share prices are mostly going down... she'll be right mates

Nice to know if there is a reason... or sentiment rules the day..So Roger is now Beagle...right that fills in the picture...

[peat]

we all love to share our opinions, debate about it and shake around our crystal balls..It's us that makes up the marketplace (and these forums)...May it continue for centuries to come..:cool::t_up:

So today, what does all this mean .....TA says market sentiment towards SUM sucks at the moment.....that is all......

I'm not so sure. In terms of PRZ its looking pretty positive.

This is why I hate the TA vs FA argument as its just too binary and doesnt allow for the various methods under each broad category.

[peat]

I'm in , another pattern on a smaller scale has tipped me.

8924

[Joshuatree]

Care to explain that chart peat, its meaningless to me except the two wings i can see, lift off?:D

[Nasi Goreng]

Care to explain that chart peat, its meaningless to me except the two wings i can see, lift off?:D

My take would be resistance line at 4.77 and support line at 4.66. The resistance at 4.77 may be a tougher hurdle than the support at 4.66 which if it starts heading that way will likely be a rather weak support. A break above 4.77 may act as a short term bullish sign but its certainly not a strong signal.

The FA vs TA argument is a good one, because if it goes down much lower than $4.66 some buyers will be salivating but who knows how low it could go?

[Beagle]

I'm in , another pattern on a smaller scale has tipped me.

8924

Were you talking about a hammer indicator the other day ? Can you please explain to a simple hound that's far more fond of FA what's implied by this hammer signal ?

[peat]

Care to explain that chart peat, its meaningless to me except the two wings i can see, lift off?:D

its the same type of pattern in my earlier chart

http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=670397&viewfull=1#post670397 (http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=670397&viewfull=1#post670397)

whats known as a buliish gartley, (I will go into more detail off this thread if requested) however in this case the chart is done using hourly candles. whereas the last one was daily.
Nasi I saw the support line at 4.69 and the failure at 4.66 but that said I'm not saying I will close at 4.65.

The combination of the bigger and the little gartley tipped me over to action

Obviously they dont always work out but when they do it can be powerful.

Yes they are wings ! Or M's .

[Nasi Goreng]

Were you talking about a hammer indicator the other day ? Can you please explain to a simple hound that's far more fond of FA what's implied by this hammer signal ?

Hammer would either say, you can't touch this... or stop... hammer time.

[peat]

Were you talking about a hammer indicator the other day ? Can you please explain to a simple hound that's far more fond of FA what's implied by this hammer signal ?
a hammer is a type of candlestick which has a long wick at the bottom indicating support. Price tests the lows but bounces back quickly giving a long wick but the open and close are in the upper range.


8925

candlestick example (not a hammer)

[Beagle]

Thanks peat.

[Joshuatree]

Yes thanks peat and Nasi.
My broker has some 5 pages out on retirement prop stocks moving from overweight to neutral on SUM atm. In a few words they are citing a cooling housing mkt will weigh on earnings , growth, sentiment and valns. Positive longterm view though with lots of explanations ORA charts etc.

[bull....]

heading to test major 4.50 I reckon , all retirement stocks look bit dodgy , ift may have timed this very nice

[trader_jackson]

heading to test major 4.50 I reckon , all retirement stocks look bit dodgy , ift may have timed this very nice

$4.21 the 52 week low - if it got to this I will do sum thinking... even more interesting because OCA has never looked stronger?

[Mickey]

$4.21 the 52 week low - if it got to this I will do sum thinking... even more interesting because OCA has never looked stronger?

If it got to $4.21 - I would do sum serious buying :)