OCA - Oceania Group - retirement villages

[hardt]

I will admit to being somewhat baffled by the OCA accounts. I was also baffled by the last FY version and was hoping for a little clarity this time.
Well that did not happen did it!

Somehow the little bits and pieces, a tax adjustment here, a PP&E revaluation (or 2) there, they appear to add up to nothing much at all.

Though to be honest, what most baffles me more is the depth of emotional attachment to this stock being exhibited on this thread.

201 pages of discussion on a stock less than a year old with high single digit projected growth

Where RYMAN (the bloody A1 in retirement) has 240 pages on here after 15years consistently booming in the industry and on the market.

[Baa_Baa]

201 pages of discussion on a stock less than a year old with high single digit projected growth

Where RYMAN (the bloody A1 in retirement) has 240 pages on here after 15years consistently booming in the industry and on the market.

If you subtract the 200 pages of quality analysis and insights from winner, Beagle and Couta, the 1 page left didn't add a lot of value to the discussion, including your post.

There's decent price support between $1.00 - $0.98 so I'd expect a slugfest between here and there over the next wee while, notwithstanding macro effects.

I'm just looking for a lowest price accumulation point, so happy if it goes below that support, even a long way below. Long holds are like that, buy the yield.

[hardt]

If you subtract the 200 pages of quality analysis and insights from winner, Beagle and Couta, the 1 page left didn't add a lot of value to the discussion, including your post.

There's decent price support between $1.00 - $0.98 so I'd expect a slugfest between here and there over the next wee while, notwithstanding macro effects.

I'm just looking for a lowest price accumulation point, so happy if it goes below that support, even a long way below. Long holds are like that, buy the yield.

I doubt a boomers echo chamber is anymore than 20% substance, 30% ad hominem bs and 50% missing the point

[BlackPeter]

I doubt a boomers echo chamber is anymore than 20% substance, 30% ad hominem bs and 50% missing the point

Not quite sure I get your point, but apparantly you think that there is too much discussion on this thread. To be fair - much of the discussion is not about OCA, but about the retirement sector in general (like what cruelties our beloved gummit could do to capital gains, misbehaviour of unrelated Australian retirement providers and similar) but I get that this must be all OCA's fault given that punters choose to discuss it here.

Obviously - you could easily just unsubscribe from this thread, if this is an issue for you.

However - given you are still here, the problem must lie deeper. Do you think that the stock is overvalued? If so - why don't you just say so? How much is it worth to you - and why? It is o.k. if you think that Ryman is the paragon of excellence ... they did well - but some people see them at current as overhyped, as you seem to see OCA.

OK - lets compare:

Forward PE (3 yr average based on analyst consensus):
RYM: 14.6; OCA: 8; OCA wins in this contest hands down, but obviously - analysts can be wrong (as can anybody else :p);
Backward PE (5 yrs avg, due to older numbers for OCA not availalbe):
RYM: 18.8; OCA: 13.7; OCA wins hands down in this discipline as well;
backward Rev CAGR (RYM 8 yrs, OCA 5 yrs average - sorry, too lazy to recalculate):
RYM: 15.3; OCA: 8.6: So - yes, no doubt - Ryman wins in this discipline
backward EPS CAGR (RYM 8 yrs, OCA 4 yrs, given that 2014 earnings was for them negative which sort of screws up the formula):
RYM: 21.8; OCA: 57.3; OCA wins, but to be fair ... we measured for OCA only a shorter period.

I still see Ryman as the "Rolls Royce" of the retirement sector, but just look at AIR to see what happens if Rolls Royce screws up - and hey, RYM might as well: not unusual for NZ companies to fetch themselves a bloody nose on the other side of the Tasman and leave afterwards with empty pockets.

I see OCA more as the Toyota ... and admittedly with less history - i.e. its o.k. that the markets demand a higher risk premium.

Re the thread length - I guess I sort of agree. Maybe we can ask the retirement sector doomsday preachers to spread their generic doomsday sermons a bit fairer across all NZ retirement stocks instead of dumping it all into the OCA thread. This should help a lot ot keep the OCA thread shorter and more relevant.

[winner69]

Not quite sure I get your point, but apparantly you think that there is too much discussion on this thread. To be fair - much of the discussion is not about OCA, but about the retirement sector in general (like what cruelties our beloved gummit could do to capital gains, misbehaviour of unrelated Australian retirement providers and similar) but I get that this must be all OCA's fault given that punters choose to discuss it here.

Obviously - you could easily just unsubscribe from this thread, if this is an issue for you.

However - given you are still here, the problem must lie deeper. Do you think that the stock is overvalued? If so - why don't you just say so? How much is it worth to you - and why? It is o.k. if you think that Ryman is the paragon of excellence ... they did well - but some people see them at current as overhyped, as you seem to see OCA.

OK - lets compare:

Forward PE (3 yr average based on analyst consensus):
RYM: 14.6; OCA: 8; OCA wins in this contest hands down, but obviously - analysts can be wrong (as can anybody else :p);
Backward PE (5 yrs avg, due to older numbers for OCA not availalbe):
RYM: 18.8; OCA: 13.7; OCA wins hands down in this discipline as well;
backward Rev CAGR (RYM 8 yrs, OCA 5 yrs average - sorry, too lazy to recalculate):
RYM: 15.3; OCA: 8.6: So - yes, no doubt - Ryman wins in this discipline
backward EPS CAGR (RYM 8 yrs, OCA 4 yrs, given that 2014 earnings was for them negative which sort of screws up the formula):
RYM: 21.8; OCA: 57.3; OCA wins, but to be fair ... we measured for OCA only a shorter period.

I still see Ryman as the "Rolls Royce" of the retirement sector, but just look at AIR to see what happens if Rolls Royce screws up - and hey, RYM might as well: not unusual for NZ companies to fetch themselves a bloody nose on the other side of the Tasman and leave afterwards with empty pockets.

I see OCA more as the Toyota ... and admittedly with less history - i.e. its o.k. that the markets demand a higher risk premium.

Re the thread length - I guess I sort of agree. Maybe we can ask the retirement sector doomsday preachers to spread their generic doomsday sermons a bit fairer across all NZ retirement stocks instead of dumping it all into the OCA thread. This should help a lot ot keep the OCA thread shorter and more relevant.

Good work BP

Just that losing ‘cheap as’ stocks get more air play than than ‘overvalued’ premium stocks

If Oceania was trading at $2 this thread would be quiet as

Something to do with either being comfortable or insecure methinks.

[couta1]

Sorry BP but bull will be back today so another page of scaremongering will be added from your totally trustworty tabloid sources.PS-Perhaps he has decided to take another day off.

[winner69]

My acquaintances at the London School of Economics looking for research material into behavioural finance think this thread is great.

[BlackPeter]

My acquaintances at the London School of Economics looking for research material into behavioural finance think this thread is great.

Is this good or bad?

[Jay]

With Aussie having capital gains tax, how, if at all, does it affect Ryman's model in Australia?? , if a CGT as put in place, then would OCA be affected that same way if we "followed" with something similar.

[winner69]

Is this good or bad?

Just good raw material for them .....they find investor behaviour intriguing .....esp when many perceive the market to be wrong

[BlackPeter]

Just good raw material for them .....they find investor behaviour intriguing .....esp when many perceive the market to be wrong

Define "wrong" in this context. Market is always right re setting the price even if it is wrong, but it is not very good in pricing the underlying value of a stock.

If it would be, than share prices would not jump around like spring lambs ... value of an organisation rarely jumps around on a daily basis while the share prices does.

That's what I know. What I don't know is whether the market over or undervalues OCA at current, but I think it is more the latter.

[bull....]

201 pages of discussion on a stock less than a year old with high single digit projected growth

Where RYMAN (the bloody A1 in retirement) has 240 pages on here after 15years consistently booming in the industry and on the market.

the difference is the rampers missed the ryman boat and tried to make up for it on oca. so you ended up with 190 pages of ramping on oca and 10 odd pages of balance from bull lol .

anyway the retirement sector had a dreadful week last week performance wise. big things to watch this week are royal commission in australia report to be released tonight this will possibly have ramifications in nz. probably explains the sell off last week in the sector. anyway be back later this arvo lots of study to do earnings season starts in aus this week and nz next week so a busy mth for investors to come

[tuaman]

What is this article about? Can someone explain it since I am not a paid-subscriber. Ta.

https://www.nbr.co.nz/analysis/tax-riddle-oceania-healthcare

[bull....]

What is this article about? Can someone explain it since I am not a paid-subscriber. Ta.

https://www.nbr.co.nz/analysis/tax-riddle-oceania-healthcare

in essence they are talking about what we talking about last week in relation to tax on occupation rights.

heres some

Even with a binding ruling from IRD, Oceania’s accounts still note: “The interpretation of New Zealand tax laws in relation to DMF involves significant judgements and uncertainty.”
To make everything a bit murkier, the IRD won’t release its ruling publicly or even confirm its existence, no matter that Oceania refers to it in its accounts. Riddle me this

https://www.nbr.co.nz/analysis/tax-riddle-oceania-healthcare

[BlackPeter]

Actually - just pulled for fun relevant 2 year trendcharts:

OCA (blue) vs RYM (red)
10293

and
OCA (blue) vs SUM (red)
10294

What I can read out of them is that the market sees all three of them quite highly correlated ... though its appreciation of OCA did in comparison slightly rise in the 18 months since they started. OCA finishes 5 to 10 % better than RYM or SUM. As well - the OCA dividend yield paid out in 2018 is better than the RYM or SUM dividend yield.

So - if we assume that the market is always right, than it is clearly nonsense to put some of them down and ramp the other(s) up. All the same with a bit higher yield for a bit higher risk.

qed

[winner69]

Define "wrong" in this context. Market is always right re setting the price even if it is wrong, but it is not very good in pricing the underlying value of a stock.

If it would be, than share prices would not jump around like spring lambs ... value of an organisation rarely jumps around on a daily basis while the share prices does.

That's what I know. What I don't know is whether the market over or undervalues OCA at current, but I think it is more the latter.

So the markets probably wrong today


But what do I know ....even though I know that I am intelligent, because I know that I know nothing

[BlackPeter]

So the markets probably wrong oday


How do you measure that?

[Beagle]

Actually - just pulled for fun relevant 2 year trendcharts:

OCA (blue) vs RYM (red)
10293

and
OCA (blue) vs SUM (red)
10294

What I can read out of them is that the market sees all three of them quite highly correlated ... though its appreciation of OCA did in comparison slightly rise in the 18 months since they started. OCA finishes 5 to 10 % better than RYM or SUM. As well - the OCA dividend yield paid out in 2018 is better than the RYM or SUM dividend yield.

So - if we assume that the market is always right, than it is clearly nonsense to put some of them down and ramp the other(s) up. All the same with a bit higher yield for a bit higher risk.

qed
But you forgot the all important ARV in your analysis who have woefully underperformed all the above in the last 2 years.
OCA have done the best since they listed though. Some would opine that's simply because they listed too cheap and some other dog is best of all but that's like creative accounting and a load of nonsense and a bit like saying if XYZ was ABC then DCE would be QED. All the proof that a dog is exactly that no matter what angle you look at it.
Woof woof.

[winner69]

How do you measure that?


....because you said 'What I don't know is whether the market over or undervalues OCA at current, but I think it is more the latter.'


Suppose I do imply undervalues means wrong

[trader_jackson]

But you forgot the all important ARV in your analysis who have woefully underperformed all the above in the last 2 years.
OCA have done the best since they listed though. Some would opine that's simply because they listed too cheap and some other dog is best of all but that's like creative accounting and a load of nonsense and a bit like saying if XYZ was ABC then DCE would be QED. All the proof that a dog is exactly that no matter what angle you look at it.
Woof woof.

being creative is comparing selected time periods... ARV has done much better than OCA in the past 6 months, but we'll just ignore that and look at the magical 2 year mark... really does depend on the angle you look at it afterall!

[peat]

Actually - just pulled for fun relevant 2 year trendcharts:

OCA (blue) vs RYM (red)
10293

and
OCA (blue) vs SUM (red)
10294

What I can read out of them is that the market sees all three of them quite highly correlated ... though its appreciation of OCA did in comparison slightly rise in the 18 months since they started. OCA finishes 5 to 10 % better than RYM or SUM. As well - the OCA dividend yield paid out in 2018 is better than the RYM or SUM dividend yield.

So - if we assume that the market is always right, than it is clearly nonsense to put some of them down and ramp the other(s) up. All the same with a bit higher yield for a bit higher risk.

qed

see post 2975 - keep up!

[BlackPeter]

being creative is comparing selected time periods... ARV has done much better than OCA in the past 6 months, but we'll just ignore that and look at the magical 2 year mark... really does depend on the angle you look at it afterall!

No idea how you can compare "unselected" time periods if this is what you are asking for ... or do you mean that a comparison is only fair if ARV wins?
Anyway - here is the chart:

OCA (blue) vs ARV (red):

10295

The only thing I can read out of that is that the market seems to think that ARV is a dog ...

[trader_jackson]

No idea how you can compare "unselected" time periods if this is what you are asking for ... or do you mean that a comparison is only fair if ARV wins?
Anyway - here is the chart:

OCA (blue) vs ARV (red):

10295

The only thing I can read out of that is that the market seems to think that ARV is a dog ...

Absolutely not, but some would argue 2 years is far too shorter time to say either has won.

[Beagle]

being creative is comparing selected time periods... ARV has done much better than OCA in the past 6 months, but we'll just ignore that and look at the magical 2 year mark... really does depend on the angle you look at it afterall!

When comparing one stock with another and one has been listed for only a short time why wouldn't the main reference point be the time since the former was listed ?
That would appear to be the most logical to make any sort of comprehensive statement about one being a better performer than the other, surely !
Of course you would argue OCA was listed too cheaply and therefore that analysis is fundamentally flawed. At face value that seems like an awfully "convenient" position to take. Perhaps one should defer any consideration until such time as we can look at average underlying eps growth over two years and then one could start to draw a reasonable, conclusion about which company is growing faster.

[BlackPeter]

Absolutely not, but some would argue 2 years is far too shorter time to say either has won.

Life is a marathon and the opera is not over before the fat lady sings ... So, absolutely - market might change its perception and things might well look very different in 5,10, 20 or 50 years. Or they might not - who knows?

And absolutely - if you are a trader (as your nome de plume seems to indicate, than there clearly would have been money in switching in Oct 2018 from OCA to ARV (though simply going into cash would have been still smarter :p) From an investor perspective however I know which one I would prefer.

[trader_jackson]

When comparing one stock with another and one has been listed for only a short time why wouldn't the main reference point be the time since the former was listed ?
That would appear to be the most logical to make any sort of comprehensive statement about one being a better performer than the other, surely !
Of course you would argue OCA was listed too cheaply and therefore that analysis is fundamentally flawed. At face value that seems like an awfully "convenient" position to take. Perhaps one should defer any consideration until such time as we can look at average underlying eps growth over two years and then one could start to draw a reasonable, conclusion about which company is growing faster.

Let us not forget I was first to announce on the forum the listing price and how cheap this was... so this is not just a "convenient" position I have taken (see post 122 - and 124 waay back on page 9)... and in fact completely opposite to the position some others had taken just 2 ish years ago... Funny that!

NPAT dropped 97% at half year for OCA, ARV NPAT up over 100%... literally polar opposites at 1H19, But I suppose it all depemds on what periods (and numbers) you compare to determine whether or not OCA or ARV is 'growing faster'? Funny that!

[Beagle]

Yes, it took me a while to warm up to them and yes you were right to say they were listed very cheaply. Well done. Kudos where its due.
NPAT....I work on underlying profit as do all the professional analysts but I think you know that already..and that last paragraph is just trying to wind up the dog's tail....

[Snow Leopard]

My acquaintances at the London School of Economics looking for research material into behavioural finance think this thread is great.

Do there use the term 'group think' a lot?

Probably got a more technical foreign sounding word for it.

[couta1]

Meanwhile we have had a Mexican standoff since 11:32.PS-In other trivial news SUM be heading under $6 in the near future.

[LAC]

Meanwhile we have had a Mexican standoff since 11:32.PS-In other trivial news SUM be heading under $6 in the near future.
Ready for it;)

[Lewylewylewy]

Wonder if that's milford dumping still. Might not be as bad as it looks... in which case, that's a buying opportunity. Of course, it's all guesses this side of the announcement

[winner69]

OCA market cap up 30% since listing on 8/5/17

ARV market cap up 35% since 8/5/17

Good ole ARV eh

[BlackPeter]

OCA market cap up 30% since listing on 8/5/17

ARV market cap up 35% since 8/5/17

Good ole ARV eh

How does this work - did ARV issue additional shares?

[Beagle]

How does this work - did ARV issue additional shares?

A LOT more.

[trader_jackson]

A LOT more.

How much more is A LOT more?
Objectively speaking, it is subjective

[winner69]

How much more is A LOT more?
Objectively speaking, it is subjective

So ARV market cap up 35% v OCA 30% since May 17 (OCA IPO)

ARV Book Value up 48% v OCA 18% in same period

ARV price/book down a bit / OCA price/book up (been related a bit)

[Onion]

All of the comparisons can be a bit meaningless as depending on the start date different shares can look good.

Each of us will have different returns depending when and how much we have invested. The talk of ARV being such a dog doesn't ring true for me - it has done better than OCA.

I'm spread (unevenly) across the sector. My returns (dividends included) for the last year:

ARV: 8.71%
MET: -15.24%
OCA: -0.08%
RYM: -1.77%
SUM: 7.42%

With OCA I have bought over the last year, the others have mostly just been sitting there. OCA's returns for me are suffering mainly because I bought chunks at 113c and 114c.

MET is definitely the dog. ARV on the other hand I am quite happy with.

I hope that all the positive talk about OCA eventually comes to something because they are overweight in my portfolio at present.

[Beagle]

Directors buying on market, a good sign.
tj - Been too busy, have a look back, you'll see ARV did a big capital raise just over a year ago.

[dr_]

Two more directors bought on market, nice to see directors are keep topping up

Elizabeth Coutts - 50000 volumes
Kerry Prendergast - 75000 volumes

[couta1]

Two more directors bought on market, nice to see directors are keep topping up

Elizabeth Coutts - 50000 volumes
Kerry Prendergast - 75000 volumes Directors know value when they see it.Lol

[oldtech]

Hmm ... tempted to stock up, but I'm a bit overweight in OCA at this stage. Might grab some more HGH instead ...

[bull....]

Hmm ... tempted to stock up, but I'm a bit overweight in OCA at this stage. Might grab some more HGH instead ...

probably a wise decision , the sector is in a downtrend and individual stocks in the sector show negative technicals , apart from arv at the moment. i like stocks in up trends myself and this usually is reinforced with fundamentals reported by a company

[winner69]

Directors buying on market, a good sign.
tj - Been too busy, have a look back, you'll see ARV did a big capital raise just over a year ago.

Yep and ARV grew the business big time as a result.

Didn’t OCA get heaps new capital about the same time?

[winner69]

Directors know value when they see it.Lol

Becoming a Dame must have affected her judgement

[trader_jackson]

Yep and ARV grew the business big time as a result.

Didn’t OCA get heaps new capital about the same time?

What was the EPS growth at half year for OCA and ARV?
No worries - OCA going to have growth of 17% EPS this year with a bigly 2nd half some (on this very thread) have stated

[winner69]

What was the EPS growth at half year for OCA and ARV?
No worries - OCA going to have growth of 17% EPS this year with a bigly 2nd half some (on this very thread) have stated

It’s like the good old days t_j when things like eyeballs, hits were the measurement of success.

These days it’s slightly more sophisticated ......success is measured by love, hype and sexy PowerPoint presentations.

ARV need to concentrate on those things and not rely on outrageous Forbar valuations.

[trader_jackson]

It’s like the good old days t_j when things like eyeballs, hits were the measurement of success.

These days it’s slightly more sophisticated ......success is measured by love, hype and sexy PowerPoint presentations.

ARV need to concentrate on those things and not rely on outrageous Forbar valuations.

You're right - core hard results don't cut the mustard anymore... its about fancy presos that make you go wow and want to keep buying no matter what is going on at the bottom line
Bit like PEB's presentations, although hasn't helped FXL much

[couta1]

Hmm ... tempted to stock up, but I'm a bit overweight in OCA at this stage. Might grab some more HGH instead ... Both stocks have been hammered and both represent good value IMO.

[see weed]

Just a little reminder. Today is last chance to buy in, to receive the dividend. 5pm deadline.

[winner69]

Just a little reminder. Today is last chance to buy in, to receive the dividend. 5pm deadline.

Looks like punters were buying that dividend on Tuesday ....hope many more will today thinking 106 is the base

[Beagle]

Both stocks have been hammered and both represent good value IMO.

Agree 100%. Possibly worth noting that financials' in the US are up about 13% year to date and the Aussie banks had a big rally on Tuesday but HGH has been the laggard.
That said I did note with the ASB announcement of their half year profit a big increase in bad and doubtful debt provisioning.

[couta1]

We need to see cost controls kicking in with this company, wages to revenue ratios pulled into line through cutting back on overstaffing in certain areas and allowing workers to clock up too many unnecessary hours(Migrant workers will work every hour possible) I reckon the board who are all substantial shareholders need to set the tone here.

[Beagle]

We need to see cost controls kicking in with this company, wages to revenue ratios pulled into line through cutting back on overstaffing in certain areas and allowing workers to clock up too many unnecessary hours(Migrant workers will work every hour possible) I reckon the board who are all substantial shareholders need to set the tone here.

I couldn't agree more. Cost control simply hasn't been good enough. Total expenses up from $81m last period to $101m this half on only a $4m increase in revenue is not good enough. The company would have made a $3.2m loss if it were not for a $4.5m tax credit the NBR was calling into question the other day.
Earl needs to seriously lift his game with cost control within the company and remember his primary role is to maximise shareholder profits. Toughen up man.
Strict cost control is absolutely essential if this company is to be built into one that's widely respected in the investment community.

[bull....]

We need to see cost controls kicking in with this company, wages to revenue ratios pulled into line through cutting back on overstaffing in certain areas and allowing workers to clock up too many unnecessary hours(Migrant workers will work every hour possible) I reckon the board who are all substantial shareholders need to set the tone here.

good point couta cut the staff , then the residents will die quicker from lack of quality care and quality food. at least the re sales will go up.

[Joshuatree]

Yeah lets do it. i was in a dementia ward the other day up to 13 residents and 1 caregiver trying to get them all to the table sit them down and give them lunch, stress all round, yep great place to put your beloved and grow the s/p same time. Lets do this!

[Beagle]

Yeah lets do it. i was in a dementia ward the other day up to 13 residents and 1 caregiver trying to get them all to the table sit them down and give them lunch, stress all round, yep great place to put your beloved and grow the s/p same time. Lets do this!

Lets have a facetious response why don't we. Have you considered that some people on here have knowledge of how OCA is running their operations. There are prescribed staff to resident ratio's and management need to stick to a disciplined formula and remember their responsibilities to shareholders and maintain tight discipline.
Its all too easy to say we're investing in our staff and other such feel good PC platitudes and look like you're doing a good job when you're not. Good disciplined staff to resident ratio's and disciplined control of all costs and good care, are not mutually exclusive things.
One thing I really like about Julian Cook is he has plenty of mongrel in him when it comes to cost control. I admire that.

[couta1]

good point couta cut the staff , then the residents will die quicker from lack of quality care and quality food. at least the re sales will go up. Notice I said overstaffing in certain areas and unnecessary hours, I'm not talking about normal,accepted and benchmarked ratios here. One Rogue manager with no real appreciation for the fact that OCA is a listed company can do a lot of damage to bottom line profits before they are pulled into line by senior management.

[bull....]

Notice I said overstaffing in certain areas and unnecessary hours, I'm not talking about normal,accepted and benchmarked ratios here. One Rogue manager with no real appreciation for the fact that OCA is a listed company can do a lot of damage to bottom line profits before they are pulled into line by senior management.

which areas are these you consider over staffed?

[couta1]

which areas are these you consider over staffed? Can be in any area of the facility but care suite staffing would be one area that definitely needs to be controlled. Unnecessary hours are where staff are allowed to work extra hours on top of their rostered hours for no justifiable reason.

[bull....]

Can be in any area of the facility but care suite staffing would be one area that definitely needs to be controlled. Unnecessary hours are where staff are allowed to work extra hours on top of their rostered hours for no justifiable reason.

i thought ocienia care suites were there with the purpose of you have care as your needs increase. always be downtime cause when can you plot when help is needed

[couta1]

i thought ocienia care suites were there with the purpose of you have care as your needs increase. always be downtime cause when can you plot when help is needed Required staffing levels for the care suites are known at any given time and it is up to the facility manager to police things which leads me to another area a rogue manager can cost the company big time, that is when the occupancy level drops and they dont reduce staffing accordingly(That's why they have a certain level of flexi staffing)

[Joshuatree]

Lets have a facetious response why don't we. Have you considered that some people on here have knowledge of how OCA is running their operations. There are prescribed staff to resident ratio's and management need to stick to a disciplined formula and remember their responsibilities to shareholders and maintain tight discipline.
Its all too easy to say we're investing in our staff and other such feel good PC platitudes and look like you're doing a good job when you're not. Good disciplined staff to resident ratio's and disciplined control of all costs and good care, are not mutually exclusive things.
One thing I really like about Julian Cook is he has plenty of mongrel in him when it comes to cost control. I admire that.

Yeah right , tui. Go for the money everytime.Imagine your family putting you or a loved one in that situation.

[couta1]

Yeah lets do it. i was in a dementia ward the other day up to 13 residents and 1 caregiver trying to get them all to the table sit them down and give them lunch, stress all round, yep great place to put your beloved and grow the s/p same time. Lets do this! That situation is outside of the 10:1 ratio.PS-If you dont like the ratios you need to loby the Govt, up till now they won't set them because they know they will have to cough up with more funding for the sector.

[winner69]

Do ordinary Oceania staff have shares under a staff share scheme?

Not including the zillions the execs have.

[couta1]

Do ordinary Oceania staff have shares under a staff share scheme?

Not including the zillions the execs have. That's a no.

[Baa_Baa]

What's this about, the two strongest advocates for OCA suddenly, out of the blue, post some fearsome concerns. Please explain. Why bring this up right now? Is this really a problem? Has it emerged lately or is it more systemic?


We need to see cost controls kicking in with this company, wages to revenue ratios pulled into line through cutting back on overstaffing in certain areas and allowing workers to clock up too many unnecessary hours(Migrant workers will work every hour possible) I reckon the board who are all substantial shareholders need to set the tone here.


I couldn't agree more. Cost control simply hasn't been good enough. Total expenses up from $81m last period to $101m this half on only a $4m increase in revenue is not good enough. The company would have made a $3.2m loss if it were not for a $4.5m tax credit the NBR was calling into question the other day.
Earl needs to seriously lift his game with cost control within the company and remember his primary role is to maximise shareholder profits. Toughen up man.
Strict cost control is absolutely essential if this company is to be built into one that's widely respected in the investment community.

Or are both of you short OCA and hoping for lower prices? What's up. (as whatsup would say).

[couta1]

What's this about, the two strongest advocates for OCA suddenly, out of the blue, post some fearsome concerns. Please explain. Why bring this up right now? Is this really a problem? Has it emerged lately or is it more systemic?





Or are both of you short OCA and hoping for lower prices? What's up. (as whatsup would say). It has emerged since the latest result(Beagle and I had a good discussion about it and felt the same way)yes it could become systemic if not addressed. PS- Still a strong advocate with the same XXOS sized holding.PPS-Can you even short OCA shares?

[Beagle]

I've had a lot on my mind lately, as you know Baa Baa. I have been mulling over OCA's very complicated financial statements in between other challenging concerns.
Coutts and I had a phone discussion about this today and we both have concerns about cost control. On thorough review the financial statements suggest this is a genuine issue and Coutts has his sources confirming the same. All other aspects of the business are going very well.

I don't short stocks and to the best of my knowledge neither does Couta1. We both hold heaps although full disclosure I have trimmed my position a bit lately. (I may yet buy a proper brand name European car and am preparing for that possibility). I don't want the SP to go down but sometimes a message has to be sent and you think some of the directors might read this forum ?

Anyway this is not the start of some new campaign of mine, I've said what I felt needed to be said, trimmed my position down a bit and that's it. Its up to each person to make of the financial statements what they will.

[Baa_Baa]

I reckon if a shareholder has a serious concern, they should address it directly to the company, ST is not a reliable comms route to listed companies consciousness. Copy us plebs here if you feel it warranted, enough said in the meantime, thanks both of you for responding.

[Beagle]

I reckon if a shareholder has a serious concern, they should address it directly to the company, ST is not a reliable comms route to listed companies consciousness. Copy us plebs here if you feel it warranted, enough said in the meantime, thanks both of you for responding.

I did very recently and got a satisfactory and prompt reply from Earl Gasparich but that was to just one question about the other expenses category. I will reserve judgement on how costs will affect future profitability until I see the full years accounts and get a chance to ask some searching questions at the annual meeting later this year. In the meantime I retain a significant investment position in OCA.

[Beagle]

As you suggested earlier mate there is plenty of work for the OCA team to do to make their accounts more comprehendible. A profit bridge like AIR do in their analyst presentations would be very useful.

[winner69]

Probably a simple and rationale explanation for this and if anybody can explain it would be appreciated

I’m still puzzled as to why when Oceania sold 42 more new units and had 10 more resales in 1st half of year compared to the prior corresponding period their underlying earnings only went up $1m or so.

One reason seems to be that the realised gains per sales on new units has fallen from $220k (H218 number) to a mere $151k this period. Making $69k (or 30%) less on each sale just doesn’t seem right.

I also note that realised gains per resale has fallen from $92k to $75k (20% less) in the same time.

[Lola]

That's an ugly debt level considering residents pay all their occupation licence fees up front. How on earth did they end up with that level of debt mate ?

Never forget this was a private equity sale ex an Aust vendor

[Beagle]

I believe all the new units sold were modest value care suites, (down the line somewhere, sorry forget where) so that would explain the lower profit per new unit.
Second half should see the sale of plenty of much higher value apartments in Auckland.

[winner69]

I believe all the new units sold were modest value care suites, (down the line somewhere, sorry forget where) so that would explain the lower profit per new unit.
Second half should see the sale of plenty of much higher value apartments in Auckland.

In H119 they sold 2 more villas, 4 more care units but 16 less apartments than previous 6 months (H218)

So average realised gains being down so much not really a case of selling heaps more care units but rather from selling a lot less apartments.

So hopefully everything is weighted to the second half of the year eh

[Brain]

Boy the sentiment has certainly changed on this thread. A while ago OCA was the bees knees ,the cats pyjamas , OCA could do no wrong. Now Lola has pointed out that it was a private equity Sale.
Private equity sale is Dick Smith, Intueri and many others that have swindelled investors out of millions. Head for the hills , the sky is falling in. Newbie investors take note the sharemarket is a very fickle place to invest. The sharemarket is not rationall. You may see the wise heads doing detailed financial analysis but in the end it is all about fear and greed nothing more nothing less.

[allfromacell]

Boy the sentiment has certainly changed on this thread. A while ago OCA was the bees knees ,the cats pyjamas , OCA could do no wrong. Now Lola has pointed out that it was a private equity Sale.
Private equity sale is Dick Smith, Intueri and many others that have swindelled investors out of millions. Head for the hills , the sky is falling in. Newbie investors take note the sharemarket is a very fickle place to invest. The sharemarket is not rationall. You may see the wise heads doing detailed financial analysis but in the end it is all about fear and greed nothing more nothing less.


In fairness sentiment has only changed after the financials were released. You can't fault people for changing their mind or altering their view when new information is available, in fact I find it honorable.

I agree with regards to being skeptical on any private equity sell off and personally am in no rush to load up on theses but am grateful to the free analysis posted here. I'm even more more appreciative of posters admitting when things may not be as rosey as they initially thought.

[couta1]

Never forget this was a private equity sale ex an Aust vendor Exactly the same as SUM was, so how has that company done since listing.

[percy]

Exactly the same as SUM was, so how has that company done since listing.

Same as Scales,SCL, great for investors.

[hardt]

I believe all the new units sold were modest value care suites, (down the line somewhere, sorry forget where) so that would explain the lower profit per new unit.
Second half should see the sale of plenty of much higher value apartments in Auckland.

81 care units delivered at Bayview.

Of new and existing unsold developments they sold:
24 care suites
24 apartments
17 villas

Seems evenly spread.

Resales
47 care suites
8 apartments
24 villas

[winner69]

Average sales price for a new apartment fell from $978k to $772k in first half

Probably location

[Lola]

Same as Scales,SCL, great for investors.

Not relevant. SCL was stolen off Hubbards investors by the receiver.

Time will tell whether Oceania lives up to all the fashion hype that these Old People Farms generate. All I said was it was a PE deal ex an Aussie seller , so just consider that.

[Beagle]

In fairness sentiment has only changed after the financials were released. You can't fault people for changing their mind or altering their view when new information is available, in fact I find it honorable.

I agree with regards to being skeptical on any private equity sell off and personally am in no rush to load up on theses but am grateful to the free analysis posted here. I'm even more more appreciative of posters admitting when things may not be as rosey as they initially thought.

Thanks. I think most serious investors run the ruler over companies they invest in every time they report or make a material announcement.
Thanks guys for posting sales analysis...I've been too busy this week dealing with Holden issues.

[percy]

[QUOTE=Lola;746695]Not relevant. SCL was stolen off Hubbards investors by the receiver.

I happened to be a Scales shareholder when Hubbard and his co-horts ran it into the ground.
The agm at The Chataeu on The Park was out of this world, with fine wines and crayfish.
The agm at The ChCh Netball HQ when Hubbard and O'Sullivan glossed over serious questions from shareholders, was a disgrace.
How Andy Borland turned it around was an act worthy of Houdini.

[aquaman]

Can someone please explain how "private equity sale ex an Aust vendor" potentially impacts OCA.
Im sorry if a silly question but would really appreciate being educated a little further.
Thanks

[macduffy]

Can someone please explain how "private equity sale ex an Aust vendor" potentially impacts OCA.
Im sorry if a silly question but would really appreciate being educated a little further.
Thanks

Macquarie interests floated the OCA IPO and is still the major shareholder. It's generally thought they will seek to further sell down at some time in the future. IPO's ex private equity funds have a very "mixed" history in NZ.

[bull....]

Can someone please explain how "private equity sale ex an Aust vendor" potentially impacts OCA.
Im sorry if a silly question but would really appreciate being educated a little further.
Thanks

it doesnt , just the previous very bullish people making up any reason whatsoever for there lack of research in the first place haha to justify there oh its not such a good investment anymore.

[peat]

Remember though at IPO time the sellers (McQuaries) wanted $1.03 until the institutions laughed and beat them down to 0.89. So that discounted the Private Equity rip-off factor. And also of course, as time passes the company becomes more understood so the Private Equity dump becomes less of a factor .

[trader_jackson]

Remember though at IPO time the sellers (McQuaries) wanted $1.03 until the institutions laughed and beat them down to 0.89. So that discounted the Private Equity rip-off factor. And also of course, as time passes the company becomes more understood so the Private Equity dump becomes less of a factor .

wrong 79c... imagine if they had listed it close to the top of the range? Roger's bold statements of OCA's outperformance would be totally invalid

[Beagle]

wrong 79c... imagine if they had listed it close to the top of the range? Roger's bold statements of OCA's outperformance would be totally invalid

You're worse than my granddaughter, always saying Granddad, imagine this... and Grandad, imagine that, which is fine for an 8 year old.

[peat]

wrong 79c... imagine if they had listed it close to the top of the range? Roger's bold statements of OCA's outperformance would be totally invalid

apologies - I should have checked the history .... was going on memory , which isnt that flash obviously.
but point stands even more that Private Equity stain was fully discounted

[Joshuatree]

What do you mean by stain.?

[peat]

What do you mean by stain.?

stain as in bad history associated with private equity placements eg Dick Smith.

[Beagle]

stain as in bad history associated with private equity placements eg Dick Smith.

Probably telling porkies = private equity IPO's. Interesting behind the paywall article in last weeks NBR questioning tax matters pertaining to OCA and the way that PE had tried to claim that the 30% ORA retentions at the end of people's tenure should be tax free. My understanding is this has never been the case in N.Z., the capital gain is tax free but the 30% retention is always subject to tax, (net of refurbishment costs). Macca's approach looks disingenuous and incorrect to me and not based on any tax principle I am aware of. OCA have subsequently got a binding ruling confirming retentions are taxable but go on to say there is considerable doubt regarding same in a note to their accounts ? Are they simply defending the majority owners dubious previous position ? There might be an awkward question for Earl to address at the next annual meeting regarding this...coming from this hound. I still like the company and its business model in case anyone is wondering but this tax thing and increased expenses means I have normalised my stake from an outsized position.

[BlackPeter]

stain as in bad history associated with private equity placements eg Dick Smith.

I guess there have been in the past examples for some really good and some really bad companies placed that way. Same with any other placements. Only highlighting the negative examples takes just the view for some outstanding opportunities at the time like e.g. SUM and OCA.

[peat]

I'm not a fan of IPO's myself so its easy for me to take a dim view of PE IPO's. I prefer history as evidence of success or likelihood of such at least.

When I was selling equities I found it weird how so many investors get all worked up over an IPO though as though there is some bargain to be had (and sometimes there is of course) but be careful who you're dealing with. Some clients would say to me "I am only interested in IPO's! " To me that's like buying something completely untested

say like a Holden (just kidding) .

[BlackPeter]

I'm not a fan of IPO's myself so its easy for me to take a dim view of PE IPO's. I prefer history as evidence of success or likelihood of such at least.

When I was selling equities I found it weird how so many investors get all worked up over an IPO though as though there is some bargain to be had (and sometimes there is of course) but be careful who you're dealing with. Some clients would say to me "I am only interested in IPO's! " To me that's like buying something completely untested

say like a Holden (just kidding) .

I share your sentiment re IPO's - and they say Warren Buffet does not like them either. I guess one of the issues is that the seller always knows more about the company they are selling than the buyer.

On the other hand - how would you propose to list a new company other than by IPO? Might be one of these things which are bad, but better than any other option.

BTW: While trying to avoid IPO's - I still remember with fondness taking part in the IPO's of our Gentailers. The fear created at that stage by Labour and our Greenies provided outstanding investment opportunities. Ah yes - and the NZK IPO was not too bad either ...

[bull....]

Probably telling porkies = private equity IPO's. Interesting behind the paywall article in last weeks NBR questioning tax matters pertaining to OCA and the way that PE had tried to claim that the 30% ORA retentions at the end of people's tenure should be tax free. My understanding is this has never been the case in N.Z., the capital gain is tax free but the 30% retention is always subject to tax, (net of refurbishment costs). Macca's approach looks disingenuous and incorrect to me and not based on any tax principle I am aware of. OCA have subsequently got a binding ruling confirming retentions are taxable but go on to say there is considerable doubt regarding same in a note to their accounts ? Are they simply defending the majority owners dubious previous position ? There might be an awkward question for Earl to address at the next annual meeting regarding this...coming from this hound. I still like the company and its business model in case anyone is wondering but this tax thing and increased expenses means I have normalised my stake from an outsized position.

the tax note was in the accounts over a yr ago , you obviously missed it

[Beagle]

the tax note was in the accounts over a yr ago , you obviously missed it
FY18 accounts were released on 26 July 2018, less than 7 months ago but as you suggest did include a note to the accounts about this.

[winner69]

FY18 accounts were released on 26 July 2018, less than 7 months ago but as you suggest did include a note to the accounts about this.

.......and did you both fully understand Note 5.1ii

[macduffy]

I'm not a fan of IPO's myself so its easy for me to take a dim view of PE IPO's. I prefer history as evidence of success or likelihood of such at least.

When I was selling equities I found it weird how so many investors get all worked up over an IPO though as though there is some bargain to be had (and sometimes there is of course) but be careful who you're dealing with. Some clients would say to me "I am only interested in IPO's! " To me that's like buying something completely untested

say like a Holden (just kidding) .

Probably they were some of your older clients. There was a time, probably before 1987, when stagging most IPO's were licences to print money.

:cool:

[Beagle]

.......and did you both fully understand Note 5.1ii

Yeap its an absolute breeze mate...I live for this sort of thing and get really excited by it.

[minimoke]

SP seems to be holding up ex div. I'll look forward to a bit of cash hitting my account on Monday.

[winner69]

That shareclarity app has OCA value gap at -17% (ie overvalued at the moment) and only gets 7 ticks out of 15 on the metrics

[Baa_Baa]

That shareclarity app has OCA value gap at -17% (ie overvalued at the moment) and only gets 7 ticks out of 15 on the metrics

That'd be about $0.88, not much above IPO. Maybe those Private Equity sharks knew what they were doing? I'd buy $0.88 in a heartbeat, but who are these Shareclarity anyway and why would you rate them enough to quote their 'value gap'

[peat]

who are these Shareclarity anyway and why would you rate them enough to quote their 'value gap'
Its a free analysis service provided by FNZC under their Direct Broking platform which replaced the ANZ Securities platform. I dont have a view on their skills yet.

[couta1]

Its a free analysis service provided by FNZC under their Direct Broking platform which replaced the ANZ Securities platform. I dont have a view on their skills yet. I do, their valuations are crap, about as accurate as a coin toss I reckon.

[warren]

I do, their valuations are crap, about as accurate as a coin toss I reckon.
Agreed

Lets have a review here of OCA at this time.

Fundamentals



P/E 11.390


EPS $0.093


NTA $0.860



Gross Div Y 4.434%



Earl running the Company.
Liz disciplining the Company.
Gregory supervising growth and many millions of shares IN.
Cash flow that I can/could only dream about.
Approx 3500 staff.
Assets over 1.1 billion $$
Personal visits to 3 glorious new builds.

Review board recommendations??
Get aboard folks just like the market is. You aint seen anything yet (apart from 4.43% on your dough) but you will.

[Beagle]

That shareclarity app has OCA value gap at -17% (ie overvalued at the moment) and only gets 7 ticks out of 15 on the metrics

If they print any of their analysis out on paper and send it to me I hope its on toilet paper so I have some use for it.
I won't mince words here, I honestly think their analysis is complete garbage.

[Maverick]

If they print any of their analysis out on paper and send it to me I hope its on toilet paper so I have some use for it.
I won't mince words here, I honestly think their analysis is complete garbage.
Nice one Beagle ��Have you ever tried that new brochure glossy paper. Things could get messy.

Id like to mention that I haven't participated in this forum lately, not because I've run off to the hills because that sp is weak , but rather there have emerged a couple of d...heads who have dominated and their only mission seems to be to pour on whatever misery and derision they can to other certain posters. The ones who have offerered their considered opinions for a long time now.
"The best way to kill something is to stop feeding it."

Ps I haven't sold a single OCA . Nothing has changed my view on the positive future of this company although I do respect any INTELLIGENT counter and cautioning views that are brought up here.

[oldtech]

If they print any of their analysis out on paper and send it to me I hope its on toilet paper so I have some use for it.
I won't mince words here, I honestly think their analysis is complete garbage.

Don't hold back Beagle, tell us what you really think ... :p

[Onion]

Its a free analysis service provided by FNZC under their Direct Broking platform which replaced the ANZ Securities platform. I dont have a view on their skills yet.

ShareClarity is an independent organisation. They have struck a deal with Direct Broking but have also offered the service to NZSA members previously.

Listen to a podcast interviewing the founder of ShareClarity, Daniel Kieser.

https://www.podcasts.nz/daniel-kieser-defogging-equities-building-bridges-across-the-asset-classes/

[hardt]

If they print any of their analysis out on paper and send it to me I hope its on toilet paper so I have some use for it.
I won't mince words here, I honestly think their analysis is complete garbage.

Capital intensives like retirement are not going to score well in an algorithmic DCF valuer.

Exclusivey DCF valuations, nothing in retirement fares wells.

Even my beloved ARV doesn't.

They are anything but garbage, they paint no biased qualitative analysis, only numbers.

[BlackPeter]

Now I understand why it feels so lonely on my perfectly good Shareclarity thread (https://www.sharetrader.co.nz/showthread.php?11254-Anybody-using-ShareClarity) ... the OCA thead seems to be the place to be to discuss them!

From my perspective - I agree that shareclarity delivers just numbers ... question is just whether these numbers add value.

In many cases I fail to see a sensible correlation between their numbers and any realistic valuation of a company. Not the fault of the DCF method, but in my view either inexperienced people (or more likely bots) feeding the algorithms ... They say: garbage in - garbage out.

... and now - lets go to the thread and continue the ciscussion - shall we?

https://www.sharetrader.co.nz/showthread.php?11254-Anybody-using-ShareClarity

[winner69]

Now I understand why it feels so lonely on my perfectly good Shareclarity thread (https://www.sharetrader.co.nz/showthread.php?11254-Anybody-using-ShareClarity) ... the OCA thead seems to be the place to be to discuss them!

From my perspective - I agree that shareclarity delivers just numbers ... question is just whether these numbers add value.

In many cases I fail to see a sensible correlation between their numbers and any realistic valuation of a company. Not the fault of the DCF method, but in my view either inexperienced people (or more likely bots) feeding the algorithms ... They say: garbage in - garbage out.

... and now - lets go to the thread and continue the ciscussion - shall we?

https://www.sharetrader.co.nz/showthread.php?11254-Anybody-using-ShareClarity

Really sorry for mentioning shareclarity .....but I had just got their new cool app and had to play with it and OCA came up.

Their DCF valuations a bit like your oft mentioned spreadsheets BP?

Suppose if shareclarity had said OCA was 17% undervalued (on their value gap basis) the comments, if any, would be have been different eh. More good raw material for the LSE guys

[winner69]

Shareclarity can’t be too bad ....their DCF value for thl is $3.81 which is 1 cent more than my optimistic scenario. Must use the same input assumptions

Can’t be right ....rubbish in rubbish out ....load of crap.

But most tend to disregard DCF valuations anyway and do the cheats way and use PE ratios and even such things ...or even worse still that much vaunted Graham Formula (when it suits)

[Beagle]

Don't hold back Beagle, tell us what you really think ... :p

:lol: :lol:


Capital intensives like retirement are not going to score well in an algorithmic DCF valuer.

Exclusivey DCF valuations, nothing in retirement fares wells.

Even my beloved ARV doesn't.

They are anything but garbage, they paint no biased qualitative analysis, only numbers.

DCF is nothing but a model using a whole bunch of assumptions. If really inexperienced analysts make a bunch of wrong calls on those assumptions you have the classic situation of any model that represents garbage in and garbage out.

[Beagle]

Shareclarity can’t be too bad ....their DCF value for thl is $3.81 which is 1 cent more than my optimistic scenario. Must use the same input assumptions

Can’t be right ....rubbish in rubbish out ....load of crap.

But most tend to disregard DCF valuations anyway and do the cheats way and use PE ratios and even such things ...or even worse still that much vaunted Graham Formula (when it suits)

I actually find it irksome that on the Direct broking website the share clarity dcf valuation appears with a reference to the discount to present price or a premium. This gives share clarity vastly more credibility than they deserve in my opinion and implies that their dcf is a very valid reference point. Nothing could be further from the truth in my opinion.

Nice to see you back Maverick. Don't let some of the bull that some people talk on here put you off your game mate.
.

[bull....]

those bollingers are turning down will they confirm the fundamental case

[couta1]

those bollingers are turning down will they confirm the fundamental case Other indicators turning up and those bands are too wide at this point to draw any conclusions.

[bull....]

Other indicators turning up and those bands are too wide at this point to draw any conclusions.

just a observation not a conclusion

[winner69]

Yesterday’s talk about Oceanio being a private equity IPO ....here’s one view

Not aimed at OCA ....just accounting and IPO in general ....though bottom right hand box is interesting

[Blue Skies]

How much of the pessimistic sentiment based on falling real estate values, in Aust & predicted to follow here, seems misplaced?
While Auckland house prices only slipped .09% over the summer, values in some of the regions going gang busters, e.g. Hawkes Bay up over 10% (OCA has 8 sites in H'Bay. 7 sites in Tasman/Nelson, 11 in Coromandel Waikato, Wellington, Canterbury etc )
With it's regional spread, overall value of OCA real estate assets likely to still be increasing rather than sliding.

[Beagle]

How much of the pessimistic sentiment based on falling real estate values, in Aust & predicted to follow here, seems misplaced?
While Auckland house prices only slipped .09% over the summer, values in some of the regions going gang busters, e.g. Hawkes Bay up over 10% (OCA has 8 sites in H'Bay. 7 sites in Tasman/Nelson, 11 in Coromandel Waikato, Wellington, Canterbury etc )
With it's regional spread, overall value of OCA real estate assets likely to still be increasing rather than sliding.

Great post and very well said !

[see weed]

If they print any of their analysis out on paper and send it to me I hope its on toilet paper so I have some use for it.
I won't mince words here, I honestly think their analysis is complete garbage.
Come on Beagle, sell all your OCA like I did last week and join us over here at ATM. We are having a ball:t_up:. We can always get back to OCA when ATM parties over:D.

[bull....]

Come on Beagle, sell all your OCA like I did last week and join us over here at ATM. We are having a ball:t_up:. We can always get back to OCA when ATM parties over:D.

dont forget ift or mel

[couta1]

Come on Beagle, sell all your OCA like I did last week and join us over here at ATM. We are having a ball:t_up:. We can always get back to OCA when ATM parties over:D. When the current ATM party is over the ballroom will be turned into trash palace.

[Beagle]

Beagle don't like masquerading as the shoe shine boy being last to buy on a run that's already almost done. I think in the late $13's ATM is a very high risk place for anyone to invest fresh capital. Synlait is the home for new money in that sector in the late $9's in my opinion.

No way selling OCA at $1.06 and paying top dollar for ATM makes any sense to me.

[see weed]

When the current ATM party is over the ballroom will be turned into trash palace.
Yeah, just like my favourite movie Hangover, but what a lot of fun getting there:). You can join us to couta1, plenty of time before it hits $14:eek2:.

[couta1]

Yeah, just like my favourite movie Hangover, but what a lot of fun getting there:). You can join us to couta1, plenty of time before it hits $14:eek2:. I've never not spent some time at this party however I'm currently on the sell side of the room.

[warren]

[QUOTE=see weed;747148]Yeah, just like my favourite movie Hangover, but what a lot of fun getting there:). You can join us to couta1, plenty of time before it hits $14:eek2:.[/QUOTE

Do you folks know exactly what ATM does?????? I know exactly what OCA does and I know its very real assets and it's very real skilled staff numbers and i understand its products 100% and i like 4.4% on my dough----- FACTS.


ATM

Gross Div Yield
0.000%

[bull....]

[QUOTE=see weed;747148]Yeah, just like my favourite movie Hangover, but what a lot of fun getting there:). You can join us to couta1, plenty of time before it hits $14:eek2:.[/QUOTE

Do you folks know exactly what ATM does?????? I know exactly what OCA does and I know its very real assets and it's very real skilled staff numbers and i understand its products 100% and i like 4.4% on my dough----- FACTS.


ATM

Gross Div Yield
0.000%




i like 20+% in little over a mth on atm any day

[Beagle]

I rate ATM a SELL at the current price and OCA a BUY. Take your milky profits and pump them into OCA before Ms Herdlicker and the other insiders give you another really good *******

[warren]

Agree
Five of six senior executives and one director of A2 sold down their a2 holdings between February 22 and February 26 but it’s a wonderful free world with rises and falls at every corner !

[44wishlists]

[QUOTE=warren;747175]

i like 20+% in little over a mth on atm any day

But the cow is probably on the burn(ing) side of the party room.

[dobby41]

Agree
Five of six senior executives and one director of A2 sold down their a2 holdings between February 22 and February 26 but it’s a wonderful free world with rises and falls at every corner !

Last year?
Only 13th Feb today

[winner69]

RBNZ’s Orr when questioned at the press conference today said ‘I expect the OCA share price to hold where it is through 2019 and that the next move could be either up or down”

[Beagle]

Agree
Five of six senior executives and one director of A2 sold down their a2 holdings between February 22 and February 26 but it’s a wonderful free world with rises and falls at every corner !

Yeah, insiders are presently precluded from selling ATM due to the imminent release of its results. OCA insiders are allowed to buy because they have already reported and that's exactly what they've been doing. Follow the smart money and in ATM's case get stuck into selling before the herd does.

[macduffy]

This thread's in danger of being re-labelled ATM2! More informed discussion of OCA please.

:cool:

[see weed]

This thread's in danger of being re-labelled ATM2! More informed discussion of OCA please.

:cool:
OK. Just a little stir, and it worked. I bought the hype 1.20 and sold 1.15...loss $900. Bought next hype at 1.05, 1.06, 1.08, 1.09 and sold...loss= $3100. All's fair in love and war. And might come back for more.

[BlackPeter]

Well, I bought several parcels between June 2017 and September 2018 and sit on a 15% paper gain (sold nothing) plus enjoyed a nice dividend.

My largest holding (but yeah, I diversify more than some others around here ;));

Life can be tough - maybe this is more an investor's than a trader's stock?

[winner69]

Even if the share price is hardly moving we are at least getting the page numbers up

That’ll keep hardt excited

[minimoke]

Well, I bought several parcels between June 2017 and September 2018 and sit on a 15% paper gain (sold nothing) plus enjoyed a nice dividend.

?At todays $1.09 plus divi I am happily back to break even. Unlike a couple of other under-performing dogs I hold

[percy]

At todays $1.09 plus divi I am happily back to break even. Unlike a couple of other under-performing dogs I hold

Increasing divies make my kennel of thoroughbreed hounds well worth keeping.
AQZ [asx] increased their divie by 172%,while MCK in NZ have increased their's by 25%.
OCA will increase their's in due course too.!
Forget the share price,look for those companies that have the capacity to pay increasing divies.I love them.!!..lol.

[Mudfish]

Liz Coutts part of the winning SKL team. Important to me, "Corporate Costs of $1.9 million, down 9% on pcp"

[winner69]

Liz Coutts part of the winning SKL team. Important to me, "Corporate Costs of $1.9 million, down 9% on pcp"

Liz Coutts part of the winning (?) OCA team. Important to me, "Corporate Costs up 14% on pcp"


OCA 1/2 year accounts Segment = Other (is support costs code word for HQ / Corporate Costs)

[warren]

[QUOTE=winner69;747311]Liz Coutts part of the winning (?) OCA team. Important to me, "Corporate Costs up 14% on pcp"


Umm!!! Hello Mr. Winner could be room here for Liz to do a SKL but its a very classy Board who I am certain know how to get me a good return--increase sales, contain costs AND build confidence. This is why I'm in OCA quite substantially and I like it. To be ahead of bank deposit terms from the very start of a new company is terrific?

Approved Director Remuneration for 2018/2019

Board of Directors Chair $180,000

Member $90,000

Audit Committee Chair $20,000

Clinical and Health and Safety Committee Chair $15,000

Remuneration Committee Chair $7,500

[winner69]

FNZC saying likes of RYM, SUM etc need to be more transparent around their debt levels and leverage in general and should be stating exposure and impacts they have to declining property prices.

OCA have just under $600m of debt ($206m Bank / $283m from residents) and shareholder equity of $540m......with $804m of investment properties to back that up.

Maybe it’s good FNZC are raising this subject

[BlackPeter]

FNZC saying likes of RYM, SUM etc need to be more transparent around their debt levels and leverage in general and should be stating exposure and impacts they have to declining property prices.

OCA have just under $600m of debt ($206m Bank / $283m from residents) and shareholder equity of $540m......with $804m of investment properties to back that up.

Maybe it’s good FNZC are raising this subject

Always good to have such things out in the open. On the other hand - real risks are minute. If I just take your numbers above - $206m bank loans secured by $804m of investment property ... How far would the property value need to drop to turn this into a problem?

Resident loans are pretty safe bet - unless you foresee all residents to pack their suitcases and leave all at once without any new residents moving in - yeah right ...

Obviously - if we assume property values in NZ peaked for the next 20 years or so (which is unlikely, but not impossible), than we will need to get used to living off the underlying earnings ... and forget about these nice bonus revaluation gains.

[bull....]

debt big worry, they need to be making a development margin on there property ( which is under pressure) to service the debt

[Beagle]

Their debt level is very modest and is in line with their business model which is being executed in a well controlled and disiplined manner.

[warren]

Their debt level is very modest and is in line with their business model which is being executed in a well controlled and disciplined manner.

I agree 100% with Mr Beagle.
But I would say OCA has cash flow that, over a lifetime in small business, I could only DREAM about. And the Bricks and Mortar assets are well over 1 billion. (As against what assets a current NZ company selling at over $12 has???). I recommend a visit (as I have to 3 OCA care villages to see if I should invest) to see the scope and class of new builds. Also drop in, as I have, to a dance or music class with OCA residents (many of these folks are very very infirm) but the OCA dance/music classes I attended were exceptional and the residents love them.
Hard times ? OK lets discuss that. Yes a fall in house prices is possible but a tidal wave of $1475 a week care patients will see the vital cash flow in. Yippee for Aged Care funding from Central Government but --yes--It will require careful cost control.

At $1.09 what a gorgeous stock yielding, what, 4.35% already. Oh, I do believe a nice big cash sum has slipped into my bank account today. Keep up the good work Liz and a very firm hand on our Company.

[peat]

Resident loans are pretty safe bet - unless you foresee all residents to pack their suitcases and leave all at once without any new residents moving in - yeah right ...


I thought the departing resident only got paid out when the property was re-leased ?

[BlackPeter]

I thought the departing resident only got paid out when the property was re-leased ?

Some retirement villages pay out 6 months after departure even if it is not onsold, but not sure about OCA. But yes, the risk for the village provider is pretty low.

[Beagle]

But I would say OCA has cash flow that, over a lifetime in small business, I could only DREAM about. Oh, I do believe a nice big cash sum has slipped into my bank account today. Keep up the good work Liz and a very firm hand on our Company.

Yes, likewise...some clients take many months to pay their bills. To your last point, a nice reminder arrived in regard to that point with the hard copy of the interim accounts that arrived today. Notes to the accounts 2.1 page 23 "The Group's chief operating decision-maker is the Board of Directors". (many of whom like Liz Coutts have a significant stake in the company).There's nothing quite like Directors who have some serious skin in the game to keep them sharp and highly motivated.
Speaking of cash flow...yes a tidy sum arrived into my account earlier today, my thanks to OCA's hard working team.

[minimoke]

Speaking of cash flow...yes a tidy sum arrived into my account earlier today, my thanks to OCA's hard working team.Just checked and more loot in the my bank. Nice!. But more importantly SP back up to $1.10 so shares are at Break even and the divi is cream on the top. (unlike a couple of my other mutts where divi is at the expense of SP)

[Beagle]

FNZC saying likes of RYM, SUM etc need to be more transparent around their debt levels and leverage in general and should be stating exposure and impacts they have to declining property prices.

OCA have just under $600m of debt ($206m Bank / $283m from residents) and shareholder equity of $540m......with $804m of investment properties to back that up.

Maybe it’s good FNZC are raising this subject

From interim accounts, total assets $1,208m of which $357m is classified as property plant and equipment and is actually care suites and the associated land thereon, see note 3.3 in the accounts. So external bank borrowings of just $206.9m against total assets of $1,208m...I'll bet the bank are really trembling in their boots lol

[percy]

Some retirement villages pay out 6 months after departure even if it is not onsold, but not sure about OCA. But yes, the risk for the village provider is pretty low.

A lot depends on the contract you have with them.
My mother's unit years ago did not sell.The owners apologised,however my brother focussed their attention by reminding them,that according to the terms of the contract, they had to pay out after 6 months whether the unit was sold or not. [Their problem].

[warren]

Knowledgeable posters Beagle and Baraccuta et al,
anything in the tax review working group suggestions that interests/effects our Company (OCA) ?

[Beagle]

I haven't had the time or inclination to read their report in detail. Lets see what the Govt actually decides to run with, (announcement sometime in April) and go from there.
Its all subject to Labour winning the next election anyway and I think they're going to shoot themselves in the foot as any Labour supporter with any level of assets will probably become a swing voter and National supporters will stay being exactly that. What Winston Peter's does will be keep us all guessing right up to the last minute as usual, assuming he doesn't retire.

[Joshuatree]

Its Bridges who has fired the first shot , into his foot. Its win/win for Labour. Good job.:t_up:
Burning Bridges: Kiwis roast Simon's 'Kiwi way of life' (https://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=12205985)

[bull....]

Knowledgeable posters Beagle and Baraccuta et al,
anything in the tax review working group suggestions that interests/effects our Company (OCA) ?

occupation rights for a resident in a retirement village is classified as personal property in the tax report , meaning it is except from CGT ( funny a cause you dont get the capital gain anyway lol ) but on the other side if this becomes law look for retirement villages to start offering you the excluded capital gain eg cambridge oaks already do this and they will have a competitive advantage over the nzx listed retirement operators who if they end up following suit will end up taking a profit hit in there results.

could explain the fall today in these stocks

[Beagle]

Depreciation reinstatement on commercial property might help retirement village stocks and REIT's.
Time will tell and I'm not going to invest huge amounts of time in reading the tax working groups endless pontifications if the Government is only going to implement part of it.
Remember none of this will get implemented anyway when Cindy's Kindy are severely handicapped by what Winston might agree too and eventually lose at the next election anyway. My sense is this is all just a big fiasco with a limited lifespan.

[Baa_Baa]

[snip] Remember none of this will get implemented anyway when Cindy's Kindy are severely handicapped by what Winston might agree too and eventually lose at the next election anyway. My sense is this is all just a big fiasco with a limited lifespan.

Even Cullen, the Finance Minister for many years, never mentioned CGT until now when he's sucking the hind tit on some glorious 'review' and goes so far as to say on its launch (abridged and paraphrased) the good [socialist] ideologies are not always politically achievable without shafting the incumbent government.

[warren]

Many thanks Beagle et al for clear views. I feel certain that the future is good (indeed what government would upset this area involving aged care where the alternative could be ?????).
But governments must review polices hence my interest. Jobs reviewed Apple's 60 products lines into 4 and Apple became the richest Company on Earth and Mrs Jobs the 4th richest lady on Earth today!!!!(Come on Liz)
I can see tight cost control being vital but not always easy in a quality care based delivery but Liz and the outstanding team at OCA have my vote of confidence and as Beagle says the economic model is breathtaking actually.
$1.08 what a bargain . So much growth AND 4.34% return!

[bull....]

glad i got my div and got out at 1.10 , looks like its heading down again

[warren]

Fair enough!! But it gives me a chance of more stock and ownership of a company that has 1.2 billion assets , Very profitable already, extremely well led and already paying PE 4.43%. And has the most cash rich outfit in NZ as an unwavering long tern client. You could try the bank at 3.7% approx. Mr Bull as it would be unchanging.

[winner69]

Fair enough!! But it gives me a chance of more stock and ownership of a company that has 1.2 billion assets ......... And has the most cash rich outfit in NZ as an unwavering long term customer .....

Metlife has 3.4 billion assets .......And has the most cash rich outfit in NZ as an unwavering long term customer

[bull....]

Fair enough!! But it gives me a chance of more stock and ownership of a company that has 1.2 billion assets , Very profitable already, extremely well led and already paying PE 4.43%. And has the most cash rich outfit in NZ as an unwavering long tern client. You could try the bank at 3.7% approx. Mr Bull as it would be unchanging.

they make most of there money from property development not from long terd clients

[couta1]

Metlife has 3.4 billion assets .......And has the most cash rich outfit in NZ as an unwavering long term customer And more leaky buildings.Lol

[warren]

Gross D Y 1.9% as against our Liz’s outstanding 4.4%. By my maths that makes OCA 43% better for an investor . I can’t see it any other way?

[winner69]

Gross D Y 1.9% as against our Liz’s outstanding 4.4%. By my maths that makes OCA 43% better for an investor . I can’t see it any other way?

NO NO NO Warren .....131% better

[dreamcatcher]

Gosh, all these billions & percentages far too confusing, now I have my dividend will chuck in the drawer for a few months.............:p

[warren]

Hello Mr D. catcher . No it’s easy although Mr Beagle and Mr Winner have far greater numerical ability than I. Gross D Yeild is the % return to you measured against the current price of the share . It’s a vital % to anyone who otherwise would have their $ in the bank .

[winner69]

Gosh, all these billions & percentages far too confusing, now I have my dividend will chuck in the drawer for a few months.............:p

Disappointed in you dc ...you should be reinvesting your dividend but if not doing that at least go and buy something nice for yourself ....never chuck dividends in the drawer

[dreamcatcher]

Disappointed in you dc ...you should be reinvesting your dividend but if not doing that at least go and buy something nice for yourself ....never chuck dividends in the drawer

My apologies winner69 should have said "CHUCK the SHARES in the drawer for a few months" .... as currently 97% invested

[bull....]

1.04 here we come again

[Ggcc]

1.04 here we come again
Longterm holder so $2 here I go........ Of course taking a year or two at least, but it will come

[warren]

Longterm holder so $2 here I go........ Of course taking a year or two at least, but it will come

I'm really interested in OCA and others' views, especially in these times that are upon us. The Government would be 100% suicidal to move on CGT in this area and here is my view.
Lets stay with OCA. They are are returning 4.34% on investors money---quite fair I say. I know Beagle and others can state exactly the returns from care (an enormous responsibility of the State that's growing every day) as against property. If the property supports the care---excellent. Without profit every company is doomed. The thought of a failed healthcare company with 3600 patients!!!!!

Before I invested and since, I visited OCA villages --there are huge numbers of folks needing quality Old Age care. There is no way on earth they can get that top care outside of a quality care home (I have tried toileting infirm loved ones -- a nightmare at home without the training, gear and skill of OCA staff.). Indeed I selected OCA because i was so impressed,
1stly with the quality and size (all of my business life cash flow inwards severely restricted me) of the care operation.
2ndly The planned care suites are a total winner.
3rdly I like very much the Directors --people in the care and construction game itself, led by proven skill, and with big personal investments in their company.
I remain delighted with progress. If Ryman can get to $12 so can OCA. Good on you OCA .

[Beagle]

Best dividend yield of the aged care sector with the best reputation in late stage care trading on the best forward PE multiple and with many years of developments already consented.

Long term this is a classic bottom drawer stock and a real winner !

[couta1]

Just to let you all know there has been an small increase in funding just announced for the sector to offset some of the extra cost due to the pay equity settlement so that should help with expenses.

[Beagle]

Just to let you all know there has been an small increase in funding just announced for the sector to offset some of the extra cost due to the pay equity settlement so that should help with expenses.

Thanks mate. Really appreciate you sharing industry information.

[BlackPeter]

Just to let you all know there has been an small increase in funding just announced for the sector to offset some of the extra cost due to the pay equity settlement so that should help with expenses.

That's good news - cheers. Do you have a link?

[minimoke]

Just to let you all know there has been an small increase in funding just announced for the sector to offset some of the extra cost due to the pay equity settlement so that should help with expenses.But the new problem is the raise in Minimum wage on 1 April - and its increase to $20 in 2021. The parity argument will see that particular tide rising all boats down that end of the pay scales.

[Beagle]

But the new problem is the raise in Minimum wage on 1 April - and its increase to $20 in 2021. The parity argument will see that particular tide rising all boats down that end of the pay scales.

There's the regular funding round increases every year on 1 July.

[bull....]

range is 1.04 - 1.10 last few mths one day this will break up or down

[minimoke]

There's the regular funding round increases every year on 1 July.Does it fully cover these govt enforced costs. Which have to include not only the increase in the wage, but also the increase in ACC premiums, kiwisaver contributions and holiday pay entitlements.

[longy]

range is 1.04 - 1.10 last few mths one day this will break up or down

I think you are right. :)

[Beagle]

Does it fully cover these govt enforced costs. Which have to include not only the increase in the wage, but also the increase in ACC premiums, kiwisaver contributions and holiday pay entitlements.

I would think so mate but Couta1 has the inside industry knowledge.

[Maverick]

It's just not possible to accurately quantify a future profit a few years out on this company. It is in a multi year process of a combination of massive remodelling and up-specking it's old care beds to premium units. Completely demolishing some buildings and some units to rebuild new it there places while also simultaneously building new units and care apartments. There are just too many moving parts making the accounting mind boggling to me.
If they pull it off as they intend then they will end up with a business offering high end , late stage care others cannot. Also in very desirable locations. This is on top of plenty of new villas and apartments on offer to match any other modern village. They are covering every base.
I personally like any business model that focuses on upgrading to quality to sell at a premium price.(especially with OCA when it will end up in a slight niche situation with its care suites).
At this stage, for me, it is all based on trust in OCA ‘s maths and execution:
-their maths are proving to be as sharp as SUM in areas we can compare. ie their resale and new sale margins are identical to the very experienced SUM
-they are building on budget and on time and are delivering everything as they say.
-presentations are all very detailed and open, despite being a very complex with so much going on.
-The directors have plenty of skin in the game which says enough of their own self belief.


As far as the share price goes, they are in the early stages of a long metamorphosis. I can't see many , if any, investors bothering to spend the energy trying to understand the business well at this stage so see no reason for the share price to appreciate much any time soon.
However I do think OCA will seriously deliver in say 4-5 years. If successful, which I believe it will be, when it's more obvious what's being delivered under our nose, then OCA will get plenty of interest. It will become a dominant ,if a little monopolistic ,business in late care living and a first class village operator.
Plus, we are getting paid not too shabbily while we wait.
Disc, holding $5:$1. OCA:SUM

[couta1]

Just to let you all know there has been an small increase in funding just announced for the sector to offset some of the extra cost due to the pay equity settlement so that should help with expenses. A slight good news correction to this post, the small funding increase is for covering the Nurses wage increase only, the main funding increase will be set in July. This will help OCA to reduce their expenses going forward.

[minimoke]

A slight good news correction to this post, the small funding increase is for covering the Nurses wage increase only, the main funding increase will be set in July. This will help OCA to reduce their expenses going forward.I hope it fully offsets Labours General Wage order by stealth

[ziggy415]

Biggest handbrake to this share at present is mcquarries overhang of shares.....they still have 42% or somewhere near 300 million shares to unload......how they do this is anyone's guess

[couta1]

Biggest handbrake to this share at present is mcquarries overhang of shares.....they still have 42% or somewhere near 300 million shares to unload......how they do this is anyone's guess They won't be doing anything at the current price, probably offload the next lot in the $1.30 range IMO.

[ziggy415]

They won't be doing anything at the current price, probably offload the next lot in the $1.30 range IMO.
To raise share price you increase profit or divvy and remember they let 95 million shares go at$1.10....guess it will depend on how much this share owes them and how bad they need the money

[gonzo56]

Biggest handbrake to this share at present is mcquarries overhang of shares.....they still have 42% or somewhere near 300 million shares to unload......how they do this is anyone's guess


Why do they have to unload these? And if and when they do, who would buy them?

[ziggy415]

Why do they have to unload these? And if and when they do, who would buy them?
Perhaps they could keep their shares but mcqueary are one of many private equity funds that buy what they consider undervalued companies...repackage them and then float them on the share market to make money

[Maverick]

Perhaps they could keep their shares but mcqueary are one of many private equity funds that buy what they consider undervalued companies...repackage them and then float them on the share market to make money
well said . That's exactly what they do. But given OCA itself is remodelling as a company AND the share price has languished they just might delay further sell down.
who really knows the mind of a private equity other than they have a thing for blue suits and brown shoes.

[bull....]

technicals still negative , expecting a downside test of lows soon

[macduffy]

Perhaps they could keep their shares but mcqueary are one of many private equity funds that buy what they consider undervalued companies...repackage them and then float them on the share market to make money

And that's the answer. They have to have another, better use for the funds released.

[Maverick]

I NEVER buy/ sell on graph analysis , I haven't got a clue how it even works ,but i must admit that OCA is looking excitedly Ready to crawl upwards now the 30 and 60 day MA have connected.
Just observing in the three times this has happened before in its short lifespan there's been a nice little share price climb.
Its never held the gain, but hey , we are overdue for a little bit of love for us jaundice ( but faithful) share holders.

[BlackPeter]

I NEVER buy/ sell on graph analysis , I haven't got a clue how it even works ,but i must admit that OCA is looking excitedly Ready to crawl upwards now the 30 and 60 day MA have connected.
Just observing in the three times this has happened before in its short lifespan there's been a nice little share price climb.
Its never held the gain, but hey , we are overdue for a little bit of love for us jaundice ( but faithful) share holders.

I never buy / sell solely based on TA ... but anyway - as far as I can see OCA is still below the MA 50 and just touching the MA30 - so probably not a technical buy anyway - unless you assume that the last ripples are turning into an inverted head and shoulders, which they well might ....

But just looking at the graph, there seems to be an interesting correlation to SUM other share, which actually just broke out of the trading channel (SUM-blue, OCA-red/yellowish).

10370

Maybe somebody accumulating / shorting here as well? Makes you wonder whether OCA is next to follow the breakout?

[couta1]

Too hard to call as most indicators pointing downwards except for bollie bands moving closer together but last time the SP dropped when that occurred, not that any of it matters for long termers.

[Beagle]

I never buy / sell solely based on TA ... but anyway - as far as I can see OCA is still below the MA 50 and just touching the MA30 - so probably not a technical buy anyway - unless you assume that the last ripples are turning into an inverted head and shoulders, which they well might ....

But just looking at the graph, there seems to be an interesting correlation to SUM other share, which actually just broke out of the trading channel (SUM-blue, OCA-red/yellowish).

10370

Maybe somebody accumulating / shorting here as well? Makes you wonder whether OCA is next to follow the breakout?

Interesting correlation but for mine SUM exceeded expectations whereas OCA only just met my minimum expectations when it reported recently.
Possibly some OCA shareholders switching some of their capital to a more proven performer trading on ostensibly a very similar forward PE but not only better more proven performance over a much longer period of time, also much better looking TA.
I would who might be doing SUM portfolio reallocation in this sector :D

[winner69]

Maverick last forecast was $75m underlying earnings for F19

That deserves a share price over $1.25

[Beagle]

$50-$60m underlying profit is my call depending a lot of timing of sell down of developments scheduled for completion in May 2019. Should see much better profit growth in FY20 in my opinion. What we learned from SUM's most recent announcement is its one thing to "deliver", (industry jargon for achieve practical completion and council sign off), and actually sell and deliver them to customers and this is very much an issue when developments are completed in the last month of a companies financial year. What it means is the underlying profit will mostly be delivered in the following financial year but IFRS profit will look good because the completed development will be valued at market value, (capture all the development margin in the month of completion)...assuming the developments are actually completed in May 2019. Company says developments are on track for delivery in May which is encouraging but sometimes things get delayed at the last minute so there's always some obvious risk with late Q4 development timing.

[winner69]

$50-$60m underlying profit is my call depending a lot of timing of sell down of developments scheduled for completion in May 2019. Should see much better profit growth in FY20 in my opinion. What we learned from SUM's most recent announcement is its one thing to "deliver", (industry jargon for achieve practical completion and council sign off), and actually sell and deliver them to customers and this is very much an issue when developments are completed in the last month of a companies financial year. What it means is the underlying profit will mostly be delivered in the following financial year but IFRS profit will look good because the completed development will be valued at market value, (capture all the development margin in the month of completion)...assuming the developments are actually completed in May 2019. Company says developments are on track for delivery in May which is encouraging but sometimes things get delayed at the last minute so there's always some obvious risk with late Q4 development timing.

Timing and accounting treatment of sales interesting ....and not that straight forward

Like $17.7m of cash received in H119 (Cash Flow Statement) for sales recognised in FY18 (in underlying earnings)

No wonder you were so excited with that astounding increased in OCA’s cash flow

[Beagle]

Tough set of accounts to get one's head around. (polar opposite to HLG) Maybe if they start doing those bridge graph presentations that will make things easier to understand ?

[Maverick]

Maverick last forecast was $75m underlying earnings for F19

That deserves a share price over $1.25


I would like to revise that 75 million profit down a lot Winner. I've had the time and got plenty of motivation to really dig through the last report. (By no means a small excersize)
I'm picking a fy profit of 64.5 million. However the actual reported profit could be anywhere between 50-65 million. The profit variance is so wide because 31 million of that profit will come from second half sales. Who knows how much of that profit will actually end up in FY 2019. (over the medium term it doesn't matter because the profit will still be there, it will just appear split between fy 2019 and Fy 2020) As Beagle has nicely explained earlier and SUM just gave a great recent example of this.
So my forward PE Calc on OCA is about the same as my forward PE calc on SUM at 11. Again, the PE could appear higher as some of this profit is transferred into fy2020.


Two things to mention here when comparing value of the two companies is that OCAs forward PE will be reality in 2.5 months compared to SUM in 8.5 months. The speed at which these organisms grow at , makes this a valid consideration.
The second point is that OCA’s higher churn rate and distinctive care suit offerings will assist OCA in getting larger and faster growing reoccurring DMF income as opposed to SUM’s higher dependence on property margins and resales.(but SUM also has solidly growing DMF income too)
Right now I do like Beagles mix of 50/50 between the 2 companies, but overall , I like OCAs future even more than SUM.It will end up less property centric with a faster growing recurring income steam. Plus my time horizon is five to ten years.
And like Couta has stated, I too am drawn to their strong focus on offering a first class care service.

[bull....]

my the big sellers are hiding in every corner ready to pounce

[bull....]

1.04 last defence looking at the depth , if it busts i guess it is a reflection of the margins being under pressure sector wide i believe

[warren]

1.04 last defence looking at the depth , if it busts i guess it is a reflection of the margins being under pressure sector wide i believe

Yep Mr. Bull ---wonderful I agree---I have invested my dividend at 1.05 today --How beautiful. The Gross Dividend Yield is rocketing up towards 4.5% (More if OCA makes budget). I cant match it in the best bank I can find. What a share!

[winner69]

I would like to revise that 75 million profit down a lot Winner. I've had the time and got plenty of motivation to really dig through the last report. (By no means a small excersize)
I'm picking a fy profit of 64.5 million. .......



You're are worry Maverick

Profit downgrade from $75m to $64.5m

Downgrades usually come in threes many say

Don't be too pessismistic with your next downgrade or two....bearing in mind F18 underlying earnings were $52m

I see your reported profit figure of $50m to $65m is a lot less than F18 .....hmm

Maybe the pros have done the sums as well and thats why the share price is languishing

[ziggy415]

1.04 last defence looking at the depth , if it busts i guess it is a reflection of the margins being under pressure sector wide i believe
noticed yesterday that all the large blocking sell orders disappeared, any ideas why this happens....noticed it on a lot of shares

[bull....]

noticed yesterday that all the large blocking sell orders disappeared, any ideas why this happens....noticed it on a lot of shares

obviously someone is selling a large holding at the moment. instos dont want to scare people or other instos off by having millions on offer in the depth list so instos just feed them out gradually until there order is finished.

[Beagle]

Someone is manipulating the market...sorry I cannot say any more. Its a little disappointing to see them down at $1.04 again. I think their business model is brilliant.

[macduffy]

Someone is manipulating the market...sorry I cannot say any more. Its a little disappointing to see them down at $1.04 again. I think their business model is brilliant.

Manipulation is a fairly strong word. Just good management of a large position? In any case, we all know that the market price from day to day isn't relevant unless one is a buyer or a seller at that time.

[Ggcc]

I think that we will see Oceania stagnant for a while (approximately 6 months). Looking at what they are projected to pay for dividend, I can get better in other shares and ones that are also gaining in capital value (HGH). I don’t plan on selling what I have as I am still making capital gain on this share and I don’t trade, but I do rebalance. I do think this share is worth $1.15 at least, but I don’t control the market

[couta1]

I think that we will see Oceania stagnant for a while (approximately 6 months). Looking at what they are projected to pay for dividend, I can get better in other shares and ones that are also gaining in capital value (HGH). I don’t plan on selling what I have as I am still making capital gain on this share and I don’t trade, but I do rebalance. I do think this share is worth $1.15 at least, but I don’t control the market I reckon you have hit the nail on the head as to why the SP is currently substantially undervalued, basically stagnation and some large holders seeing better use for their money elsewhere and probably a disbelief that the SP is back at $1.04 after what was a discounted $1.10 at the time selldown by Maccas. I never thought we would see the price under $1.10 again 6 months ago but it just reinforces my mistrust of the market to get things right, I back myself and therefore continue to hold an XXXOS sized position. PS-My 12 month target price is $1.30 and $2.50 within 3 years.

[Maverick]

I like those numbers Couta. I've done as much homework as this mere mortal can do on their reports. As stated above I come up with a FY19 underlying profit of 50-65 ( the large variance due to delivery dates of their new builds as to which FY They will be sold in)
At 60 million that's an EPS of ten, multiplied by a PE of 13.5 ( that's all this grumpy market will afford it currently- i believe it "should" rise to 17- 18 in years to come , given its probable,strong growth trajectory.)
then wallah...... a share price in SIX months of $0.10 x 13.5 = $1.35.
I do think your price of $2.60 in 3 yrs is reasonable but it's dependant on the market raising its PE rating. It surely must by then, especially with MAQ exited and some history building up.
Even if Mr Mkt still won't budge on the PE then the company will still deliver strong underlying growth so it might take five years to get there all by itself. ( but I seriously doubt it will take that long).

[Champion]

Hi All, this is my first time posting on this forum and I am an absolute beginner as an investor in share (and businesses). First of all, thank you for all the information and sharing of your knowledge here, it has been great reading the posts on this forum.

I am learning to read the annual reports. I noticed that in the OCA report, it has something like 'Change in fair value of investment property' as one of the income, and it was like 34m in 2017 and 1.6m in 2018. May I ask what it is actually? Is it just based on valuation of the property, and not actual cash income? Is this specific to business related to property investment? I guess if this is the case and the income is not realised until things are sold, so it is just income on paper?

Apology for asking such basic questions. Thanks for your help!

[BlackPeter]

Hi All, this is my first time posting on this forum and I am an absolute beginner as an investor in share (and businesses). First of all, thank you for all the information and sharing of your knowledge here, it has been great reading the posts on this forum.

I am learning to read the annual reports. I noticed that in the OCA report, it has something like 'Change in fair value of investment property' as one of the income, and it was like 34m in 2017 and 1.6m in 2018. May I ask what it is actually? Is it just based on valuation of the property, and not actual cash income? Is this specific to business related to property investment? I guess if this is the case and the income is not realised until things are sold, so it is just income on paper?

Apology for asking such basic questions. Thanks for your help!

Hi Champion, welcome to the forum!

And yes, you are right - the change in fair value is just a "paper gain" unless realized. These revaluations however are not confined to property companies (other companies have to value as well every year their stock and assets, be that wine, honey, milkpowder, "goodwill" or - in this case - real estate.

How else would you find out what a company is worth? Paper gains are still "real" as long as a company could realise them. Take it some other way - if the asset value of a company is $2b, than you might be prepared to pay more for it than for the same company when the asset backing was only $1b. And if this increase from $1b to $2b happened during a certain period, than the company just had an additional $1b as "income".

If a company makes say $100m by selling widgets but leaves the money in a bank account (instead of "realizing its value and spending it) - would you call this just a "paper gain" as well?

[Champion]

Thank you BlackPeter for explaining. I am not sure how the valuation is done (I have briefly read through the notes) but in residential property, valuations done by registered valuers are often very inaccurate (+/-20% at its best?) so if it is similar then basically the actual profit of the company could vary significantly for a real estate related business. And I would think that in terms of dividend payment a rise in asset value will not (and should not) be paid out? And if I read the reports correctly, if we take away the increase in asset value (capital gain) then the business is actually not very profitable (including other retirement villages not just OCA)?

Is it true that it is not that easy to find out how much each care unit costs to run and how much income it is bringing in (excluding asset value)? Or is it just me not understanding how the financial statements should be read? I would think that is the most important information to know?

Thanks again!

[winner69]

Thank you BlackPeter for explaining. I am not sure how the valuation is done (I have briefly read through the notes) but in residential property, valuations done by registered valuers are often very inaccurate (+/-20% at its best?) so if it is similar then basically the actual profit of the company could vary significantly for a real estate related business. And I would think that in terms of dividend payment a rise in asset value will not (and should not) be paid out? And if I read the reports correctly, if we take away the increase in asset value (capital gain) then the business is actually not very profitable (including other retirement villages not just OCA)?

Is it true that it is not that easy to find out how much each care unit costs to run and how much income it is bringing in (excluding asset value)? Or is it just me not understanding how the financial statements should be read? I would think that is the most important information to know?

Thanks again!

Often it’s better to look at presentations to understand the business rather than the accounts

Your care question . Oceania made $11,000 odd ebitda per bed for the last half year. See page 29
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/329805/294060.pdf

[Champion]

Thank you winner69, exactly what I am after!

[Beagle]

Welcome to the forum Champion. Unfortunately you have chosen one of the very hardest sets of financial statements, (of any of the listed companies I follow) to try and get you head around.

I suggest at this stage the best thing for you to do is concentrate on the underlying profit the company is making and its underlying earnings per share as in this sector that's how the shares are compared.

For what its worth I have recently trimmed my expectations for underlying profit for OCA to a range of $50-60m for Fy19. Why such a wide range ? Its impossible to know how many of the units that the company says will be built in FY19 will be sold this year because a lot of the "delivery to market" is scheduled to happen in May 2019, the last month of the financial year.

I am expecting underlying profit growth in FY19 to be quite modest but we should see good growth in FY20. Long term I love OCA's business model but its well worth noting that its going to take another 5 years for them to transition their model over to mostly selling based on the occupation right agreement model. Good long term hold as part of a well diversified portfolio.

[BlackPeter]

Thank you BlackPeter for explaining. I am not sure how the valuation is done (I have briefly read through the notes) but in residential property, valuations done by registered valuers are often very inaccurate (+/-20% at its best?) so if it is similar then basically the actual profit of the company could vary significantly for a real estate related business. And I would think that in terms of dividend payment a rise in asset value will not (and should not) be paid out? And if I read the reports correctly, if we take away the increase in asset value (capital gain) then the business is actually not very profitable (including other retirement villages not just OCA)?

Is it true that it is not that easy to find out how much each care unit costs to run and how much income it is bringing in (excluding asset value)? Or is it just me not understanding how the financial statements should be read? I would think that is the most important information to know?

Thanks again!

Sure - valuations are guesswork, given that they try to predict what a current but not existing buyer would pay for the property. And who knows - tomorrow they might discover some contamination and the property loses 50% of its "worth" - or somebody finds out that they really need this estate - and the value doubles.

Estimating the value of a property is easier if there are plenty of comparable properties around (which are on the market), but even this is less likely with typical retiremet properties. Still - so far nobody found a better way to establish the "real" value ;);

Easy to find out how the business is doing without the property gains. Most companies call this "underlying profit" - and so does OCA. However - this measure is not standardised (i.e. its up to your research to find out what is in and what is out) - and comparing companies based on their underlying profit is often comparing apples and pears ...

If you don't trust them and want to do it yourself - just remove the revaluation gain from the balance sheet and the income statement - and recalculate afterwards whatever (modified) ratios you use ;);

[Champion]

Hi BlackPeter, thank you so much for the explanation, that is very helpful. And thanks Beagle, I enjoy reading your posts and insights.

BTW, I do own a very small amount of OCA share for long term hold. I feel I just need to start investing (even just a little) to really learn, instead of just keep watching the market and researching. Thanks again.

[winner69]

Hi BlackPeter, thank you so much for the explanation, that is very helpful. And thanks Beagle, I enjoy reading your posts and insights.

BTW, I do own a very small amount of OCA share for long term hold. I feel I just need to start investing (even just a little) to really learn, instead of just keep watching the market and researching. Thanks again.

Researching and understanding companies always a good practice.

You’ll be amazed how much you learn about the world in general.

No matter how your investments go you will be all the wiser for the experience

[Maverick]

Hi BlackPeter, thank you so much for the explanation, that is very helpful. And thanks Beagle, I enjoy reading your posts and insights.

BTW, I do own a very small amount of OCA share for long term hold. I feel I just need to start investing (even just a little) to really learn, instead of just keep watching the market and researching. Thanks again.

Hi Champion....If you are just starting and in it for learning you might be better to buy a simple animal like HLG. At current prices you might pick up an easy 20% profit shortly and they really are a simple structure. OCA has multiple levels to it. To just begin with , whats the difference between a villa , apartment , care suite and care bed? Then add a refurbishment and a redevelopment? (easy when you`ve figured it out but very confusing at the onset)That`s not even finance stuff. Too many concepts to get your head around when starting from scratch.

[Baa_Baa]

My two cents, OCA like the other aged care providers are fundamentally a challenging business model to understand at the accounts detail level, let alone their complex obfuscated wording in the accounts. They are a unwieldy mix of property investing alongwith the business of profitably caring for our elderly, their income source is spread across individuals and government funding with complex rules. There are really smart people here who can help with that, I don't pretend to be an expert in the FA although I do study it, but I'm happy to offer some insights to the SP movements.

OCA is currently captive to market sentiment, which is negative. Look up 'momentum trading', Google will give you some insights. Smart traders rode the SP momentum up past its real value (price) and sold into the trend, maybe somewhat influenced by a ramp attack here, who knows really. Fact is though, it's sold off after sentiment said it was too high and maybe still is (TA says so). Currently OCA has recently tested its longer term resistance levels around $1.11-$1.09 (also failing the 50MA resistance).. now settling below.

It reckon that's a fair market price range, so where we are right now is a decent buy, below that on the technicals with a downside risk of a few cents if it plumbs the March to May 2018 lows, which if it does I'd also be happy to buy into. If property prices collapse, it will affect all aged care providers property business, but one needs a longer term horizon, they will recover. None of these stocks are short term holds unless you're a bonafide SP trader.

If you look through all the talk, whether FA or TA, you might see that the next period of time is a good opportunity for taking a position, or accumulating onto a position. It doesn't look like a 'sell a position' to me, unless you've lost faith in the company, that would be capitulation at this price.

[whome]

Excellent advice & knowledgeable common sense answers on both FA & TA to Champions post. Thanks people. Great to have a benchmark of opinion to measure portfolio mix. Discl. OCA 25% of portfolio.

[BlackPeter]

Not a biggie - but it looks like Sally Evans (one of the newer directors) thought the current SP weakness is a good opportunity to buy her first parcel (20k) of OCA shares:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/331722/296485.pdf

Ah yes - and talking about downtrends - anybody noticed that the SP seems to bounce along the EMA400 (yellow in the pic below) which is currently $1.04? So, maybe this is as dark as it gets ...

10383

[forest]

[QUOTE=BlackPeter;750787]Not a biggie - but it looks like Sally Evans (one of the newer directors) thought the current SP weakness is a good opportunity to buy her first parcel (20k) of OCA shares:

You right, one director buying not a biggie.
It looks however more significant if one realise that 2 directors bought shares in Feb and the GM property Mark Stockton in Jan.
That are 4 insiders buying in sort period of time, might give others the confidence to buy.

[Beagle]

Not a biggie - but it looks like Sally Evans (one of the newer directors) thought the current SP weakness is a good opportunity to buy her first parcel (20k) of OCA shares:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/331722/296485.pdf

Ah yes - and talking about downtrends - anybody noticed that the SP seems to bounce along the EMA400 (yellow in the pic below) which is currently $1.04? So, maybe this is as dark as it gets ...

10383

Yes I would think there is very sound long term value at this level.

I agree with Maverick that HLG financial statements are very simple to understand, by FAR, the simplest of any company that I own on the NZX. I like the company a lot too. On the other hand even for professionals the OCA accounts are a VERY hard read in my opinion.

[winner69]

Good on Sally ...she’s a hero buying some Oceania shares ..probably took her that long to help bderstand the company

Only taken a year for her to get involved ...but we will forgive her

No longer truely independent now ..has a vested interest

[peat]

Not a biggie - but it looks like Sally Evans (one of the newer directors) thought the current SP weakness is a good opportunity to buy her first parcel (20k) of OCA shares:


not that she bought them in weakness, paying 1.10 per share as per the notice.

[bull....]

1.04 looking vunerable again

[winner69]

1.04 looking vunerable again

What’ll happen if it breaks below 1.04 bull...

[bull....]

What’ll happen if it breaks below 1.04 bull...

re sales will probably go up

[BlackPeter]

1.04 looking vunerable again

Well, that's not like you, isn't it? A real bull would predict a bullish $1.03 double bottom .... :p

[bull....]

Well, that's not like you, isn't it? A real bull would predict a bullish $1.03 double bottom .... :p

think just under 1 is next supports if 1.04 doesnt hold

[Beagle]

SUM technical's looking great, OCA very sad...like one's dog dying.

[bull....]

calls for a higher staffing levels

https://www.stuff.co.nz/national/health/111235929/overstretched-aged-care-staff-say-residents-lie-in-pain-rather-than-making-a-fuss

i imagine after the royal commission in aus reccommends this nz will follow at some stage. higher costs coming one day as care becomes a social cost thing not a money thing

[BlackPeter]

SUM technical's looking great, OCA very sad...like one's dog dying.

I guess it just depends on the timeframe you are looking at ... and hey - we are investors, aren't we?

Just looked at the trendcharts of SUM (blue line) and OCA (orange line) since Oceanias listing - and anybody buying at that stage OCA would still be 7.5% better off than holding SUM (and this is not even considering Oceanias premium dividends). So, maybe SUM just playing catchup.

10389

One other interesting observation: these two stocks are less correlated than I would have thought. Maybe it does make sense to hold both?

I do.

PS:
Just read your post in the TRA thread ... I didn't realise you mean the "dying dog" literally. Very sorry for your loss - I do know how it feels to lose a beloved pet ...

[Beagle]

I guess it just depends on the timeframe you are looking at ... and hey - we are investors, aren't we?

Just looked at the trendcharts of SUM (blue line) and OCA (orange line) since Oceanias listing - and anybody buying at that stage OCA would still be 7.5% better off than holding SUM (and this is not even considering Oceanias premium dividends). So, maybe SUM just playing catchup.

10389

One other interesting observation: these two stocks are less correlated than I would have thought. Maybe it does make sense to hold both?

I do.
Thanks and yes that's quite an interesting observation. Not really all that correlated, quite different business model's.
Definitely a good idea to have a bob or two each way :)

[winner69]

One other interesting observation: these two stocks are less correlated than I would have thought. Maybe it does make sense to hold both?



...

Loosely (or not correlated) maybe

From the weekly numbers on Yahoo OCA floated the SUM share price was 6.2 times OCA's

Today SUMs share price is 6.2 times OCAs


Spooky eh



Hey couts - reversion to the mean in play .....just maybe

[Blue Skies]

calls for a higher staffing levels

https://www.stuff.co.nz/national/health/111235929/overstretched-aged-care-staff-say-residents-lie-in-pain-rather-than-making-a-fuss

i imagine after the royal commission in aus reccommends this nz will follow at some stage. higher costs coming one day as care becomes a social cost thing not a money thing

I think that's only going to help highly reputable companies like OCA as it takes out some of the truely awful low cost low care operators in this sector.
I remember an elderly relative whose health collapsed being put into a dreadful place with disinterested overworked staff as it was all that was available , & we couldn't wait to move him.

[Maverick]

I've done plenty of homework on this company and from that I have built a rock solid belief in their model and execution . But .....this relentless, seemingly endless selling to the point of barely a few buyers left is getting tiresome. Personally , I won't be selling one share but I do feel for those out there on this downhill ride who don't have the same confidence in this company.

[Beagle]

I guess it just depends on the timeframe you are looking at ... and hey - we are investors, aren't we?

Just looked at the trendcharts of SUM (blue line) and OCA (orange line) since Oceanias listing - and anybody buying at that stage OCA would still be 7.5% better off than holding SUM (and this is not even considering Oceanias premium dividends). So, maybe SUM just playing catchup.

10389

One other interesting observation: these two stocks are less correlated than I would have thought. Maybe it does make sense to hold both?

I do.

PS:
Just read your post in the TRA thread ... I didn't realise you mean the "dying dog" literally. Very sorry for your loss - I do know how it feels to lose a beloved pet ...

Thanks BP. Tough day no question. I think I'm overdue for a stiff drink or two.