OCA - Oceania Group - retirement villages

[Cyclical]

Go you good thing GO GO GO!;).

It looks faster in italics doesn't it? ;)

[nevchev]

Broker targets appear to be 108 and 122 (Marketscreener)

Big upside from here

Go OCA

Not a bad upside in that case winner.If you have faith in the company then one could hope for more.cheers

[Justin]

whats the target price before update？

[BlackPeter]

Wouldnt be silly to take out a small mortgage at fixed rate of 2.something% for 5 years and buying OCA which at 6% would still offer a return of over 3%.Not to mention the capital gain!!!

Well, it looks tempting, does it ... however they say 'invest only money you can afford to lose'.

Unless you are able to predict the future (and I know only about one being able to do that, and not so sure about her as well) I would try to avoid betting the house on the performance of one individual stock, even if it looks tempting.

[Entrep]

OCA is a strong company for sure, but have we really started to consider broker targets? They’re a joke and should never be used as part of any serious investment decision

[Baa_Baa]

OCA is a strong company for sure, but have we really started to consider broker targets? They’re a joke and should never be used as part of any serious investment decision

That could be true, a joke. But notice that they are quite conservative around pre COVID highs. How materially has the business been damaged by COVID? Not 25% imo. Room to move up to close the gap as the two months of delays in development are caught up with, other than that nothing else seems material? In relation to sector peers OCA is a gift at these prices, again imo

Disc raging bull 😁

[nevchev]

Well, it looks tempting, does it ... however they say 'invest only money you can afford to lose'.

Unless you are able to predict the future (and I know only about one being able to do that, and not so sure about her as well) I would try to avoid betting the house on the performance of one individual stock, even if it looks tempting.
It funny you mention the house BP.I first brought into HGH when they got their banking license (74c from memory) and held for some time while looking for something with more upside despite knowing there would be more risk.Its at that stage i came across ATM.I sold my HGH for$1.28 a share and brought 70,000 ATM shares for 50c a share.My partner then got herself pregnant somehow and been an honorable man i decided i could no longer continue with the risk that is the sharemarket and sold them at $5.60.We purchased an investment property and have enjoyed the passive income ever since.Despite been tempted many times to come back to market,i resisted.Then there was covid.........After much discussion and lots of soul searching,here i am.Opportunities like this may come around once or(im hoping)twice in a lifetime.The saying is nothing surer than death and taxes.Well,before death comes old age...blah blah blah.You get the point.The house you mention came from here and ive always been a bit of a punter.He who dares....WINS.cheers

[Beagle]

I think the important point is the 6% is in your hand, (before tax) with no work and is likely to grow over the years ahead. On the other hand the 5 year fixed rate from BNZ at 2.99% is exactly that, fixed. I think that's quite a useful margin for the modest risk involved.

Not much chance of an OCA resident contaminating your property with methamphetimine, throwing wild parties wrecking the place or not paying their weekly rent and they're the ones paying for the full refurbishment of the proeprty every so many years, not you :)

[davflaws]

My first mortgage in the mid 1990s was at over 20%!!!

My first second in 1976 was 26%

[nevchev]

My first second in 1976 was 26%
Wow....winner was paying 28%.I wont complain about 20% again.cheers

[tim23]

My first mortgage in the mid 1990s was at over 20%!!!

Really? My mortgage went to over 20% in the late 80s but then rates dropped to around 13% from 1989 when I bought my 2nd house so either your memory is at fault or the bank was having a lend of you? I bought a beach house in 1991 and rate was about 11%.

[fish]

I think the important point is the 6% is in your hand, (before tax) with no work and is likely to grow over the years ahead. On the other hand the 5 year fixed rate from BNZ at 2.99% is exactly that, fixed. I think that's quite a useful margin for the modest risk involved.

Not much chance of an OCA resident contaminating your property with methamphetimine, throwing wild parties wrecking the place or not paying their weekly rent and they're the ones paying for the full refurbishment of the proeprty every so many years, not you :)


My understanding is that interest on the 2.99 should be tax deductible-the borrowing on the house is with the purpose of making a profit.If you are buying to hold long-term for the dividend a capital gain is not taxed .
Would be wise to document the purpose of the mortgage

[nevchev]

Really? My mortgage went to over 20% in the late 80s but then rates dropped to around 13% from 1989 when I bought my 2nd house so either your memory is at fault or the bank was having a lend of you? I bought a beach house in 1991 and rate was about 11%.
You could be right tim.Will check when home, but you got the point?Money will never be this cheap again

[Beagle]

My understanding is that interest on the 2.99 should be tax deductible-the borrowing on the house is with the purpose of making a profit.If you are buying to hold long-term for the dividend a capital gain is not taxed .
Would be wise to document the purpose of the mortgage

You're on to it mate.

[tim23]

You could be right tim.Will check when home, but you got the point?Money will never be this cheap again

Quite right but money might get cheaper and my memory is okay on mortgage rates!

[nevchev]

My understanding is that interest on the 2.99 should be tax deductible-the borrowing on the house is with the purpose of making a profit.If you are buying to hold long-term for the dividend a capital gain is not taxed .
Would be wise to document the purpose of the mortgage
Thanks for that fish.Worth looking at!

[nevchev]

Quite right but money might get cheaper and my memory is okay on mortgage rates!
Thats great tim,enjoy it while you got it

[Snoopy]

It funny you mention the house BP.I first brought into HGH when they got their banking license (74c from memory) and held for some time while looking for something with more upside despite knowing there would be more risk.Its at that stage i came across ATM.I sold my HGH for$1.28 a share and brought 70,000 ATM shares for 50c a share.My partner then got herself pregnant somehow and been an honorable man i decided i could no longer continue with the risk that is the sharemarket and sold them at $5.60.We purchased an investment property and have enjoyed the passive income ever since.Despite been tempted many times to come back to market,i resisted.Then there was covid.........After much discussion and lots of soul searching,here i am.Opportunities like this may come around once or(im hoping)twice in a lifetime.The saying is nothing surer than death and taxes.Well,before death comes old age...blah blah blah.You get the point.The house you mention came from here and ive always been a bit of a punter.He who dares....WINS.cheers


Nevchev, you have taken some huge risks in the sharemarket and they have paid off. You got an investment property out of it and that is fantastic for you. The question is how much of this was due to your investment skill and how much was luck? Huge risks can lead to huge rewards and when the rewards are crystallised investors tend to forget about the risks they took to get there. Eventually if you keep rolling the investment dice on huge sharemarket gambles you will go broke. It doesn't matter how successful your gambles have been in the past because once you recycle your capital into your latest investment gamble all investment history is forgotten. Your new investment is what in statistics is called an 'independent event'. An independent event will have no respect for any past success. I am not saying don't invest in OCA. I am saying don't invest more than you can afford to lose.

I can see plenty of downside with OCA.

1/ The underlying government funding for care staff from the government is not sufficient to meet existing wage bills today let alone into the future. The recent increase you read about in the news is a one off related to Covid-19 and will not fix the problem, Rest homes are not allowed to increase their room rates to cover the wage shortfall, because the a government has mandated maximum care suite prices for those residents claiming the government subsidy.

2/ Wages have to be subsidised by property development and unit resales. If either of these twio income sources slow, then the likes of OCA will be in serious trouble.

3/ Property in Auckland is seriously overvalued on a global affordability scale and incomes in NZ are set to reduce across the board.

4/ The property market is being artificially propped up with the dropping of minimum deposits and record low interest rates. Renters will not be able to pay more to support further property price rises.

IMO this is probably the worst time ever to invest in property and shares that are associated with it. Even a 10% property price correction will be insufficient to fix the imbalance. I personally would say avoid OCA at all costs. But if you think the wage bill isn't an issue and property prices can only go up then by all means put a modest amount of capital in. Just remember it isn't a one way bet.

SNOOPY





.

[justakiwi]

Government funding must increase in the not too distant future, regardless of which party is governing. Over the next 10-20 years we will have a much greater population of elderly, and an explosion of people with dementia. That is a fact. The need for care is going to increase significantly. Oceania recognises this and is planning for it. Their focus is on care, which sets them apart from the others, and I think that will hold them in good stead. Government funding will have to increase. So will the wages of staff on the floor. It is no longer acceptable for someone like me to be doing what I do for just over $20-23 an hour. Countdown’s announcement today of pay increases for staff will see everyone working in a supermarket, earning more than I do. I have no problem at all with them being paid that, but it does show just how underpaid and undervalued caregivers are. Recent events have highlighted the role we play, the responsibility we hold, and I really hope it helps change the public’s poor opinion of caregivers.

I am not sure how the different levels of care rooms/suites work with Oceania - they have standard care rooms and premium care suites from what I can tell. I assume the government funds them both at the same rate and residents/families pay the difference for the premium rooms?

Regardless, care will continue to be an essential service and the government of the day will have to fund it better than they are right now.



1/ The underlying government funding for care staff from the government is not sufficient to meet existing wage bills today let alone into the future. The recent increase you read about in the news is a one off related to Covid-19 and will not fix the problem, Rest homes are not allowed to increase their room rates to cover the wage shortfall, because the a government has mandated maximum care suite prices for those residents claiming the government subsidy.

[BlackPeter]

Government funding must increase in the not too distant future, regardless of which party is governing. Over the next 10-20 years we will have a much greater population of elderly, and an explosion of people with dementia. That is a fact. The need for care is going to increase significantly. Oceania recognises this and is planning for it. Their focus is on care, which sets them apart from the others, and I think that will hold them in good stead. Government funding will have to increase. So will the wages of staff on the floor. It is no longer acceptable for someone like me to be doing what I do for just over $20-23 an hour. Countdown’s announcement today of pay increases for staff will see everyone working in a supermarket, earning more than I do. I have no problem at all with them being paid that, but it does show just how underpaid and undervalued caregivers are. Recent events have highlighted the role we play, the responsibility we hold, and I really hope it helps change the public’s poor opinion of caregivers.

I am not sure how the different levels of care rooms/suites work with Oceania - they have standard care rooms and premium care suites from what I can tell. I assume the government funds them both at the same rate and residents/families pay the difference for the premium rooms?

Regardless, care will continue to be an essential service and the government of the day will have to fund it better than they are right now.

I think there is no dispute about the current need for age care and that it is going to increase. The risk is just that the funding might not keep up with the cost.

Just look at a similar issue at the other end of the population pyramid: There is indisputably a huge need for childcare. However - last time I checked some of the child care providers are running with minimal margins (if they are really lucky) - but most are just writing losses year after year due to the government happy to raise the cost every year without raising the funding.

Have a chat with EVO shareholders to find out about the amazing money you can make providing an essential social service ...

[Maverick]

I can see plenty of downside with OCA.

1/ The underlying government funding for care staff from the government is not sufficient to meet existing wage bills today let alone into the future. The recent increase you read about in the news is a one off related to Covid-19 and will not fix the problem, Rest homes are not allowed to increase their room rates to cover the wage shortfall, because the a government has mandated maximum care suite prices for those residents claiming the government subsidy.

2/ Wages have to be subsidised by property development and unit resales. If either of these twio income sources slow, then the likes of OCA will be in serious trouble.

3/ Property in Auckland is seriously overvalued on a global affordability scale and incomes in NZ are set to reduce across the board.

4/ The property market is being artificially propped up with the dropping of minimum deposits and record low interest rates. Renters will not be able to pay more to support further property price rises.
.
With all due respect Snoopy I feel I just have to correct your statements for the sake of others here, like me , who respect and rate your contributions . Because of this I feel it's necessary to wade in, sorry mate.


You state rest homes struggle to profit on govt bed rates, true. However the govt made a deal with providers as to keep them interested to curry more investment in the sector.
The deal that more CAN be charged on top of regular rates as long as:
1. The room is “premium” .
2. The client is willing to pay.
3. There are also sufficient basic offerings available within a radius area. (Beagle , this is why OCA won't eventually convert ALL of their beds to premium as you have mused in the past).
Basically the govt pay the exact same amount per room but the client pays extra for premium, generally in the form of a ORA arrangement. This govt arrangement makes late stage care profitable in its own right.


This is one of the corner stones of OCA’s point of difference . Their primary focus is upgrading old “care beds” to “premium care suits” to attract the cream on top of the govt subsidy on a large scale.


The second point I must comment on is that all profit for RVs comes from development margins and house prices rising.(which in turn subsidises the care arm). Not true.
The magic of the whole RV sector, in NZ, is the “right to occupy” agreement which creates a recurring income without house prices having to increase. I will not go into it here, but it is mandatory to understand by anyone “investing” in this sector. It's easy to look up.
Property development margins and resales do enhance the bottom line but the level of contribution is dependent on the particular RV companies model. For example , I no longer own SUM as it is heavily dependent on these margins whereas OCA is at the other end of the scale focusing more longer term income streams on DMFs of its villas and it's turbo charged DMFs on its care suites.


BTW, I have protracted OCAs pipeline of developments to completion and the underlying profit is rudely healthy , and reoccurring. This is when all, one off, new building margins have ceased . In these workings I have also assumed property inflation as benign.(so bugger all profit on resales too)


OCA have really tried hard to present understandable material explaining how their multiple incomes streams work. Anyone serious about this company should read their recent “investor presentations” and also watch Beagles recent link to their online presentation . Personal offort is required of course by investors but that's where “ investing” differs from “rolling dice” or just getting hot tips off ST.


Again , Snoopy , only because your opinions carry such weighting that I feel I have to challenge your statements.

[justakiwi]

Then maybe providers need to go back to providing excellent standard care, where the government subsidy will cover more of their total cost, rather than aiming for what seems to be high end, luxury care. They can still provide attractive care rooms/suites which would meet the needs of residents, at a lower cost. Staffing is, and should be, the most important aspect of any care provision. Without skilled and passionate staff, you have nothing. You certainly don’t have safe care.

I understand that these places are not actually catering for the everyday folk that live in the rest home I work in. They are catering for the higher social-economic group, and that is abundantly clear from the location and design of their facilities. There will no doubt always be a market for that, but I suspect the bulk of our growing elderly population will be people like me, not people moving out of million dollar houses. Perhaps providers will need to consider that when planning for the future.

I don’t have the answers - just an inside perspective and lots of concerns and questions.


I think there is no dispute about the current need for age care and that it is going to increase. The risk is just that the funding might not keep up with the cost.

Just look at a similar issue at the other end of the population pyramid: There is indisputably a huge need for childcare. However - last time I checked some of the child care providers are running with minimal margins (if they are really lucky) - but most are just writing losses year after year due to the government happy to raise the cost every year without raising the funding.

Have a chat with EVO shareholders to find out about the amazing money you can make providing an essential social service ...

[nevchev]

Nevchev, you have taken some huge risks in the sharemarket and they have paid off. You got an investment property out of it and that is fantastic for you. The question is how much of this was due to your investment skill and how much was luck? Huge risks can lead to huge rewards and when the rewards are crystallised investors tend to forget about the risks they took to get there. Eventually if you keep rolling the investment dice on huge sharemarket gambles you will go broke. It doesn't matter how successful your gambles have been in the past because once you recycle your capital into your latest investment gamble all investment history is forgotten. Your new investment is what in statistics is called an 'independent event'. An independent event will have no respect for any past success. I am not saying don't invest in OCA. I am saying don't invest more than you can afford to lose.

I can see plenty of downside with OCA.

1/ The underlying government funding for care staff from the government is not sufficient to meet existing wage bills today let alone into the future. The recent increase you read about in the news is a one off related to Covid-19 and will not fix the problem, Rest homes are not allowed to increase their room rates to cover the wage shortfall, because the a government has mandated maximum care suite prices for those residents claiming the government subsidy.

2/ Wages have to be subsidised by property development and unit resales. If either of these twio income sources slow, then the likes of OCA will be in serious trouble.

3/ Property in Auckland is seriously overvalued on a global affordability scale and incomes in NZ are set to reduce across the board.

4/ The property market is being artificially propped up with the dropping of minimum deposits and record low interest rates. Renters will not be able to pay more to support further property price rises.

IMO this is probably the worst time ever to invest in property and shares that are associated with it. Even a 10% property price correction will be insufficient to fix the imbalance. I personally would say avoid OCA at all costs. But if you think the wage bill isn't an issue and property prices can only go up then by all means put a modest amount of capital in. Just remember it isn't a one way bet.

SNOOPY





.

Thanks for the advice Snoopy and the time youve taken to give it.It is because of the means by which the property market is been propped up that this opportunity has presented itself.All investment opportunities are still on the table,not just OCA and i learnt some valuable lessons during the GFC and hopefully will not make those mistakes again.$20 to$30k is neither here nor there in the grand scheme of things and i would never push the envelope to the point where i could loose everything.I already have 60k OCA so will be examining all options first.cheers

[winner69]

OCA might make $54m underlying this year (Mavericks est - Earls bonus based on $83m) but Arvida says 2021 wont be as good as 2020

[Beagle]

OCA might make $54m underlying this year (Mavericks est - Earls bonus based on $83m) but Arvida says 2021 wont be as good as 2020

Customers are cancelling contracts at ARV. Earl Gasparich reported last week no client has cancelled at OCA. ARV trade at a material premium to NTA. OCA still trade at a material discount to NTA.

[winner69]

OCA might make $54m underlying this year (Mavericks est - Earls bonus based on $83m) but Arvida says 2021 wont be as good as 2020

ARV seemed to suggest operating costs going up that will affect 2021

[Snoopy]

Snoopy I feel I just have to correct your statements for the sake of others here, like me , who respect and rate your contributions . Because of this I feel it's necessary to wade in, sorry mate.


I welcome your contribution Maverick. No apologies needed. You are allowed to disagree with me, as of last time I checked the forum rules!



You state rest homes struggle to profit on govt bed rates, true. However the govt made a deal with providers as to keep them interested to curry more investment in the sector.
The deal that more CAN be charged on top of regular rates as long as:
1. The room is “premium” .
2. The client is willing to pay.
3. There are also sufficient basic offerings available within a radius area. (Beagle , this is why OCA won't eventually convert ALL of their beds to premium as you have mused in the past).
Basically the govt pay the exact same amount per room but the client pays extra for premium, generally in the form of a ORA arrangement. This govt arrangement makes late stage care profitable in its own right.


I am speaking from recent experience of an elderly relative being housed in a full care unit at what must be seen as an upmarket retirement village in the greater Wellington district. It is an independently run village under a trust set up that is not controlled by any of the listed operators.

This village has 25 full care beds of which 6 were classed as 'standard'. However, these are far from minimalist rooms. They have their own bathrooms for a start and are about twice the standard room minimum size. The standard classification of 6 rooms was clearly to meet the bare minimum requirement of government rules, so that the rest of the rooms could be charged out at a 'premium' rate. My elderly relative was in a 'premium room' , which was exactly the same layout as the standard room. The premium charge was justified because the room had a nice view into the internal garden. However, the occupant of the room was blind. So it is rather doubtful that this resident gained any personal benefit from being housed in a 'premium' room. This resident could have gone to a standard room in another retirement village to avoid the premium charge. But that would have meant being removed from all the other residents and carers she had know for many years. So it wasn't really an option.

The standing joke is that this particular retirement village is a transplant from an upmarket leafy well to do Wellington suburb. You would think that if anyone could make the premium model work, then this village would. However, the issue is that after up to twenty years of retirement in a right to occupy villa, there aren't enough wealthy elderly transferring to care who are still wealthy enough to make a full premium care model work. This retirement village must plug itself into the government subsidy model to remain viable.

I think many investors in this space equate 'premium' to 'up market room'. Premium to a person in a care ward is defined by staff to resident ratios. This particular care unit has a significantly higher staffing rate than standard. Yet on all my visits there, I have never seen the staff sitting down twiddling their thumbs. When you have a high need client base, there are always things to do. Premium is taking more time to help feed a person. Premium is having a shorter wait to be taken to the toilet. Premium is staff being able to chat to a resident, without thinking they are letting down another resident by not attending to that other persons needs. Premium means employing diversional therapists to create interest during the day and keep that elderly brain turning over.

In this particular village, with most of the rooms charged out a a premium rate (a not insignificant $9 to $15 extra per room per day) this village still cannot cover their care costs. The accounting shortfall in running costs is a medium sized six figure amount per year on just 25 people - seriously! Overall this village is not small and it does have scale.. For a long time it was the largest employer in the entire district. I contend that the premium business model is not sustainable on a village scale, with government funding as it is now, without watering down what 'premium' really means. I also contend that the situation is getting worse.



This is one of the corner stones of OCA’s point of difference . Their primary focus is upgrading old “care beds” to “premium care suits” to attract the cream on top of the govt subsidy on a large scale.


Sounds good in theory. But even if you can fill a retirement care unit with 'premium paying guests', you cannot guarantee a continuing pipeline of premium paying guests. So for business planning purposes, you have to plug into the government funding model.

SNOOPY

[Maverick]

Hey Snoopy, I obviously can't comment on that particular business without knowing it. Perhaps it's a trust not designed to make profit or needs to tweak its model if it is, I've no idea.

The 2 overall concerns I read in your post is the high staff costs always kills any chance of a profit and also the reduction of clients who can afford to live there.

OCA, charge a ORA on the physical bed AND also a nursing charge for extra tailored services as required. There's no "not for profit" intentions in that model!
I personally don't expect any profit on the nurse component nor ever will. It's the bed underneath them that produces the profit. This average ORA revenue (property component)alone for Last years new sales was $33k p/a, per one care suit. That runs on average over 3 years then it starts over again immediately . That's what I meant earlier about a turbo ORA. Comparably, Villas recycle over about 7 years to yield 3 years of ORA income.

As far as clients not being able to afford a care suit in the future....
For now , pre covid, OCA caresuit sales were tracking slightly ahead of expectations and also running my own ruler over the sales rates I came to the same conclusion. So no issues at the moment of demand or affordability.
We are also told inquiry actually picked up further during the lockdown.

It is clear OCA put in plenty of consideration to cherry pick suburbs that yield this type of high end client in which to place their caresuits and to date they have been successful. We know the older oldies are on their way in increasing numbers with current insufficient supply ready for them

So really the last concern Im reading in you post is that there may not be enough wealthy people in the decades ahead.

Jesus said ages ago, "the poor will all ways be with us" , by default that tells me , "the rich will always be with us too" So lots of OCA customers ahead I reckon.

If he is wrong then then there is plenty of time to sell out.

[Beagle]

Quite a number of key points the dog that's still in puppy school has missed.
1. A care suite is much smaller than the average house in the surrounding neighbourhood so there is usually a vast gulf between what an average resident will sell their house for in say Browns Bay and what they will pay for a care suite at the Sands. The care suite could be less than a third of the price of the house.
2. Under the occupation right agreement model the estate of the resident pays the cost of the elderly folks staying in the care suite not the resident.

Couta1 has previously commented extensively about how smaller care operators are struggling to stay afloat. This is nothing new and OCA are adapting their business model to generate an excellent return on capital employed. Quite apart from that Earl Gasparich mentioned they are happy to rent the care suite at around $60 per day over and above what the Govt pay and the financial outcome for OCA is essentially very similar to the ORA model.

Conclusion - Even people of quite modest means can afford a care suite at OCA. As Maverick quite rightly says, Jesus said the poor will always be with us and that's exactly right. OCA cannot be everything to everybody but you certainly don't need to be very wealthy at all to afford to live in a care suite at OCA.

[justakiwi]

At $60/day (over and above what the groceries paying) that is $420/week. Current single pension is $424/week. That would leave someone like me with $4 a week “pocket money.” There are a heck of a lot of elderly renting, and even those who own a house do not necessarily own an expensive one or have other assets. So I dispute your claim that you don’t have to be rich to afford a care suite (not just with OCA - anywhere).


but you certainly don't need to be very wealthy at all to afford to live in a care suite at OCA.

[Beagle]

At $60/day (over and above what the groceries paying) that is $420/week. Current single pension is $424/week. That would leave someone like me with $4 a week “pocket money.” There are a heck of a lot of elderly renting, and even those who own a house do not necessarily own an expensive one or have other assets. So I dispute your claim that you don’t have to be rich to afford a care suite (not just with OCA - anywhere).

From what I have seen around where I live a modest sized apartment / care suite, call it what you like is about 35-40% of the average value of a house in the suburb I live in. I think that's quite a modest cost but I accept others will have a different opinion and they're perfectly entitled to that.
The average age of someone moving into a care suite as I understand it is about 85. If after a lifetime of work one has not built up sufficient in the way of assets to afford a care suite then there are other options like standard sized units the Govt will fund and OCA have some of them as well. OCA cannot be absolutely everything to everybody and neither should they try to be in my opinion.

I stand by what I said the other week about its great that OCA put the care of their residents above all else, but its not a not for profit charitable organisation and nobody should expect it to be.

[dubya]

And always worth remembering that the DMF in the care suites is structured differently to the villas.

Care Suites are:
15% for the first year. The ‘first year’ is fixed at 15% irrespective of whether the resident stays for one week or one year.
10% for the second year. Accrued and apportioned on a monthly basis. (0.8333% per month)
5% for the third year. Accrued and apportioned on a monthly basis. (0.4166% per month)

Villas are:
10% per year for three years, accrued and apportioned on a monthly basis from the beginning of the residents stay.

[Snoopy]

Hey Snoopy, I obviously can't comment on that particular business without knowing it. Perhaps it's a trust not designed to make profit or needs to tweak its model if it is, I've no idea.


Yes it is a trust. No profit over the long term required, although they definitely don't want to make a loss either. The model has been tweaked by charging a now very substantial one off 'contribution towards facilities' fee when you enter the village. This is in addition to the monthly fee you pay to the village each month. That is the only practical way they have found to 'balance the books'.



The 2 overall concerns I read in your post is the high staff costs always kills any chance of a profit and also the reduction of clients who can afford to live there.


You read right.



OCA, charge a ORA on the physical bed AND also a nursing charge for extra tailored services as required. There's no "not for profit" intentions in that model!
I personally don't expect any profit on the nurse component nor ever will. It's the bed underneath them that produces the profit.


I would suggest the splitting of the 'bed charge' and the 'nursing charge' in a care suite is an artificial accounting construct. I can't really see how you can have one without the other. If you don't want to book a 'return' on the nursing costs, you will have to offset that with a higher return on the bed cost.



This average ORA revenue (property component) alone for Last years new sales was $33k p/a, per one care suit. That runs on average over 3 years then it starts over again immediately . That's what I meant earlier about a turbo ORA. Comparably, Villas recycle over about 7 years to yield 3 years of ORA income.


'Occupation Right Agreement' associated revenue would include a 'capital purchase component'' and a 'monthly operating component'. You are saying that the average turnover time for a care suite is 3 years, verses 7 years for an occupy your own unit? If OCA claim a 'retention' each time the unit turns over, then I can see why that is attractive from an OCA perspective. And the more times it turns over the better from an OCA perspective. But isn't it also true that the capital value of a care unit would be less? You might find a licence to occupy a village home turning over every seven years generates a better return than a care unit turning over every three years.



As far as clients not being able to afford a care suit in the future....
For now , pre covid, OCA caresuite sales were tracking slightly ahead of expectations and also running my own ruler over the sales rates I came to the same conclusion. So no issues at the moment of demand or affordability. We are also told inquiry actually picked up further during the lockdown.

It is clear OCA put in plenty of consideration to cherry pick suburbs that yield this type of high end client in which to place their caresuites and to date they have been successful. We know the older oldies are on their way in increasing numbers with current insufficient supply ready for them

So really the last concern I'm reading in you post is that there may not be enough wealthy people in the decades ahead.

Jesus said ages ago, "the poor will all ways be with us" , by default that tells me , "the rich will always be with us too" So lots of OCA customers ahead I reckon.

If he is wrong then then there is plenty of time to sell out.

You may be right on this. There may be pockets of wealth in Auckland rich enough to not need a government subsidy to fill a care suite. I don't think that would apply throughout the country though.

SNOOPY

[Brfc]

Yes it is a trust. No profit over the long term required, although they definitely don't want to make a loss either. The model has been tweaked by charging a now very substantial one off 'contribution towards facilities' fee when you enter the village. This is in addition to the monthly fee you pay to the village each month. That is the only practical way they have found to 'balance the books'.



You read right.



I would suggest the splitting of the 'bed charge' and the 'nursing charge' in a care suite is an artificial accounting construct. I can't really see how you can have one without the other. If you don't want to book a 'return' on the nursing costs, you will have to offset that with a higher return on the bed cost.



'Occupation Right Agreement' associated revenue would include a 'capital purchase component'' and a 'monthly operating component'. You are saying that the average turnover time for a care suite is 3 years, verses 7 years for an occupy your own unit? If OCA claim a 'retention' each time the unit turns over, then I can see why that is attractive from an OCA perspective. And the more times it turns over the better from an OCA perspective. But isn't it also true that the capital value of a care unit would be less? You might find a licence to occupy a village home turning over every seven years generates a better return than a care unit turning over every three years.



You may be right on this. There may be pockets of wealth in Auckland rich enough to not need a government subsidy to fill a care suite. I don't think that would apply throughout the country though.

SNOOPY

Hi Guys interesting debate refer to my previous post where i have extensive experience in the industry as a owner operator
I now only run a small facility now (27 Beds )
And yes it getting tougher re wage bill !
But if you run a well maintained ship there is still a $ to be made (without retirement units etc ) The extra costs running the business during lockdown was quite expenses ie More Staff Hours / Protective gear etc
The upside was that A) We didnt lose a single resident during this period though natural illness (which is unusual )and all residents being healthier due to no outside visitors hence no bugs into the facility
B) The Government made a lump sum payment to compensate the extra costs mentioned above (didnt quite meet the extra costs but it was most welcome )
I Still like the stock i am a holder but its going to be a slow progress
Cheers

[Waltzing]

plenty of lawyers and accountants with trusts that can pay for care suites when needed. Even in the country side these people are well heeled i can assure you.

[Baa_Baa]

@snoopy I think you’re over thinking this from a perspective of a trust model verse a profit listed company model. The two are not comparable imo. One is essentially a charity, the other has to return value to shareholders. OCA have crafted a fine balance in their strategy, be it right or wrong long term, it is focused on the best outcomes for shareholders, while still offering the best care for their customers. If this is uninvestable for you at substantial discount to nta then no listed retirement company is either and therefore your argument is moot.

[Snoopy]

@snoopy I think you’re over thinking this from a perspective of a trust model verse a profit listed company model. The two are not comparable imo. One is essentially a charity, the other has to return value to shareholders.


I actually thought about that very question earlier today Baa_Baa. My conclusion was the opposite to yours though. Both the trust I am talking about and OCA are in fact putting on exactly the same service to exactly the same client base. Both are offering a continuum of care, from right to occupy stand alone houses to full care units. Both employ from the same people pool of potential staff. The only difference is the profit target '$P'.

In the trust, 'P' could be $0. In the case of OCA the target for 'P' is a much larger positive figure. But the mechanics for reaching 'P' in both cases is the same.



OCA have crafted a fine balance in their strategy, be it right or wrong long term, it is focused on the best outcomes for shareholders, while still offering the best care for their customers. If this is uninvestable for you at substantial discount to nta then no listed retirement company is either and therefore your argument is moot.


Let me put another perspective to you about why OCA trades at a discount to NTA. By purchasing OCA today, you think you are buying value. But if OCA was cashed up, you would not be able to realise that NTA value for some years. The residents have 'right to occupy' contracts. You would have to wait for these contracts to expire before as an investor you could cash up. So it makes perfect sense for a retirement village to trade at less than NTA, or at NTA with a discount factor. The only exception to this would be if the company could somehow earn a return on its assets that is greater than expected, given the market price of those assets. But of course if that were to happen the company might revalue upwards the price of those assets to reflect their greater earning potential. So where are these rambling thoughts leading to?

I think the asset value discount available on the market by buying OCA, or MET for that matter, is because the market expects the respective managements to extract below average returns on those assets. There is a perception that because a property is of a certain size and in a certain location it must have a certain value. But as landlords know, rental yields are not the same for a house with a given number of bedrooms in the same suburb. My theory is that the discount on net assets at OCA reflects the market perceived reality that:

1/ OCA operate a certain number of houses and care suites that if sold for residential living on the open market would fetch a certain price BUT
2/ because of the constraints of operational costs of the business, these same assets cannot earn a 'market rate' return.

So the discount to NTA represents operational constraints at OCA, and buying OCA at 'below asset backing' is not the bargain it seems. We also know that these operational constraints can persist of years as evidenced by MET trading below NTA for years.

SNOOPY

[King1212]

Guys..put your money on 2% term deposit....

All good in the hood..no risk.

We all agreed the market is in lala land.... companies issued a bleak forecast...SP goes up

Companies issued a good forecast...SP stuck n down....

Go Labour!

[Cyclical]

.... companies issued a bleak forecast...SP goes up

Companies issued a good forecast...SP stuck n down....

My King, you are awesome, the penny has dropped and I've just figured out where I've been getting it all wrong! Move aside Master Beagle!

[King1212]

Dont mention it my mighty warrior! Any time....

[King1212]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

[bull....]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

yea but there earnings will come back later this year or next year or is it the year after or maybe the following year?

[BlackPeter]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

We probably are, but I think this is nothing new. You are missing an important detail: Share price = Fundamental value + Hype - Fear factor.

At the moment hype is a really big number and fear seems to be gone. Makes the fundamental value quite irrelevant in calculating the SP.

[Justin]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

some companies SP still in bottom and PPL like to grab some bargain and PLX almost all time high and PPL like to cash up，make sense？

[Waltzing]

Justin, its not la la land, its printing money land. All those AIA to AIR are priced as if the reserve banks of th world will support economies no matter what. Its QE to infinity and you might as well be ALL IN. OCA is not seen as a growth stock but a defensive stock and with defense support taken care risk is ON. If you bought the high risk high growth stocks with high PE. FPH, XRO, ATM , and even EBO you made big money but they were always over priced. If you took traditional low risks stocks you made nothing in the end. As for SKC it has a monoply and in 5 years time? This is the GPHC (global pandenic health crisis) not the GFC. In fact it will be safer and healthier to fly and move in public and solutions are put in place every where to ,monitor and screen the public. Health systems will improve and society might start down a path to safer healther buildings and institutions.

[trader_jackson]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

Just to add to this... meanwhile ARV and AFT produce very robust results... share price dooowwn

[RGR367]

Below is to support my above post.

Air.... announced staffs cut n revenue down 95%....SP upppp

Thl... announced restructure n cut cost .. revenue down.....SP upppp

AIA....traffic down to 5%...hardly any international flights....SP upppp...

SKC.....hardly any revenue in the last couple months.... possible till end of year.... SP upppp

Kmd.....heaps of debts...n bleak future...SP up.....

NPh..... uncertainty ahead....cut dividend....SP up...

Now.....

Tlt...good announcement on thier revenue....SP stucked for months

Oca....recent announcement said contracts will be signed n no clients would cancelled....all want to move in.... people here all mourning about OCA future...

Plx.... bright n rosy future ahead....SP down....

So....are we in a lala land???

Plz enlighten me......I am really confused with the current market.

Good. You're now slowly getting enlightened. And hoping you're not paying the Market too much for your education :p

[bull....]

dont know why people rave on about retirement stocks being so wonderful , there crap investments this year

rym down 23%
arv down 27%
sum down 33%
met down 36%
oca worst of the lot down 37%

and most everyone raves on about there so good long term lol heres the best long term shares performing yr after yr even this yr

pph up 71% this year
fph up 40%
atm up 28%

[dobby41]

Heaps of advertising in the papers for villages and village life in general - Oceania, MET and SUM in particular.

[trader_jackson]

dont know why people rave on about retirement stocks being so wonderful , there crap investments this year

rym down 23%
arv down 27%
sum down 33%
met down 36%
oca worst of the lot down 37%

and most everyone raves on about there so good long term lol heres the best long term shares performing yr after yr even this yr

pph up 71% this year
fph up 40%
atm up 28%

ATM was 33 cents in 2004, and was the same price about 8 years later... I suppose anyone can cherry pick numbers to make it suit them..?

[Beagle]

So....are we in a lala land???


Suppose I should yap a bit about my theory on this.
There is no question that there has never been a greater disconnect between the market and the present and immediately foreseeable economic fundamental's.
I've been investing since the early 1980's and have never seen anything remotely like this. So what to make of it ?
Firstly, if history is any sort of guide, the market usually bottoms about 7-9 months before the economy does, i.e. the market starts rising 7-9 months before the economy does. This seems logical enough as the market is always a forward looking beast and is always looking to price shares based on future expected earnings.

How do we know that the economy will bottom in 7-9 months ? We don't. The market appears to be pricing in a vaccine solution by the end of 2020 or very early in 2021 which will be rolled out in 2021 worldwide. What if this doesn't happen ? There is clear downside risk and one is best to be in needs based business's capable of paying a good dividend yield like this one.

What's the insurance policy. Central banks worldwide appear ready to throw almost limitless stimulus money around. This is la la land stuff. Ultimately it is highly likely to destabilize currency values and those countries who end up with really high debt to GDP will suffer some consequences.

What's the answer to the conundrum the current situation presents ?
1. Stick to needs based business's that will do well no matter how long we are in recession.
2. Stick to companies that can pay you a decent and sustainable dividend yield so that you are not counting on capital gains and can weather a protracted economic storm by simply collecting the dividends and being satisfied with that.
3. Stick to value stocks trading on compelling fundamental's - There is no fluff or la la land pricing built into their prices.

OCA fits the above criteria very nicely so is by far my largest investment position on the NZX.

[Cyclical]

What's the answer to the conundrum the current situation presents ?
1. Stick to needs based business's that will do well no matter how long we are in recession.
2. Stick to companies that can pay you a decent and sustainable dividend yield so that you are not counting on capital gains and can weather a protracted economic storm by simply collecting the dividends and being satisfied with that.
3. Stick to value stocks trading on compelling fundamental's - There is no fluff or la la land pricing built into their prices.

In other words, Investing vs Speculating.

[macduffy]

Good post, Beagle! In a nutshell, a dose of reality!

:)

[Sideshow Bob]

In other words, Investing vs Speculating.

I think there is also good dose of FOMO going on too. Had a big (dead cat??) bounce.

Good post Beagle - had thought it was only me......

[Waltzing]

The BRILLANT MR B has spoken. As Winston Church said "there is nothing certain except death and taxes" or some such. Retirement homes are here to stay and some other business are not. There are very few well run public companies on the NZX and companies like Fonterra and FBU unfortunately are approaching basket cases and uninvestable , AIA not much better, (runway in bits). Monoply companies like SKC and POT are few and far between. New Zealand really doesnt understand that if need a radical new policy on multiple fronts to transform its ecomony. Sadly a center left economy is not going to transform an economy at the bottom of the world but it is a safe place to live prehaps..

[Cyclical]

How do we know that the economy will bottom in 7-9 months ? We don't. The market appears to be pricing in a vaccine solution by the end of 2020 or very early in 2021 which will be rolled out in 2021 worldwide. What if this doesn't happen ? There is clear downside risk and one is best to be in needs based business's capable of paying a good dividend yield like this one.

What's the insurance policy. Central banks worldwide appear ready to throw almost limitless stimulus money around. This is la la land stuff. Ultimately it is highly likely to destabilize currency values and those countries who end up with really high debt to GDP will suffer some consequences.

Even if the market is pricing in a vaccine within the suggested time frame, hasn't the damage to economies already been done, but the full effects have yet to be felt? Think any other economic down turn that isn't triggered by a pandemic (and let's face it, we were well overdue a correction), you'd expect some long drawn out pain, right? Fundamentally there was a pretty decent bubble before C19 came along. Sure, this massive QE injection is all well and good, but it's not stopping people from losing jobs left right and center. It's not suddenly going to breath life back in tourism and everything else that enjoys the foreign currency trickle down. Is QE the silver bullet? Didn't we (maybe not so much NZ) have plenty of that last time?

To me it just seems like we're going to have '87 all over again, when every man and his dog was speculating, and a huge chunk got burnt, never to return. History never repeats though, right?

Yeah, I think the market is in la la land. But who knows. I've got some FOMO of my own going on, but having lost ~80% back in '87, I'm being pretty cautious. Like Beagle, OCA is by far my biggest holding currently, because I think it's a pretty safe hedge, regardless of which way the market (and MET's takeover) goes.

[Joshuatree]

Yes complete separation between Wallstreet and Mainstreet. Im still majorly out since Feb 4th except for Goldies and gentailers and some dabblers.

[RTM]

What's the answer to the conundrum the current situation presents ?
1. Stick to needs based business's that will do well no matter how long we are in recession.
2. Stick to companies that can pay you a decent and sustainable dividend yield so that you are not counting on capital gains and can weather a protracted economic storm by simply collecting the dividends and being satisfied with that.
3. Stick to value stocks trading on compelling fundamental's - There is no fluff or la la land pricing built into their prices.

OCA fits the above criteria very nicely so is by far my largest investment position on the NZX.


Good post, Beagle! In a nutshell, a dose of reality!

:)

Yes...sure is, thanks Beagle. So...its the assumption of having the COVID issues resolved in 7-9 months that is interesting. Not sure that production of vaccine is a necessary factor, although it would be ideal. Maybe a drug to treat the disease within that time period is more likely. Seems to me that a vaccine might take a couple of years.

What I see happening is that most countries are going to have to learn to live with the virus applying public health controls (social distancing, group control etc) as needed to keep the curve flattened to the point that their health systems are not overwhelmed. We are seeing this with the opening up of USA and Europe even while the virus is still prevalent. This is quite different from our approach in NZ. This will let those economies start to function again in a relatively normal (might be a new normal) way. So what does this mean for investment in NZ and following on from what Beagle has above:
Agriculture: Our customers are going to keep needing food.
SCK PGW REL SEK FSF
Ports: We will need them to export our production
Power Companies: NZ'ers will continue to use power
Healthcare: FPH, PAZ other ?
Retirement Villages: Hmmmm...I see them, simplistically, as largely a real estate play. And I think price of property will drop a bit as unemployment & lack of immigration bite.

Now...I hold a lot of other companies as well...will I be brave enough to re-structure along these lines ? Not sure.

[Beagle]

Even if the market is pricing in a vaccine within the suggested time frame, hasn't the damage to economies already been done, but the full effects have yet to be felt? Think any other economic down turn that isn't triggered by a pandemic (and let's face it, we were well overdue a correction), you'd expect some long drawn out pain, right? Fundamentally there was a pretty decent bubble before C19 came along. Sure, this massive QE injection is all well and good, but it's not stopping people from losing jobs left right and center. It's not suddenly going to breath life back in tourism and everything else that enjoys the foreign currency trickle down. Is QE the silver bullet? Didn't we (maybe not so much NZ) have plenty of that last time?

To me it just seems like we're going to have '87 all over again, when every man and his dog was speculating, and a huge chunk got burnt, never to return. History never repeats though, right?

Yeah, I think the market is in la la land. But who knows. I've got some FOMO of my own going on, but having lost ~80% back in '87, I'm being pretty cautious. Like Beagle, OCA is by far my biggest holding currently, because I think it's a pretty safe hedge, regardless of which way the market (and MET's takeover) goes.

Excellent post with some great searching questions. To your first point and perhaps as RTM has suggested, perhaps some sort of treatment program is more likely within this timeframe ? No question huge parts of the N.Z. economy have been seriously affected and there's plenty more damage to come when the wage subsidy program finishes...possible third leg to that program using some of the $20 billion unallocated in the budget ?
Yes there will be plenty of sustained economic pain from this and widespread effects on people's mental health and you are absolutely right we were well and truly overdue for a correction.

More concerning is on a forward looking FY21 market earnings basis the NZX has arguably never been more expensive than it is now.
There is no silver bullet to this, there never was but we started this with just 20% debt to GDP so that and the way we have managed this Covid 19 thing, (Ardern and Bloomfield have been a very impressive duo) leads me to think we will weather this much better than most.

The parallel's between 87 and now are certainly not lost on me just the names have changed. Instead of Judgecorp, Equitycorp and Ariadne to name just 3 we have a new breed of companies trading on little more than the hope of earnings at some undefined point in the future.

The market overall is VERY expensive based on foreseeable earnings, for sure, but there are pockets of value like this one but they are few and far between and I am happy to sit on a large allocation to short term deposits and Kiwibonds rather than jump into a FOMO market that appears at least to some extent being driven by some people investing their stimulus payments.

I think we come through this okay but the way some Govt's are printing money by the trillions and grossly mismanaging the Covid crisis could lead to some worrying consequences down the track.

[winner69]

From Reserve Bank - Unemployment could rise to 18 per cent, house prices could halve

https://www.stuff.co.nz/business/121635138/insurers-and-nonbank-deposit-takers-reserve-banks-biggest-worry

[Beagle]

From Reserve Bank - Unemployment could rise to 18 per cent, house prices could halve

https://www.stuff.co.nz/business/121635138/insurers-and-nonbank-deposit-takers-reserve-banks-biggest-worry

On a quick skim read that's a good sobering reality check that downside risks remain...but thankfully, yet again, another day of zero new Covid 19 cases.

[Waltzing]

oh winner your a BEAR after all...

however this may put a slower recovery in retirement stocks out to 2023-2024

https://www.interest.co.nz/property/105233/westpac-report-says-residential-construction-activity-likely-fall-20-next-year

[Cyclical]

Ardern and Bloomfield have been a very impressive duo


From Reserve Bank - Unemployment could rise to 18 per cent, house prices could halve

https://www.stuff.co.nz/business/121635138/insurers-and-nonbank-deposit-takers-reserve-banks-biggest-worry


On a quick skim read that's a good sobering reality check that downside risks remain...but thankfully, yet again, another day of zero new Covid 19 cases.

I really like Orr's straight up level headed realism...just the right bloke for the job IMO. Trump would slaughter him if he was heading up the Fed, for being so candid. I'm happy for you to add him to the duo, Beagle :)

[kiora]

From Reserve Bank - Unemployment could rise to 18 per cent, house prices could halve

https://www.stuff.co.nz/business/121635138/insurers-and-nonbank-deposit-takers-reserve-banks-biggest-worry

Ah hem
But where not based on the here and now scenario

[nevchev]

And that is based on a worst case scenario.i did like that he said banks are well positioned to weather the storm

[RTM]

And that is based on a worst case scenario.i did like that he said banks are well positioned to weather the storm

He's got to say that doesn't he ? Isn't having a viable banking system a large part of his job ?
So if they are stable through this....which seems pretty extreme....how does this sit against the requirement, (not yet in place?), for them to hold more capital ?

[Beagle]

This is a great time for me to lob this little hand grenade in here for debate (because its something I have been thinking about).
Is your money safer in OCA with its needs based business model hopefully paying ~ 6% or in one of the banks on term deposit currently offering about 2.3% and subject to the open banking resolution wherein one of the members of the dynamic trio, namely Orr, could suddenly become the bad guy and ringfence and potentially hijack part of your funds on deposit ? Hmmm...I for one do not think the 2.3% compensates one properly for the (admittedly modest), risk of something bad happening.

[macduffy]

I think we all wonder the answer to that question, Beagle. I don't know the answer but I won't be putting all my cash into OCA, or any other stocks - too hard to barter them for groceries, for starters!

Disc: Holding plenty of OCA though.

[Beagle]

I think we all wonder the answer to that question, Beagle. I don't know the answer but I won't be putting all my cash into OCA, or any other stocks - too hard to barter them for groceries, for starters!

Disc: Holding plenty of OCA though.

LOL Good humour :)

[Joshuatree]

Spark, Vector Chorus, Gentailers maybe safer with yields from re 3.20-6.2%.

[Snoopy]

This is a great time for me to lob this little hand grenade in here for debate (because its something I have been thinking about).
Is your money safer in OCA with its needs based business model hopefully paying ~ 6% or in one of the banks on term deposit currently offering about 2.3% and subject to the open banking resolution wherein one of the members of the dynamic trio, namely Orr, could suddenly become the bad guy and ringfence and potentially hijack part of your funds on deposit ? Hmmm...I for one do not think the 2.3% compensates one properly for the (admittedly modest), risk of something bad happening.


You naughty Beagle casting aspersions on our Adrian like that. Adrian tells us we have one of the most robust banking systems in the world. Of the big four, they have all re-capitalised themselves to become 'unquestionably strong'. Adrian is confident and you must be confident. Adrian's confidence should usurp all worry, and he will retain his confidence until the banking system gets into trouble, at which time he will rebuild his confidence by making a little transfer out of your and everyone else's bank account. But do not worry, this little rescue transfer will happen so fast and under lock down that you won't be able to do anything about it and you certainly won't have time to worry about it. Sweet dreams and I am sure they will be sweeter if your cash is supporting an OCA bed.

SNOOPY

[RTM]

This is a great time for me to lob this little hand grenade in here for debate (because its something I have been thinking about).
Is your money safer in OCA with its needs based business model hopefully paying ~ 6% or in one of the banks on term deposit currently offering about 2.3% and subject to the open banking resolution wherein one of the members of the dynamic trio, namely Orr, could suddenly become the bad guy and ringfence and potentially hijack part of your funds on deposit ? Hmmm...I for one do not think the 2.3% compensates one properly for the (admittedly modest), risk of something bad happening.

I hear you re the 6% Beagle (and I have a decent allocations of OCA as well) wonder how secure that is tho ? Been quite a few Dear John notifications re dividends.

[Cyclical]

This is a great time for me to lob this little hand grenade in here for debate (because its something I have been thinking about).
Is your money safer in OCA with its needs based business model hopefully paying ~ 6% or in one of the banks on term deposit currently offering about 2.3% and subject to the open banking resolution wherein one of the members of the dynamic trio, namely Orr, could suddenly become the bad guy and ringfence and potentially hijack part of your funds on deposit ? Hmmm...I for one do not think the 2.3% compensates one properly for the (admittedly modest), risk of something bad happening.

One would have to assume that if Mr Orr had to ring fence part of your funds, let's say 25% for argument's sake, OCA will be back down to ~40c per share at that point, so you can load up and arguably be better off in the long run ;)

[nevchev]

You naughty Beagle casting aspersions on our Adrian like that. Adrian tells us we have one of the most robust banking systems in the world. Of the big four, they have all re-capitalised themselves to become 'unquestionably strong'. Adrian is confident and you must be confident. Adrian's confidence should usurp all worry, and he will retain his confidence until the banking system gets into trouble, at which time he will rebuild his confidence by making a little transfer out of your and everyone else's bank account. But do not worry, this little rescue transfer will happen so fast and under lock down that you won't be able to do anything about it and you certainly won't have time to worry about it. Sweet dreams and I am sure they will be sweeter if your cash is supporting an OCA bed.

SNOOPY

I want to trust him but he looks so much like shane jones...

[bottomfeeder]

I wish I had bought more at .73, dont want to chase the price now. Have to be happy with 70k.

Hot Copper on the ASX has a facility after each post to firstly give an opinion as to BUY HOLD or SELL, as well as HOLDING or NOT HOLDING. Really relevant when considering the efficacy of comments. Also provided they are honest you can pick the down rampers and up rampers from the genuine investors.

[winner69]

I wish I had bought more at .73, dont want to chase the price now. Have to be happy with 70k.

Hot Copper on the ASX has a facility after each post to firstly give an opinion as to BUY HOLD or SELL, as well as HOLDING or NOT HOLDING. Really relevant when considering the efficacy of comments. Also provided they are honest you can pick the down rampers and up rampers from the genuine investors.

You should set an example. Even though you presumably put BUY / HOLDING

DISC: BUY / BUYING

[Beagle]

I hear you re the 6% Beagle (and I have a decent allocations of OCA as well) wonder how secure that is tho ? Been quite a few Dear John notifications re dividends.

I don't know but I have mused about that at quite some length. If they paid a 2.6 cent final divvy like last year it would cost them on the face of it just on $16m, less whatever amount of shareholders have signed up for shares in lieu of dividend at the 2.5% discount, (last year ~ $2.7m), so about $13.3m net shall we say.

Operationally from the Macquarie presentation they appear to be tracking fine from a profitability perspective and they have more than $100m headroom with their financial resources so I would say on the balance of probabilities its highly likely, (but not certain), they will declare a normal dividend when they report their full year result in just on two months time in late July.

I will probably sign up for the shares in lieu of dividend program.

[bottomfeeder]

Have they got a dividend reinvestment program.

DISC: HOLD and am HOLDING

[Joshuatree]

I wish I had bought more at .73, dont want to chase the price now. Have to be happy with 70k.

Hot Copper on the ASX has a facility after each post to firstly give an opinion as to BUY HOLD or SELL, as well as HOLDING or NOT HOLDING. Really relevant when considering the efficacy of comments. Also provided they are honest you can pick the down rampers and up rampers from the genuine investors.

There are some honest posters on H/C and ive got to know about 5 of them,4 are kiwis;). But it takes alot of time , years to verify this. There are many more pumpers and dumpers there who say BUY as they are selling and vice versa. Be careful who you trust,its your money they are after.

[Baa_Baa]

Have they got a dividend reinvestment program.

DISC: HOLD and am HOLDING

I presume that was a question. Yes they do (https://www.oceaniahealthcare.co.nz/investors/news-article-docs/oca-dividend-reinvestment-plan-offer-document.pdf).

[winner69]

I don't know but I have mused about that at quite some length. If they paid a 2.6 cent final divvy like last year it would cost them on the face of it just on $16m, less whatever amount of shareholders have signed up for shares in lieu of dividend at the 2.5% discount, (last year ~ $2.7m), so about $13.3m net shall we say.

Operationally from the Macquarie presentation they appear to be tracking fine from a profitability perspective and they have more than $100m headroom with their financial resources so I would say on the balance of probabilities its highly likely, (but not certain), they will declare a normal dividend when they report their full year result in just on two months time in late July.

I will probably sign up for the shares in lieu of dividend program.

Bit stupid OCA (and others) paying unimputed divies ..only winner is taxman

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

[Cyclical]

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

Mind you, he'd be the same kind of person that would have put 10% as his tax rate on his Kiwisaver and had the last laugh. Sometimes it pays not to be too clever (or honest).

DISC: HOLD (or am I?)

[dibble]

..only winner is taxman

Huh? how does that work? IRD only get one slice from the profit, either from the company (then we get a credit or debit depending on your angle for tax already paid to avoid double payment) or from us/individuals if the company hasnt paid tax already.... have I got that all pete tong?

[Beagle]

Bit stupid OCA (and others) paying unimputed divies ..only winner is taxman

Neighbour was under impression that if he took shares instead of cash he didn’t have to pay tax on the divie ..some people shouldn’t own shares

Even when he saw on the statement that for every $1000 of divie he only got $670 of shares he didn’t quite get it.

Some people need the income.

[winner69]

Some people need the income.

Could always sell a few every now and again.

But if the likes of Oceania pay divies the taxman is at least getting a decent chunk of their profits (with shareholders paying it). As a taxpayer I say thank you but as a shareholder I say it’s dumb.

[Baa_Baa]

Some people need the income.

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world

[Beagle]

I presume that was a question. Yes they do (https://www.oceaniahealthcare.co.nz/investors/news-article-docs/oca-dividend-reinvestment-plan-offer-document.pdf).

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world
Thanks, You're on to it :)

[Scrunch]

Some people don’t care, just enjoying the free shares on drip. Compound interest, the eight wonder of the world

Compounding interest is great, but its benefit is neutralised a lot if there is leakage to the taxman. This leakage is minimal when dividends are fully imputated, but is pretty significant when there are no imputation credits and a significant dividend is paid. Overseas shareholders may distort the calculation a bit, but if all shareholders were on a 33% marginal tax rate, a full 2% of OCA's value is being gifted to the tax man each year. This choice to give away 2% of the company to the tax man each year could be part of why OCA isn't trading closer to, or above NTA. Sorry - if you had a discretionary expense lowering your surplus by $10m/yr wouldn't you look to address it?

A better alternative would be for OCA not to pay a dividend but buy-back 6% of its shares each year. This should give shareholders an additional 6%/yr tax-free capital gain rather than the 4% they get from receiving the dividend as cash. If someone wants the cash, they can sell a small proportion of their shares each year. Share buybacks are very common overseas, particularly in countries like america where imputation credits don't exist (hence the low dividend payments over there). The problem is educating some of the existing shareholder base that there is an alternative.

[dibble]

Well yeah if no dividend at all is being suggested and none is ever expected and the sharebuyer knew this then the share must have purchased purely with the intent of capital gain and, therefore technically (I think?? intent being key?), any gain ought be taxable. Perhaps the suggestion is thus that companies allow us to flaunt the weak policing of this rather grey legislation.

[winner69]

Salt possibly taking a breather until the the next wave of selling

Salt still selling ...lot more to go

Remember what they think of this sector ....net short

[Beagle]

Compounding interest is great, but its benefit is neutralised a lot if there is leakage to the taxman. This leakage is minimal when dividends are fully imputated, but is pretty significant when there are no imputation credits and a significant dividend is paid. Overseas shareholders may distort the calculation a bit, but if all shareholders were on a 33% marginal tax rate, a full 2% of OCA's value is being gifted to the tax man each year. This choice to give away 2% of the company to the tax man each year could be part of why OCA isn't trading closer to, or above NTA. Sorry - if you had a discretionary expense lowering your surplus by $10m/yr wouldn't you look to address it?

A better alternative would be for OCA not to pay a dividend but buy-back 6% of its shares each year. This should give shareholders an additional 6%/yr tax-free capital gain rather than the 4% they get from receiving the dividend as cash. If someone wants the cash, they can sell a small proportion of their shares each year. Share buybacks are very common overseas, particularly in countries like america where imputation credits don't exist (hence the low dividend payments over there). The problem is educating some of the existing shareholder base that there is an alternative.

Conceptually I would have no problem with that and it certainly makes profound common sense when the shares are trading under NTA (but a lot less sense when they are trading at a significant premium to NTA) but OCA has a history of paying good dividends and I am confident this will continue. They are the highest yielding stock in this sector but quite a comfortable margin.

[bottomfeeder]

Compromise, with dividend up to level of imputation credits and balance of cash flow to reduce debt.

[dibble]

'd be an agreeable strategy if they had use for the money and had any imputation credits but none for last 2 years...perhaps none ever. Accounts are full of deferred this and that, incl $13m tax benefit and $15m deferred tax liability. Not too sure what that all means, but perhaps at some point in the future some net tax cash will need to be paid and imputations assigned. Maybe.

[Cyclical]

Salt still selling ...lot more to go

Remember what they think of this sector ....net short

Thanks winner, I managed to miss this one yesterday. It's interesting that they only ceased having a substantial holding on Monday, and yet we've been seeing good upward momentum since a nice uplift in the SP since early last week.

So do we assume they've backed off selling at such large volumes, maybe because they've reached their target holding of under 5%? Or have they just slowed down a little in order to eek out more value from their remaining shares and will continue to offload at a more sedate pace? If the latter, it's pretty impressive that we've seen such an increase in the SP over the last couple of weeks and it should go gang busters once Salt have finished selling ;) Sounds a bit like I'm pumping doesn't it, but truth be known, I wouldn't be too upset if Salt dumped out quicker and we had an opportunity to pick a few more up in the 70s.

[nevchev]

If Salts average sell down price was 75c,had they have held on and trickle fed and averaged at say 82c.......
12000000×0.07=$840,000.
Must be nice to play with someone elses money
Maybe they read my post from the 25th

[Beagle]

No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

[RTM]

No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

You will be almost ready to vote Labour Beagle !

[justakiwi]

It is an outstanding result and it is entirely due to the measures the government took from day one, combined with the cooperation and commitment of Kiwis. NZ can, and should be proud of this outstanding result.


Regardless of what the one who shall remain nameless believes.



No new Covid 19 cases today and only one active case left in all of New Zealand. Crikey that's an outstanding result. I can almost feel vulnerable people all over New Zealand breathing a collective breath of relief !

[Beagle]

You will be almost ready to vote Labour Beagle !

Crikey, that's a scary prospect but I have to say in a time of crisis, whether it was the Chch Mosque shooting, the White Island eruption tragedy and especially in this Covid 19 crisis, Jacinda Ardern has done a truly outstanding job. I am a bit worried if Labour can win the next election on their own as everyone needs checks and balances.
I wouldn't want her getting too carried away with the comrades thing and we need to radically change the tax system to equalise out all the wealth in the country.

We should be back to level 1 soon enough and life can get back to very close to normal at OCA villages. Having faced this thing down and stared the possibility of having it right in the face, the sense of relief we're on top of this thing is palpable. I might go and spend some money this weekend and some airpoints at Mitre Ten :)

[dobby41]

We should be back to level 1 soon enough and life can get back to very close to normal at OCA villages.

Does level 2 restrict rest homes or do they restrict themselves?
I think it is the later - villages can be as close to normal as the rest of us but, I think, they choose not to.

[Sideshow Bob]

It is an outstanding result and it is entirely due to the measures the government took from day one,

Were too slow to close the border. Didn't take Ashley's advice.

[Cyclical]

Were too slow to close the border. Didn't take Ashley's advice.

Probably. I was calling for it to be closed about 2 weeks prior, but I think the country needed to go through the process it did. Had it been closed earlier, a lot less people would have been in favour, even though it was plain to see what was happening overseas. Having said that, a National lead government would have probably left it even longer for fear of the economic carnage...we'll never know. All seems like a blur now though. Sorry, off topic.

[Cyclical]

Wouldnt be silly to take out a small mortgage at fixed rate of 2.something% for 5 years and buying OCA which at 6% would still offer a return of over 3%.Not to mention the capital gain!!!

So I put this very concept past my bank this week, no mention of any figures or anything, just curious to hear their response more than anything. This was it:

"After discussions with the right people we are unable at this stage to release funds/equity for shares. It is something that <name of bank> is normally not comfortable with at the best of times but given the current environment it’s a no."

Very prudent, if boring.

[winner69]

So I put this very concept past my bank this week, no mention of any figures or anything, just curious to hear their response more than anything. This was it:

"After discussions with the right people we are unable at this stage to release funds/equity for shares. It is something that <name of bank> is normally not comfortable with at the best of times but given the current environment it’s a no."

Very prudent, if boring.

you meant to tell them you need money to build a BIG deck

But I think they've done you a great favour

[Longhaul]

"After discussions with the right people we are unable at this stage to release funds/equity for shares. It is something that <name of bank> is normally not comfortable with at the best of times but given the current environment it’s a no."

Very prudent, if boring.

I wonder if banks would lend for investing into their own investment funds? Imagine that, they would clip the ticket twice.

[Beagle]

Does level 2 restrict rest homes or do they restrict themselves?
I think it is the later - villages can be as close to normal as the rest of us but, I think, they choose not to.

Yes I believe it is the latter. The vast majority of the retirement industry has been playing this very conservatively and good on them and especially good on all the brave caregivers who worked right through this crisis at significant risk to their own health and the health of their loved ones. Awesome stuff !

[nevchev]

So I put this very concept past my bank this week, no mention of any figures or anything, just curious to hear their response more than anything. This was it:

"After discussions with the right people we are unable at this stage to release funds/equity for shares. It is something that <name of bank> is normally not comfortable with at the best of times but given the current environment it’s a no."

Very prudent, if boring.

On ya!!Takes cahoonas to think like that.My focus changed when they announced changers to the biulding regulations regarding what does and doesnt require consents.Still looking to take advantage of the cheap money.cheers

[Cyclical]

you meant to tell them you need money to build a BIG deck

I'm not sure the IRD will let you claim on the loan costs for a deck, even if it was for the local OCA village ;-)


But I think they've done you a great favour

You're probably right. However, I wouldn't have gone large, and OCA would probably need to retract back into the 70s for me to take the plunge with money that's not mine. One would assume that bank's money dropped into OCA at ~25% discount to NTA would be safer than dropping it into a rental property at current asking prices? Anyway, no matter, sleep easy is good.

[nevchev]

Whats going on at the auction.good greif!!!

[sb9]

Whats going on at the auction.good greif!!!

Nothing to see, relating to this as per below...

"NZX Product Operations wishes to advise that today’s ‘Adjust’ trading session in X-stream will be extended to 45 minutes for the NZX Main Board, Debt Market, and Fonterra Shareholders’ Market.
This amendment has been made to accommodate the last trading date in advance of the Quarterly Index Review for the MSCI Equity Indices.
The Adjust session will operate from 5:00pm to 5:45pm. The Enquiry session start time will move to 5:45pm."

[Cyclical]

I wonder if banks would lend for investing into their own investment funds? Imagine that, they would clip the ticket twice.

That would be interesting. Or better yet, something like, Hi ANZ, can I please borrow some money to invest in ANZ shares? The answer might be a great QA of your TA ;)

[Baa_Baa]

Whats going on at the auction.good greif!!!

Pretty huge volumes on bid, is that what you meant?

[nevchev]

Whats going on at the auction.good greif!!!
Dont see that everyday.Whatever it is i like it

[Cyclical]

Wow, it actually went through too, 21m volume today, closed at 89 :-)

[King1212]

Big swap from met to oca ....

[dubya]

Wow, it actually went through too, 21m volume today, closed at 89 :-)

That's great lol. Makes up for what i just posted on the MET thread.

[nevchev]

Wow, it actually went through too, 21m volume today, closed at 89 :-)
No complaints.I considered selling but thought better of it

[Cyclical]

Big swap from met to oca ....

Haha, don't think it's related in anyway, $ amounts too different, but yeah, win some, lose some.

[King1212]

Related... people or fundies re position to de risk on the sector

[nevchev]

Wow, it actually went through too, 21m volume today, closed at 89 :-)

Ended up been 32m.Can someone explain?

[youngatheart]

So it looked like RYM, SUM and MET were sold down to buy OCA.

I must take note of this should any of these stocks enter or leave the MSCI Equity Indice...

[King1212]

Re balancing... people. End of may... months.... Monday public holiday.

And master Beagle bought more! He could not resist bit ...keep buying...

[Beagle]

Great close for the week. :t_up: :t_up:

[Harley]

Big swap from met to oca ....
Sold OCA bought MET. Gift horse, mouth.

[Baa_Baa]

Re balancing... people. End of may... months.... Monday public holiday.

And master Beagle bought more! He could not resist bit ...keep buying...

Interesting looks like OCA was the only beneficiary of the rebalance in the sector, OCA up on 20m volume, ARV flat and the others took a hit. Maybe the big end of town waking up to the value here?

[nevchev]

Interesting looks like OCA was the only beneficiary of the rebalance in the sector, OCA up on 20m volume, ARV flat and the others took a hit. Maybe the big end of town waking up to the value here?
Anz reckons 32m and all other sector companies total trades for day around 7m

[Cadalac123]

Great pickup at 40c, once the divi comes back though I somehow doubt the growth will be great and we might need to remind ourselves what a dog stock this was even during the great bull market, before people start trapping themselves in it once it surges

[Mufasa]

I brought 21 million at about 4.58pm, had to fork out 89cents each to get some of you sellers to take the bait :sneaky2:

[nevchev]

So there will be alot of happy punters from 85c to 90c who got what they were asking for?Time will tell i guess.Would have thought the brains at Salt would have been aware of the possibility that this could happen.I live and learn!
Just thinking about it,maybe they were!..Some big sell orders appeared just at the right moment

[bottomfeeder]

Crazy market at the moment, yet MET down 25cents? What to Do. Will sell a few OCA and buy MET.

[youngatheart]

How does one find out which stocks are in and out every quarter? I googled "MSCI Equity Indices NZ" but all I get is a PDF with only the top 10 constituents ..

[nevchev]

Crazy market at the moment, yet MET down 25cents? What to Do. Will sell a few OCA and buy MET.

Maybe at close yesterday would have been the time to sell a few.Will be interesting to see where this goes on Tuesday

[dubya]

I read somewhere that ETF and other index tracking funds have a certain time frame to rebalance their allocations.
I've looked for the article but can't find it. I'm therefore assuming that not all ETF and index tracking funds have bought OCA at this stage, so there could be a bit more buying support to come.

[Waltzing]

I noticed that no one commented on this post "I brought 21 million at about 4.58pm, had to fork out 89cents each to get some of you sellers to take the bait"

well ive still got a few.. prehaps this portfolio manager could buy a few more next week... ive got some i dont need..will keep the rest but if its hits 1 dollar or a dollar 10 ... well sell time as always..

[nevchev]

OCA joining the MSCI small index from today. Default buying by index tracking funds.

Disc. Hold but for different reasons.
Cheers for the explanation Mogul.Water tanks now full and fire going so time for a little research before a fish at the wharf

Couldnt find much info on this.

[Beagle]

Back to 90 cents now. Wouldn't surprise me in the slightest if this recovered to slightly above NTA of $1.01 by the time they report their annual result next month.

[winner69]

Back to 90 cents now. Wouldn't surprise me in the slightest if this recovered to slightly above NTA of $1.01 by the time they report their annual result next month.

NTA will be heaps more by then eh

So price should be well over $1 by time they report

Hope momentum keeps up

[Beagle]

NTA will be heaps more by then eh

So price should be well over $1 by time they report

Hope momentum keeps up

Yeap, not long until they get to the average brokers target price of $1.16. Then our good mate Maverick will be smiling again too.

[Mufasa]

Yeap, not long until they get to the average brokers target price of $1.16. Then our good mate Maverick will be smiling again too.

You may think I am just roaring crazy, but I expect OCA to be around $1.50 by end of trading for 2020. Why Mr Lion you ask, well I have a hunch that its going to creep up over the next few months as it remains undervalued and eventually meet NTA, then theres going to be some newbies who on Sharesies set their filter to the highest annual price change in the last few weeks or months, whatever it is, and see little old OCA sitting there, a successful Healthcare provider, a retirement village - that every new investor thinks holds the pots of gold in the future, so they will start biting and when that happens with the little pockets of sharesies transactions, we will see the price push upwards and before you know it we've got one of the most successful stocks of 2020. And what a recovery it will be for those of us who purchased at 40cents. Maybe I am just crazy though. ;)

[winner69]

Yeap, not long until they get to the average brokers target price of $1.16. Then our good mate Maverick will be smiling again too.

You know better than to talk averages ....one broker a true pessimist so the other target at $1.24 a better guide as to where its heading

[winner69]

Shane profit won't get to the $83m that Earl needs for his LTI but heck it will be heaps more than Mavericks forecast if $54m (that's only about the same as last year)

Oceania now going through the 'sell heaps more make heaps more' stage ...unlike the past when it's been 'sell heaps more but make bugger all more'

[Beagle]

You know better than to talk averages ....one broker a true pessimist so the other target at $1.24 a better guide as to where its heading

You'll get no argument on that one from me. I had a look at 6 month term deposits at various banks today. Vast majority are one point something now. Money probably safer in here anyway !

[Baa_Baa]

At 60% retirement sector no one will be listening to me anymore let alone taking it seriously, and that mainly OCA. There’s some quality left in the the bourse and some good deals but I’ll save that for the equal portfolio value of cash that’s sitting in the sidelines, when I’m sure that there’s no second wave, and the economy doesn’t tank, even if I miss the whole recovery.

[Ggcc]

Maybe 95 cents by the end of the day

[Beagle]

At 60% retirement sector no one will be listening to me anymore let alone taking it seriously, and that mainly OCA. There’s some quality left in the the bourse and some good deals but I’ll save that for the equal portfolio value of cash that’s sitting in the sidelines, when I’m sure that there’s no second wave, and the economy doesn’t tank, even if I miss the whole recovery.

I'm listening Baa Baa :) https://www.youtube.com/watch?v=4KT0xZk48hU
On the same page with you. Lots of this and lots of cash and a few others things.

$1.23 would still give a 4% dividend yield + growth in the years ahead and this is a high dividend yield in the current environment. Mark Lister of Craigs reported yesterday the average NZX50 yield is 3.6% gross.

[winner69]

Maybe 95 cents by the end of the day

And over $1 by end of week

Rugby starting up again

[Cadalac123]

And over $1 by end of week

Rugby starting up again

Singapore flights going to christchurch, resthomes will go up this week

[Leftfield]

New OCA relativity theory.........OCA and PLX SP's in synch.

Spooky! ;)

[winner69]

Miracles happen every day, change your perception of what a miracle is and you will see them all around you.

Good guy that Jon Bon Jovi

[kiora]

New OCA relativity theory.........OCA and PLX SP's in synch.

Spooky! ;)

Whaaaat?That's just too weird!Where's the relativity?

[Leftfield]

Whaaaat?That's just too weird!Where's the relativity?

Glad you like it Kiora. I'm really pleased with my brilliance.
(However, I do concede that the relativity of one day when they both traded in the .90 to.95c range needs further testing over time.) :p

[Beagle]

Coutts is the undisputed KING of relativity theories in this sector and his theory is
1 RYM = 2 SUM
1 RYM = 10 OCA

This IS THE GOLD STANDARD, you don't need FA or TA, only CA (Coutta analysis).

Using CA OCA should be $1.35. Makes perfect sense to me. What a LEGEND of this sector Couta1 is...hope he comes back one day....I am working on encouraging him.

[Leftfield]

Good on you Beagle, happy to concede my 1 day relativity theory brilliance to Couta's slightly more proven theories.

Looking forward to $1.35 for OCA (and PLX!!)

[winner69]

Coutts is the undisputed KING of relativity theories in this sector and his theory is
1 RYM = 2 SUM
1 RYM = 10 OCA

This IS THE GOLD STANDARD, you don't need FA or TA, only CA (Coutta analysis).

Using CA OCA should be $1.35. Makes perfect sense to me. What a LEGEND of this sector Couta1 is...hope he comes back one day....I am working on encouraging him.

The average up to last year was 10 OCA = 1 RYM ...but if you use the who duration since IPO to now its over 11. But 10 is a nice round number so Couts is spot on.

Yep in relative terms OCA is so cheap it’s not funny. Spooky it’s got worse since Macca sold out.

But again mr beagle you never try to address why does OCA (and MET) always appear to be so so cheap.

Anyway just for you

[winner69]

Maybe that chart is saying RYM solid result not liked by market and their share price drops below $10

Relativity restored

OCA fairly valued on that basis until OCA next report and another sell off

[cymonger]

Coutts is the undisputed KING of relativity theories in this sector and his theory is
1 RYM = 2 SUM
1 RYM = 10 OCA

This IS THE GOLD STANDARD, you don't need FA or TA, only CA (Coutta analysis).

Using CA OCA should be $1.35. Makes perfect sense to me. What a LEGEND of this sector Couta1 is...hope he comes back one day....I am working on encouraging him.


I've genuinely made a lot of money following his advice. I admire the way he shuts down the trolls and bulls with solid reasoning and logic. Please tell him from the forum,

Illegitimi non carborundum

[Beagle]

Interesting chart, thank you.

My thinking is that most of the time OCA has been listed I believe it has traded slightly above its NTA, its certainly in a different category to MET which has demonstrated a habitual pattern of trading at a material discount to NTA.

As usual earlier this year Macquarie played a blinder of a hand and dropped their bundle at $1.20 just before Covid 19 started to become a major issue. In doing so they took advantage of uninformed investors who hadn't really thought through the pandemic risk and shifted the risk on to them. Subsequently we saw a lot of panic selling based on a perception that the horror stories that had played out in some rest homes overseas would be replicated here.

The placement before that we saw a lot of weak hands churn the shares when they became disenfranchised with the lack of any upwards momentum and that combined with the remaining overhang is what I think that suppressed the share price for quite some time.

So were are we now ? Macquarie have gone. We are on top of Covid 19 and the shares are steadily recovering and I believe will soon trade at a reasonable premium to NTA like they usually have since listing. The outlook for OCA is very good as they have now proven they can handle a serious pandemic risk and they are primarily a needs based business.

MET a different animal that we have discussed that ad nauseum. Just remember with MET, "every dog has its day" :)

[macduffy]

So were are we now ? Macquarie have gone

Have they gone, completely?

[Beagle]

Gone like Donkey Kong...only to live on in our memories, (unless you have a classic arcade machine at home with 1980's classic games) :D

[kiwico]

Honourable mention to Craig’s for issuing $1.25 price target upgrade at a fortuitous time right when coincidentally they were a lead manager helping to unload the Macquarie holding on the market.

That's very sneaky!

[Snow Leopard]

...What a LEGEND of this sector Couta1 is...hope he comes back one day....I am working on encouraging him.

What did happen to him?

[Maverick]

The average up to last year was 10 OCA = 1 RYM ...but if you use the who duration since IPO to now its over 11. But 10 is a nice round number so Couts is spot on.

Yep in relative terms OCA is so cheap it’s not funny. Spooky it’s got worse since Macca sold out.

But again mr beagle you never try to address why does OCA (and MET) always appear to be so so cheap.

Anyway just for you
Ohh...ohh...ohh Winner, can I answer this one?

I see Beagle has since given a very solid response to your question, I've got my own ideas to add to his well articulated reply(on OCA)
Very simply …..OCAs model is just too complex for most to undertake the behemoth task of working it out . The only other person I'm aware of who has tried to mathematically project the whole pipeline to completion is Mogul, and it's an intense task.
That means for everyone else to either “believe the story “ as you nicely put it Winner, or just look at the bottom line annual underlying profits... (This includes analysts IMO.)
“Believing the story” doesn't cut it when the share price tanks like it did, many investing on that unsubstantiated “nice idea” would have sold in horror while watching the share price turn into a nightmare...sell..sell.
On the other hand, those looking at the underlying profit will be thinking this is a no growth company now also thwart with horrid covid and property risks...sell..sell.
Overwhelming and overshadowing all this is the massive oversupply from MAQ recently flooding the market, as Beagle quite rightly points out. So any of the above selling goes out to a fully saturated market of OCA. Supply and demand 101.
Chuck in….margin calls , kiwi saver switching, Sharesies…..BOOM $.38 cents.

That's well behind us now , so what's next?

As you know Winner, I'm picking 50-54m underlying profit next month. That compares to the last 2 years which were also circa 50m.

That is hardly a headline grabbing new result but based on P/E fundamentals alone the share price deserves to be around $1.20 - $1.30.( BTW , exactly matching the Coutta relativity theory ).

However , there will be a number of astute’s out there that will see this profit increase, albeit small, has been achieved during the full covid L4+L3 / end of the world experience. Therefore 10.5/ 12 months of a normal trading year.
Accordingly, I see a base SP of $1.20 but PLENTY of scope for higher.

What's changed in the last 1 month?
The long term trepidation of MAQ overhang is fully behind us.
The swamping of their 300m shares appears now fully assimilated.
Covid is behind us.
Property Hasn't fallen of a cliff to date,
Govt policy's underpin property prices
NZ is the global place to be. Crikey , I think even Snow leopard wants to be here

In 7 weeks we will have some actual real OCA numbers to work with but for now , with what we do know , it is very easy to justify the sp rising , obviously not in a straight line, to $1.20- $1.30

At this point in time, I have no reason to change any assumptions in my long term projections which is annual growth of underlying earnings increasing about 20%-22% p/a for the next eight years.

[Beagle]

What did happen to him?

Coutts just decided to take a break for a while...and then he found it very peaceful in Siberia, so peaceful I think he's taking a real liking to the place.
He adds real value with his insights into this sector and the forum is the poorer for his self exile. We usually chat on the phone once or twice a week...from time to time I remind him he's missed on here. Maybe one day he will come in from the cold...

Great Post Maverick. I REALLY like your last paragraph !

[tommy_d]

That is hardly a headline grabbing new result but based on P/E fundamentals alone the share price deserves to be around $1.20 - $1.30.( BTW , exactly matching the Coutta relativity theory ).

i'm concerned that your post might result in me buying more, but i'm enjoying having my average price per share down in the 70s....

[Cyclical]

i'm concerned that your post might result in me buying more, but i'm enjoying having my average price per share down in the 70s....

In the same boat tommy_d. And in my case, one might suggest too many eggs in one basket. But it’s very tempting, because at least this one has sound fundamentals and imo isn’t overpriced, unlike a lot of other stocks out there atm.

[Beagle]

In the same boat tommy_d. And in my case, one might suggest too many eggs in one basket. But it’s very tempting, because at least this one has sound fundamentals and imo isn’t overpriced, unlike a lot of other stocks out there atm.

I feel the same way. I still have far too much cash from my February market sell-down and its getting really hard to find good stocks at sensible prices. The rally on the US markets overnight will probably further compound the problem here on Monday and further widen the disconnect between the market and the underlying economy. Thankfully some stocks are still a haven from the almost all pervasive irrationality that's sweeping the markets.

I'm feeling I need more of these as the returns on cash and short term deposits are now probably negative after tax and inflation.

[winner69]

I just love it when the true Oceania believers and the newcomers who only bought a cheap ticker code a month or so ago have a mutual feel good session and give each other lots of hugs and cuddles (figuratively these days) and espouse the gospel according to St Earl.

Sort of gives me some comfort that I need to hang in there and maybe even top up. Hopefully one day the dreams of many will burst into reality ....it’s only hope that keeps me in.

Disc: I’m not a believer. I can’t warm to St Earl. Does that make me a heathen

[Mufasa]

I just love it when the true Oceania believers and the newcomers who only bought a cheap ticker code a month or so ago have a mutual feel good session and give each other lots of hugs and cuddles (figuratively these days) and espouse the gospel according to St Earl.

Sort of gives me some comfort that I need to hang in there and maybe even top up. Hopefully one day the dreams of many will burst into reality ....it’s only hope that keeps me in.

Disc: I’m not a believer. I can’t warm to St Earl. Does that make me a heathen

Agree in part. Am a proud purchaser of OCA at IPO and have ridden the lumpy swell that it became in March, but truly believe it is on the up from here. Do I think there will be another crash? Yes I do, but I believe this time OCA will be more resilient to it than last time due to the fact that the drop off the cliff in march was out of fear on what could happen to a village if the Rona got in. This time it would be a crash based off genuine economics and to me, OCA is in a good cash position. Plus investors will look at the rebound OCA had last time and think "well it will come back, I am happy to hold and not sell off". As I say I agree with your above statement - it wad the same with A2M, a lot of hard times and patience required but now suddenly everybody who came into A2M at $2 or $3 is an expert in investing. What about the ones of us who rode the 50cents to $1 years? Such is the world though ;)

[Beagle]

Maybe if you met him in person like some of us on here have...
"Hopefully one day the dreams of many will burst into reality". The good book says not to skite so its best if I don't post how much I am already up on this one....besides, I bought for the dividend income anyway.

TSB want to roll over my 90 day term deposit for another 90 days in the next ten days. 80 days ago the rate was 2.0%, now its 1.05%. Hmmm, thanks, but no thanks. I can still get over 5+% here plus growth in the years ahead.

[winner69]

Maybe if you met him in person like some of us on here have...
"Hopefully one day the dreams of many will burst into reality". The good book says not to skite so its best if I don't post how much I am already up on this one....besides, I bought for the dividend income anyway.

TSB want to roll over my 90 day term deposit for another 90 days in the next ten days. 80 days ago the rate was 2.0%, now its 1.05%. Hmmm, thanks, but no thanks. I can still get over 5+% here plus growth in the years ahead.

Probably made zillions when you bought back into Oceania in the 40’s and 50’s and 60’s.

As you bailed from Oceania once before I’d hazard a guess it was you couldn’t resist buying something ‘cheap’ rather than anything that Earl had done.

Anyway glad we’re both on the right side of the ledger

[Beagle]

He presented at the N.Z. shareholders association meeting in late 2018 and everyone I know that attended that day was impressed with how clearly and articulately he presented and his professional but friendly and cordial manner in discussions after the meeting.

I understand he is a qualified lawyer and accountant, (dual degrees were too much hard work for this dog) and he is a good Christian man. He appears to have a really good heart for the care of residents and puts their needs first. I hear from Coutts he goes out of his way to visit all the villages on a very regular basis and goes out of his way to meet any staff that want to meet him, almost to the point where staff get sick of him visiting the villages and meeting with him. Make of that what you will but nobody is perfect and maybe he has a problem with delegation...or maybe he really does care a lot about the staff and residents welfare ?

I lost a bit of dough from Macca's first sell-down so steered a very wide pathway from their door with the second major tranche they sold down. Being bitten once, shame on them, bite me twice, shame on me. You know the old saying mate, "once bitten twice shy"

Mine were mostly in the 60's and low 70's. I will admit with high blood pressure I considered Mrs Beagle and I to be in the at risk group so was really scared at the start of the Covid 19 crisis. Too scared to even think about investing at the depths of the market in late March. All I could think then was if we could get through this Covid 19 thing okay with our health and finances intact and the same as what they were, that would be a great outcome.

I am sure there are others who have done better than me, those who did buy in the 40's and 50's.

[Waltzing]

Prehaps as a lawyer he is aware of this responsibilities to the residents ? Well they are in good hands then and prehaps shareholder capital is also in good hand MR B?

[justakiwi]

Based on this alone, I would happily to work for him. The only time we ever see our CEO is once a year at our annual study day. I like that Earl cares about care, and that OCA is one of the few that understand and value the importance of having a big focus on care, not just property.


I hear from Coutts he goes out of his way to visit all the villages on a very regular basis and goes out of his way to meet any staff that want to meet him, almost to the point where staff get sick of him visiting the villages and meeting with him. Make of that what you will but nobody is perfect and maybe he has a problem with delegation...or maybe he really does care a lot about the staff and residents welfare?

[Beagle]

Prehaps as a lawyer he is aware of this responsibilities to the residents ? Well they are in good hands then and prehaps shareholder capital is also in good hand MR B?

I think so.
Fundamentally this looks good. compelling value, excellent dividend yield, stable and growing needs based business trading on a PE of about 11. Cheap.
Couta1 says 1 RYM = 10 OCA CA says its worth ~ $1.35.
Technically...that's a very interesting looking chart 11664

Here you are justakiwi https://www.oceaniahealthcare.co.nz/jobs

[justakiwi]

Ha ha ... if they ever venture further south, who knows :)



Here you are justakiwi https://www.oceaniahealthcare.co.nz/jobs

[Brain]

Mine were mostly in the 60's and low 70's. I will admit with high blood pressure I considered Mrs Beagle and I to be in the at risk group so was really scared at the start of the Covid 19 crisis. Too scared to even think about investing at the depths of the market in late March. All I could think then was if we could get through this Covid 19 thing okay with our health and finances intact and the same as what they were, that would be a great outcome.

I am sure there are others who have done better than me, those who did buy in the 40's and 50's.

Probably not many were traded in the 40’s and 50’s . My view at the time was well maybe they might go to 20 c and Maybe the aged care population was going to be decimated and nobody would be going near a retirement village. I did swap some Somerset for OCA at a higher price and I think that will prove to be the right decision.

[Baa_Baa]

Probably not many were traded in the 40’s and 50’s . My view at the time was well maybe they might go to 20 c and Maybe the aged care population was going to be decimated and nobody would be going near a retirement village. I did swap some Somerset for OCA at a higher price and I think that will prove to be the right decision.

I think that’s fair enough, wouldn’t be surprised if a lot of folks were thinking similarly. Instead of trading out, I watched my holdings get gutted to under 40 cents, but then said to myself, at what point would I be comfortable buying the rebound, which I did and now I have a great deal more OCA than before COVID at a greatly reduced holding price. I love the idea of buying assets, not so much selling them. Funny how as I’ve got older my focus has become even more long term, maybe in hindsight I should’ve deployed this strategy a long time ago. Buy assets when they’re cheap, don’t sell them. Just accumulate, forever.

[Beagle]

Well done Baa Baa. I went and had a look back at this wild, swift and savage dip. There were only 7 trading days it traded under 60 cents and only 3 it traded under 50 cents but some of those days were high volume. Intraday low it ever reached was 38 cents, gee that was a scary day ! Fortune favours the brave and the quick. I was neither but made up for it with sustained buying shortly thereafter.

[JeffW]

I think that’s fair enough, wouldn’t be surprised if a lot of folks were thinking similarly. Instead of trading out, I watched my holdings get gutted to under 40 cents, but then said to myself, at what point would I be comfortable buying the rebound, which I did and now I have a great deal more OCA than before COVID at a greatly reduced holding price. I love the idea of buying assets, not so much selling them. Funny how as I’ve got older my focus has become even more long term, maybe in hindsight I should’ve deployed this strategy a long time ago. Buy assets when they’re cheap, don’t sell them. Just accumulate, forever.

I think your last sentence particularly makes a lot of sense!

[Cyclical]

I love the idea of buying assets, not so much selling them. Funny how as I’ve got older my focus has become even more long term, maybe in hindsight I should’ve deployed this strategy a long time ago. Buy assets when they’re cheap, don’t sell them. Just accumulate, forever.

Looking back on my actions over the last 3 months, I wish I'd seen and heeded this advice back then! I seem to be having trouble holding nerve and stocks. OCA is a long term one though...honest ;-)

[Waltzing]

I hold some in one portfolio and trade it sometimes in another. TA says it may be due for a pull back soon?

[Beagle]

I hold some in one portfolio and trade it sometimes in another. TA says it may be due for a pull back soon?

I expect a break up through the 100 day moving average next week, (probably on Monday), which is a very bullish TA signal.

[Waltzing]

After the FED meeting , The Brilliant MR B?

https://www.cnbc.com/2020/06/05/look-for-the-sp-500-to-turn-positive-for-the-year-with-a-boost-from-the-fed-in-the-week-ahead.html

[winner69]

I expect a break up through the 100 day moving average next week, (probably on Monday), which is a very bullish TA signal.

Cool if that happens seeing MA100 is 1.0557

Mind you that MA100 is as flat as a pancake ....is that good

[Waltzing]

The US is expecting a continuation of S&P 500 moving up. Not sure if this will translate to the NZX. The NZX may move up simply as the ECB and FEB enlarge there monetary policy and MR B may get his target.

[King1212]

My gut feeling said..it might be pull back as many will do profit taking....maybe not Monday but could see throughout the week. As many bought in low....now the time to sell at high...

So ...let see aye

[nevchev]

Im amazed by the US markets.Rioting in the streets,over 100,000 dead from corona virus which is still not under controll and the highest rate of unemployed since the second world war.Donald says he's winning on all fronts so everything must be ok!!

[Baa_Baa]

Cool if that happens seeing MA100 is 1.0557

Mind you that MA100 is as flat as a pancake ....is that good

I'm not seeing that Winner, MA100 is at 0.94 and still declining. MA200 confluence with 61.8% Fib retrace at $1.00 brings back into play a big resistance band up to $1.11. Support at $0.88 (https://invst.ly/r1jji).

[Waltzing]

MA 100 is declining but if we see the markets pricing in 12 to 18 months as suggested by global markets than Mr B may be correct and the decline is priced out. If it does pull back its a trade. DISC: hold OCA in one portfolio and Trade in another.

[RupertBear]

Probably not many were traded in the 40’s and 50’s . My view at the time was well maybe they might go to 20 c and Maybe the aged care population was going to be decimated and nobody would be going near a retirement village. I did swap some Somerset for OCA at a higher price and I think that will prove to be the right decision.

I was one of the lucky ones that topped up @$0.42...felt the fear but decided at some time in the future this one should be ok. Did the same with THL @ $0.61, PLX @$0.50, SKO @ $1.12 but felt a lot more fear as I wasnt sure if these businesses would even survive. So far so good but who knows what the future will bring so while I am feeling grateful I am watching very closely.

[Mufasa]

My gut feeling said..it might be pull back as many will do profit taking....maybe not Monday but could see throughout the week. As many bought in low....now the time to sell at high...

So ...let see aye

Usually I would say I agree with this, but if those people brought in at lets say .40 - .60, then they are making a lot currently, and quite quickly and easily. I would be inclined to think that they will actually stay in. Those who brought in at .40 have already doubled their money, and for very little effort and very little time, they may triple their money soon. By the end of the year they may quadruple it. I don't think there will be that many profit takers from this stock for a while yet.

[winner69]

I'm not seeing that Winner, MA100 is at 0.94 and still declining. MA200 confluence with 61.8% Fib retrace at $1.00 brings back into play a big resistance band up to $1.11. Support at $0.88 (https://invst.ly/r1jji).

Suppose yahoo always had crap data anyway

[Baa_Baa]

Suppose yahoo always had crap data anyway

Yahoo has it at .94 as well

[winner69]

Yahoo has it at .94 as well

Not when I looked so I must be reading their interactive charts wrong

But if in doubt do it yourself and the abacus says 94 ....yippee

From what you said earlier does it appear that trading in a 100 to 111 range for some time might be as good as it gets this year

[RTM]

My gut feeling said..it might be pull back as many will do profit taking....maybe not Monday but could see throughout the week. As many bought in low....now the time to sell at high...

So ...let see aye

I bought a few to average down to 98c. I will certainly be selling some should they reach ~110c. As they will become a bigger portion of my portfolio than I really want. Not sure I would call that profit taking. But same effect.

[Beagle]

I'm not seeing that Winner, MA100 is at 0.94 and still declining. MA200 confluence with 61.8% Fib retrace at $1.00 brings back into play a big resistance band up to $1.11. Support at $0.88 (https://invst.ly/r1jji).

Thanks for the detailed chart confirming the break up through the 100 day MA. I was just going visually off the direct broking one I posted a link for yesterday which indicated a break was imminent.

Augers well for the future in my opinion. Previous trading and resistance was with the massive Macquarie overhang so that being behind us now is something that I think is very relevant going forward. My sense is NTA of $1.01 last year is one thing but NAV, (which is net asset value inclusive of developments work in progress, IP and some other stuff) of $1.15 as at 31 May 2019 is where this is headed in the near future.

[Maverick]

Thanks for the detailed chart confirming the break up through the 100 day MA. I was just going visually off the direct broking one I posted a link for yesterday which indicated a break was imminent.

Augers well for the future in my opinion. Previous trading and resistance was with the massive Macquarie overhang so that being behind us now is something that I think is very relevant going forward. My sense is NTA of $1.01 last year is one thing but NAV, (which is net asset value inclusive of developments work in progress, IP and some other stuff) of $1.15 as at 31 May 2019 is where this is headed in the near future.
And wait there's more.......don't forget Beagle , there is another 8 cents of net asset value on top of the $1.15 waiting to be addded when the current new empty units on hand get leased for the first time.

[winner69]

Thanks for the detailed chart confirming the break up through the 100 day MA. I was just going visually off the direct broking one I posted a link for yesterday which indicated a break was imminent.

Augers well for the future in my opinion. Previous trading and resistance was with the massive Macquarie overhang so that being behind us now is something that I think is very relevant going forward. My sense is NTA of $1.01 last year is one thing but NAV, (which is net asset value inclusive of developments work in progress, IP and some other stuff) of $1.15 as at 31 May 2019 is where this is headed in the near future.

Surely that NAV thingie will be close to $1.30 come May 2020 reporting

Good stuff eh

[winner69]

Listed retirement operators to a certain extent don’t make much (if anything) out of looking after old people ...all their profits and cash flows are generated from property related activities,

It’s good that Oceania’s NAV apparently is increasing and maybe is a good metric to use to ‘value’ the company.

But it begs the question whether this should be ‘discounted’ by how much it is costing to looking after old people. In Oceania’s case non-property cash flows over last two half years have been negative $25m. That’s quite a lot eh.

Maybe based on this approach ‘fair value’ is less than NTA or NAV

But then I’ve never really understood Oceania’s model and their financials remain obtuse so maybe looking at it this way is completely wrong.

Maybe it’s best to act just dumb ...believe the story ....and hope like hell I make heaps over the next few years by hanging in there

[Beagle]

Listed retirement operators to a certain extent don’t make much (if anything) out of looking after old people ...all their profits and cash flows are generated from property related activities,

It’s good that Oceania’s NAV apparently is increasing and maybe is a good metric to use to ‘value’ the company.

But it begs the question whether this should be ‘discounted’ by how much it is costing to looking after old people. In Oceania’s case non-property cash flows over last two half years have been negative $25m. That’s quite a lot eh.

Maybe based on this approach ‘fair value’ is less than NTA or NAV

But then I’ve never really understood Oceania’s model and their financials remain obtuse so maybe looking at it this way is completely wrong.

Maybe it’s best to act just dumb ...believe the story ....and hope like hell I make heaps over the next few years by hanging in there

Yeah, this year's NAV less last years NAV and add on dividends paid and BINGO, that's their real earnings...that's makes their financial statements much more legible ;) Taking a "dogged" approach to holding for many, many years makes profound common sense to me !

[winner69]

One thing going for us is that Oceania have a new CFO with a background that might enable him to change how things are done and conjure up a boomer of a result.

[Waltzing]

Hmm , i see a small pull back at some stage around 1.10 at least , maybe each 15 cent push has a small pull back built in.

[Waltzing]

OCA Yahoo - are the stats accurate i hope so but we can download the data and do a recalc.

11668

[allfromacell]

Do anyone have any thought of what the dividend might be? If cash flows are healthy and earning's are good then it would send a strong message if they raise the dividend from last year.

[winner69]

Do anyone have any thought of what the dividend might be? If cash flows are healthy and earning's are good then it would send a strong message if they raise the dividend from last year.

We will probably get 3.0 cents

Dumb paying unimputed divies, even more so with negative cash flows and increased borrowings

[Baa_Baa]

OCA Yahoo - are the stats accurate i hope so but we can download the data and do a recalc.

11668 That's a weekly closing price chart, Winner. The daily chart has the 100MA at 0.94
11669
Cheers

[Ggcc]

Do anyone have any thought of what the dividend might be? If cash flows are healthy and earning's are good then it would send a strong message if they raise the dividend from last year.
https://www.marketscreener.com/OCEANIA-HEALTHCARE-LIMITE-103506268/financials/

This gives an idea how the dividends will be paid suggested by analysts. These are extraordinary times and no one can actually knows how they went throughout the COVID 19 financially to be able to pay a dividend.
I feel that this time there won't be a 6 monthly dividend and maybe 3.5-4 cents for the entire year. Only my thought.

[Waltzing]

Direct Broking has the 120 at about 98 and The Brillant Mr B is correct on that TA Chart. But a chartists recently called it into question for accuracy.

I havnt downloaded the data since our custom software does the transaction files not the data analytics , not yet anyway and not expected to do that till 2021.

i expect some here are experts with there charts.

[winner69]

Direct Broking has the 120 at about 98 and The Brillant Mr B is correct on that TA Chart. But a chartists recently called it into question for accuracy.

I havnt downloaded the data since our custom software does the transaction files not the data analytics , not yet anyway and not expected to do that till 2021.

i expect some here are experts with there charts.

Mathematically the MA100 is 94 on daily closes

[Waltzing]

As for dividends i had the view that did OCA feel some pressure to strike a dividend with MAQ in mind.

[Leftfield]

OCA and PLX both at 97c this morning - spooky!

[winner69]

OCA and PLX both at 97c this morning - spooky!

Both over a buck later today ...or tomorrow morning

Not spooky ....just reality

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354271/323998.pdf

One can expand one's knowledge of the sector a bit by reading this valuation report.
For those who are time poor, skip to page 15 wherein development margins are graphically represented. This is especially encouraging for OCA shareholders.

[Waltzing]

Many thanks once again MR Brilliant B.

[Beagle]

You're welcome mate but I'm not brilliant, just a food obsessed Beagle that's always sniffing around for his next feed even those he's too fat already :lol:
https://wagwalking.com/behavior/why-do-beagles-sniff-so-much (Snoopy, you got a special mention in there, how good is that !).

[stoploss]

$ 1.00 Go you good thing

[winner69]

$ 1.00 Go you good thing

Breakout ...big time ...nothing to stop it getting to $1.20 before month end

[Mufasa]

Hello $1 my old friendddd

[Beagle]

Breakout ...big time ...nothing to stop it getting to $1.20 before month end

Agreed. We're Covid 19 free, we are Macquarie free (which some would say is an even worse virus), and OCA has confirmed they have traded well and there's no longer any reason to be under this year's NAV which should be in the mid-late $1.20's.

OCA - You can't have too many :t_up: :t_up:

[tommy_d]

Agreed. We're Covid 19 free, we are Macquarie free (which some would say is an even worse virus), and OCA has confirmed they have traded well and there's no longer any reason to be under this year's NAV which should be in the mid-late $1.20's.

OCA - You can't have too many :t_up: :t_up:
i've got a vague idea that i should have a sell value, i.e. a value where it's well outside of a range where i would consider buying, which would mean that I should sell as over-valued.
Trying to figure out what that is for OCA, and it's still a while away, $1.25 feels like a clear sell though. Anyone else got sell numbers?

[winner69]

Agreed. We're Covid 19 free, we are Macquarie free (which some would say is an even worse virus), and OCA has confirmed they have traded well and there's no longer any reason to be under this year's NAV which should be in the mid-late $1.20's.

OCA - You can't have too many :t_up: :t_up:

OCA share price up 33% in last month

Another 33% in next month and a new ALL TIME HIGH beckons before results announced

That's exciting

[Beagle]

i've got a vague idea that i should have a sell value, i.e. a value where it's well outside of a range where i would consider buying, which would mean that I should sell as over-valued.
Trying to figure out what that is for OCA, and it's still a while away, $1.25 feels like a clear sell though. Anyone else got sell numbers?
Have a look at the link I provided in post #5493 - page 15. OCA have the best development margin in the industry. They also have the best yield in the industry. We are free of the Macquarie virus and the Covid 19 virus. I see no reason to sell.
Heck if the independent appraisal report valued MET at the mid point at 17 times underlying earnings with their suboptimal development track record then OCA must be worth at least 20 times earnings which could be 11 cps next year so potentially this could more than double in the next year or two ! 11 cps x 20 = $2.20 !!

OCA share price up 33% in last month

Another 33% in next month and a new ALL TIME HIGH beckons before results announced

That's exciting

Excellent recovery that's only just started. Very happy days ahead for OCA shareholders. Still yielding ~ 5% at 1.00 and trading cum FY20's final dividend of nearly 3 cps to be announced next month.

[winner69]

Jeez suggests OCA shate price could double in next year.

That would be cool.

Having fun today ...share prices going mad...
And I had my first lunch of oysters and chips on the beach in the sun for ages

[Beagle]

Jeez suggests OCA shate price could double in next year.

That would be cool.

Having fun today ...share prices going mad...
And I had my first lunch of oysters and chips on the beach in the sun for ages

MATE...what a great way to celebrate being Covid free !! I would have gladly joined you if I lived in wellington...could have even patted your dogs, that would have been a great bonus :)...but instead I celebrated N.Z. being Covid free by cleaning out the sell line at $1.00 and going on the bid for more.

Could be a dangerous thing when you start believing your own B.S. eh mate lol...but I took a DEEP BREATH and thought about where this will be in 2025 and $1.00 looks stupid so I did something about it.

[Waltzing]

The legends of investing are suggesting a share price that is far higher than they were predicting a year ago and yet the fundamentals of this company are the same if not worse due to a deep recession on the horizon? Ok you guys know this industry in depth including that other legend (MAV). I looked at page 15 and it certainly means i should have bought a lot more today in the trading portfolio. I have a few in another portfolio not anywhere near as many as they heavy investors here im sure.

[Panda-NZ-]

The legends of investing are suggesting a share price that is far higher than they were predicting a year ago and yet the fundamentals of this company are the same if not worse due to a deep recession on the horizon? Ok you guys know this industry in depth including that other legend (MAV). I looked at page 15 and it certainly means i should have bought a lot more today in the trading portfolio. I have a few in another portfolio not anywhere near as many as they heavy investors here im sure.

Interest rates my friend, where else can you put your $$

[Beagle]

Interest rates my friend, where else can you put your $$

Exactly...in news hot off the press Beagle buys even more at $1.00. Maverick will be proud of me !!

[Waltzing]

Does this mean that that legend of OCA (MAV) was right all along? as the auction hits 1.05, got some more at .97 but clearly yet again NOT ENOUGH of them!!! almost back to where i had 200,000 of them in december and sold at 1.30 only to loss the profit in selling AIR far to late. This time i only have a small number at 72. How ever i have a small holding company coming on line later this week i hope and prehaps buy a lot more at 1.08 again! Ground Hog Day. The last 10 years have indeed been one of nothing but Ground hog Days. Will the next 10 year bring a new golden bull market.

[Ggcc]

I came home to see these at $1.03 wow. Popping a bottle of beer lol

[Beagle]

I came home to see these at $1.03 wow. Popping a bottle of beer lol

Yes...I might have a couple of liquid refreshments too. The days of OCA trading at less than a $1 is (I believe), now closed and we're on to bigger and better things and happy days ahead :t_up:

[winner69]

Never never again will we see a sub dollar share price

[Bjauck]

Never never again will we see a sub dollar share price That is quite a bold statement in our crazy old World at the moment. Let’s hope the second wave of infections skips NZ or is a just a ripple.

It is not often that I buy a big (for me) tranche of shares in a company just a couple of weeks before its SP increases dramatically!

[Beagle]

That is quite a bold statement in our crazy old World at the moment. Let’s hope the second wave of infections skips NZ or is a just a ripple.

It is not often that I buy a big (for me) tranche of shares in a company just a couple of weeks before its SP increases dramatically!

On the same page with Winner and put lots of money where my bark is with a decent sized top up at $1.00 this afternoon.
Impossible to overstate the importance of being free of both the Macquarie and Covid 19 virus's.

[Onion]

Some do say today is the last day we see OCA under $1.10...
maybe even the last few hours/minutes/seconds since this post.

This quote is from 24-01-2018 - for those thinking that today’s move past $1 is a one way, irreversible, shift.

[Beagle]

This time its different. Real estate market strong https://www.oneroof.co.nz/news/38003

[nevchev]

Nice read Beagle.Its not all gloom and doom out there.cheers(and i mean that.Im having a wee,after dinner dram in celebration of todays OCA's rise)

[value_investor]

Yes...I might have a couple of liquid refreshments too. The days of OCA trading at less than a $1 is (I believe), now closed and we're on to bigger and better things and happy days ahead :t_up:

I'm in the same boat, had to double take on sharesight. My buys up at 0.44 and 0.68 are sitting pretty. If this goes over the value I see it at then I would sell otherwise I hold in the long term.

[Cadalac123]

Wonder if it’ll act like a dog stock like it did for the past two years

[Cyclical]

Big shout out has got to go to our friends at Salt, allowing some of us to top up quite nicely in the mid 70s. 33% gain...the figure is not a surprise, but the haste in which it got there was something else!

[nevchev]

Dow up again and looking gangbusters!Will the uplift continue?

[nevchev]

Big shout out has got to go to our friends at Salt, allowing some of us to top up quite nicely in the mid 70s. 33% gain...the figure is not a surprise, but the haste in which it got there was something else!

Its still a bit of a mystery to me how those big fundies work but surely someone there is regretting there decision to sell.Like you i am thankfull for their contribution

[winner69]

Wonder if it’ll act like a dog stock like it did for the past two years

This time around no Macquaries and this time it’s different

Be back to all time highs before full year announcement


That’s another 33% .....and the recovery complete ...and then onwards and upwards ....somebody mentioned 2 bucks in a years time

[Brain]

Its still a bit of a mystery to me how those big fundies work but surely someone there is regretting there decision to sell.Like you i am thankfull for their contribution

It would be a mistake to think that funds make better decisions than individual investors. A lot of the characters that post on this forum are making good money. The other advantage that we investors have is that it is a lot easier to buy or sell smaller holdings.

[Leftfield]

This time around no Macquaries and this time it’s different
Be back to all time highs before full year announcement
That’s another 33% .....and the recovery complete ...and then onwards and upwards ....somebody mentioned 2 bucks in a years time

Sometimes investing is like surfing...... you just got to enjoy riding the waves.

Happy to DCA as the SP moves up, keeping a nice safety margin with av holding SP more than 20% below recent highs.

ps think I'll have to scrap my PLX/OCA relativity theory.... leave that stuff to Couta!

[Cadalac123]

This time around no Macquaries and this time it’s different

Be back to all time highs before full year announcement


That’s another 33% .....and the recovery complete ...and then onwards and upwards ....somebody mentioned 2 bucks in a years time

Guess we can start chanting you can never have enough OCA like last time !!

[Waltzing]

105 in the opening....106... blowing past the 1 dollar barrier. 1.10 the next resistance.&nbsp;

[winner69]

105 in the opening....

Just the start .....over 110 today

The world is so happy ....and even more so in this cool country

[Bjauck]

Just the start .....over 110 today

The world is so happy ....and even more so in this cool country LOL. Maybe a corner of a corner. New infections and misery continue rapidly in other parts of the World.

https://www.bbc.com/news/world-51235105

[Waltzing]

im not happy... yet again i did not buy ENOUGH OCA!!! who here was the first to say winner? Also bought perfect TA for MCY and did not hold... Trust the chart....

[Ggcc]

I am happy I bought 60,000 shares at under 70 cents per share to add to my total, after I sold out of SUM After their poor results at roughly $8 per share........... I should have sold Summerset earlier, but held back.