Getting very tempted too. Must stay disciplined though... I'm sure you will :)
Printable View
I topped up again today. The two times I've brought during some week long aggressive rises it has fallen hard and ended up costing me. I seem to do my best buys while catching the knife.
My only concern especially for how the NZX seems to go sometimes is that insiders might know the result isn't as good as it is expected to be. I highly doubt this but i'm always cautious.
It is all fathomable though, short term traders sometimes create great opportunities solely for intangible technical reasons.
Look at it as a gift, 9.8% off recent high's, undervalued, accelerating growth, 12 days to reporting.
I just want to say - thank you all.
Couta1, Met has dropped with Sum. Both are off their recent share price increases.
Err i'm already overweight in Sum.. Looks like i'm moving into heavy weight category
I think Roger would remind us all that we are sailing on a very capable and seaworthy yacht at full mast and we have just run into some rough waters which will slow our journey down a bit but will have no bearing on us arriving safely at our final destination
probably anything under a 3.30 is now a buy. Edit to clarify - i'm not sure if this one was already known/priced in by punters? Has this NP one already been announced in some form/plans for it etc?
Summerset Gets Green Light for $55M Village in New Plymouth
9:15am, 14 Feb 2014 | ASSET
NZX, ASX & MEDIA RELEASE
Friday 14th February 2014
SUMMERSET GETS GREEN LIGHT FOR NZ$55 MILLION VILLAGE IN NEW PLYMOUTH
Summerset has been granted resource consent to build a NZ$55 million retirement village at its site on Carrington Road, New Plymouth.
The 4ha village will be Summerset’s first village in the Taranaki region. The village has a rural outlook towards Mt Taranaki. This picturesque flat site is located for excellent sun.
Summerset CEO Norah Barlow said, “Summerset Mountain View will have a unique feel to it. There’s few other locations in the country with a view that’s as instantly recognisable. It’s only a 10 minute drive from town and five minutes from beautiful Pukekura Park.”
The company intends to build around 150 homes on the 4ha site. The village will have townhouses and villas for independent living, and care apartments and care rooms for those with more advanced needs. Care integrated into a village in this way provides residents with certainty that should they require more care as their needs change, it is provided on site.
The heart of any Summerset village is the village centre, which will house a range of recreational facilities as well as the care centre offering rest home and hospital-level care.
New Plymouth’s village centre will include a cafe, an indoor spa and swimming pool, exercise room, hair salon and residents’ bar. Outdoor facilities could include an all-weather bowling green, blokes’ shed, communal vegetable garden and BBQ area.
Summerset announced its purchase of the land in August 2013.
ENDS
For investor relations enquiries:
Julian Cook
Chief Financial Officer
julian.cook@summerset.co.nz
04 894 7310 or 029 894 7310
For media enquiries:
Kimberley Rothwell
Communications Advisor
kimberley.rothwell@summerset.co.nz
04 894 6993 or 027 601 2001
Gidday ship mates :) Its certainly been more choppy than I expected, most of you like me would have thought we were looking at a great summer's cruise when it went north of $3.70 and would have expected a better price in the lead up to the annual result due in ten days.
The current SP is sitting right on the bottom of the long term uptrend band, right on the 100 day moving average and a great buying opportunity if you have the courage. Sticking with the boating analogy seeing as I had one, I'm feeling slightly sea sick but I know we're on a good solid boat so I'll ride out the choppy waters knowing with one hundred percent confidence there will be smoother sailing ahead. Nothing has changed, the dynamics of the age care industry are extremly favourable, (tail winds, spinnaker set), SUM is focused in N.Z. which is a very, very good thing. Ryman will face an extremly difficult challange in southern states in Australia, the prognosis with the exit of all Australian car manufacturing and all supporting component suppliers by 2017 together wityh the downstream effect of that on the Australian economy in general and all other small business owners in the surrounding areas will be a profound sea change event in Australia. None of this is concern for SUM shareholders, other than the back wash effect of what could happen to RYM's price.
Happier times lie ahead for SUM shareholders. Consistent strong growth inevitably ends up in a ever increasing share price over time.
Hopefully it marks a diversion within the sector also, there’s a lot of growth potential within SUM to go.
I just find it bizarre when media journalists report on the retirement sector like it is in some peculiar way a single animal, equally bizarre when we see sector correlations as we did yesterday.
Is it not a sector of stocks each with their own economic fundamentals and outlooks ?
I think the sector has shared economic fundamentals and outlooks but each individual entity has their own financial fundamentals and opportunities. We could argue details on this but overall, they are in the same sector so share some attributes, but individual companies so also have their own attributes.
A classic example of this is AIR - the Airline sector is nortoriously bad but AIR is currently enjoying a good run. In my view the sector will ultimately win so thats why I am more positive about those in the retirement sector, though have different opinions on each.
Exactly Mac you have just hit the nail on the head and as I have alluded to in the past they are not all equal in terms of the quality of care offered either,don't be fooled by past success of a company when it comes to this area,with too much focus on profit at the expense of care things can change,I've put my money in Sum so you can read between the lines here
Exactly Mac you have just hit the nail on the head and as I have alluded to in the past they are not all equal in terms of the quality of care offered either,don't be fooled by past success of a company when it comes to this area,with too much focus on profit at the expense of care things can change,I've put my money in Sum so you can read between the lines here
Lots of small sellers selling down into the weak uptrend... Guess we shall wait and see how the real SP movement plays out with announcements in 10 days time...
Aside from SUM being undervalued at present, those valuations are the net present value of forward cashflows from residents seeking access to aged care and elderly communal living benefits.
A dip in the property market may for some make a suburban unit look attractive, but then those individuals don't necessarily need aged care right away.
Most prospective residents of SUM are looking to buy the aged care facilities and the communal lifestyle more than the property itself, or they are buying with a view to needing the aged care if so required in the next couple of years of life if suddenly required. Life can be uncertain in the later years and a little more conservative certainty is where the value is, not in the property it sits on.
Agree that a property dip would lower book values, and it would create an opportunity for land banking, but the valuation of aged care cashflows is insulated considerably more than the outside real estate market.
Must confess that I got in at 3.34. My decision, but at this stage would you hold out for the annual results, or exit and get back in closer to the announcement.... looks like downtrend still in play....
This is becoming a very frustrating stock to own. Another day, more good news and another reduction is share price....go figure ???
Can anyone give any reasonable explanation as to why the price has dropped so much the last couple days only 10 days or so out from the financial report, which from what I have heard should be positive.. Maybe it's not going to be quite as positive as what everyone thinks?? Inside trading? Somethings up and I cannot put my finger on it. I never thought we'd see below 3.30 again!!
Yep Moosie I think you can see this in this whole sector especially over the last couple of weeks,there's been some big volume days plus big individual sales over at Rym this last week for the observant,I think there's a lot of small sellers of Sum who don't understand the value and long term nature of the stock,as for a comment I saw somewhere on here quite a while ago that these stocks are no good for traders,that's nonsense,in fact if I was trading seriously these stocks and the likes of Tel would be near the top of my list as you know if you get it wrong you only have to bide your time to get out of jail IMHO
Definitely need to read the charts, if you don't understand spend more time doing analysis and research before investing. The last 10 pages should be a wealth of information, plus SUM's website (awards, reports etc). Glad they got the go ahead with NP. I purchased a little bit more today, think that will do it.
Completely agree with your couta1 and moosie_900. The evidence is all there, it's all about patiences!! Stocks actually do go down and up!
I agree the stock has moved in a clear wave pattern and its clear that ACC have been the biggest trader of the lot but if you subscribe to this theory I would have thought sitting right on the bottom of the trading channell and right on the 100 day moving average line that ACC and other large traders would have been buying this stock in volume at present prices of circa $3.30 especially after a more than 10% pullback from $3.75 less than a month ago and five minutes so too speak before the annual result, but they've been completly AWOL ? Its either a great buy at current prices or there's something that we don't know lurking in the forthcoming annual result. I think its the former.
I hope it is great buying at these prices too. I have been buying small chunks from 3.43 down to now and prepared to buy more sub 3.20. Like couta, I am overweight on SUM. Feeling obese like a big mac :ohmy:
At least we haven't seen any SSH notices selling.
Steady on lads, only 11 more days to full year result. Just gotta brace for a few more waves and maybe a thunderstorm. We will see sunnier days ahead :cool:
Really like your guys ship analogy!
I stand by my statement, no matter what your time frame is if you're trading. Making a trade into a long term hold because it goes below your purchase price is plain stupid and will lose you money. You have learnt that in the past. No point tying up capital that you are losing money on. You need to to know why you are trading something and need to know at what point the trade is "broken". Once it gets to that point stop losses should exit your position for you. No emotion and no poor decisions.
All buy and sells are trades so everyone is a trader...
Trying to make technicial analysis sense out of SUM is difficult...SUM plays to its own tune....Like many stocks in a constant uptrend, indicators are useless they "cry wolf" every time there's an opportunity to buy (due to dip buying fundies??)...but at some time in the future this up trend will end, as all trends do..and us TAer's will ignore the "cry wolf" sell signals and crash and burn.
.SUM is so chart unfriendly you can't even draw a long term primary uptrend line as it always breaks...So how do you know which break will be geniune in the future when all its listed life so far on the NZX is full of false signal breaks and unreliable indicators??
On closer inspection SUM seems to have a primary bull trend curve and the curve seems to be maturing.
I have used Winners idea of trend channels (I used SD(1) channels just to be different:p),,but the channels ultimately break down because of that maturing curve.....see chart
So a chartist life using SUM is a bitch but S&R lines sort of work as each bull market correction just breaks them ...so I accumulated more at 3.29, in the dip....and hope the dip isn't the reversal..any price below the 3.20 bull/bear line will have me worried..
http://i458.photobucket.com/albums/q...UM14022014.png
Hoop- do you think that your "maturing curve" that SUM (and RYM is doing the same) Has is actually a sign of total market sentiment beginning to wane and maybe a signal that a market correction (or worse is imminent.
Recall that 2007/08 and to a lesser extent 2010 down periods didn't happen overnight and before the big drops there was general market weakness and many stocks had stopped going up and had started trending down before the big falls came
Maybe SUM and RYM are the bell weather stocks this time sending out that message
As moosie says history has a tendency to repeat
Interested in your thoughts Hoop
Hoop, firstly I would like to salute you for drawing a chart with a log price axis - everybody should be doing this.
Secondly I am appalled that you should write "Trying to make technicial analysis sense out of SUM is difficult..."
It goes up and it goes down where is the difficulty? You are just using the wrong model.
Thirdly I am even more appalled that you also wrote "..So how do you know which break will be geniune in the future ... ?"
You know as well as I do that TA does not accurately predict the future (neither does FA for that matter), it is a percentages and profit protection game.
But you know your current sell conditions for SUM surely?
If it meets them you sell don't you?
Then you are on the look out for (re)entry conditions and you continue to ply your TA rules, updating them as you learn.
Just for you here is a chart (and not like yours so full of stuff that it is difficult to see anything :p).
Attachment 5485
If the SP hits that second line up then start selling and if it hits the bottom line sell up completely. (And then watch it turn round and climb again maybe?)
Best Wishes
Paper Tiger
Reason they are not going upis because they are fully valued, some might say expensive.
Good stock , but every man and his dog are already in , it will be a case of waiting for the company to catch up to the shareprice
People expecting 25% returns year after year are being a little unrealistic. May well go through an adjusting period of underperforming the matket . You may have noticed that good news no longer moves the shareprice , its already factored in
One broker said the same recently much to the disbelief of the forum.
Sorry ratkin don't agree with you,I think your describing Ryman above not Sum,I believe Sum is suffering because Ryman has run ahead of itself and because it is the market leader in the sector it has dragged Sum down with it in its downtrend hence why good news is not influencing the share price much,you could see the same effect happening over at the tech stocks with Xro dragging other stocks up or down with it several times I've noticed,is Sum fully valued at $3.28,I don't think so,as for brokers valuations,yeah right pass another Tui,cheers
See article in Herald this morning on Sums frustrations in dealing with Auckland's Council processes
Now see what you done ratkin ..... upsetting the loyal followers
couta explained why - rym ran ahead of itself and on the pull back sum gets punished as well (unfairly by an irrational market?)
Both in the same sector. There will always be a market leader in any sector (usually the best of the bigger ones) and that is RYM in this sector. The market leader becomes the 'benchmark' price wise and the others will follow the trends of the market leader.
As such in couta's eyes Ryman will always be 'overvalued' and SUM will always be 'undervalued' - its not an irrational market thing, its just markets will give a premium to the one they see the best (from an investment point of view)
I live with that and set my expectations accordingly
But like you ratkin what the heck do I know
Summerset in the Sun doing well
http://www.stuff.co.nz/nelson-mail/n...ith-10m-centre
Hey Winner on a lighter note seems yourself,PT and Hoop have all graced us with your presence here at Sum perhaps we could also invite balance and Snoopy to come on over and then we would have kinda like the African big five right here on the Sum thread:scared:
I read somewhere on a TA site that Bull cycle reversal is nearly unnoticeable it starts when your favourite stocks not all at once but quietly one by one slowly start to technically break down while the "rock star" stocks, the media and market commentators are still exuberant and singing the praises of a vibrant economy and a prosperous future.
Yeah ..history repeating rule of thumb is well known...eh?....Chartists, me included, follow pattern behaviour with interest...I personally have some companies I keep an eye on in a hope to pick that inevitable reversal quick enough...I personally am more vigilant now that the NZX50 Bull market cycle has matured and is 5 years old.....
I look for and try to identify both leaders and laggards with the NZX.
Its well known that Utilities lag the market and analysts recommended to hold in a bear cycle ...yes they can lag but in the end they too get severely mauled by the bear so don't hold them..don't fight the bear just get out and let the market drop...See CEN.
Other laggards I've noticed are the high profile rock stars shares...in 2007 it was RAK.....this year.. PEB XRO ???
In 2007 MHI stood out ...clothes retailers led while gold silver jewelry lagged
Leaders in 2007 were the two with property associations AIA and RYM both topping out in July and end of May respectively. 4 and 3 months before...
You would expect the retailers to be laggards, the beneficiaries at the end of the trickle down economy cycle....surprisingly PPL and HLG topped out Feb 2007 and December 2006 a good 8 to 10 months before the NZX50 multi-topped for the last time...
Actually these leaders I've mentioned haven't yet developed established bear type downtrends as I write....but they have come off the boil ...Hmmm.
Winner...if you think the Wall St 1929 comparison doing the media rounds is scary...Have a look at HLG chart...if Moosie's "history repeats" is true then HLG suggests NZX50 has recently topped out and the unnoticeable bull to bear cycle reversal has now commenced...
Disc: 90% in .. 10% cash....
Nice chart Hoop, thank for posting that.
Of interest is that your upper channel correlates with the Quadrant sell down period, from the anticipation right through the wane of the post transaction overhang.
It is clear that for a such a substantial sell down Summerset really held up very well during this period, continuing to grow even into such a big overhang says a lot in itself.
The fundamentals are strong, steady even accelerating growth, net margin expansion, award winning performance, best in breed, forward sites land banked at least six years ahead, and wealthy baby boomers about to enter the market and probably compete amongst themselves to get the best.
It would not surprise me one bit to see the next channel take a compensatory move to the upside.
To those who are concerned about valuation, I say DYOR. The brokers also retain higher 12 month price targets, Macquarie’s have $4.50 (+37%).
If NZ First Capital are representative of the market, we should anticipate NPAT growth of 68% at reporting in nine day’s time.
Being undervalued at present, if SUM achieve close to this or exceed it, the SP is going to fly.
http://www.nzherald.co.nz/business/n...ectid=11202286
Still in the news!
http://www.nzherald.co.nz/business/n...ectid=11202494
Hey moosie you seem to imply some of us think SUM is a dog.
Its not a dog, its a great company, as is RYM in the same sector.
Hoop says we are all traders (even investors) Traders trade price. My trade in SUM started 2 years ago in Jan 2012. It's been a great trade so far but as good traders I try to make as much as I can on any trade. As Mr P said 'the market giveth but the market taketh away'. I intend to keep my profits and not giveth back. At 330 the long up trend may be over, if so time to take profits. Might wait a week or so to see what happens. The signals are sell and end th trade but I am allowed some emotional attachment to this winner eh.
Price does not reflect intrinsic value. Price is driven by sentiment, how much punters are prepared to pay for those future cash flows.
My DCF valuation for SUM is slightly higher than MACs. But my experience is that my DCF valuations are usually 20% away from current price. Further more analyst targets often seem to be about 20% higher than price as well. Maybe saying that DCFs don't always reflect reality and are subject to the bias of the person doing them. On this basis SUM (and RYM) are as ratkin says 'fully priced'
History also seems to be playing out again. Good stocks showing price weakness when fundamentals are improving where a signal in 2007/2008 and other times of an impending period of overall market weakness. I have lived through this several times and it all looks familiar again. This is another reason to exercise more caution than normal, and don't let emotions rule.
If this does happen sentiment is negative and most stocks get downgraded, I lower PE ratios. Fundamentally nothing changes and unless on changes the discount rate the DCF valuation doesn't really change. In SUM case the population will continue to age, they will continue to build, and the old will still be buying their units - but the market won't pay as much as today for those cash flows.SUM shareprice possibly will have a 2 in front of it.
If this happen then we can start all over again and make heaps (maybe from as low 180 or something)
So SUM not a dog but price/value driven by sentiment an fundamentals mean next to nought see days.
Maybe SUM will recover from 330. If so th trade continues but at some future point in time that upward trend will end. The market giveth and the market taketh away.
Im a holder (in at 1.40) They now firmly in the bottom draw , my time frames tend to be long , unless the fundamentals take a sudden turn for the worst i will continue to hold for many years (hopefully) .
i said earlier that the price needs a breather as its gotten ahead of itself a little . However im still optimistic for the longer term , the demographics etc are all in its favour
From the quarterly reports we have total new sales for the FY13 year of 228 representing an increase of +36% on FY12.
We won’t get the actual number of new units delivered until reporting is released in a few days time, however there were 102 units delivered at HY13 reporting, their goal being 200 units total for the financial year. The new unit sales figure for the year of 228 also may suggest that construction is on schedule.
It is even entirely possible that Summerset may upgrade their outlook for FY14.
I wouldn't be surprised if they raise their build target from 200 units per year to 250 units per year for FY14, let’s wait and see.
Attachment 5488
Price gotten ahead of itself
Cant talk for SUM but no doubt similar to RYM where over the last 2 years about 80% of the increase in their price has come from multiples expansion (market sentiment). The balance being company performance (increased profits and/or increases I. Net assets)
Multiples of underlying profit / reported NPAT / book value have more than doubled over the last 2 years.
RYM and SUM will continue to perform well with earnings etc all up 20% or so a year. But it is those high multiples that are likely to contract - that's the bit that Mr P always said 'the market taketh away'
Doesn't happen overnight - just a slow grind down. I think that process is underway at the moment.
Keeping a close eye hoping that market sentiment gets a little more positive then it has been lately
That's my current view but then what the heck do I know
Just we coming at from different perspectives moosie
I been in for 2 years and in both RYM and SUM trailing stop losses are being tested. So what do I do ensure I keep most of the profits so far?
You not in but looking to get in so you have different triggers. No doubt it will work out for you
Interesting eh
I reckon Underlying Profit for FY13 will be $23.1 million up 51% on pcp
I'm thinking 50-55% growth range in underlying profit for 2013.
68% growth as suggested earlier in this thread would be a positive surprise as far as I'm concerned.
I'm inclined to agree Roger, NZ First seem to be at the top end of the range and with SUM being undervalued as it is, just meeting expectations should see a nice step up. It's looking increasing like a nice entry point actually, lot's of solid growth ahead building off a base of good performance.
Attachment 5489
That still gives a P/E based on underlying profit of over 30. (I am using the 216m shares listed on the NZX site). So still another year and a half or so of stellar growth needed before someone buying today would see a P/E well under 20 based on purchase price. Is that realistic or normal?
Cyclist, PE is a metric that is often used for roughly gauging the relative value of cyclical stocks FBU, TEL, MRP etc. Value investors use PE as a quick screening tool to see if cyclical’s are under or over valued relative to the market as a precursor to performing more in-depth analysis and modelling.
Growth stocks like SUM have higher PE’s because investor’s value forward discounted cashflows, and those cashflows are increasing over time. As a rule the higher the earnings growth, the higher the PE will be for a growth stock.
If SUM report 51% earnings growth in a week or so, a PE in the 30’s will be entirely acceptable.
Do have a go at some DCF you may be pleasantly surprised, trust this assists.
There is an interesting item on stuff this morning http://www.stuff.co.nz/business/mone...ping-dividends . Of particular interest was the assertion "Labour's capital gains tax policy was expected to impact on property and aged care stocks" .
I have what is a very basic question and this will display my ignorance! SUM and all other property and retirement village companies would face a capital gains tax liability if a village/building were sold. Currently they are already taxed when a licence to occupy a unit (less costs) is sold for a gian.
However other companies would also have to pay capital gains tax if a part of their business or a subsidiary were sold for a gain. As it seems unlikely that SUM would sell part of a village at the moment...a CGT would not have much of an effect. Would a CGT actually have a greater impact on SUM and the other listed retirement villages compared with other NZX listed companies? Would the retirement companies actually face the same % increase in tax as the listed property trusts?
For those who haven't got access :)
Quote:
GENERAL: SUM: Summerset Invests NZ$500M in Auckland Developments
SUM
17/02/2014 08:49
GENERAL
REL: 0849 HRS Summerset Group
Holdings Limited
GENERAL: SUM: Summerset Invests NZ$500M in Auckland Developments
NZX, ASX AND MEDIA RELEASE
17 February
2014
SUMMERSET INVESTS NZ$500 MILLION IN AUCKLAND
DEVELOPMENTS
Retirement village operator Summerset will have spent NZ$500
million on
developments in Auckland by the time it completes its three latest
villages
in the city. The figure was revealed on Saturday at the launch of
the
company's Hobsonville village, where the public got their first chance to
see
what the NZ$120 million waterfront development will look like.
MP
Paula Bennett attended the event and welcomed the new development.
"This
development is a fantastic addition for the community, and will provide
great support for our older people, who'll have access to accommodation built
specifically for their needs," Mrs Bennett said.
Summerset CEO
Norah Barlow said the affordability and availability of housing
in Auckland
is something both the Government and Council are working to
address. "We
support both Council and Government's policies such as the
Housing Accord,
which will encourage development to help address the shortage
of housing in
Auckland.
"In our five Auckland villages we will spend a total of NZ$500
million, and
create homes for some 1300 people. We've built a village at
Manukau, and are
close to completing our Warkworth village. Now we're
commencing work on our
Karaka village and look forward to construction
starting on our Hobsonville
village. We are working with Council and looking
to finalise resource consent
to commence our Ellerslie village as soon as
possible."
Summerset's Auckland villages will free up existing homes for
younger
families. This will assist Auckland Council's stated goals of
providing a
range of housing options and increasing
affordability.
Plans for the 7.6 hectare Hobsonville village include
approximately 225 homes
comprising villas, apartments, and care apartments,
and a 90-bed care centre
providing rest home and hospital-level care. The
site has 180-degree views of
Waitemata Harbour out to Herald Island. The
village will be named Summerset
at Monterey Park after the tourist theme park
that previously occupied the
site.
Summerset CEO-designate Julian Cook
said, "This village is going to be an
asset for the community and for wider
Auckland. We look forward to
contributing to the growth of Hobsonville which
is on its way to becoming a
vibrant part of the city, and to the city as a
whole as our developments
progress.
"In our experience, many of the
people moving into retirement villages are
down-sizing from three and four
bedroom family homes. This frees up homes in
the community for younger
families.
"Our villages also support the ageing population, who require
safe, secure
housing that is designed for their needs. Demand for our
villages across the
city shows there's a real need for this kind of
housing."
“In our five Auckland villages we will spend a total of NZ$500 million, and create homes for some 1300 people.
That provides for roughly 1,300 units in Auckland which is considerable considering the total units constructed to date by is 1,748.
Summerset have done well with that strategy, taking on the local councils in Auckland in pursuing big build, and doing it effectively in the lucrative Auckland area where demand and pricing pressure is higher. This is something that RYM and MET have not achieved as well or effectively.
The recent land banking of the two big sites in Christchurch I think will pay off well in a similar way, there’s a few years of property development, economic growth and demand there also.
Onward, upward and higher.
I agree 100% Mac. Ryman for the relative size of the company with a market cap of circa 5 times that of SUM have executed in quantum very poorly in the lucrative high demand Auckland area. The facilities they do have are very good, but in number are woefully inadequate in my opinion. SUM's approach in the Auckland market is one of the key reasons i've been favouring them over Ryman for some time now, with the other main reason being the much higher growth rate of SUM and its generally better geographical spread of villages. (People seem to have forgotten that RYM have a high percentage of their villages in Christchurch and none of us can forget how earthquake prone that area is).
On another topic its nice too see Mr Cook taking a more public approach towards making comments aimed at Auckland City Council's lathargic consent approval process. This augers well for the future and I believe he brings fresh energy to the CEO role.
[edit] Sorry just realised this is a couple of days late... [/edit]
Not sure if this has already been posted but Summerset have just gotten consent for a New Plymouth village:
on Sunday 16 February 2014 in Gainz, Sectors, Securities - NZ, Summerset 0
Summerset Group Holdings Ltd has been granted resource consent for a $55 million retirement village on Carrington Rd, New Plymouth.
The 4ha village will be Summerset’s first in Taranaki. Chief executive Norah Barlow said it would have about 150 homes in a mix of townhouses, villas, care apartments & care rooms, with a rural outlook towards Mt Taranak
For those interested, this is the Macquarie report I referenced during the weekend;
Macquarie have a price target for SUM of $4.50 (+37%), a price target for RYM of $7.50 (-2%), and a price target for MET of $4.65 (+14%).
“we prefer Summerset Group” …… “it has a stronger growth rate and larger discount to our price target”.
Seems Macquarie see SUM and RYM moving in different directions.
http://www.macquarie.com.au/dafiles/...MTA2Mjk5NTk5S0
Thanks for that Mac. Interestingly since that report dated 16 December 2013 we have had the extraordinary sales result of 50% growth on the previous compareable period in the final quarter of 2013, an exceptional result that McQuarie couldn't have known about when preparing that report, so it could easily be argued their fair value target could be shifted a little further north...perhaps even more so later next week after the profit announcement :)
SUM seems impervious to good news at the present time...can't stay like that forever though...
I'm buying more if the profit growth is > 50%
Until the last few months, my parents' broker was recommending RYM as their preferred exposure to the sector. Now SUM is their preferred choice. If other brokers are doing the same, as more long term holders make switches in their portfolios, maybe we will see a gradual strengthening of SUM relative to RYM.
I think my post at #1202 may have got lost in the other news concerning SUM. However I am still interested to know what others may think of the article on stuff and how Labour's capital gains tax policy may impact on property and aged care stocks. My understanding on the subject is not clear.
A CGT wouldn't impact them directly as they are unlikely to sell. To date we have not seen any indication that the business model of any of the major three is to build and then dispose at some point, they all appear to be long term hold. Even from a diversification perspective, if they are under represented in an area, they are more likely to construct their own than acquire of someone else.
A CGT may have an indirect impact as some suggest that a CGT would result in lower house prices. One only has to look at Sydney or Melbourne to know this is not the case but for arguments sake, lets say they are correct. If the Oldies get less money for their house, they will have less to purchase an occupation license. From memory, RYM targets the cost to be about 75% of the average house price in the area, so if the average house price goes down, so does the occupation license (and the 25-30% they earn from that). They could always counter this by increasing the deferred charge or increasing the weekly charge as we all know, aged care is expensive and if you can pay you will. So it really comes down to affordability. If CGT means oldies have less money, the they have less to spend on their retirement. Having said that, they may just choose to spend it all and not give away such a big inheritance or donation to the SPCA.
Bjauck - This is all off the top of the head thinking - is that what you were thinking?
Labours CGT policy.
Probably means that gains in the value of the property creates a deferred tax liability that never actually becomes payable because they do not or rarely sell properties.
In this case it would generally not affect cash flow.
Best Wishes
Paper Tiger
Disc: Could well be wrong.
If they are going to exempt the family home then that is an unfair tax on those who choose to rent and invest in other assets: discuss.
Thanks HS, PT and M900. I was thinking along the lines of all three of you...
I still do not know why the article seems to think that the retirement sector will be affected more than the average company. CGT would not just be levied on real estate gains. In fact real estate in general would be less affected because of the Labour Party exemption for the family home!
I guess a CGT with an exception for the family home has a very big exemption, with incentive for people to have a very big and expensive family residence! If the family home is included...it would be certain political suicide for Labour.
If implemented it will take a few years to show a half decent revenue stream. By then, small business owners (of which there are many), Kiwisaver account holders, farmers and investors in productive enterprises (incl shares) will perhaps have twigged that they are paying a CGT while their neighbour in the $2 million plus house is not.
It's not the $2m house thats a problem, it's the $2m of investment properties, mostly leveraged through the bank, which he intends to sell over the next few years at a reasonable capital gain, and not tell the tax man.
These are the properties the 1st home owner is struggling to raise a 20% deposit for,
No doubt there will be IRD checks and balances to catch these situations. Or many of them anyway. One way IRD identified property developers not paying tax on gains was by asking real estate agencies for lists of sales. Only takes a few hefty penalties before word gets round in an industry in our small country.
Watched Sum close off for the day seems like a few holders getting impatient waiting for a rise or maybe they thought the price would have started rising anticipating the result by now 3 individual lots of around 40k shares up for sale 1c apart,one lucky buyer scooped a lot at $3.28,irrational market staying that way longer than holders can remain rational perhaps?
I'd speculate that was one institution with a 3 way staggered sell order that's probably been progressivly letting stock go at circa $3.30 for some days now. Go figure why any insto would sell at this level just before a profit announcement.
Where's my sea sick pills LOL.
Mac. Thanks for your reply. I guess I understand that DCF is the correct way to value a stock like this, but I am also mindful that the price is also significantly affected by market sentiment. As someone who has purchased more recently, I guess I am trying to figure in my head how long it will take for profit growth to give me a greater margin of safety.
Cheers
dear Moosie a thousand thankyous...Indeed why do kiwi investors continue to treat the SM as a Casino....I suspect that many folk have/do not realised the difference between being momentarily cash rich and wealth....it truly saddens me that many many folk do not yet get it....Many rejoice in a quick trade and have made money....wow big deal...what are their financial circumstances in 5 years time....Id like to think that wisdom/lessons learnt from the past WILL not be repeated....i.e...boom and busts.....
Like I have posted before...re RYM MET SUM do folk expect honestly .... the SP trajectory to rise for ever ????>? THIS does not happen in the real world...
I suspect that the behaviour/attitude of "investors" in NZ is indeed a harbinger of woeful times ahead..like do investors anticipate the fortunes/SP on a day by day basis only...what about appreciating the benefits that may accrue in 5-10 years time !!!
Roger, the only logical conclusion can be that 'they' either have close knowledge of the result, or are confident in their (negative) assumptions. Remember Forbarr were down on them a short while ago. Their 'house view' probably hasn't changed, so we can only assume their clients are encouraged to continue to exit. Who-ever it is likes to weigh in near and at the close, to provide a weakened finish most days lately.
Perhaps they are trying to hit Winner69's (and others') stops, which are probably clustered just below 325/320 to provide a cascade for re-entry?
Despite my short term reservations, Mr and Mrs Xerof bought a chunk late today to hold until death us do part.....
Nice timing on buying Xerof. I am confident over time shareholders will be well rewarded.
Troyydh - There is no reason a company that grows strongly and consistently over time won't see its share price reflecting the growth in underlying earnings. SUM isn't a casino or ATM machine, its a great investment for those looking to build significant wealth in the long term with extremly favourable demographics applicable to the sector as a whole and more specifically to the company best situated to facilitate market demand.
What I think you are getting at is that PE expansion cannot go on forever and if that's the case, yes I agree with that aspect of your argument. We've seen RYM's SP triple in the last 3 years and obviously their underlying earnings have nowhere near tripled.
I think its quite possible with long term interest rates forecast to increase this year (AKA tapering) we may see some pressure regarding PE contraction world-wide.
Its well worth noting that SUM is on a PEG ratio (Price Earnings to Growth) of less than 1 and this suggests not only that the stock is compelling value but it will be more insulated from any PE contraction than others. You've got to invest your money somewhere that's going to grow for you and I beleive this is one of the most compelling opportunities, arguably the most compelling of any on the NZX.
Completely agree with you Roger, especially your first paragraph.
I have been accumulating these since about $2.40 and don't plan on selling for a long time unless something untoward occurs.
This year looking interesting for all investments...
Cheers,
MPC
Last i looked MET, RYM and SUM are all roughly 10% off their highs .
If you compare the SP charts for SUM, RYM and MET, depending on the timeframe each of them can look to have performed the best at various times:
1 Year: Best is RYM (+63%), MET & SUM (+30%)
6 months: Best is MET (+26%), then RYM (+11%) and SUM trailing at +6.5%
3 months: Best is SUM (+1%), then RYM (-4%) and MET languishing with -9%
1 month: all a bit sad
SUM closed unchanged today. Which wrapper are you reading?
but you are right, it's been barking recently
Giday..I for one would like to know what the percentages of folk who actually invest in shares as opposed to those who trade in shares like MET SUM RYM...like I mean I suppose its fairly much a given that in time ..its a no brainer..re SP appreciation will occur of these companies....What intrigues me is the amount of comment about the daily fluctuations in share prices.
What am I saying ?. well have investors matured to the point where an investment in shares is viewed as an "investment"...or a "profitable short term trade".
As we know our private debt to the world is virtually totally reliant on overseas dosh suppliers being nice to us.
So ..what is preventing us from being self funding in the way of investing...I understand that "we" have Billions of dollars in bank deposits....Like why would that be...its my belief that most folk have almost nil confidence in our sharemarket as a place to invest money in....WHY WHY....cheers
Troy, let me explain my own circumstances:
I have two accounts, one for long term (the till 'death us do part' account), and a trading account, which for good order is set up as a company, which pays corporate tax on nett trading profits less deductible expenses
over the past few days, I have bought for both accounts, in fact I bought SUM more for the trading account again today
so if it may seem I speak with forked tongue, unfortunately it's true!
I think you will find a disproportionately large number of contributors on SHARETRADER are traders, not long term investors. It's the nature of this beast
Seems to me that many of the SUM investors say they are in for the long term but seem to fret over every single up or down day.
Makes you wonder how they would cope during a temporary market downturn.
It's also been a frustrating stock to hold. Having been in it for just shy of a year, I missed the stellar run, and have had mostly hover, up, return, small gain, hover, hover, hover, up, return, hover, small gain, massive gain, regress, hover, hover, hover.
There's probably a few of us who are a bit miffed given the continuing strong performance.
...Long term, excellent stock to keep. Likely that there be some solid day trading happening with SUM. Long term, still a great business IMO. Beaut day!
The last six months or so seems to have been about shaking out the remaining Quadrant overhang. Now that’s all dust it may be the market just needs to see a growth business as usual report to reaffirm those fundamentals and to continue the course.
Holding long term and anticipating good things for next week, looking forward to those results on Tuesday.
If you are a long term holder what does it matter if we see a big spike in SP.
Stocks don't stay undervalued for all that long. I would not be surprised one bit to see a steeper upward trajectory forming, possibly a sector divergence away from Ryman also since it’s not presenting close to the same value as Summerset at this juncture.