And MorningStar still have RYM at $4.50 with a recommendation to REDUCE.
Can you believe these guys?
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And MorningStar still have RYM at $4.50 with a recommendation to REDUCE.
Can you believe these guys?
[Classic :laugh:Quote:
QUOTE=SparkyTheClown;407420]Was just thinking that this morning. Moaningstar - the most negative of all analysts in NZ. They are predicting 12% growth for Ryman.
Ryman = village builders
Moaningstar = village idiots.[/QUOTE]
Craigs for what its worth.
Downgrade to hold
Price Increase of price target from $4 to $6
Revised med term build rate forecast from 600RV units/ 325 care beds pa to 750RV units/ 420 care beds
Upgraded price inflation forecast to 6% (was 3%) from FY14-16
Hi Sparky,
What return per year do you hope to make if you purchased RYM shares now if you buy and hold?
Considering a P/E ratio of 23 is quite high. If after 5 years it was valued at only 17-18 times earnings then you would only be making somewhere between 8-9% per year based on growth of EPS hovering around 15%
Why not wait until they become a bit cheaper, more in line with 17-18 PE then you could potentially earn in excess of 17% per year which is almost double what you would be making per year if you bought now.
Because at the end of the day, your annual return is based quite considerably on the price you pay for the stock.
YOur lucky your young as you may be waiting a while. Buyers would enter the market well before the annual return got to 17%!
What is the annual return on property companies? about a 8-10% yield so a 8-9% return for Ryman sounds reasonable. The risk is they don't grow at 17% a year and as a result their P?E ration gets hammered, resulting in a double hit on the shareprice.
When they were priced at 12 PE about 3 years ago the potential returns were well above 17% p/a
History repeats. It doesn't take a genius to figure this out
Where is the margin of safety buying at 23 times earnings?
Plenty of people buying Summerset on a historic PE of over 40 believing that the company will continue to grow quickly, on the other hand as you can see from the link I provided late last week, Ryman have plans to grow their operation in Australia quickly and have recently taken on board a highly talented new Australian director. When you consider that Ryman has grown the company significantly both before and throughout all the years of the GFC they command the respect to deserve a premium rating based on proven performance and a thoroughly proven growth stratagy.
Anyone looking for a material correction in the share price shouldn't hold their breath, in my opinion. This stock is best of breed by a substaintial margin compared to its other unproven competitors, yet one of which trades on nearly twice the multiple, go figure ?
I respectfully disagree with you Sparky, this company is growing its cash flow at a remarkable rate circa 30% for the last two years and its this cash flow that will drive the profit and build rate going forward.
Fact is cash returns almost nothing so if you're not investing in a blue chip proven growth stock like this, where do you put your money to get better proven results, surely not Summerset with its incredible PE ratio and unproven record ??? or are you in the "I'm waiting for a significant pull-back camp" ?
If Ryman can grow their Australian operation and build momentum and brand credibility over there... the stock could easily be double its current price in 5-6years in fact if they can maintain 15% compound growth and the PE stays the same that's exactly where they'll be.
I have no research to verify but have heard a number of times that returns in Aus in this sector are alot less then NZ for whattever reason (subsidies, tax interpretations, structure , margins etc) so is it maybe wrong to suggest return rates will be the same as NZ?