Oh, of course, but it’s interesting to look at what the market sentiment thinks. These business are all essential to provide the infrastructure nz needs to meet the demand for our aging population. No question.
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Where are they going to get all their staff from when immigration is reduced by more than 50% though?
Not sure, although I'm not so sure immigration has as bigger hit on retirement villages as some may perceive (bit like the whole big wage rise thing - impacts some more than others I suppose).
Where are all the builders going to come from to build the lofty, say 450 (and even higher numbers in coming years), units sum in the sector are hoping to build? (as reflected in there very high price to book valuation)
Sorry, the sum puns are just to easy!
Wondered who was the lucky one that picked 97c this morning...?
I'm more curious as to who was the one that panicked ;)
Probably be back at $1.00 by day's end, maybe higher - crazy that this only recently traded around 95 to 96c, apparently because of political risk (I think? Maybe?) and now it is still higher than these recent times - amazing what a bit of market sediment towards one or multiple stocks can do, when fundamental valuation is replaced with illogical panic.
Selling down only because you worry your neighbour will sell down is how it starts
maybe 90 cents on the cards.... So much downward pressure
Nice action on OCA in the last hour. Should go over $1.00 next week with a bit of luck.
Should never have gone below $1 - Aside from ARV briefly, I can't believe OCA was so hard hit (given it was already the cheapest on a price to book ratio - and apparently it is all about the re-sale values and how these must be hit hard by decreasing profit prices[??])
Hey winner, do you get the feeling we're close to full cycle when lots of company's are hyper priced, future prosperity is baked in, and the punters reckon a good profitable growing business should always be rewarded with rising market valuations? They can't fathom why a 'market' would sell their stock at all, let alone at something below their perceived valuation. The stock market as many 'older' (more experienced?) folk know, doesn't give a monkeys about valuations, FA, TA or any bloody thing when the plug is pulled, or even when some sector nervousness creeps in. That's why it's helpful to be an active investor imo, realtime awareness, run with the upside, cut the losses and cull the noise.
Hey baa_baa, agree with your comments.
I think there are many on here who have only experienced a ‘half cycle’ and that being the better half with rising prices and valuation prices. Where we are now is what you outline.
Appreciation of a full cycle is a valuable tool. And many stocks on the NZX are showing similar behaviour as they did in 2007/2008 with weakening prices and multiples ..and this was happening then before the gfc triggered collapse (forward looking eh)
These current “stupid” “crazy” priced stocks I reckon will remain so for a while ...might even get “cheaper” and some would say that’s nonsense.
Sentiment is the key driver of share prices and that is measured by things like PE multiples. Even PE multiples move in cycles. The study of secular bull and bear markets is fascinating and well worth understanding properly.
LOL. The generations that have enjoyed the fortune of benefiting from leveraged real estate capital gains as a result of falling interest rates now tell the generations largely locked out of owning stand alone housing that they should settle for either being renters or owning a small flat in a hastily built apartment block!
Not to mention that the younger generations have to deal with the inability of the older generations to supply sufficient residential land to cope with the demand for it due to investment, tax and migration policies.
Bj , If you check history you will find in Auckland the issue of land available for housing can be sheeted back IMO to the ARC and its chairman one Mr Mike Lea who steadfastedly refused to zone rural land for housing in his tenure coupled with the last and preceeding Auck Council who was/is lead by a Labour mayor, what should we expect from the left, no real understanding of how business works and never will, just like this current mess of a government !!
I'm not suggesting the Baby Boomers be required to go into retirement villages - just perhaps some kind of incentive might be more cost efficient than creating "Affordable Houses" in areas that don't already have established infrastructure for those going into the Affordable Houses
Wow looks like a downtrend on no news... 90 cents coming up?? This sector is under huge pressure since government change. Long term holders don't need to stress..... Short term holders might want to break until 90 cents gets hit.
by the way these are guesses and no way financial advice
Kinda crazy really isn't it... OCA trading on the lowest price to book ratio (the thing you'd think, if anything, would get hit when talking about property valuations), growth well into the double digits, have a reasonable development pipeline, a very solid reputation and position in the market, and to top it all off: low debt, and to top off the top off, over 4% dividend in the bank by this time next year (at current prices)...
Even craigs's report dated mid June reckoned it was worth 97 cents - and that was before OCA beat their prospectus EBIDTA and seemed to indicate it was "well positioned" to meet their prospectus forecasts for FY18.
Anyhow, "the original dog" is due to report their half year tomorrow, and some say OCA is the most comparable, so could be interesting - you'd think if "the original dog" produced an at least ok report, then "the new dog" would benefit somewhat, but then again you'd also think OCA would be significantly closer to the $1 mark than the 90 cent mark.
Seems to be in on the Retirement Village Boat Lifting exercise.
I put a 'at market' bid in yesterday to have the market move quicker than my finger on the buy button.
I would be up 5% if I had pounced quicker !
Best Wishes
Paper Tiger
I have purchased few start ups but I am,so far, delighted with this one. The care% of income pleases me and protects somewhat from property downturn. The returns look like being 5% double the bank rate and the leadership have their money up and appear to be legitimate builders of business as against scoundrels that plague us investors. Well done so far OHC
When is this going to break through the $1 mark again? Feels like we've been stuck on 97/98 for weeks.
Why should it ? Because you want it to? Wow about 100 million wanted the market to break through in 1929.! The market says 97 is the perfect price and here is why----no dividend history, unproven business, new to the market. I am delighted as I have said ----A lovely share at about 97 cents. Wait patiently for a very nice dividend hopefully 5.5%, encourage good honest management and in 18 months time it will coast through $1.00 maybe even $1.10-- wow.
Hasn't actually been terribly volatile, like some of the operators... which is a good and bad thing I suppose. warren is correct about it being 'unproven', it is actually proven it can do very well, just not on the exchange aka not to Mr Market - but that time will come, and it was kicked off with last years result already being slightly ahead of forecast. Look at Ryman, huge premium there, mainly because Mr Market believes they are a 'proven business' (even if they are having the lowest growth recently in quite some time)
Only a matter of time before the market starts getting more excited about the new dog (that is Oceania Healthcare), half year results could provide a small boost, although there is probably also some uncertainty as to how/when Macquarie will try jump out, but once this is done (increasing liquidity), likely a one way ticket to the NZX 50, and the share price will be significantly higher than the high 90 cent range (i would think).
I see these as fair value at present and hold a modest stake. It takes time to build one's track record. Once we start to see their batting average over the next few half year periods the market will get more comfortable with it and probably ascribe a slightly higher PE and along with underlying earnings growth patient holders should do well.
http://www.4-traders.com/OCEANIA-HEA...10/financials/
Just a few figures as to why the price is what it is. These are just guidance figures and I would not be surprised if Oceania better these figures in terms of net income over the coming years.
What I will say about OHC is that when we transferred my very infirm, old Dad from another aged care company to OHC and the the superior care and organization of OHC was quite remarkable. I knew then it was a "superior" organization in every aspect that I could see. OHC was so good at its core business I grabbed quite a holding as soon as I could. I suspect I will never regret that decision. Take a visit to Lady Alum Home, Milford or the Maureen Plowman Village at Brownsbay. Talk to the staff, check their qualifications, look at the cleanliness and the entertainment roster as I did many times. Impressive and well done OHC as you prepare for the aged tidal wave that's coming.
Whats everyone's guess on OCA dividend CPS? I've got 2 CPS in my spreadsheet so 4 CPS for the year. Am I being ambitious?
t_j finally a greenfields site. That will please you
St Heliers nice spot (hope no grumpy neighbours)
Wonder what they paid for it?
http://nzx-prod-s7fsd7f98s.s3-websit...048/271928.pdf
Nice spot for a village that new piece of land
https://www.bayleys.co.nz/1684142
Great stuff - I thought this would be marked price sensitive as it shows a clear step in the growth direction - they are jumping into the bigly game (that allows sum other operators to trade at much higher price to book price to underlying PE etc ratios) that is high risk high reward greenfield development. Jumping in quite a bit sooner than I thought, probably also means higher growth than what I thought (and far far higher growth than the market is currently pricing up).
You'd think we'd see over a dollar by the end of the week, worst case, but probably not.
I think this pup could bark a bit in 2018. If they can exceed their forecast numbers and the outlook is encouraging the underlying PE is cheap as chips.
It is slowly going up. Sellers are drying up. Wonder I should top up again. Like mr dog said...the pup could bark in 4 weeks time...25th Jan 2018?
Or maybe the pup trips over its own paws ?, early days, too hard to tell. Interesting move to buy that site on unconditional terms. Hope the neighbors are friendly to the consent process.Quite like the way MET buy sites conditional on consents and due diligence, very little risk in that approach. A little birdie tells me their care standards are very very good.
Disc: Modest holding, lets see what their batting average looks like over the next few years.
i doubt it will trips over. Thier last report was exceeding market expectation. Plenty of progresses which completed thier end of year n scheduled to be completed early next year. Yes, indeed. Thier care is excellent..better than Arvida. My wife is RN...her friend works at OCA.
Their lasts purchase is right in the middle of some very expensive homes, not sure the neighbours will be impressed, then again the land is a bit of an eyesore at the moment, has been for quite some time. They were/are all individual sites reasonably large. Think they were part of nearly half of two streets someone bought up with a view to building their own gated type community or something similar, until all it all fell over.
I have also heard OCA has very good care standards, and continuum of care. I would hesitate to agree they are better than Arvida ;) (and that is when you know they really are the best!). Like I boldlyand bravely called a few years ago with Arvida, I think OCA could be the top performer over the coming year.
I confess l’ve been buying a few more lately, while they’ve been trading under $1, oh and this one is one of my nzx competition picks for 2018! Time will tell.. a bit risky compared to it’s pairs, but I like the potential :)
One suspects they have a better than fair chance of leveraging off their excellent care reputation to grow nicely over the long term.
Got to say..not much value share at NZX now..except OCA
Maybe a bit late, yet I see OCA as a opportunity. Long term, has potential.
Disc. Had a look, liked what I saw. Bought a small parcel. Diversified
Yes its been a big year on the NZX with the market up 23% and value getting harder to find which will encourage more people to look at left field less obvious choices.
Lots of potential if they can prove themselves but investors jaded from getting skunked on a lot of new listings in recent years (TGH, EVO and MPG to name just 3) will need to see a steady string of positive announcements before they'll ascribe a market average sector PE to this one. If they can prove themselves and grow earnings nicely over the next few years this has plenty of potential to double over time with some reasonable PE expansion thrown in as the company builds trust with the market.
I am cautiously optimistic over the long run.
Forward looking say OCA underlying profit F18 (May year end) of $50m puts them on a forward looking PE of 12 (they haven’t said what F18 profit going to be but refer to underlying ebitda of $62m so using that)
SUM underlying profit F18 (December year end) say $100m (+20% on F17) puts them on forward looking PE of 12
Think I know which is better value / cheapest or whatever
probably completely wrong about OCA forecast - you never know they might make as much as SUM. I stand to be corrected
Big dig for OCA for you Winner69. I found it a good opportunity to buy in now and consider the long term potential for another retirement stock.
With the hopeless rate at most banks for earning interest, the additional uncertainty around the housing market, the stock market seems relatively solid.
The effect of a increasing New Zealand population, from natural growth and of course immigration, takes time to factor into the market. Many people are not quickly aware of the options available to them for investing and securing their finances into a variety of assets. IMO the money from internal and offshore will keep the tide moving higher for the New Zealand share market for some time.
I believe there is plenty of potential to find value in New Zealand.
Long term I am in big favour for beautiful New Zealand.
SUM maths which really says what I think. Yes SUM are very very cheap on a forward basis and also have potential to rerate back up to the mid point PE for the sector once the market gets comfortable that the sky isn't falling in the real estate market, (SUM more development focused) I have twice as many OCA as SUM after doubling down on OCA today..but they are quite different prices so more than double the amount of capital invested in SUM :) Two different models mate. OCA very big on the care side and have a stellar reputation. SUM birdie tells me SUM other companies have work to do in their care centers.
Okay, here is the Couta rating scale for care and development amongst RYM/SUM/OCA. On the care side Rym and OCA both excellent with Sum a distant third. Sum number one for development at the moment. Rym earn the top ranking for the combo package and deserve to be the biggest/baddest dog on the porch. PS-Not including Arv or Met as I don't have an intimate knowledge of their care operations. PPS-You may want to ponder why Sum has issued a profit upgrade on such a small projected increase from the original, just a few weeks before their Q4 metrics.
How does one value the 'care' part of the business as opposed to developing and operating villages
OCA reported they made $31m ebitda from 'care' in F17. Ryman seem to make about $45m npbt, ARV a small amount (maybe $4m tops) and SUM stuff all.
What bearing does this have on the ultimate market valuation (share price) of each ......seeing earnings and value appear to be driven by village development and operation.
Like couta's question there probably is a why in the question but I don't know what
i would venture to suggest the care side is a fiscal drag on the business but one which will be a strong selling point.
Yes the timing and quantum of SUM's profit upgrade as well as the omission of confirmation of 450 build target despite being in all previous releases means its not awfully hard to follow the trail of breadcrumbs... but in their defense up until about a month ago we had the wettest year for at least a decade and that can make it pretty tough to get developments completed on time. Still very strong profit growth exceeding previous forecast and I am expecting very strong Q1 metrics in early April 2018 as some completions / sales that should have been done in Q4 roll over. Sets the company up for good growth next year too.
SUM make nothing out of their care centers so its not hugely relevant and by the way according to their latest Summerset Scene magazine customer care satisfaction level's are very good at 96.8%. Forward PE of around 12 for FY18 is very very cheap given their proven record of growing at an average rate of 45% over the last six years.
Meanwhile over at OCA their model of superb care drives ongoing demand and other privately owned and charitable trust owned centers closing down due to wage cost pressure will ensure occupation level's at OCA remain very strong indeed. They've made a number of property acquisitions since listing and I am cautiously hopeful they will come along nicely with their development activities. Underlying profit could surprise and we could be trading on a forward PE of as low as 10.
RYM...we all know they're run like the proverbial Swiss watch and are priced like one two on a forward PE of about 25. I rate the chances of sector outperformance by RYM as extremely slim as everyone already expects perfection and will most probably get it and it is already priced for perfection. I am not especially interested in achieving an outcome of average sector performance so don't hold RYM.
Chances of sector outperformance by SUM I rate as very high and OCA as good - very good.
.....meaning it is unlikely to be rewarded lofty multiples by the market ...yes?
I think that was my point the other day - SUM generating most of it not all earnings from villages and OCA having a large proportion of earnings from .care. currently on similar forward looking multiples doesn't seem to gel with me
But then some might say OCA is a good solid now and heaps more development is icing on the cake ....ie future enrichment of punters
But then what the heck do I know and it doesnt really matter because the share price of both will be driven by sentiment rather than fundamentals
Perhaps our Couta friend is working on a new dynamic quantum theory of relativity...something like...I dunno...maybe one RYM share is worth ten OCA shares ? (Sorry Couta1 mate, I couldn't resist)
Seriously though I suppose the relative PE thing and SUM making all its money from property is that property is more cyclical than care...anyway what do I know, they're probably both good and worth a bob or three each way. The thing with picking a couple of horses is you're more likely that one will win and if you choose wisely you might get the quinella :)
Disc: Added more shares in OCA this morning. $1.00 is a nice round number and the hound remembers the directors thinking the same in quite considerable volume some time back. Nothing like a decent sized vested interest by insiders to get them working harder is there !
Wow, a fiscal drag eh? Well several things jump to the fore here. Aged care and investment therein is all about "aged care" is it not? Anything else in this field and one is a dreamer, of that I am certain. Operators with top class methods, staff, training and who can carefully control costs, plan for the coming tidal wave and it sure is coming, offer quality care with a determination to be best in their field will get my dollar every time (in fact quite a few dollars). I see OCA generate 32% of income from "aged care". If they can maintain a steady 5% return as they appear to be I am delighted. The buildings --well that will be important to house the tidal wave and return me 5% hopefully year on year. My dollar in the bank gets about 3.5% before tax. As the "aged care' activity grows into a gigantic operation over time so must my investment become gold edged.
I agree Beagle. It is certainly worth the punt. Must be excited by Winner69's enthusiasm (at least that's what I gauged from his posting)
It is a good round number $1.00 for OCA. I had another look. Have to say I am very much in favour and have even sold up some SUM to get in at this price. I can handle a spread in portfolio and then still have double the value in SUM shares. For me, I see it as a good diversification.
Merry Festivities and bring on Jan 25th
Cheap indeed..will see people Rush in when it comes 25th Jan!
All the boundless enthusiasm has dragged me in to the fold. Luckily I didn't need to sell SUM to join in. And the plumber won't come and take away the refurbished bathroom if I don't pay he bill will he?
I'm starting to build a nice little portfolio of retirement and healthcare stocks. They have worked well for me to date. They have MET my expectations so far and no RYM nor reason to sell down on this OCAsion.
Bought a wee holding at close (Couta sized wee)
578 or 50k lol
Jeez guys ....all this enthusiastic ramping this week and the share price has hardly budged the last few days and is still $1.00
Last time we all ramped this it at least got to $1.11 ......but didn’t kick on to the $1.20 ....$1.50 it’s really worth. Big fail eh.
C’mon guys, we need to do much better this time. Needs more ramping and needs more buying to get the price moving upwards.
Instos and fund managers on holiday now so doesn’t take as much to move the price now ...so c’mon, I anymore getting impatient
Let’s do this ...because if we don’t create some hype and excitement the price will never get to $1.50 ....no matter what the company says on January 25th
Great company, great prospects, cheap as
I put a valuation of $1.34 on the share by the end of 2018 based on average profit (not taking into account valuations) based on SUM others, but if I put a valuation of RYM I put this share much higher. Then they are different businesses each offering the similar product except the leader runs on years of proving themselves.
That was not a ramping..that was purely election fear.bloody Labour capital gain tax...immigration etc.otherwise would see the spare around $1.10 ish now
Surely more than $1.10ish by now. Been a couple of bits of good news since it was $1.11. The nzx50 has also kicked onto new highs
OCA is a laggard and has catching up to do
If OCA is any good it should e $1.30 by half year announcement
Wonder what guru analyst at Forbar has as a target. If + then OCA should be $2.00 eh
Well, 4 weeks to go...the result will loud n clear.
Cant see any facts in there:). Foundation holder here. Finding value on the NZX is as rare as rocking horse droppings atm.