Believe there's 3 Covid vaccines now with another days away. 20m doses by 11th Dec and 30m monthly thereafter multiply that by 4 so momentum building. Maybe formula sharing be available ?
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Believe there's 3 Covid vaccines now with another days away. 20m doses by 11th Dec and 30m monthly thereafter multiply that by 4 so momentum building. Maybe formula sharing be available ?
off topic already so am just going to blatantly skite about where I spent Saturday afternoon bbq'ing and drinking whiskey :cool:
Attachment 12115
These guys are never going to sell .... the property has been in the family for 100 years or so.
They reckoned that 'everybody says' there were backhanders to get the 5 storey consent for THe Sands......
What's a backhander ;)
Well RYM and ARV results are out and the market responded negatively to both. OCAs January result will have to be a rip snorter result to shift the current price north. $2.15 looking like pie in the sky given given current mood in mkt in the retirement home sector.
Interest rates staying ultra low for several years to come at least highly chance.
NZ government having executed an over the top Hail Marry in mid air and the NZ investor having invested in housing since before Adam i just would not want to bet against jane and jim investing saving in the house and where possible prehaps a retirement stock because its easier than a rental or 2. I know a young ACA and even he has a rental plus an stock holdings in game stocks on the NAS ect..
I see these lovely retirement allotments all round the country side here and they are adding a lot of business to the communities where they are springing up.
Until the numbers go south at you cant afford to bet against the housing market in the shaky isles. The govt has given up and are no longer in the game.
one way the govt could stimulate the market is with incentives for developers in the rent to own space. this is a starting up growth area in australia eg mirvac listed on the asx is getting into this, in NZ kpg is looking into it. local govt provide incentives for large scale rent to own developments. with incentives the market would correct the supply issue pretty quick.
We know from the annual meeting address in late Sept that the first quarter sales, (June to August 2020) were up 26% on pcp and that there were many high value Meadowbank and Sands units involved.
I wonder how Q2 sales are going as we draw this second quarter to a close. Hmmm
awaiting market update.. and what does MR B think about ARG...
ANZ Been selling a few..http://nzx-prod-s7fsd7f98s.s3-websit...124/336326.pdf
wall of money .......waiting for the numbers... show us the numbers ...
it could just be a re balance into another product or even a brainless panic sell... remember they might also have need to raise capital for something...they are only a bank, not a brains trust. remember the banking enquiry.. i have met with a local bank sale investment guy several times over the last 24 months and brains trust not... more like a slick second hand car sales man.
https://www.stuff.co.nz/business/opi...housing-market
house prices going down soon? well prehaps not yet...
House prices continue to increase https://www.newshub.co.nz/home/money...ationally.html
That LTI scheme they told us about the other day - apparently we need to wait until the 2021 Annual Report to find out what the UESP (Underlying Earnings per Share) growth targets are - ie what Earl et al will get their bonus on. Bit of a lack of transparency here I reckon
Probably they'll consult with Jarden/Forbar to get a nice easy growth target so we as shareholders can throw an easy few mill Earls way
Incentives align execs interests with shareholders - a big signal that money/profits come first and everything else doesn't really matter. I'd prefer Earl et all were paid their bonus on a residents/patient satisfaction rating/score or even a staff engagement number - that's aligning exec interests with what really matters
DeletedDeleted
$517K is his salary last year as disclosed in the 2020 annual report. (Some glorified bus drivers at Air New Zealand are earning more). I think that's the lowest CEO's salary I can ever recall and I think he is a very capable leader so there's no question in my mind that his base salary is very fair and reasonable indeed ! It's not easy at all being a CEO especially in these extraordinarily trying times, just look at how many CEO's of other listed companies have resigned because of the pressure, (hope he doesn't). LTI thing probably is suboptimal disclosure but lets not jump to any conclusions yet.
Why the unnecessary disparaging of a respected profession where a bad day at work can result in over 300 people dying not to mention incredibly volatile job security and a massive personal outlay for training. I don't see how that is relevant to this thread either. If Earl or most other CEOs make an error of judgement the only thing usually hurt is a balance sheet.
If you want to gripe about professionals in society that aren't part of the F.I.R.E. club start a thread on off-market.
So what's up with the bonds that they need a trading halt while it's sorted out?
"To: Market Participants
From: NZX Product Operations
Date: Tuesday, 2 December 2020
Subject: Oceania Healthcare Limited Bonds ("OCA010") - Trading Halt of
Securities
Message:
NZX Regulation ("NZXR") advises that a trading halt has been placed on
Oceania Healthcare Limited ("OCA010") Bonds, pending confirmation of
operational matters relating to the bond.
The halt will remain in place while this is investigated, and NZXR will
provide an update when further information is available.
Please contact NZX Product Operations on +64 4 496 2853 or
productoperations@nzx.com with any queries.
ENDS
End CA:00364311 For:OCA Type:HALT Time:2020-12-02 09:14:42"
Been a bit slack around here lately and share price languishes around $1.30
We need some good news to come out of the company to get punters excited again
If they not careful the world will pass them by --- no wonder always apparently 'undervalued', even though Forbar says $1.65 (I think it was)
We need a confirmation of the next dividend, as well as the final results, including the positive revaluations. Then I can see the $1.65 coming fast.
Let's not rush a good thing, January sometime they'll tell us their property valuation at last reporting was bogus (hope they fired the independent valuer) and us accumulators will have a much larger pile of happiness to enjoy for summer. Almost at target holdings, please don't ramp my average entry price any more.
;)
Can’t begrudge airline pilots when you have lawyers with 4 years experience charging out at $250/hr... aaaanyway
NZ Herald: Wide-sweeping retirement village law change mooted, owners reject suggestion
https://www.nzherald.co.nz/business/...+December+2020
Lets see where these Retirement stock go ....posted on 4/6
Updated -----------4/6----------..6/7--------------5/8.................8/9...............7/10............7/11............3/12
Arvida ..............$1.37..........$1.48 ............$1.60.............$1.65............ $1.77.........$1.78..........$1.67
Summerset.......$6.34..........$6.73.............$ 7.80............$8.56.............$9.15........$10 .50........$10.83
Ryman..............$13.35........$13.04 ..........$12.77..........$13.79..........$14.85.. ......$14.70........$14.69
Oceania............$0.94..........$0.95 ............$1.03.............$1.04............ $1.20.........$1.36..........$1.29
Metlifecare........$4.28..........$5.76 ............$5.92.............$5.94............$5. 98 .........$6.00..........0000
Wonder which company be most affected if property prices wane
Yeah, I'm inclined to agree. I read the article over at Interest that dreamcatcher posted a link to in the Summerset thread, so see where he's coming from, but a cooling of the property market, which would only be natural after the recent increases, is a lot different to a retraction, if that's what he means by waning. Too big issues here...under supply and cheap money. The gov can't do jack about the cheap money as the dollar is already getting too high for the exporters, so they actually need to stop talking and get real about sorting out the supply side. So a "cooling" of the market I'm expecting in the new year, but otherwise same same for the next few years...covid or serious geopolitical notwithstanding...at which point we've got other things to worry about.
Agreed. All about the supply but too many invested parties on the quite dont want house price inflation to decrease imo. Every few years or less the same old issue of house price inflation pops up but no party seem to be able to sort it out.
Most of thse politicians really are clueless. Kiwibuild, nice try but no. About as effective as having an ex wood work teacher and career politician in charge of the chch eq rebuild a.k.a Gerry Brownlee.
Only people wishing for house price decreasing is BUYERS but agree house owners are enjoying the rally as is the NZ economy.
I thought Don Brash made some interesting observations on Q& A last week,
1) the challenge for any government, which no govt has been able to face is to bring down property prices AND get re-elected,
and 2) the cost of land, when a small section in a place like Flat Bush miles out from the centre of Auckland costs $800,000, and you put a cheap $300,000 house on it, you’re well over the million dollar mark and 10 X the average wage, when it should only be 3 or 5 X the average wage.
NZ is now the most expensive English speaking country in world for housing relative to income.
They have to bring down the cost of land and that’s to do with councils freeing up urban boundaries and working out how to pay for infrastructure like roads and water for new developments without immediately loading it all onto the price of the development.
Our Liz named Chairperson of Year at big Deloittes annual do last night
Oceania not mentioned though .....maybe it’s their strategy to keep a low profile in the investment world.
I was with you until you had a stab at GB, the nats did not get everything right but what they did get is affordable housing by removing the RMA rules in chch The RMA has to be the dumbest act ever legislated in nz along with other moves by the green lobby. Thankfully national got rid of wholesale tree protection and brought in the supercity. Look whats happening in canal rd Avondale, tree protesters trespassing and banging on for a few scruffy and poorly maintained trees where development is badly needed. Its their chance to make a big noise and I think some politicians have already been down there which is disgraceful.
Alan Isaac is now president of the Institute of Directors...Senior management are supported by a very high caliber board of directors.
https://www.iod.org.nz/about-us/our-council/#
What’s the point of diminishing the outrageous cost of housing to income ratio in NZ by finding a particular survey where NZ is just behind Vancouver Sydney and Melbourne? Is that supposed to make it ok.
Several of the latest international surveys put NZ at the very top of Housing affordability to disposable income ratio, it’s a shocking statistic, and diminishing it in any way enables vested interests to continue doing little to address it.
So many problems in society and eventually costs to the taxpayer stem from poor or unstable housing.
We don't need to look very far to see how house prices can be tamed. Sorry a little of thread as not directly related to OCA but certainly related to last few posts on here https://businessdesk.co.nz/article/p...rdable-housing
I’m not saying it’s a good thing we’re up there I’m saying there are other countries up there as well.
You are commenting on a retirement property stock on how unaffordable property is but your invested in it.
The haves and the have nots could be where it ends up. Is it right? Probably not, has this problem been around for decades yes , has anyone got an actual solution, no.
I knew that Alan Isaac was ICC President. Didn't know that you were, too, winner!Quote:
I was ICC President for a few years
:ohmy:
Kansas ? the US is complaining of the same housing price confluence..in NZL land is Gold...
hope that sentence makes some sense...:mellow:
added to that , Tulips anyone?
but then again houses in a far off land with beaches and blue skies that is the envy of the world ..
is it no wonder there is no place like home ...
https://www.stuff.co.nz/business/opi...n-todays-youth
The property market wont be allowed to be Tulips and arnt they far more practical an investment. Profits for this sector seem to be baked in for at least the next 5 years and beyond.
https://www.interest.co.nz/property/...interest-rates
Our favourite red ones are ...
https://www.amstel.com/
Yes they did !!!! But it appears the NEW consensus is up for a while!!!
Proposal to make retirement villages share capital gains with residents
https://www.stuff.co.nz/business/123...with-residents
Is the Rest Homes Party about to get too crowded - as more clueless muppets from another Quazi Govt Commission want to join in & have a mindless meddle in things ? ;)
I knew there must have been good reason why I jumped out this sector a while back .. ;)
Yes economists are very good at describing the present but are absolutely hopeless at predicting the future and it seems to me there are no recriminations. Private sector guys go broke and lose their homes if they make judgements as bad as the economists
"clueless muppets from another Quazi Govt Commission"
Classic!
, well NZ just had an election. I dont know if anyone in wellington being paid by the tax payer really cares once the money is in the bank account!
Economists are perhaps better than some other people in explaining how the economy got to where it currently is, but they are as good as everybody else (but not worse either) in trying to predict the future.
If you want to understand the reasons you might want to look into chaos theory ... and the economy is not just a simple first order chaotic system but a second order chaotic system where elements with knowledge about the system are part of the system and does impact its behaviour. We all are part of the problem :):
https://danielmiessler.com/blog/firs...and%20politics.
I think by now we all should know that NOBODY is able to predict the future, and this includes preachers of any couleur, politicians, analysts, sharetrader posters including you and me as well all economists.
No point in singling individuals out.
Accountonomists are a different breed altogether ...a more realist approach to things than what economists practice.
A couple accountant economist jokes
—————————————————————————————————————————————————
A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?
—————————————————————————————————————————————————— —-
Man walking along a road in the countryside comes across a shepherd and a huge flock of sheep. Tells the shepherd, "I will bet you $100 against one of your sheep that I can tell you the exact number in this flock." The shepherd thinks it over; it's a big flock so he takes the bet. "973," says the man. The shepherd is astonished, because that is exactly right. Says "OK, I'm a man of my word, take an animal." Man picks one up and begins to walk away.
"Wait," cries the shepherd, "Let me have a chance to get even. Double or nothing that I can guess your exact occupation." Man says sure. "You are an economist for a government think tank," says the shepherd. "Amazing!" responds the man, "You are exactly right! But tell me, how did you deduce that?"
"Well," says the shepherd, "put down my beagle and I will tell you."
—————————————————————————————————————————————————— ——-
Off Topic:
Its a nation in turbulence as the profits from property accumulate. Imagine if there is another crisis in the next ten years. We are hurrying to get ready.
Funnily enough the dog's first job in the school holidays as a young pup was on his uncle's sheep farm. 5,000 acres just out of Gore Southland. First job each morning was to ride right around the entire farm looking for cast sheep, sheep who had fallen over on their back and couldn't get up without help. (I suppose you'd send a drone up for that these days). The flock grows quite a bit each year as nature takes its course but you never really know how many until there's a full muster and you bring them all into the yards for drenching or shearing. Uncle Stan had quite a few Huntaway dog's. I used to watch in awe of their speed and determination and at how much they loved their work. I try and bring some of that enthusiasm into my work.
In the same way as you never really know how many sheep you've got until you do a full muster nobody really knows how much underlying profit OCA will earn for the year until there's a full muster of all sales and all costs. I suspect care costs have outstripped the ministry of health 3.0% increase on 1 July 2020 and the August lockdown in Auckland slowed them down a bit and there would have been some ongoing PPE gear costs.
Recent strong gains in real estate prices will take time to flow through into increased retirement unit pricing but those benefits will accrue to OCA in the years ahead and I am confident that having past the point of inflection with their business redevelopment plan we will see good growth in the years ahead.
Real estate is a long term investment, nobody should be under any illusion about that.
Thought it was about time for a contribution just to stay “on the team” while we all standby awaiting the 1HY result.
I thought some here might be interested in some of the numbers I'm personally expecting then;
EPS 5.35c (PCP 4.0c) +33%
Care profit $12.8m (PCP$9.6m)+33%
Village profit $39m(PCP33.2M)+17%
Overheads, depreciation and interest cost $19.3m(PCP$19.1m)+1%
Overall underlying profit $32.8m (PCP $24.6m) +33%
I've withdrawn my full year expectations as I want to see how the 1HY goes first. This post covid property craze is too wild at this point.
Significant changes since last 1HY 2020 have been;
-Macquarie overhang is now gone,
-Property has gone up 15%, depending on the measurement used.
-Sales rates of caresuites and ILUs are now substantially more proven.
-Capital gains tax, NZ and USA elections are all done .
-Interest rates and term deposits are substantially lower.
-The development pipeline has advanced a full year
-Care profits are now past the point of inflection by Beagle, my calcs and according to Earl.(unproven to the market yet though).
-MET is gone.
-Covid cost and disruption came and went -touch wood.
Interestingly, last year's share price after the HY19 result, was about where today's price is. If my numbers are in the ballpark (obviously they won't be perfect but I believe they will be close) and considering the list of years changes above ,then the SP is considerably undervalued in comparison to back then.
If OCA was indeed worth $1.30 then then it's worth a heck of a lot more now no matter how deep or shallow one's research is. I have the greatest confidence that anyone buying or holding at this price will have purchased a fabulous earner both in the short and long term.
(Am I ramping ? I don't particularly care, I'm personally all about the EPS growth not the SP.)
Thanks Maverick appreciate your time on this if it’s anything like your Avida workings they where
spot on.
Maveric I assume the forecasted "village profit" is a typo. Thanks for sharing
Good spotting Iceman! fixed.
"....you can be my wingman anytime.."
Thanks Mav,
I was at $35m underlying for the half but have pulled that back a bit due to:-
1. Second lockdown in the Auckland region caused interference with their refurbishment program
2. Although my model suggests sales are progressing well, sales in the pcp comprised a lot of very high value sea view Sands units with some selling at up to $2.5m and this is not so repeated in this half
3. Ongoing higher PPE costs regarding new Covid 19 protocols in the care facilities
4. Staff costs outstripping the 3% annual increase provided by the ministry of health
5. I expect the huge increase in real estate prices to provide a benefit to OCA in future years but not so much in the current year.
I'll be very pleased indeed if you're more right than I am on this half's underlying profit and look forward to the results being released in late January.
I haven't got a new number for the half year, (I see it somewhere in the $25-$30m range) and won't get too prescriptive about it as I am focusing on the medium to longer term. I see underlying earnings per share growth in the 15-20% per annum range in the foreseeable future and even if they do 8 cps underlying for the 10 months as Forsyth Barr are forecasting and 9.7 cps for FY22 that's a forward FY22 PE of $1.30 / 0.097 = 13.4 for FY22 which I think is compelling value.
I think the current share price is probably quite close to the NAV, which as we know is NTA + developments in progress and a few other things.
An investment is the retirement sector is ostensibly an investment in property. In my opinion its much easier to get a decent medium - long term return on property when you are paying fair value for it than if you pay huge amounts for goodwill with some of the others in this sector.
OCA senior management certainly have the "Midas touch" with getting extremely difficult resource consents through, (like Waimarie St), and the intellectual property, skills and capabilities behind those processes that have allowed ~ 86% of all their future development plans to be already consented are something that I note is not recorded on their balance sheet anywhere...but I would argue it has quite a high degree of value going forward.
Disc: I recently trimmed my high OCA portfolio allocation a little (to get back slightly under my self imposed maximum of 15% in any one share) and reallocated those funds to HGH.
With the gap that's now opened up in the share price of these two, (that were very close), I wouldn't be inclined to do any more of that now.
we think what holds any stock back is the numbers. IE the Financial market reporting statistics.
"with getting extremely difficult resource consents through, (like Waimarie St), and the intellectual property, skills and capabilities behind those processes that have allowed ~ 86% of all their future development plans to be already consented"
big job....
Most people have no idea how hard it is. I am a professional trustee for a client trying to get resource consent for a development on some land that is covered by the Auckland Unitary plan as having an "outstanding natural feature" overlay. To call the process "exceptionally challenging, frustrating, time consuming and massively expensive" would be considerably understating how difficult it is. OCA will do exceptionally well from its Waimarie street development in the future but that is some years away from providing any tangible underlying earnings for the company.
Trimming, not selling. I felt uncomfortable being over 15%, (was over 17%) in any one stock....(I like to sleep well) so I fixed that.
I'll be VERY happy if Mav is more correct that I am with his very prescriptive $32.8m underlying profit this half.
Bit cheeky me now having a new range of $25-30m, but I think its prudent not to be too prescriptive and to focus on the longer term.
Big picture, this is a compelling long term growth story trading on a PE in the early teens and a PEG of less than 1.
I got most of my stake in the early 70 cent range so I am a very happy camper.
Although some complain it has not yet shown the SUM total of its potential yet. Mr B has hit the NAIL on the head here in whats really holding back the share price. There is still a lot of heavy lifting and building to do before its reached the SUM of its TOTALITY .....:mad ;:
"Rome wasn't built in a day"...or as they say in the Mainland cheese advertisement, "Good things take time" Some of the young ones on here have probably never seen this classic advertisement https://www.youtube.com/watch?v=qcILD9OJ2wg or this one https://www.youtube.com/watch?v=WbAMg5pQhWQ
exactly
and these two things are not un-related in terms of price action and sentiment etc....
and in case you mean me Waltzing, I am not complaining... just saying it how i see it. I still have a 2/3'rds position and love hearing Mav and Beagle make their predictions on fundamentals.
We will see it clearly when the market starts to agree... the price will move up! But of course some here wont notice that because they ignore price action.
'If OCA was indeed worth $1.30 then then it's worth a heck of a lot more now no matter how deep or shallow one's research is.'
Not sure if we can compare with that rise in Jan, I thought that was due to the rising MET tide lifting all ships, rather than a reflection of actual performance?
Note: when referring to investors who are not happy with a shares performance any statements are not assigned to any individuals and those investors have the option of selling or trading. It appears bull is a successful trader of the stock.
Beagle do you the percentage that you bought the shares at or the market value to determine how you balance your holdings?
Market value.
I know you bought early. What's wrong with being slightly overweight.. 17% isnt a lot. Must be somewhere else your looking to park money beagle?
Hi all,
I just want to say a big thank you to Beagle and Maverick for the information they contribute to this OCA thread it really is invaluable.
I've been a holder of OCA since 2017 and have built up a sizeable position around 800k shares with an average price in the late 70c range, and will continue to add to the position when opportunities arise. In all I think OCA has a lot of further growing to do and will provide at least a solid dividend every year, the EPS growth is just an added bonus.
Just wanted to thank everyone else as well, the forum is top quality.
Joh13
See post #13982 on page 700 in the HGH thread on 18 November. That was a very emphatic post wherein I made it very clear I thought HGH was an outstanding opportunity around $1.35. ITs still very good value at today's closing price of $1.56 in my opinion.
Doesn't hurt to spread one's nest egg around amongst a number of outstanding opportunities :)
Thanks Joh13 and welcome to the forum.
Of course the other option is to top up the rest of the portfolio
You only use the % you bought the shares at when the current value has seen it has grow past your maximum % in your portfolio and you see good things ahead and you need to justify keeping them. I've had a few in that category....however recent meltdown has corrected things somewhat. :)
Right, I don't say much on here but thought I would have a go at articulating my understandings to at least help me clarify my own thinking about OCA as a medium to long term investment.
Firstly, thanks to all, especially Maverick and Beagle for all the freely shared information. Top quality stuff.
As has been said many times, the SP won't really get cracking until OCA shows significant profit growth. This coming first half year report 2021 in January will be critical in the short term to the SP. If it does well, off we go as OCA's model will be seen to be correct and working. If the report is pretty average, it's back to the long term waiting game. I personally believe, this is a fantastic long term share and in 5 years time, will prove a great divi stock that I will likely never sell. However, I also am keen to see it fire up and get going in the short term so am keen to explore the possibilities of how this coming report may look.
Here's my attempt:
Earl has stated, June-July-August sales are 26% up on the same 3 months last year. To me in a very crude way without getting hung up on DMF's, resale margins, PAC fees, etc etc etc, this can be extrapolated as 26% more profit on the bottom line. Very simple thinking I know.
- 24.6m (last years 6 months profit) /2 to get to 3 months = 12.3m
- 12.3m x 26% = 3.198m (that's simple 26% extra profit for June-July-August)
- 12.3m +3.198m = 15.498m (profit )
-15.498m x2 = 30.996m gives the whole 6 month period. Round down to 30m to be conservative.
Therefore the profit is 30m - up from 24.6m same time last year. I'm making assumptions here that the sales rates continue to be strong through the entire 6 months. I can't see any reason why this is not so. 30m gives a EPS of 4.81cps (annualised to 9.62cps - crude and simple thinking again)
Therefore:
PE of 13.5, SP=$130
14.5, SP=$140
15.5, SP=$150 ( I think things should be sitting now but understand the market needs to see the proof)
16.6, SP=$160
Add some more thoughts to this
-If I take your thoughts of 25-30m Beagle (you are much better at this than me) and apply midway at 27.5m. This gives annualised EPS of 8.82cps. At a PE of 15, that's a SP of $1.33.
- Maverick's (also much better than me at this) very specific 32.8m prediciton gives 10.52 EPS. At a PE of 15, that's
SP of $1.58
- Earl's statement of " we are at the point of inflection" is significant in its self. He didn't need to say that.
- Credit Suisse rates OCA at $1.30. Forsyth and Barr rates it at $1.65. Maverick believes they have made some
mistakes and will need to rethink after January. Time will tell, but even if they are right, SP should be between $1.30
and $1.65.
- House prices have boomed recently.
- The light's on at the end of the tunnel regarding Covid risk.
In conclusion, right now there appears to be plenty of indicators pointing towards excellent, if not fabulous growth that will be seen in January. Then the cat will be out of the bag and the market will choose how high to push the PE and of course the SP. If the report is not as good as I/we hope, it's certainly not a disaster but more waiting required.
For the record, I own loads of these shares and intend to hold for a very long time expecting them to become a great little set and forget divi stock in the years to come. Feel free to rip my post apart and destroy my thoughts as you wish.
Thanks for your post mudfish.
KPMG did a huge report in relation to the MET takeover and noted the sector average PE is 18. No reason why OCA's PE won't rerate to that average over the due course of time as they prove they can grow eps.
That's an excellent post Mudfish,
Great to see a lot of good thinking going on there.
Earl said SALES where up 26% and I think that should be only applied to the "new sales" or " new sales profit "of last HY , not "overall profit" as you have applied it to. Last years HY "new sales profit "was $17.7 m for the 6 months.
I have assumed that Earl`s comment on "sales" means NEW Sales (not resales) and is the total $value of sales, not volume units sold. Gee this gets messy when you think about it too hard.
I've recently looked up the sales by REINZ in Auckland for the following 3 months and those are even stronger than the 3 months Earl speaks of.
Whatever it exactly all means has got be very good.
I think your short term expectations of a share price around $1.50-$1.55 is spot on.
PE of 18 one day...definitely.
Truly astounding latest property stats
HPI at NOVEMBER up 3% from October and 9% in last 3 months
https://reinz.co.nz/Media/Default/St...er%202020.docx
If utility stocks such as Meridian and Mercury trade at PE of circa 41x and 44x respectively (admittedly based on historical EPS), then why shouldn't the likes of OCA trade at 18?? Matter of time one would think?
Yield not materially different (MEL ~2.5%, MCY 2.3% based on current SP and historical dividend vs OCA ~2.6%. Difference here being, as have said previously, I like that OCA pays dividend from net OCF ($0.0161 OCF/share, $0.04 dividend/share), whereas utilities often pay dividend through cash reserves or debt raised (CEN being worst, $0.059 OCF/share, $0.39 dividend/share), so question sustainability of that yield, even if it is good in interim. All numbers there trailing / historical aside from SP.
While operate in different sectors, large similarities as well - big balance sheet / large fixed asset base, ability to leverage this, relatively reliable cashflow, wider demographic and economic trends support etc.
Full REINZ report is here https://reinz.co.nz/Media/Default/St...ber%202020.pdf
PE of 18, (the sector average) is only a matter of time.
Winner, should do wonders for the revaluation gain for 1H21. Looking at the FY20 report, change in fair value of investment property for the:
12 month period ending May 2019 was a gain of 46.6 mil, while the REINZ May 2019 HPI was up 1.8% nationwide for the 12 month period;
12 month period ending May 2020 was a loss of 21.7mil, while the REINZ May 2020 HPI was up 7.9% nationwide for the 12 month period.
We now also know that REINZ October 2020 HPI: +7.7% nationwide (3 months), and November up another 3%.
As others have mentioned on this forum already, May 2020 revals were based on CBRE's April 2020 forecast. If last year's numbers are something to go by which was a relatively flat year in the property market, expect to see a big upward revaluation in 1H21 when residential properties are going gangbusters.
Price to NTA (as at 8/12/20):
RYM: 3.06
SUM: 2.22
ARV: 1.27
OCA: 1.37
Reversing last years loss of 21.7mil + a gain of 50mil in 1H21 (being conservative) should increase NTA by 10 cents per share easily. This puts OCA at a price to NTA of 1.24. Perhaps my estimate of 70mil revaluation is too conservative...
Disc: OCA is 20% of my portfolio
22nd Jan half year due. Lock it in..
UBS report just out initiating coverage with a BUY. Price target $1.50 and calling it that underlying profit should double from FY20 to FY24.
Projecting underlying earnings per share of 18 cps in FY25 and general expectation that we will see multiple expansion up to the medium for the sector, just over 18.
Market always a forward looking animal so my medium term expectation is that sometime late in 2024, My medium term forecast is that 4 years from now the shares will be trading on a forward PE of ~ 18 expecting ~ 18 cps in earnings = expected price range of $3.00 - $3.50.
This is awesome thank you Beagle; I’m in this one for next 5 years; my projection is a medium 29m on result Jan 22nd. If PE goes to 18 on this share then look out. Real estate Market is still red hot; so those developments that are upcoming look very very very good for future pipeline.
Appreciate everyone that puts up their workings on here; Mudfish your maths is so damn similar to mine so thank you. And Mavs and Beagles are way above what I can do but appears to be a very good long bet and thank you all contributors
Happy holder on this one GL all.
Have to look at the development pipeline as well, all that stuff that's already consented, it's complicated trying to factor in the 'onboarding' of new developments but imo over the next five years OCA will significantly close the gap on all metrics against RYM and SUM. Haven't given much thought to ARV.
Anyway, it's not a race, the whole sector looks to be a good option for investors over the long term. I think it's too easy get too focused on the excitement of the next big capital gain which tends to de-focus on accumulating something we might have no intention of ever selling.