Originally Posted by
Beagle
RYM average growth rate in the last five years 14% per annum.
SUM average growth rate in the last five years 36% per annum, assuming they make at least $114m in 2019 to be reported in February 2020.
For the sake of complete clarity, (as I am sure you probably already know), this is the growth rate in underlying earnings per share for the last 5 years.
Yes I think the churn has been a lower than expected and I am expecting this to revert to normal level's going forward and with quite substantial IFRS valuation gains in previous years, growth in resales both in volume and realised profit per unit will be a key driver of SUM's ongoing strong growth in underlying profit in the years ahead.
To me as a numbers man, the number that really matters is underlying earning per share and the rate of growth in same. RYM's growth in eps in recent years is something I find quite underwhelming to be honest and certainly not something I would pay a forward PE of 31 for. I think SUM is dirt cheap on a forward PE of about 14, (market average is about 30 and market median about 19) with a future average expected growth rate in the 20-25% rate for the years ahead. Hope SUM are not next cab off the rank for a takeover offer, that would be very disappointing.
Even if SUM's growth rate slows to an average of 15% per annum average for the next 5 years on a forward PE of 14 they're still a bargain at a PEG ratio of just on 1.