SUM - Summerset Group

[NZSilver]

Mid May, but maybe never!

[Food4Thought]

I agree, I am also stumped with NZSilver prediction, how ever even more surprised by having having been off. Would have thought SUM would have been past $4.50 by now. Must be some type of calm before a storm. I do want it to head South of $4 as I will be selling my liver to fund another buy in.

[Beagle]

haha, thanks Roger (saves me having to blow my own trumpet every time!)

Are you going to the AGM?

Not this year mate. For the record. I am sure Mrs Barlow has made a wonderful contribution to the company over her many years there and I do appreciate that she made a real difference to a lot of people's lives and she is to be commended for that. In some ways it is more than a little sad that so much shareholder activism was required for the board to have a policy surrounding directors and management dealing in SUM's shares when simple common sense should have been all that was required. My sense is its probably best if I let others farewell her at the forthcoming meeting and thank her for her efforts.

[winner69]

Those house price numbers that REINZ put out the other day were amazing. It looks like he boom is on again back time and spreading across the country. Revaluations this year will probably be at higher rate than last year.

Gives me even more confidence in my $120m plus real earnings forecast for F16

Thats an eps of 55 cents = share price over $5 later in year

[winner69]

Westpac guru economic team have made 'material changes' to their house price forecasts

The 'chunky changes' have seen them upgrade their forecast for house price inflation in 2016 to 11.5% (higher than 2015)

Jeez i almost wet myself reading how the usual dismal pessimistic economists at westpac were Using such exciting words as material and chunky. Wow, and probably they still playing it safe.

So Summerset selling prices and revaluations are certainly on track to be $120m in F16

Thats an eps of 55 cents = share price $5 plus later this year

Footnote: i wont mention the debt thats being taken in a low wage increase environment - that story is for other threads

[Beagle]

Westpac guru economic team have made 'material changes' to their house price forecasts

The 'chunky changes' have seen them upgrade their forecast for house price inflation in 2016 to 11.5% (higher than 2015)

Jeez i almost wet myself reading how the usual dismal pessimistic economists at westpac were Using such exciting words as material and chunky. Wow, and probably they still playing it safe.

So Summerset selling prices and revaluations are certainly on track to be $120m in F16

Thats an eps of 55 cents = share price $5 plus later this year

Footnote: i wont mention the debt thats being taken in a low wage increase environment - that story is for other threads

Interestingly, despite a rampant property market for 2014, 2015 and now looking like 2016 the SP is only just over 20% from its early 2014 level of $3.60 so from an embedded value basis there's a ton of catching up to do. On the other side of the coin they've grown underlying earnings 70% in total in those two years and a further increase in build rate is projected of 33% this year. But that's not all. In that time they've materially grown their development margin which augers extremely well for a robust and highly profitable business model going forward, so any sort of DCF model needs to build in robust development margins of over 20%.

They have a land bank of over 6 years supply at the current higher build rate of 400 units and 100 care beds per annum.

Any way you slice and dice this SUM appears to be a company that's really starting to fire on all cylinders.

[Bjauck]

Yep its a crazy market in Auckland alright. We got a really amazing offer today for another one of our investment properties we've decided to sell into this booming market...so good we didn't bother counter signing...might as well take it and buy really undervalued shares like SUM instead. Late $5's early $6's this time next year mate.

Interestingly, despite a rampant property market for 2014, 2015 and now looking like 2016 the SP is only just over 20% from its early 2014 level of $3.60 so from an embedded value basis there's a ton of catching up to do. On the other side of the coin they've grown underlying earnings 70% in total in those two years and a further increase in build rate is projected of 33% this year. But that's not all. In that time they've materially grown their development margin which augers extremely well for a robust and highly profitable business model going forward, so any sort of DCF model needs to build in robust development margins of over 20%.

Any way you slice and dice this SUM appears to be a company that's really starting to fire on all cylinders.

I have shares in the retrement (and real estate Investor) companies including SUM and I am pleased to see them doing well.

However I do think it sad reflection on the NZ investment environment that NZ is losing companies including DIL, which has passed out of NZ hands and MHI which is shifting is shifting its prime listing to Australia - to have access to a wider pool of investors. If NZ investors could be encouraged to invest less in real estate and more into a diversified range of equities, including some based overseas and some with an international focus, then maybe such events would happen less frequently. As it is NZ share capitalisation as a proportion of GDP at less than half, is less than half of the Australian proportion. So with our expensive real estate, is NZ turning into a land where the majority are tenants to landlords, an unknown number of which may be overseas based, and where the majority could end up working for foreign-owned companies? It does not sound like the recipe for a productive economy with a committed population who have skin in the game and a sense of commitment and belonging.

[Beagle]

Plenty of other software start-up's...extremely robust tourism growth, booming agriculture, beef e.t.c. The beauty of SUM is they're solving a real need, a need that's forecast to grow exponentially over the next 30 years as baby boomers in their droves want to enjoy a relaxed, comfortable and supported retirement.

[Bjauck]

Plenty of other software start-up's...extremely robust tourism growth, booming agriculture, beef e.t.c. The beauty of SUM is they're solving a real need, a need that's forecast to grow exponentially over the next 30 years as baby boomers in their droves want to enjoy a relaxed, comfortable and supported retirement.

True, the retirement sector has the baby boomers to look forward to - especially perhaps those baby boomers, whose kids have to hold down multiple jobs to afford housing or have had to seek employment opportunities overseas and are not able to help support the old folk and look after the old family home. Let's hope the remaining start-ups stay and develop in NZ hands to give employment to the kids of NZ baby boomers....There are always exceptions and for the time being there are returning younger Kiwis. It would be great to hold onto more companies well beyond the start-up phase and build up well-capitalised NZ owned companies employing a highly productive work force who could afford to buy their own reasonably-priced homes.

[Beagle]

Westpac guru economic team have made 'material changes' to their house price forecasts

The 'chunky changes' have seen them upgrade their forecast for house price inflation in 2016 to 11.5% (higher than 2015)

Jeez i almost wet myself reading how the usual dismal pessimistic economists at westpac were Using such exciting words as material and chunky. Wow, and probably they still playing it safe.

So Summerset selling prices and revaluations are certainly on track to be $120m in F16

Thats an eps of 55 cents = share price $5 plus later this year

Footnote: i wont mention the debt thats being taken in a low wage increase environment - that story is for other threads

Here's the link
http://www.nzherald.co.nz/economy/ne...ectid=11623193 People with investment properties look like having another boom year !