Interesting article in the Herald today titled "Wage rises has down sides" If someone could put it on here as an attachment please as it's a very good article. (I'm still a dinosaur when it comes to this attaching stuff)
My sense is the combination of the Oceania float and Infratil selling down its stake in MET have together sucked close to half a billion dollars of capital out of the market in the last month in this sector. High quality companies are not immune to the laws of supply and demand and when you get that much supply of scrip in the retirement sector it had to have an effect.
I feel however we're coming to the end of that effect with Oceania listing shortly on 5 May, some stags will take profits and reinvest in the best of breed in this sector, (which in terms of growth is definitely SUM in my opinion) and the current price represents a good opportunity to take advantage of a supply demand imbalance.
Disc: Bought more this morning and looking forward to catching up with some of my friends at a very positive annual meeting tomorrow.
My estimate of underlying profit for FY17 is for ~ 25% growth to 32 cps which is based on a 12.5% uplift in build rate and a circa 20% uplift in resale profit from higher volume and higher embedded value per unit. Puts SUM on a 2017 PE of only 16.2 times my forecast FY17 earnings. Historically this has traded in the low - mid 20's PE.
Fears of a serious correction in the housing market and the potential impact on SUM are well and truly overdone in my opinion.
Last edited by Beagle; 26-04-2017 at 12:24 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
I trimmed some HLG at $3.40 ex divvy after having increased my holding cum divvy at $3.34 but I wouldn't be a seller at the current price. A good hold for 13.5% gross divvy yield at $3.20 in my view. That said SUM vs HLG over the medium term in terms of total shareholder return looks like a pretty one sided horse race to me
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Govt punished stats on working age today. Numbers show an increase in people turning 60 over the next 20 years. That's excluding the massive over 70yo bracket which covers a larger age range than the older stats. Not sure if that means there will be a drop or an increase in home requirements in future.
Thoughts on the shareholder day? I got some warm fuzzies reading their report. You can tell they really love and believe in the company and its purpose which is a nice feeling as an investor. Everything seems on track anyway, they did mention challenges in the Auckland construction market rising costs which they expect to continue. Again stated performance of SUM is not linked to property market.
There was a major focus on cleaners during the voting part of the AGM... I assume what was a union man kept harking on about what increase the cleaners should get (specifically those that clean up the sputum) now the caregivers are getting an increase.
Plus the potential for looking at building in Oz given how well their main rival Ryman was doing over there (which prompted a shareholder remark on WHS' lack of success on their trip over the Tasman. The Chair made clear it should not be assumed they will build in Oz as there are still opportunities here given the land banking sites they still have in NZ.
Originally Posted by couta1
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. Certainly not a rush to buy & s/p down 1% today atp. Meeting started at 1pm from what i read.
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