OCA MET SUM ARV in 5 years time

[Ggcc]

Anyone want to guess where these companies will be in 5 years. My guess is SUM will lead the pack in percentage growth in SP 150% followed by 135% OCA then 110% MET then 100%RYM and last will be ARV at my idea 90% growth in SP........ Thanks investor I found the link.

[trader_jackson]

In terms of percentage gain, including dividends (of course), over the next 5 years from Friday's closing prices, OCA 1st, SUM 2nd, ARV 3rd (expect it will be a tight race between these 3), RYM 4th, MET 5th.
All will post solid gains over the next 5 years, but as the population gets older, those with highest care continuum (combined with not already being huge ie RYM) will become increasingly more 'in demand' than those with few care operations (and in return, able to charge more across the spectrum).
I expect SUM will start ramping up their care offering, although running a quality and consistent care operation is substantially harder than building units (in my view).

[value_investor]

Gee this is quiet a loaded question. My answer is probably higher than they are today.

I think that this sector will make up a large part of the nzx50 by then perhaps joined by a few more, especially if the building boom and the population growth continues. The aging population won't stop so its a good bet if your patient enough to put your money into and wait.

[Beagle]

The best guide to future profit growth is past profit growth.
Share prices follow earnings per share and anticipated sustainable earnings growth in the years ahead.

Some companies have very little history which renders any attempt to forecast 5 years ahead as little more than wild speculation.

RYM (Note when faced with a difficult exam question with multiple aspects too it, my approach was always to answer the easiest part first)
Pretty sure you want to include RYM in your guesswork. (Please lets get this straight, forecasting one year ahead is hard work, anything further than that is little more than a partially educated guess at very best).

A useful yardstick for you reference. RYM's stated medium term objective is to grow underlying earnings at 15% per annum and their extremely long track record of doing just that on average gives the most useful benchmark for this sector. Rather conveniently to keep the mathematics relatively simple 15% growth compounded for five years means underlying earnings will double in five years time.
If their forward PE of about 23 stays the same that will translate into a doubling of the share price from its current level.
In my view RYM is fully and fairly priced and an investment in them will likely give a satisfactory market performance over the long haul. I think $20 or thereabouts is quite likely.

SUM
Consistently N.Z. fastest growing retirement stock. Average growth rate over the last 6 years since listing is ~ 45%. This was off the back of significant refinement of their development model and increase in the build rate. Looking forward I expect slower and more steady growth that perhaps might average 20-25% in the five years ahead.
I think the current PE is about 30% below where I see this in a few years time as they continue to prove their development capabilities so we could see PE expansion as well.
$6.80 x 1.225 x 1.225 x 1.225 x 1.225 x 1.225 plus some PE expansion could see them at a similar price level to RYM's indicated above. I hold.

OCA
This is the dark horse of the field with unproven development capability all we have to go on at this stage is the company is confident of meeting its IPO forecast of 8.42 cps for a 40% underlying profit growth on last year's figures. They have a large number of consented developments and their current year PE is just 11.75 so I expect steady profit growth in the years ahead and some improvement in their PE as they prove up their development capabilities. $2 to $2.50 would be my guess. I hold.

MET have a LOT of work to do to prove their development capabilities. I read a LOT into Infratil's decision to sell down their stake in MET last year. They know the company better than anyone on here and are fairly astute asset managers. I think many of MET's assets are slightly compromised and frankly I think its impossible for them to accurately assess the likely remediation cost of their villages that have suffered issues. I expect this company to underperform the sector. Perhaps around $10 in 5 years.

ARV - My preliminary analysis this week showed high single digit underlying profit growth on an EPS basis this year and next. They have been issuing A LOT of new scrip so headline profit will give a disingenuous view of underlying earnings per share profit growth. 70% of their revenue comes from the care sector which is highly susceptible to the serious increase in caregiver wages we've seen and which will rapidly increase in the years ahead. I think its likely this will also underperform. Maybe $2 per share in 5 years.

I see the capital gain potential (and have allocated capital accordingly) as SUM, OCA, RYM, ARV and MET. OCA more speculative than others but potential to surprise favorably is pretty good in my opinion.

Anyone who claims their crystal ball is crystal clear five years ahead should probably give up their day job and take up fortune telling :)

[RupertBear]

The best guide to future profit growth is past profit growth.
Share prices follow earnings per share and anticipated sustainable earnings growth in the years ahead.

Some companies have very little history which renders any attempt to forecast 5 years ahead as little more than wild speculation.

RYM (Note when faced with a difficult exam question with multiple aspects too it, my approach was always to answer the easiest part first)
Pretty sure you want to include RYM in your guesswork. (Please lets get this straight, forecasting one year ahead is hard work, anything further than that is little more than a partially educated guess at very best).

A useful yardstick for you reference. RYM's stated medium term objective is to grow underlying earnings at 15% per annum and their extremely long track record of doing just that on average gives the most useful benchmark for this sector. Rather conveniently to keep the mathematics relatively simple 15% growth compounded for five years means underlying earnings will double in five years time.
If their forward PE of about 23 stays the same that will translate into a doubling of the share price from its current level.
In my view RYM is fully and fairly priced and an investment in them will likely give a satisfactory market performance over the long haul. I think $20 or thereabouts is quite likely.

SUM
Consistently N.Z. fastest growing retirement stock. Average growth rate over the last 6 years since listing is ~ 45%. This was off the back of significant refinement of their development model and increase in the build rate. Looking forward I expect slower and more steady growth that perhaps might average 20-25% in the five years ahead.
I think the current PE is about 30% below where I see this in a few years time as they continue to prove their development capabilities so we could see PE expansion as well.
$6.80 x 1.225 x 1.225 x 1.225 x 1.225 x 1.225 plus some PE expansion could see them at a similar price level to RYM's indicated above. I hold.

OCA
This is the dark horse of the field with unproven development capability all we have to go on at this stage is the company is confident of meeting its IPO forecast of 8.42 cps for a 40% underlying profit growth on last year's figures. They have a large number of consented developments and their current year PE is just 11.75 so I expect steady profit growth in the years ahead and some improvement in their PE as they prove up their development capabilities. $2 to $2.50 would be my guess. I hold.

MET have a LOT of work to do to prove their development capabilities. I read a LOT into Infratil's decision to sell down their stake in MET last year. They know the company better than anyone on here and are fairly astute asset managers. I think many of MET's assets are slightly compromised and frankly I think its impossible for them to accurately assess the likely remediation cost of their villages that have suffered issues. I expect this company to underperform the sector. Perhaps around $10 in 5 years.

ARV - My preliminary analysis this week showed high single digit underlying profit growth on an EPS basis this year and next. They have been issuing A LOT of new scrip so headline profit will give a disingenuous view of underlying earnings per share profit growth. 70% of their revenue comes from the care sector which is highly susceptible to the serious increase in caregiver wages we've seen and which will rapidly increase in the years ahead. I think its likely this will also underperform. Maybe $2 per share in 5 years.

I see the capital gain potential (and have allocated capital accordingly) as SUM, OCA, RYM, ARV and MET. OCA more speculative than others but potential to surprise favorably is pretty good in my opinion.

Anyone who claims their crystal ball is crystal clear five years ahead should probably give up their day job and take up fortune telling :)

Great summary, very helpful thank you Mr Beagle :)

[iceman]

Agree, great summary from Beagle. FNZC in a recent report, according to NBR, have Metliefcare as they're favourite, followed by SUM and then RYM

[percy]

Agree, great summary from Beagle. FNZC in a recent report, according to NBR, have Metliefcare as they're favourite, followed by SUM and then RYM
Craigs also like MET.
Great to able to disagree with brokers.!
I hold OCA,RYM and SUM.
RYM with there growing number of villages in Australia could surprise us all.?

[Beagle]

Thanks guys. Must be topical as its the lead article in the behind the paywall on the NBR this morning.
Surprised FNZC have MET first as they go on to say that MET have a very limited land bank which gives them limited scope for profit growth.
I think their main argument seems to be its the value pick with the SP trading at a discount to NTA but I would counter with a couple of points as noted above that many of their villages have weather tightness issues and I maintain, (using FBU's construction cost complete fiasco as all the market evidence you need), that's its impossible to accurately predict the cost of remediation at this stage and its worth noting that ARV and OCA are trading fairly close to asset backing.

Don't see any mention of ARV or OCA in FNZC report, I guess they don't cover them.

Interesting article in the N.Z. Herald this morning. This is why I think retirement villages and the activities and community support they offer will be very popular in the years ahead.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12012734 I think all companies in this sector will do well, SUM probably better than others.

[Dean007]

Wow Beagle .. thank you, great work !
Very succinct, with absolutely on point supporting evidence to substantiate your position.

As a newbie, I'm still learning and doing my due diligence, therefore find this an awesome read.
Not holding a position in any of the above just yet ;)

Reflecting on the "Financial health" and future prospects of the key players in this sector (as so succinctly layed out in your post ), makes for very interesting reading... paticularly for someone working directly in this sector (and for 3 of the aforementioned) From an on the floor level, privy to the all important work culture ... very interesting indeed.
Thanks again Beagle .. great read!

[Beagle]

You're too kind mate its just a bunch of guesswork.

That said I do strongly believe that a companies established track record of underlying earnings growth is BY FAR the best indicator of likely ongoing success over the medium term. In that regard I think people investing in this sector and overlooking SUM's extraordinary track record of growth are probably not doing themselves any favors. You reading this Couta1 ?

[winner69]

Wow Beagle .. thank you, great work !
Very succinct, with absolutely on point supporting evidence to substantiate your position.

As a newbie, I'm still learning and doing my due diligence, therefore find this an awesome read.
Not holding a position in any of the above just yet ;)

Reflecting on the "Financial health" and future prospects of the key players in this sector (as so succinctly layed out in your post ), makes for very interesting reading... paticularly for someone working directly in this sector (and for 3 of the aforementioned) From an on the floor level, privy to the all important work culture ... very interesting indeed.
Thanks again Beagle .. great read!

Sounds like you should take a position in all of them to start off with and then fine tune how much in each as you find out more ...and how they perform ...and that way you'll probably end up holding the winners

I just have SUM by the way

[Dean007]

Cheers Winner69 ... I was inclined to do just that!
Definitely will be in for the long hold, as one of my vehicles to Retirement :)

[Food4Thought]

The best guide to future profit growth is past profit growth.
Share prices follow earnings per share and anticipated sustainable earnings growth in the years ahead.

Some companies have very little history which renders any attempt to forecast 5 years ahead as little more than wild speculation.

RYM (Note when faced with a difficult exam question with multiple aspects too it, my approach was always to answer the easiest part first)
Pretty sure you want to include RYM in your guesswork. (Please lets get this straight, forecasting one year ahead is hard work, anything further than that is little more than a partially educated guess at very best).

A useful yardstick for you reference. RYM's stated medium term objective is to grow underlying earnings at 15% per annum and their extremely long track record of doing just that on average gives the most useful benchmark for this sector. Rather conveniently to keep the mathematics relatively simple 15% growth compounded for five years means underlying earnings will double in five years time.
If their forward PE of about 23 stays the same that will translate into a doubling of the share price from its current level.
In my view RYM is fully and fairly priced and an investment in them will likely give a satisfactory market performance over the long haul. I think $20 or thereabouts is quite likely.

SUM
Consistently N.Z. fastest growing retirement stock. Average growth rate over the last 6 years since listing is ~ 45%. This was off the back of significant refinement of their development model and increase in the build rate. Looking forward I expect slower and more steady growth that perhaps might average 20-25% in the five years ahead.
I think the current PE is about 30% below where I see this in a few years time as they continue to prove their development capabilities so we could see PE expansion as well.
$6.80 x 1.225 x 1.225 x 1.225 x 1.225 x 1.225 plus some PE expansion could see them at a similar price level to RYM's indicated above. I hold.

OCA
This is the dark horse of the field with unproven development capability all we have to go on at this stage is the company is confident of meeting its IPO forecast of 8.42 cps for a 40% underlying profit growth on last year's figures. They have a large number of consented developments and their current year PE is just 11.75 so I expect steady profit growth in the years ahead and some improvement in their PE as they prove up their development capabilities. $2 to $2.50 would be my guess. I hold.

MET have a LOT of work to do to prove their development capabilities. I read a LOT into Infratil's decision to sell down their stake in MET last year. They know the company better than anyone on here and are fairly astute asset managers. I think many of MET's assets are slightly compromised and frankly I think its impossible for them to accurately assess the likely remediation cost of their villages that have suffered issues. I expect this company to underperform the sector. Perhaps around $10 in 5 years.

ARV - My preliminary analysis this week showed high single digit underlying profit growth on an EPS basis this year and next. They have been issuing A LOT of new scrip so headline profit will give a disingenuous view of underlying earnings per share profit growth. 70% of their revenue comes from the care sector which is highly susceptible to the serious increase in caregiver wages we've seen and which will rapidly increase in the years ahead. I think its likely this will also underperform. Maybe $2 per share in 5 years.

I see the capital gain potential (and have allocated capital accordingly) as SUM, OCA, RYM, ARV and MET. OCA more speculative than others but potential to surprise favorably is pretty good in my opinion.

Anyone who claims their crystal ball is crystal clear five years ahead should probably give up their day job and take up fortune telling :)

Nice work Beagle. A pat on the back, and a scratch behind the ear. I know one thing. They will be NZ companies operating in and out of NZ. Great for NZers long term ownership.

Biased of course. I do have my finger in a few pies. Got a long way to go to get burnt and can't wait for them to get hot(ter).

SUM has made me a comfortable gain already. Divested a bit so I could also part take in other opportunities.

Excited. Very much so

[Bjauck]

Craigs also like MET.
Great to able to disagree with brokers.!
I hold OCA,RYM and SUM.
RYM with there growing number of villages in Australia could surprise us all.?

It is a about a year on now. So it is interesting to compare the performances in the past year.

The following is for approx share price only:

OCA + 8.2%
RYM +7.7%
ARV +5.0%
SUM +4.6%
MET -12.7%

Despite a recent solid result, MET’s sp is still under water.

[Ggcc]

It is a about a year on now. So it is interesting to compare the performances in the past year.

The following is for approx share price only:

OCA + 8.2%
RYM +7.7%
ARV +5.0%
SUM +4.6%
MET -12.7%

Despite a recent solid result, MET’s sp is still under water.
Sad about the death at Kapiti MET.

[Beagle]

It is a about a year on now. So it is interesting to compare the performances in the past year.

The following is for approx share price only:

OCA + 8.2%
RYM +7.7%
ARV +5.0%
SUM +4.6%
MET -12.7%

Despite a recent solid result, MET’s sp is still under water.

Its been a tough year although those quick on their feet and getting out of SUM at $8 or RYM at $14 and getting back in at current level's have done pretty well.
Some dog actioned the former and called the latter.

[limmy]

It is a about a year on now. So it is interesting to compare the performances in the past year.

The following is for approx share price only:

OCA + 8.2%
RYM +7.7%
ARV +5.0%
SUM +4.6%
MET -12.7%

Despite a recent solid result, MET’s sp is still under water.
Did you include dividends in the % ?
The results could look a lot different ?

[bull....]

well guess they all went bad lol

[huxley]

Another win for a low fee diversified global equity fund lol

[Bjauck]

well guess they all went bad lol
I just checked on Sharesight the return (inc. divs) on my open investment since my post on 5/3/2019 in SUM.

SUM returned 10.7%pa versus benchmark of Smartshares nz top 50 return of 4.8%pa. OCA is DOWN and I am not sure about the others.

I added to my OCA when it hit Covid lows, so the open investment calculation, inc. dividends, would be skewed by that.

[Curly]

When I got into OCA at float, my expectation was that the SP would be around $3 by now. How wrong can one be. Sold a bulk at $1.35 and repurchased at .77c. Will try and pick up more at current price. Guess others had similar expectations. The covid fiasco along with reducing property prices has stymied progress. Maybe things will change in 2024. Here’s hoping.

[Bjauck]

RYM up; OCA down. Does the market expect those that offer care to fare no better under a new Govt. Whereas those involved in residential property will fare better. Just what NZ does not need - even more expensive housing…

Disc: hold Rym but I (still) have more in Oca.