SUM - Summerset Group

[Beagle]

just a follow up on the suggestions vaygor1 made recently in this forum (post #1279 and #1285):

I contacted SUM following these allegations and received a response directly from Julian Cook. He clearly states that they (SUM) have no relationship with the organiser of this competition and he points out that during the 15 years this contest is running as well RYM and MET have been under the winners for some years as well. He highlights that selection of candidates or judging criteria are a matter for the organisation concerned (i.e. seniors-housings) and that they (SUM) have been only informed after a decision has been made by the panel.

Still waiting for a meaningful response from seniors-housing and shall keep you posted if anything relevant eventuates.

This...its time Vaygor1 for you to move on from your disingenuous claim surrounding the award. I know for a fact that Ryman won this award several times and at times in the past this fact has been well publicised in their marketing and promotional material. On the other hand allegations of insider trading by one of the Directors appear to be extremely well supported by the facts.

[couta1]

Perhaps Vaygor1 would like to comment on how legit the Readers Digest 2014 most trusted brand award Ryman have recently won is? That award seems a lot more subjective than the Sum award we are talking about here,just saying.

[winner69]

Well I'm sorry I don't see what the issue is.
Here's the awards criteria for 2014 - http://seniors-housing.net/core/awards-2014/

Here's the home page of the website.
http://seniors-housing.net/core/

I take it one of these major brands won't be in the running, whoever they are.

Not a good look for the sector

http://seniors-housing.net/core/major-companies-contributing-to-diminution-of-sector-reputation/

Major companies contributing to diminution of sector reputation
September 9, 2014


Major companies are contributing significantly to a growing lack of confidence in the integrated retirement village sector, with their growing propensity to simply shrug off adverse coronial findings with platitudes, legally screened brief apologies and a vague promise to address shortcomings.

In the past six months, three national brands have been excoriated in coronial findings.

There is a growing unease about the sector. A sense that it is more dangerous to go into a care environment, than to stay at home…

… Full story covered in the AGED CARE HOUSING WEEKLY

[winner69]

This village sounds a good place

http://seniors-housing.net/core/allegation-made-over-moonshine-manufacture-at-retirement-village/

[winner69]

And Ryman building 'prisons' even get a mention

Ryman promoting “prison institution” look in first Australian project

September 4, 2014


closed-jail-barsMELBOURNE: New Zealand based Ryman Healthcare has built a ‘tribute’ prison as its first offering to Australian clients.

The fortress structure is a re-embrace of both white Australian roots and a reminder to its residents of the ‘institutionalism’ of the 1950s.

It is a soulless amalgam of concrete and steel, with the design characteristics of the Pentagon.

It is an appalling age-apartheid compound…

Weary Dunlop Retirement Village
Image Source: Ryman Healthcare Limited (RYM) / NZX Annual Results Presentation – March 2014 (pg 15)

… Full story covered in the AGED CARE HOUSING WEEKLY

[winner69]

Hope this fate don't affect SUM when the inevitable happens in NZ

http://seniors-housing.net/core/retirement-village-landbanks-will-have-to-be-revalued-downwards/

[winner69]

Don't know what efficacy really means but it sounds painful

http://seniors-housing.net/core/efficacy-of-retirement-village-management-sales-contract-under-court-challenge/

[winner69]

Hope SUM not building too many of these institution type villages

http://seniors-housing.net/core/integrated-retirement-village-design-starting-to-mimic-institutionalism/

[winner69]

You all laughed at me when I said Gran would go and live with the kids or grandkids instead of going to a village

http://seniors-housing.net/core/multigenerational-housing-is-the-new-normal-says-research-centre/

[winner69]

Your fault Roger for starting this

Before I give this outfit my money does anybody subscribe to Seniors Money Weekly thing?

Worth it?

[winner69]

Maybe the assumptions about what the grey tsunami are going to do when they get to 75 are wrong

http://seniors-housing.net/core/statistics-prove-rest-home-tradition-is-on-the-wane/


http://seniors-housing.net/core/boomerang-children-and-extended-working-lives-combine-to-reduce-retirement-housing-market/

http://seniors-housing.net/core/will-growth-in-over-60s-demographic-guarantee-retirement-village-growth/

[couta1]

Gee winner you must have an extra big wooden spoon for Sundays but yeah a few families are keeping the Grandparents at home so they end up with more of the inheritance in their pockets rather than the villages sucking it up,still huge tailwind etc etc nothing to worry about aye and unlike Aussie NZ is known as the land of the Retirement Village so all good, sounds like a good reason for Sum to stick to NZ in the meantime, I always felt Rymans Aussie operation may end up being subsidized by its NZ one.

[karen1]

This village sounds a good place

http://seniors-housing.net/core/allegation-made-over-moonshine-manufacture-at-retirement-village/

I think the still is a great idea! Gotta make a $ somehow. http://www.couriermail.com.au/news/queensland/aveo-gold-coast-retirement-oasis-an-alleged-hotbed-of-moonshine-male-visits-censorship/story-fnihsrf2-1227048464152?nk=6687d3535e2849556d5c650615a44f18&utm_content=buffer81897&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

[karen1]

There's a RYM in Tauranga which looks sadly similar. Viewed from the back it looks far worse, reminds me of something out of Coro Street...

[percy]

Diversity,multi-channels,one model does fit/suit all.
We will see operators targeting different niches. From full total care to more lifestyle independent living.
We can see this very quickly when you compare RYM/SUM model to INA's [asx].INA are putting retirement relocatable mobile homes in tourist park/villages.A lot of these are in lovely places on the NSW coast.
I did note this appears to be happening at Tahunanui Motor camp in Nelson.
Governments around the world are keen to keep people in their own home,and supply them with more services.
We will also see growth in people taking up resverse mortgages so they can afford to stay in their own home.
In years to come we will see people retiring who are penniless and have never owned a house .
"May we live in interesting times."

[BlackPeter]

Well I'm sorry I don't see what the issue is.
Here's the awards criteria for 2014 - http://seniors-housing.net/core/awards-2014/

Here's the home page of the website.
http://seniors-housing.net/core/

Hi Roger, good to see this year some information and criteria on the web (though nothing of relevance testable - except that nominees have to sit in NZ or Australia) ... you will find that it is much more difficult to find anything for the previous years.

I remember the forum discussion in February about these awards and I contacted at that stage Julian Cook as well as senior-housing. Julian responded within 24 hours indicating that these awards have now been running for 15 years and are quite well known in the sector. He mentioned that previous NZ winners have been Ryman (6 years in a row) and Metlifecare (1 year). He didn't know about the selection and judging criteria but confirmed that they (SUM) have no relationship with the organisation running the awards. So far, so good, but than - he would say that, wouldn't he?

I contacted as well "seniors housing" aka "age care housing australia" aka "Worldwide Resources" (all using the same St. Kilda PO Box, in which they as well seem to live (I never got a physical address from them, despite having to surrender my own. I don't know either with whom I communicated other than "Awards Secretariat" - they always responded per anonymous email - they must have something to hide). Felt quite funny - I had to identify myself basically down to my physical address, profession and passport number (actually - the last claim is an exaggeration, but it felt that way) before they started to respond other than "please identify yourself, we want to know, with whom we are dealing", and then they didn't answer my questions (related to award decision criteria), but promised me that the judge will contact me to arrange a meeting when he is in March 2014 in Christchurch anyway. I never heard from them again.

So - no, I found no evidence for a connection between Summerset and Worldwide Resources aka whatever, and I don't believe there is one. I found however as well no evidence of Worldwide Resources aka whatever's respected standing in the industry, and the real performance criteria for this award are unknown other that the editor makes a not contestable decision based on ... well I guess whatever drives him (we know his sex - this is the one information worldwide resources revealed when they talked about the judge as "Him"). Obviously we can only assume that it is neither money nor ads nor personal relations he values, but that he is just driven by the desire to find the best age care provider in Australasia.

At this stage I am still not sure, whether (and why) it is appropriate to crow about having received this award, given that it is absolutely unclear why the editor would choose one nomination over some other. And that is not because of lack of trying. I would prefer if my company (SUM) could not just claim to receive awards from independent, respected and fully qualified organisations, but if these attributes would be as well visible to everybody to see.

Discl: holding, though preferring to have a board which not just claims to act above board, but is as well always seen in doing so.

[Beagle]

Hi Roger, good to see this year some information and criteria on the web (though nothing of relevance testable - except that nominees have to sit in NZ or Australia) ... you will find that it is much more difficult to find anything for the previous years.

I remember the forum discussion in February about these awards and I contacted at that stage Julian Cook as well as senior-housing. Julian responded within 24 hours indicating that these awards have now been running for 15 years and are quite well known in the sector. He mentioned that previous NZ winners have been Ryman (6 years in a row) and Metlifecare (1 year). He didn't know about the selection and judging criteria but confirmed that they (SUM) have no relationship with the organisation running the awards. So far, so good, but than - he would say that, wouldn't he?

I contacted as well "seniors housing" aka "age care housing australia" aka "Worldwide Resources" (all using the same St. Kilda PO Box, in which they as well seem to live (I never got a physical address from them, despite having to surrender my own. I don't know either with whom I communicated other than "Awards Secretariat" - they always responded per anonymous email - they must have something to hide). Felt quite funny - I had to identify myself basically down to my physical address, profession and passport number (actually - the last claim is an exaggeration, but it felt that way) before they started to respond other than "please identify yourself, we want to know, with whom we are dealing", and then they didn't answer my questions (related to award decision criteria), but promised me that the judge will contact me to arrange a meeting when he is in March 2014 in Christchurch anyway. I never heard from them again.

So - no, I found no evidence for a connection between Summerset and Worldwide Resources aka whatever, and I don't believe there is one. I found however as well no evidence of Worldwide Resources aka whatever's respected standing in the industry, and the real performance criteria for this award are unknown other that the editor makes a not contestable decision based on ... well I guess whatever drives him (we know his sex - this is the one information worldwide resources revealed when they talked about the judge as "Him"). Obviously we can only assume that it is nor money nor ads or personal relations he values, but that he is driven by the desire to find the best age care provider in Australasia.

At this stage I am still not sure, whether (and why) it is appropriate to crow about having received this award, given that it is absolutely unclear why the editor would choose one nomination over some other. And that is not because of lack of trying. I would prefer if my company (SUM) could not just claim to receive awards from independent, respected and fully qualified organisations, but if these attributes would be as well visible to everybody to see.

Discl: holding, though preferring to have a board which not just claims to act above board, but is as well always seen in doing so.

Hi Blackpeter,

Many thanks indeed for all your sleuthing behind the scenes. I think this puts said award into perspective.
What you've said makes for very interesting reading and I well remember how forthrightly Ryman proclaimed those awards in their slick marketing and promotional material in years gone by.
As you know I value openness and transparency and believe that all organisations benefit from the accountability this brings to their processes.
When organisations hide behind ill-defined processes and completely undefined selection and validation procedures the cynic in me quickly jumps to conclusions that such awards could easily be open to "influence" and doubts about the veracity and authenticity of same quickly spring to mind....maybe I've become too cynical over the years.

Its would seem that Vaygor1 has good points to make on not only the insider trading allegation but doubts surrounding the veracity of these awards.

[couta1]

Bottom line here folks regardless of the number of awards or how good they are 99% of all residents I have ever met in a Summerset village are very happy to be there and they wouldn't have it any other way:cool:

[percy]

Bottom line here folks regardless of the number of awards or how good they are 99% of all residents I have ever met in a Summerset village are very happy to be there and they wouldn't have it any other way:cool:

I think that says it all.!!
I would think the worse job in the world would be running a retirement village.
What would it be like having it full of ex sharetrader posters,will all the time in the world,to formulate their suggestions,complaints and generally cause trouble.Gee Whiz I think even Vince would have his hands full trying to keep the peace!!!
I note RYM are confident to hold their agms at their villages,where I lot of residents are shareholders.I must admit I would be happy at RYM Aidanfield or Ngio Marsh in ChCh, or SUM in Nelson or Katikati.

[Beagle]

Your fault Roger for starting this

Before I give this outfit my money does anybody subscribe to Seniors Money Weekly thing?

Worth it?

LOL I can't accept responsibility for that mate. From vague recollection someone on here posted that the subscription was quite expensive.
Makes you wonder when the board are happy to defend what by all appearances is a very serious $4.8 million case of insider trading, what else goes on behind the scenes ?
Still, according to most, as long as the end justifies the means we're all good, or are we ?????

[psychic]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11325559&ref=rss

A group of 19 privately-owned New Zealand retirement villages is considering amalgamating into a single, publicly-listed company that is expected to be similar in scale to NZX-listed aged care operator Summerset.

The new entity, provisionally named Hercules, will comprise of facilities in Auckland, Tauranga, the Bay of Plenty, New Plymouth, Palmerston North, Waikanae, Nelson, Blenheim, Rangiora and Christchurch, according to a statement released this morning.

The group would have more than 2000 residents, with roughly half accommodated in aged care facilities and the other half in retirement villages.

Owners of the 19 facilities are expected to meet early next month to approve the transfer of their shares into Hercules in exchange for shares in the new entity.

"To complete the transaction, Hercules has undertaken that the company will seek to complete an initial public offering and listing on the NZX main board," the statement said.

"Final details of the offer, including a possible name change, will be finalised by the Hercules board prior to registration of an IPO prospectus."

The offer is intended to raise $50 million to $100 million through the issue of new shares, which Hercules said would be used to pay down debt and provide funds for future growth.

The statement did not provide any details on the timing of the offer.

[Hoop]

Below is a cut version of my PM sent last weekend regarding SUM.
It seems appropriate to post this now with SUM's 8c fall today ....as the new uptrend has broken down...
At 292c SUM is currently testing a short term support area





Hi xxxxx
........................
................................deleted
Also did SUM set off some buy signals around the 19th August at 2.81c.But the DMS did not say buy.....Correct..the DMI is only one indicator, many others have fired buy signals...The DMI is my favourite, but some times it fails especially in trading ranging situations...I think in SUM's case the DMI indicator is slow to fire because the other indicator buy signals fired off unusually early and the uptrend is still very new... the chart patterns are at a conjunction point (299 support line/uptrend line).. and the EMA 50 resistance is still coming into view...Also when DMI doesn't fire think sucker rally..even though there is new short term uptrend the overall longer trend is still downward as shown by the continuing downtrending nature of the EMA 50 200 lines....
..............................
...................deleted

Cheers
Hoop



http://i458.photobucket.com/albums/qq306/Hoop_1/SUM12092014.png (http://s458.photobucket.com/user/Hoop_1/media/SUM12092014.png.html)

[okay]

Interesting article Psychic.
Will we see an investor saturation point in this sector with each new listing? How many retirement listings can the
tiny NZX and it's punters stand?
Don't they say with tech the time to get out is when every man and his dog is trying to list before the party ends?
Rising costs?
With Christchurch rebuilds, Auckland ramp up, political parties scrambling to outdo each other with new build promises/grants, increasing number of retirement companies chasing the same labour pool and resources, costs surely have to start rising.
When the labour shortages start to bite, will new build targets start to come increasingly under pressure?

[Harvey Specter]

Interesting article Psychic.
Will we see an investor saturation point in this sector with each new listing? How many retirement listings can the
tiny NZX and it's punters stand?
Don't they say with tech the time to get out is when every man and his dog is trying to list before the party ends?
Rising costs?I dont think it is a sign to get out, though I have dramatically cut back my holdings since most are in a downtrend.

My issue with the new entity is they need to set up a new management structure, common policies etc. It will take a while for them to sort that out. Then they have to create a development plan to build new villages which is where a lot of the value is created.

As such, I wouldn't expect the new entrant to be valued in the same ball park as SUM and RYM. If it lists at a discount, you may get a good step up once they get their management sorted - refer MET which presumed that IFT will be able to sort our MET issues.

Lots of space in the market for more villages and remember, these aren't new villages, they are existing villages.

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11325559

[couta1]

Remember the cream always floats to the top,its going to take a lot of whipping before this bunch has any effect on the current top 3 IMO and the debt level may end up being a lot more than they initially anticipated once this bunch come together leaving how much of their capital raising for future growth? Super Council problems anyone?

[skid]

Below is a cut version of my PM sent last weekend regarding SUM.
It seems appropriate to post this now with SUM's 8c fall today ....as the new uptrend has broken down...
At 292c SUM is currently testing a short term support area

What!! The old folks didnt say anything about that:)

[couta1]

E=skid;504976]What!! The old folks didnt say anything about that:)[/QUOTE]
Thats because the old folks dont give a toss about the fluctuations in the Sum shareprice they are just happy to be living in one of their complexes.

[mayday]

Below is a cut version of my PM sent last weekend regarding SUM.
It seems appropriate to post this now with SUM's 8c fall today ....as the new uptrend has broken down...
At 292c SUM is currently testing a short term support area

looks it has started to draw "M" at bottom now

disc: not holding

[Hoop]

looks it has started to draw "M" at bottom now

disc: not holding

To many pattern variables in play to predict with good odds....After a line break there is often a pull back event to test the area of the break in this case the 299 300 area...Will this pull back occur this time?...Lets take a look at this first step and see what transpires from it

[MAC]

If you may indulge in a predictive challenge Hoop,

My FA provides me with at forecast of $2.63 at FY14, in clarification that would be the closing share price at reporting day’s end, probably 25th February 2015, noting that the SP may swing higher or lower between now and then.

What better chance to show us how good any of that TA really is ?


Declaration: Sold SUM from my long term growth portfolio back in May after a two year hold, presently hold SUM within our long term defensive income portfolio, all bottles of wine welcome.

[Harvey Specter]

presently hold SUM within our long term defensive income portfolio, all bottles of wine welcome.Retirement villages aren't exactly income stocks are they - yield is less than 2%??

[MAC]

Retirement villages aren't exactly income stocks are they - yield is less than 2%??

Yeah Harvey your right, they’re just at the beginning of transforming from a growth to a cyclical dividend stock.

By long term I mean that we are content to hold the demographic until the boomers flush through the system, or a capital gains tax comes along, or some other such event.

There’s twenty years for cash from the wealthiest generation in human history yet to be recycled, whether it comes in share price or dividends, or a combination along the way, I’m content to receive some of it over the long term.

[Hoop]

If you may indulge in a predictive challenge Hoop,...No!!! you may not:)..My abilities as a Seer suck..sorry

My FA provides me with at forecast of $2.63 at FY14, in clarification that would be the closing share price at reporting day’s end, probably 25th February 2015, noting that the SP may swing higher or lower between now and then. I see..FA predicting the future ..I wish you good luck..As for TA, I've always said many times over and over again on ST TA does not predict the future..TA uses past and up the present data..Using TA to tell us what happens next week is impossible because that future data is not available yet.....Why is it that FAers keep harping on about TA predicting the future???

What better chance to show us how good any of that TA really is ?..You are not fully concentrating when reading ST posts, I've already showed how good it is ..Go back and read my chart posts on AIR SUM and PEB...I have made it a point this year to show IN and OUT on these charts..IN is my real life buy in and OUT is my real life sell out...every time I buy back in I use my sold out money (or more) to repurchase so often my number of shares compound as well as the price increase so TA is beating the shareprice increase..The most extremely successful example using this same TA methodology which I partly did in reality towards the end was theoretically making +89% profit from MFT when it had declined ~60% over the same time period (Post #285 shows how it was done) (http://www.sharetrader.co.nz/showthread.php?760-MFT/page19&highlight=mft) during the bear market crash of 2007 -2009


Declaration: Sold SUM from my long term growth portfolio back in May after a two year hold, presently hold SUM within our long term defensive income portfolio, all bottles of wine welcome.

Addition:
Anyone can use forecasting data...economists weatherpersons FAers TAers..there are forecasting models out there using past trends and behaviour patterns (e.g weather system patterns) and using historic data to find repeating behaviour in correlating series of each individual or more complex events...Modern technology has given us the ease to correlate all sorts of data to find repeating patterns or to calculate the odds of repeating patterns..Weather forecasting computer modelling has I think has benefited the most out of this technological revolution ..weather forecasting has become much more accurate in recent years...especially the last year or so...

FA and TA also enjoy the benefits of modern day computer models..every day we see new models and the easy automated updating of day by day data (hyperlinking) helps all disciplines to "keep their finger on the pulse" on any of the world"s systems (incl equity markets)...
I currently individually use a few other peoples models and have developed a couple on my own based mostly on hyperlinked Google data models operatoring off my Google Drive which is always running on my computer..My Alerts are instant in Time...These are a mixture of FA and TA discipline models

An interesting desktop app I have is... when I turn my computer on in the morning..if the desktop displays are red it means Wall St has had (having) a bad day or green for a good day :)

The data received and computerised is up to the nanosecond present time...

When using FA forecasting this instant time is not a luxury FAers have..Change in profits or sales takes time to analyse and the people in the know are the first to gain this info..Us shareholder plebs are usually well down the information food chain and either become aware of it via media release or shareprice change..So most are using snapshot data results which are months out of date

TA is a little better discipline with receiving data info...there are specific indicators which monitor all sorts of things that goes on within a marketplace...Any deviation in a day to day share behaviour can be picked up before the masses are informed (the info delay could be minutes or days)....MAC.. TA's ability to fire off signals as in these example mentioned is not a future prediction event, it is up to date behavioural info received from an happening not yet released or disclosed to the shareholders or general public....or the market is spooked by an yet to happen event and has corrected to show that increased variable risk of the event happening.

TA is based on Human (Animal) group behaviour. TA can display on a chart the greed and fears of that trading group through price corrections affected by perceived level of risk... Animal behaviour can be predictive such as the (dangerous) noise of a hunter firing a gun or a similar (no danger) noise...both similar noises fire off the same intinctive behavioural response signals (fear)..Experienced Stock market TAers respond to these fear signals as sell signals...It might matter to a FAer but to an TAer it does not matter if the event(s) are real or imaginary... if the market experiences fear that is real enough to a TAer!! and TAer's respond accordingly..

Its a swing and roundabouts thing with FA v TA..FA not responding to possible danger may win out but waiting to find out creates risk..then FA conflict may cause denial which creates more risk and delay...TA responds quickly so risk is low they may miss a little gain or whipsawed (treated as insurance policy fee) but once group behaviour realises and fear turns to greed, the signal to buy returns quickly at a lower risk..FA doesn't factor in market risk unless using specific tools such as the likes of Z Altman scores etc

[skid]

I think Hoops post is demonstrating that TA ,while not predicting the future ,can help predict the future (actually future behavior)(better than just FA)

I think DIL and PEB are an example of how costly it can be to be Stubbornly FA

[Hoop]

Stupid question: but what use is TA if it can't help predict the future? In other words, how else would anybody want to use it? Nobody wants to predict the past...
FA can't predict the future either.... so if you imply your same argument of TA to FA... you would be asking this question too... why use FA?

Nobody wants to predict the past..I do:)...Trends relies on the past,,also.. Past behaviour has a habit of cycling.. greed follows fear which follows greed

[MAC]

Crumbs Hoop, haven’t had a nice four page reply from you for ages.

Come on though, one must still have some basis for investing ones hard earned savings, it’s not a lottery after all, things can change for FA’s between now and February also, interest rates, company goals, build rate, unions, wage pressures, property valuation methods, construction schedules, all manner of things, yet one still must have a basis to invest and to develop a base case, important for sensitivity work too.

The best one can do is to assess the rewards with FA models and determine a base case from an assessment of risk likelihoods and mitigations.

For profitable growth stocks like SUM I use a long run DCF model of course, but get greater short run (six months) accuracy with a generic anchored PEG/PER model.

If what you are telling me though is that you trade within timeframes which are less than reporting periods than that’s all fine, you don’t have to play.

You may like to though consider stating that in your posts.

Some TA’s very often give newbies a scare at times because newbies are often not yet confident enough to fully appreciate that very short term negative charting predictions are not typically representative of the long term underlying fundamentals of a company.

Over the long term the share price goes from point to point as fundamental valuations change up or down, in the short term, well the share price wobbles about as you say depending on human behaviours and sheep trails.

[skid]

FA sounds like a good way to identify potentially good stocks--TA sounds like a good way to keep track of them.(or peoples behavior towards them)

[winner69]

Who says FA can't help predict the future? An intimate understanding of a company's current operations and future aspirations provide very useful insights to likely future performance.

Yes, no argument

But what do investors/traders/punters want to pay for that company performance at any point in time is the question?

[skid]

And there are plenty of outside events that can throw a spanner into that mix

[Jay]

MAC - have a read of KW's thread http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits

That explains a lot in my opinion

[Hoop]

Crumbs Hoop, haven’t had a nice four page reply from you for ages. Thks MAC for those kind words:)

Come on though, one must still have some basis for investing ones hard earned savings, it’s not a lottery after all..No is not My TA discipline requires 70+% odds before I invest SUM's Chart odds at the moment are far less than that so I"m out of SUM, things can change for FA’s between now and February also, interest rates, company goals, build rate, unions, wage pressures, property valuation methods, construction schedules, all manner of things, yet one still must have a basis to invest and to develop a base case, important for sensitivity work too. Yep agree it is called using Past data to create a base line Both TA and FA use this..

The best one can do is to assess the rewards with FA models and determine a base case from an assessment of risk likelihoods and mitigations.

For profitable growth stocks like SUM I use a long run DCF model of course, but get greater short run (six months) accuracy with a generic anchored PEG/PER model.

If what you are telling me though is that you trade within timeframes which are less than reporting periods than that’s all fine, you don’t have to play...No timeframes, react on important signals..

You may like to though consider stating that in your posts.

Some TA’s very often give newbies a scare at times because newbies are often not yet confident enough to fully appreciate that very short term negative charting predictions are not typically representative of the long term underlying fundamentals of a company. Often Newbies enter the market near the top of the bull cycle ..
Most of the money lost by Newbies is through denial that the equity cycle has changed to bear which puts downward trading pressure on all stocks The equity market tops out before the economy tanks so the latest published forward FA figures are usually rosy..Newbies grasp FA disciplines first (they can't grasp TA so they either ignore it or treat it as Voodoo) they listen and act on conventional brokers reports, crunch past data and failure to exit the market when it tops out as they find its too hard to push the sell button especially when Fundamental data still look rosy...Experienced TAers have no problems in pushing that sell button..In SUM's case it is not hard to see that the shareprice increase has got ahead of it fundamental growth increase...
Over the long term the share price goes from point to point as fundamental valuations change up or down, in the short term, well the share price wobbles about as you say depending on human behaviours and sheep trails.Hmmm don't limit your thinking that wobbles and trader behaviour are just short term. They are time indeterminate ..and could also can be a long term or a very long term secular market events..There are some very unloved stocks out there for various reasons...also, ex darling stocks usually suffer for years from "No anger is worse than that of a jilted woman" syndrome...Hmmm.. the retirement sector has been the darling sector for a while now hasn't it?....
.....................................

[MAC]

MAC - have a read of KW's thread http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits

That explains a lot in my opinion

Oh yeah don't get me wrong, I'll use TA when I want to enter or exit, but typically I just don't care too much about it during the one or two years in between. One must filter the short term noise from the important fundamentals, especially the sentiment cycles.

It is a case of each to their own though, statistically over half of short termer's make no money, for every trader who has a win another just had a loss, there are some like KW and Hoop that probably do quite well as they have the experience to be consistently in the 50% that make money at it.

It’s not for me though, I gave it up many years ago and never looked back, long term investing in NZ is an attractive option with the unique tax break we have. It's pretty much allowed me to give up the salaried life in my mid 40's and now I just work for Mac Inc, life’s good.

[Vaygor1]

Hi all.

I have essentially been offline for the last week and see some interesting discussion and responses in that time on many topics within this thread.
Will hopefully be able to contribute more interesting discussion next week or maybe (hopefully) over the weekend.

But (somewhat) briefly:

I was fairly critical of Hoops TA style of trading when 1st joining ST. I have changed my view since. FA & TA assist each other and I wish to thank you for your contributions and insights Hoop.

Winner. Re the http://www.seniors-housing.net (http://www.seniors-housing.net/) articles. This website to-date has essentially been a robot searching the web for any recent retirement sector news/keywords and, following a cursory glance by probably one individual, dumping it into its mumbo-jumbo website. Has a vendetta against RYM for reasons unknown. Has changed its format very recently though.. might be worth another look/review.

My earlier views on the awards in question are here:
http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=463434&viewfull=1 - post463434 (http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=463434&viewfull=1#post463434)
and
http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=463540&viewfull=1 - post463540 (http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=463540&viewfull=1#post463540)
Note – As referred to above, seniors-housing.net have recently changed their website so some of the links/descriptions within the above ST posts no longer apply. Still yet to see ANY reference to a 2012 & 2013 winner and now all awards’ history has completely disappeared in the new format…. must be very prestigious.

Black Peter. Thanks for your well balanced input and feedback re Awards.

NewGuy. Re http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=504269&viewfull=1#post504269 Gradually moving to full in-house development is about as effective as trying to gradually become pregnant.

Couta. Still waiting for that $3.08 mark . Possibly a new low point below $2.80 soon?

Roger. Will try and get back to you soon re your PM.

[couta1]

I have just received an out of line and out of the blue reputation comment from smokin Cubans basically insulting me and saying I don't belong on this forum(In relation to the Sum thread) I thought we had moved past this and what right does this individual have to decide who should and shouldn't be on the forum? I have complained to the moderators so we will see what happens, no wonder people are leaving when things turn into a twitter bullying type site.

[couta1]

I have just received an out of line and out of the blue reputation comment from smokin Cubans basically insulting me and saying I don't belong on this forum(In relation to the Sum thread) I thought we had moved past this and what right does this individual have to decide who should and shouldn't be on the forum? I have complained to the moderators so we will see what happens, no wonder people are leaving when things turn into a twitter bullying type site.
The Moderators have removed Mr Cubans nasty comments from my rep page, were all learning along this path and can I suggest Mr Cubans learn some basic respect for his fellow posters and take a good look in a mirror you never know he may even discover some flaws in himself.

[Beagle]

I met couta1 at the SUM annual shareholder meeting and can personally attest that he strikes me as a very nice guy. His honestly in that he is learning and about his losses is refreshing and he struck me as a unpretentious good honest hard working bloke.

I think there a very small rouge element on here that need to reflect upon their conduct. Lets try and be ladies or gentlemen and share constructive information in a mature and kindly way that helps our fellow investors. My 2 cents.

[macduffy]

Fully agree, Roger.

We don't want any rogue ladies or gentlemen rouging themselves up on this forum - lipsticks on pigs, so to speak!

;)

[Mista_Trix]

You're alright with us Couta, don't worry too much about the actions of the few.

Appreciate your commentary, and honesty :)
Keep it up.

Anyways, SUM.
Downtrending still.

[iceman]

I met couta1 at the SUM annual shareholder meeting and can personally attest that he strikes me as a very nice guy. His honestly in that he is learning and about his losses is refreshing and he struck me as a unpretentious good honest hard working bloke.

I think there a very small rouge element on here that need to reflect upon their conduct. Lets try and be ladies or gentlemen and share constructive information in a mature and kindly way that helps our fellow investors. My 2 cents.

I was lucky enough to meet both of you there as well and wholeheartedly agree with you Roger. No need for personal attacks on this forum.

[Goldstein]

Depth is looking rather startling at close. What are others seeing?

[Goldstein]

Sorry about the size of the pic, I was in a rush.

Over $10m traded. Biggest since QPE's sell down.

[winner69]

Huge volume and an up day as well

Looking good for next week I reckon

Hoop better update his chart before Monday morning. This could be a pivotal point

[Goldstein]

[QUOTE=winner69;505585
Hoop better update his chart before Monday morning. This could be a pivotal point[/QUOTE]

He'll probably give us his drifting sideways with weak signals comment (it would still be good to hear it though).

I must admit I've been very surprised with the SUM SP over the last week. I'm still a bit in front riding it up to 2.98 selling and then getting back in. But I really did think that once we had the higher high of $3.02 we were all set for a nice drift up to Q3.

I can't really work out why we had the plunge. Also there is a complete discrepancy between the volumes on the way down and those on the way up today. There seems to be small fish, medium fish and big fish. The big fish currently valuing the company at @2.93, while some jittery small fish were thinking $2.83 a couple of days ago.

Was it Hoop who said he only invests when he has >70% certainty? I think I feel a bit closer to a coin toss with SUM at the moment.

[couta1]

Goldstein remember this is a long term investment which has been having a breather lately as has Ryman, we will see what happens once the election is out of the way and we still have nearly 3 weeks until the Q3 results are due so I'm still expecting a climb between now and then. Other factors to consider are the recent announcements of the possible Oceania and Hercules listings weighing on the market but the big fish showing confidence is a good sign.

[Goldstein]

Goldstein remember this is a long term investment which has been having a breather lately as has Ryman, we will see what happens once the election is out of the way and we still have nearly 3 weeks until the Q3 results are due so I'm still expecting a climb between now and then. Other factors to consider are the recent announcements of the possible Oceania and Hercules listings weighing on the market but the big fish showing confidence is a good sign.


That's what I feel too couta1. I can't help wondering what affected the SP this last week. Nothing material has changed over the last week to warrant a ~3% swing each way (unless there is some macro reason).

The other possibility of course is that we've just seen insider trading at work. Some insiders had news of a large sell (getting out beforehand), then others had news of a matching buy.

[Beagle]

Goldstein remember this is a long term investment which has been having a breather lately as has Ryman, we will see what happens once the election is out of the way and we still have nearly 3 weeks until the Q3 results are due so I'm still expecting a climb between now and then. Other factors to consider are the recent announcements of the possible Oceania and Hercules listings weighing on the market but the big fish showing confidence is a good sign.

Mate there was some sort of index rebalancing action late yesterday afternoon at the close. If affected a lot of stocks and huge volumes. The net result is we now know where the big fish see this stock as being fair value.

[winner69]

Mate there was some sort of index rebalancing action late yesterday afternoon at the close. If affected a lot of stocks and huge volumes. The net result is we now know where the big fish see this stock as being fair value.

Insos think Fair value 293 then.

That's good .....you may get your 250 wish then

[Beagle]

Insos think Fair value 293 then.

That's good .....you may get your 250 wish then

No I hold some now mate :t_up:

[Goldstein]

Mate there was some sort of index rebalancing action late yesterday afternoon at the close. If affected a lot of stocks and huge volumes. The net result is we now know where the big fish see this stock as being fair value.

Cheers Roger. The after hours swaps went on until 5:30pm. There may be a raft of SSH notices early next week.

I still think the market reacted to this during the week before it happened. Those in the know aye?

[winner69]

Obviously punters weren't worried who became the government. SUM et al not following the market up today.

Maybe some hidden message in this?

[Hoop]

Obviously punters weren't worried who became the government. SUM et al not following the market up today.

Maybe some hidden message in this?

Maybe..... Before the next election we should all buy a truckload of SUM then vote Labour ??? :D

[dingoNZ]

Surprised me too especially given the Oceania news in the ARF.

[Beagle]

Obviously punters weren't worried who became the government. SUM et al not following the market up today.

Maybe some hidden message in this?

Its all cloak and dagger stuff in the dark at this stage.
http://www.afr.com/videos/business/company-directors-buy-and-sell-rub2jscdq10nnmv2xhwaq_dmm0xzufws

Loved the bit where they say there's only certain times during the year when they can buy and sell.
At the next AGM be sure to ask directors and management why they think quarterly sales results contain no price sensitive information, (despite being clearly marked as price sensitive in the NZX release), and why they believe they should be free to trade immediately before such quarterly sales announcements

We all know the company makes the vast majority if its profit from new sales and resales but according to management the release of these numbers is not price sensitive...the mind boggles how they think they can justify their stance.

[couta1]

Obviously punters weren't worried who became the government. SUM et al not following the market up today.

Maybe some hidden message in this?
Yeah that message would be BUY and be PATIENT:cool:

[Snow Leopard]

Yeah that message would be BUY and be PATIENT:cool:

It is my belief that the price has further to fall for SUM.

Best Wishes
Paper Tiger

Disc: The only one I currently hold is MET.

[BlackPeter]

Its all cloak and dagger stuff in the dark at this stage.
http://www.afr.com/videos/business/company-directors-buy-and-sell-rub2jscdq10nnmv2xhwaq_dmm0xzufws

Loved the bit where they say there's only certain times during the year when they can buy and sell.
At the next AGM be sure to ask directors and management why they think quarterly sales results contain no price sensitive information, (despite being clearly marked as price sensitive in the NZX release), and why they believe they should be free to trade immediately before such quarterly sales announcements

We all know the company makes the vast majority if its profit from new sales and resales but according to management the release of these numbers is not price sensitive...the mind boggles how they think they can justify their stance.

Don't forget, the link is referring to Australian companies. Maybe Australian shareholders have some better framework / systems to protect them from insider trading (less sleepy watchdogs?)?

[BlackPeter]

It is my belief that the price has further to fall for SUM.

Best Wishes
Paper Tiger

Disc: The only one I currently hold is MET.

Why do you think that?

On face value their fundamentals (average PE, forward PE) look now similar or better compared with MET and RYM ... and analysts forecasts (ft.com puts the median 12 month target at $3.45) are quite upbeat as well ...

[Beagle]

Don't forget, the link is referring to Australian companies. Maybe Australian shareholders have some better framework / systems to protect them from insider trading (less sleepy watchdogs?)?

Quite correct mate. The Australian regulators (watchdogs) are funded extremely well and have real teeth relative to their N.Z. poodle counterparts.

[winner69]

Why do you think that?

On face value their fundamentals (average PE, forward PE) look now similar or better compared with MET and RYM ... and analysts forecasts (ft.com puts the median 12 month target at $3.45) are quite upbeat as well ...

$3.40 to $4.50 the targets range from. You would love the $4.50 one eh

As the article posted somewhere yesterday said - DON'T use broker research for Valuations (they're implausibly precise)

I always discount them 15% to 20% so today's price probably where it might be in a years time.

[couta1]

Bottom line is you'll make money in this sector if your patient and I don't mean cat on a hot tin roof kinda patience so many seem to have around here:cool:

[Beagle]

$3.40 to $4.50 the targets range from. You would love the $4.50 one eh

As the article posted somewhere yesterday said - DON'T use broker research for Valuations (they're implausibly precise)

I always discount them 15% to 20% so today's price probably where it might be in a years time.

Well if we use this analogy we have broker targets of about 97 cents for HNZ so fair value is 15-20% discounted from there, (about 80 cents). Time for another wake-up coffee mate :)

[In4a$]

Bottom line is you'll make money in this sector if your patient and I don't mean cat on a hot tin roof kinda patience so many seem to have around here:cool:
I'm with you Couta1, been topping up and in the red at moment but confident that 2 or 3 years from now I'll be glad I brought and held.

[winner69]

Well if we use this analogy we have broker targets of about 97 cents for HNZ so fair value is 15-20% discounted from there, (about 80 cents). Time for another wake-up coffee mate :)

Time will tell

And brokers have got HNZ wrong eh

[Vaygor1]

I'm with you Couta1, been topping up and in the red at moment but confident that 2 or 3 years from now I'll be glad I brought and held.

That is an excellent timeframe to be thinking over, and for which you will be handsomely rewarded.

[winner69]

Well if we use this analogy we have broker targets of about 97 cents for HNZ so fair value is 15-20% discounted from there, (about 80 cents). Time for another wake-up coffee mate :)

Now look what you have done .... HNZ share price tumbling today

[Ginger_steps_]

Yup, I'm working to a 3 to 4 year plan, during which I expect the SP to roughly double. My longer term play is around 12-15 years, by which time I expect the SP to roughly increase 10-fold. Im a holder (and heavily overweight) but i don't think the sectors success is a given. I see technology as a huge threat to the sector over the next 10-20 years - when the technology is available for people to stay in their own homes till death do they part - it will have massive implications for retirement villages.

[Beagle]

Now look what you have done .... HNZ share price tumbling today

VWAP was 103.2 yesterday and 102.99 today as at 3.15 p.m...in line with market. Its all good mate, we can relax over a nice cup of tea.
I need all the calming herbal tea I can find as well as my favourite dog to pat, (stroking / patting pets lowers blood pressure), when my mind reflects on a certain director's share transaction.

[Deej5]

Im a holder (and heavily overweight) but i don't think the sectors success is a given. I see technology as a huge threat to the sector over the next 10-20 years - when the technology is available for people to stay in their own homes till death do they part - it will have massive implications for retirement villages.

Quite right. We are all going to live in virtual rest homes with virtual nurses making cocoa from 3D printers. Can't wait!

[In4a$]

Im a holder (and heavily overweight) but i don't think the sectors success is a given. I see technology as a huge threat to the sector over the next 10-20 years - when the technology is available for people to stay in their own homes till death do they part - it will have massive implications for retirement villages.
I dont think it will be to bad, many dont want the hassle of maintaing their home, garden etc and go to the villages for companionship, security and carefree life. Technology wont replace companionship and its the main reason those I know went into a retirement village. Money, space wasnt an issue, they wanted the village lifestyle. I dont see that changing any time soon.

[Beagle]

I know what ginger is getting at with the advances in robotics and wearable medical devices but the average entry age is apparently 78 and from what I've observed its more about care, companionship, community and village lifestyle than about meeting specific health care needs.

[troyvdh]

Thankyou couta...my sentiments exactly....cheers

[Ginger_steps_]

Really? You think that technology will displace two of the main reasons that people go to a village - to socialise and have immediate access to care if/when needed?

If anything, the rate of growth will decline, but I foresee SUM's village portfolio growing in size year on year, and house prices sustaining decent long term growth, too. Collectively, these paint a very favourable picture IMHO.

And what happens to house prices when an abundance of baby boomers down size or move into retirement homes? There are an multitude of other possibilities for daily companionship outside of a retirement village. Do you think that with baby boomers about to hit the age, and demand rapidly increasing that there wont be new companies companies to fulfil the need for their out of village healthcare? Not all old people want to move into a retirement home for many reasons - if they have the option not to, save thousands in the process and guarantee their children a better inheritance - that there wont be a large amount of takers for this option??


Quite right. We are all going to live in virtual rest homes with virtual nurses making cocoa from 3D printers. Can't wait! I realise you are being sarcastic but yes that is exactly my point buddy. Whats so hard to believe about have you health status monitored in the cloud and automated food preparation devices to make you oh so precious cocoa? So.... what exactly do you think can not be addressed by technology in coming years?


Better alert the summerset board, fellas, they don't seem aware of this imminent threat and already have enough land to double their village portfolio.

*hurriedly exits the stock* Now your just being a dick NG. Did i mention anything about the management? If you don't think there is any threat then your a extremely naive. Just because they double their portfolio doesn't mean their future ROI will be as positive as present.


I dont think it will be to bad, many dont want the hassle of maintaing their home, garden etc and go to the villages for companionship, security and carefree life. Technology wont replace companionship and its the main reason those I know went into a retirement village. Money, space wasnt an issue, they wanted the village lifestyle. I dont see that changing any time soon.
Or they can downsize their home to a small low maintenance apartment and spend the extra money on enriching their lifestyle.


I know what ginger is getting at with the advances in robotics and wearable medical devices but the average entry age is apparently 78 and from what I've observed its more about care, companionship, community and village lifestyle than about meeting specific health care needs. Yes Roger you are right those are some of the threats. Again care, companionship and lifestyle can easily be met outside of a retirement village with nearing technology and some smart planning by either a company or a retiree's family - not presently but soon i'm sure as the monitoring technology develops and new companies emerge.

Dont forget ALL - I am a shareholder and believe the sector still has plenty of gains to come. Im just stating that technology is a threat - I am 30 and remember only twenty years ago I was typing 6 lines of DOS commands into a computer just to play a game! The internet didnt even exist for public use yet!!!!!!!!!!!!!!! Now I have an Ipad that takes 5 seconds to download anything I want, Google are about to release self driving cars - that will likely put hundreds of millions of people out of jobs, medicine is improving at a huge rate and prolonging life and health - Whats going to come of the next 10 -20 years (again keeping in mind the exponential technology curve)?? if you don't think something as simple as a retirement village is at risk at all - then you are being incredibly naive.

[Joshuatree]

Just in case a few didn't watch this in the lounge."Humans need not apply"

https://www.youtube.com/watch?v=7Pq-S557XQU&list=UU2C_jShtL725hvbm1arSV9w

[Ginger_steps_]

Just in case a few didn't read this in the lounge."Humans need not apply"

https://www.youtube.com/watch?v=7Pq-S557XQU&list=UU2C_jShtL725hvbm1arSV9w

haha Love the quote "If your job is clicking and typing (like maybe you are supposed to be doing right now!) then the bots are coming for you too buddy" Made me piss myself laughing - as that is exactly what I was supposed to be doing...right then!

[couta1]

Things will have to change dramatically before there is any meaningful system in place to keep people in their own homes. Firstly there is a dramatic shortfall in the funding model currently running whereby subsidized allowable hours of care don't even begin to meet the needs of people staying in their own homes, basically you would have to pay a full time nurses salary for many for their complex needs requirements to be met(For each individual) so basically the Govt would be picking up the tab that is currently being covered by retirement village operators profits. Secondly I have noticed an ever increasing number of elderly Asians entering the care section of retirement villages over the last few years (This was not the case going back 10 years) highlighting that families that traditionally looked after their family members until death are reducing in numbers all the time increasing the need for villages, I think this trend is only going to continue. Anyway just a bit of food for thought from the coalface.

[Goldstein]

Things will have to change dramatically before there is any meaningful system in place to keep people in their own homes. Firstly there is a dramatic shortfall in the funding model currently running whereby subsidized allowable hours of care don't even begin to meet the needs of people staying in their own homes, basically you would have to pay a full time nurses salary for many for their complex needs requirements to be met(For each individual) so basically the Govt would be picking up the tab that is currently being covered by retirement village operators profits. Secondly I have noticed an ever increasing number of elderly Asians entering the care section of retirement villages over the last few years (This was not the case going back 10 years) highlighting that families that traditionally looked after their family members until death are reducing in numbers all the time increasing the need for villages, I think this trend is only going to continue. Anyway just a bit of food for thought from the coalface.

Yep the last point you make couta1 is something I've thought a bit about. Increasingly, the aging population are going to spend captial they would otherwise have left to the next generation - the next generation being too busy to look after the aging population.

The only thing that will stop this is large unemployment for the current workforce. This will see the return of the extended family to protect wealth.

[karen1]

Things might change dramatically in the near future, take a look at this, and wonder at the implications.

http://www.3news.co.nz/tvshows/3rd-degree/pushing-3d-printing-to-new-boundaries-2014091721

[Goldstein]

Things might change dramatically in the near future, take a look at this, and wonder at the implications.

http://www.3news.co.nz/tvshows/3rd-degree/pushing-3d-printing-to-new-boundaries-2014091721

You still need somewhere nice to wait for your 3-D printed hip replacement to be done. A Summerset unit perhaps?

There is more to aging than just parts wearing out. Hormone levels drop off, telomeres shorten every time cells divide. Maybe a new heart, lung, liver etc would add a few more years to anyone with an acute condition, but this is far from extending lives in general.

So I guees SUM villages need 3D printers and if they have robots they better be indistinguishable from humans?

[Ginger_steps_]

So I guees SUM villages need 3D printers and if they have robots they better be indistinguishable from humans?
Dont forget the cocoa - looooots of cocoa.

[Beagle]

Elon Musk reckons self driving Tesla's will be available from 2020 but I don't expect them to be widely available at an affordable level for many years after that.

While huge advances are currently being made in computers ability to process visual inputs, affordable home help robots and a very long way off in my opinion and will never replace the sense of care, community, support and lifestyle I have seen my own mother really enjoying at her retirement village.

[Joshuatree]

Don't know about that ; have you watched "Humans need not apply" The bots are invading and it will be explosively fast..
Will bots be able to buy Lotto tickets and keep the winnings?:) And do you remember the movie"The cars That Ate Paris" the cars became intelligent and refrigerated themselves and put a human body behind the wheel to hide the fact.

Hers another 3D printing article re eyes, noses and blood


http://gizmodo.com/how-doctors-are-printing-bones-eyes-noses-and-blood-1474983505

[winner69]

Roger - they might listen

http://www.stuff.co.nz/business/money/10543852/FMA-probes-fresh-insider-trading-claims

[skid]

Yep the last point you make couta1 is something I've thought a bit about. Increasingly, the aging population are going to spend captial they would otherwise have left to the next generation - the next generation being too busy to look after the aging population.

The only thing that will stop this is large unemployment for the current workforce. This will see the return of the extended family to protect wealth.

I think if we are talking about elderly Asians you are talking much more about a cultural shift rather than just capital.

Meanwhile the robot idea has gotten plenty of response--Sometimes ST can be a real hoot:)

[Beagle]

Roger - they might listen

http://www.stuff.co.nz/business/money/10543852/FMA-probes-fresh-insider-trading-claims

Thanks mate. Not holding my breath for any litigation as they're woefully under-resourced.

[Harvey Specter]

Thanks mate. Not holding my breath for any litigation as they're woefully under-resourced.Indeed - there is a reason complaints have declined. Everyone knows there wont be any follow through.

[Beagle]

Here we have a case where any reasonable person would freely accept that Mrs Barlow was in possession of inside knowledge when two days before the Q1 sales announcement on 7 April 2014 she sold $4.8m of her family trust owned shares, (associated person test applicable). The company has not denied that she has inside information in their written response to my enquiry when she sold and their sole defence is that subsequent share price performance after the Q1 sales result was such that this indicates the Q1 sales announcement was not price sensitive.

Clearly any reasonable person would acknowledge that at the time she acted on this inside information she would have had no idea what the share price would do after the Q1 sales announcement. Further such Q1 sales announcement was clearly marked as price sensitive when it was announced to the market. If the company didn't think it was price sensitive why issue the announcement with a price sensitive classification ?
How can the company possibly claim that quarterly sales metrics, (which are THE leading indicator of future profitability as the company makes ostensibly ALL its profits from sales and re-sales), are not price sensitive information ? Quite clearly the company's contention is absolutely ludicrous and without any merit whatsoever. SUM's response is as ludicrous as some teenager trying to claim that when they travelled in a sports car at 150 miles an hour down Queen St running red lights all the way (and nobody was injured or killed as a result thereof), then that sort of criminal behaviour is perfectly acceptable simply because it was a victimless crime.

[winner69]

Roger - if Norah rang you up a few days before an announcement with the good oil and you acted on that and made a killing would you (or deserve to) end up in jail as an 'information insider'?

Did Martha Stewart go to jail or just hang around the mansion in chains for a while?

[forest]

Here we have a case where any reasonable person would freely accept that Mrs Barlow was in possession of inside knowledge when two days before the Q1 sales announcement on 7 April 2014 she sold $4.8m of her family trust owned shares, (associated person test applicable). The company has not denied that she has inside information in their written response to my enquiry when she sold and their sole defence is that subsequent share price performance after the Q1 sales result was such that this indicates the Q1 sales announcement was not price sensitive.

Clearly any reasonable person would acknowledge that at the time she acted on this inside information she would have had no idea what the share price would do after the Q1 sales announcement. Further such Q1 sales announcement was clearly marked as price sensitive when it was announced to the market. If the company didn't think it was price sensitive why issue the announcement with a price sensitive classification ?
How can the company possibly claim that quarterly sales metrics, (which are THE leading indicator of future profitability as the company makes ostensibly ALL its profits from sales and re-sales), are not price sensitive information ? Quite clearly the company's contention is absolutely ludicrous and without any merit whatsoever. SUM's response is as ludicrous as some teenager trying to claim that when they travelled in a sports car at 150 miles an hour down Queen St running red lights all the way (and nobody was injured or killed as a result thereof), then that sort of criminal behaviour is perfectly acceptable simply because it was a victimless crime.

Roger I appreciate you pursuing what seem to me insider trading, the more I think about SUM (this issue and the way they deal with share holder questions) the less I like them.

[Beagle]

Martha Stewart case
http://www.sec.gov/news/press/2006/2006-134.htm

Banned from being a director for 5 years !!

In the States the SEC progresses approximatly 500 cases a year of insider trading !!
http://economics.about.com/cs/finance/a/insider_trading.htm

Time for the FMA to be well funded so they can bark and BITE !!

Thanks Forest.

[Goldstein]

I don't really want to open this can of worms again - and apologies if I do.

From what I can see Mrs Barlow has only ever made one sale of shares which coincided with her stepping down as CE.

Good luck to those of you on a crusade here.

[Beagle]

I don't really want to open this can of worms again - and apologies if I do.

From what I can see Mrs Barlow has only ever made one sale of shares which coincided with her stepping down as CE.

Good luck to those of you on a crusade here.

So what you're suggesting is that because she was stepping down as CEO she is completly exempt from the Securities Market regulations. Yeap, that's a really "compelling" argument.
Just as weak and irrelevant as SUM's subsequent SP performance contention.
Next we will have someone claiming because she's been showered with so many awards she must be so good that entitles her to a securities act exemption.

[Goldstein]

So what you're suggesting is that because she was stepping down as CEO she is completly exempt from the Securities Market regulations. Yeap, that's a really "compelling" argument.
Just as weak and irrelevant as SUM's subsequent SP performance contention.
Next we will have someone claiming because she's been showered with so many awards she must be so good that entitles her to a securities act exemption.

Roger it is a bit like selling the family home. and all the tax dodges you can lump in when doing so. You've probably even advised a few clients on the matter.

However the onus here is to prove guilt - and I don't see that happening.

There was:

(i) Just reason for disposing of the shares
(ii) No prior form

So I suspect any litigation would be fruitless.

Now the different question of whether what she did was right or ethical. Then we have the following to consider:

(i) the transaction could have been set up in advance
(ii) the board slipped up
(iii) Mrs Barlow simply made a mistake

I just can't imagine a CE being that successful trying to squeeze the last few % out of her shares by quickly selling before the Q1 results.

I'll let you get back you sharpening your axe

[Beagle]

Sorry the analogy is lost on me but if you are alluding to a pattern of buying and selling houses on a regular basis, i.e. trading, I understand the IRD are pretty hot on that area and using Council records looking for flippers.
Securities Act is clear on insider trading, she had clear inside knowledge, knew the market would be likely to be disappointed, (nobody invests in a company that touts itself as a growth company for flat sales results) and went about carefully disposing of her stake in an organised manner in what looks like a book-build, (ACC substantial security holder notice indicated they bought a substantial part of her stake).
Company has clear Securities trading policies that should have been followed and known by the board and CEO.
No mention was made of the transaction being set up in advance argument by SUM in their written response.

The reason for selling her shares is irrelevant, as is subsequent SP performance after Q1 sales result.

Some poor bugger has to try and work hard to ensure transparency and integrity in the execution of SUM's securities trading policies seeing as the board clearly pay only lip service to them and seeing as nobody else seems prepared to do it I've taken up the challenge. You call it what you like, I'll call it an attempt to keep those buggers honest.


I just can't imagine a CE being that successful trying to squeeze the last few % out of her shares by quickly selling before the Q1 results.
I can, its called Greed.

[Vaygor1]

I don't really want to open this can of worms again - and apologies if I do.

From what I can see Mrs Barlow has only ever made one sale of shares which coincided with her stepping down as CE.

Good luck to those of you on a crusade here.

There is utterly no link between the timing of Norah stepping down as CEO and selling her shares. Why on earth do you think there is a link there?

Even if there was some odd-ball link, are you saying she couldn't wait 3 or 4 more days and sell post-announcement? It's a rhetorical question because the answer is that she could have waited. She elected not to.

I would be VERY surprised if the board didn't know prior to the transaction what she was doing, and assuming I'm right, they should have tried to stop her. Otherwise why would the Board be defending her now?

In her timing to capture the perceived gains, she has taken the calculated risk of potential fallout via the FMA and other entities. With hindsight, she gained nothing, but the outcome is irrelevant. Does one get off for attempted burglary if the heist was unsuccessful?

I agree with Forest. In my view the board with its current behaviour,evidenced by the occurrence of this event and their current position on it, makes me nervous. On top of that, rightly or wrongly, I've lost faith in their (audited and unaudited) reported figures. The upshot being that the figures are no good to me.

No trusted figures, no useful analysis, no buying. Sorry guys/gals. Truly am. Was looking forward to being part of this thread as a holder. :(

[Tevita]

Goldstein does not make a very convincing argument. As a defense attorney pleading in the US of A he would certainly not earn his retainer.
Having said that it is a thorny issue. Forgetting the legalities and the pending announcement and appreciating the fact that she was stepping down what would have been a
respectable time within which to sell? She did not owe ongoing loyalties. But I am interested in the nature of her subsequent career moves from an ethical view point and shareholders ongoing loyalty if valued by the Board..

[Goldstein]

Vaygor - it is common practice for CEs to sell shares earned over their tenure when they step down.

Tevita - a crime has not been committed.

NewGuy - apologies for tying your forum up. I'll keep quiet now.

[Vaygor1]

Vaygor - it is common practice for CEs to sell shares earned over their tenure when they step down.

It happens occasionally, but not usually under circumstances that can at best be described as dodgy.


Tevita - a crime has not been committed.

This statement is definitive 'Not guilty'. How do you know? Do you have ESP?


NewGuy - apologies for tying your forum up. I'll keep quiet now.

If I were a shareholder (or as I was, a shareholder-to-be), I would be welcoming this discussion. It's relevant, and provides a good basis to consider your own options based on your own perceptions, experience, and appetite for risk. Just because it isn't the most positive news does not mean is isn't worthy news... and this is not NewGuy's forum as you allude; we all have as much right to it as each other. Whether you agree or disagree with anyone's particular viewpoint, it is better to have the feeling of others out there than not. After all the 'others' are the market.

The impact of Norah's actions is real (I'm proof, and Roger's proof amongst quite a few others I know of both inside & outside of ShareTrader), and its occurrence cannot be construed as being positive for the Boards reputation or the share price.

But this does not appear to concern you Goldstein.

For me, from a purely selfish viewpoint?... I am pleased Norah timed it the way she did. Without which, there would have been no discussion here, no follow up from Roger (to whom I am now indebted), and I would be much more in the dark as to the mindset and culture that I have concluded exists within SUM's highest ranks; a conclusion, need I say, that gives me the heebie jeebies.

The content and nature of SUM's very recent response as a result of Roger's enquiry is extremely valuable to me given my genuine intent to buy and in large volumes; an intent that has subsequently vaporised by the way. Far more valuable in fact, ironically, than the knowledge of Norah's trading event that triggered it all.

[Tevita]

Vaygori -Thank you for that impartial comment. Particularly as it is free of sour grapes bias as a professed non shareholder. You stress a good point. Can we learn something of the culture of the Board from this lesson? Where do their greater loyalties lie? Should we use this background as a filter when listening to/reading any reports on the company`s progress into the future?

Disclosure - I have substantially sold down since. All I need are convincing and reassuring noises from the AGM to convince me that protecting my investment back-side as I did was an imprudent move.

[gv1]

Some might remember how MD of GUNNs disposed his 2 million odd shares before the profit announcement. Guess what, even taken to courts...He claimed to be suffering from some illness to sell for medical reason...He is still around...didn't die. BUT sure would rot in hell.

[Beagle]

There is utterly no link between the timing of Norah stepping down as CEO and selling her shares. Why on earth do you think there is a link there?

Even if there was some odd-ball link, are you saying she couldn't wait 3 or 4 more days and sell post-announcement? It's a rhetorical question because the answer is that she could have waited. She elected not to.

I would be VERY surprised if the board didn't know prior to the transaction what she was doing, and assuming I'm right, they should have tried to stop her. Otherwise why would the Board be defending her now?

In her timing to capture the perceived gains, she has taken the calculated risk of potential fallout via the FMA and other entities. With hindsight, she gained nothing, but the outcome is irrelevant. Does one get off for attempted burglary if the heist was unsuccessful?

I agree with Forest. In my view the board with its current behaviour,evidenced by the occurrence of this event and their current position on it, makes me nervous. On top of that, rightly or wrongly, I've lost faith in their (audited and unaudited) reported figures. The upshot being that the figures are no good to me.

No trusted figures, no useful analysis, no buying. Sorry guys/gals. Truly am. Was looking forward to being part of this thread as a holder. :(

I've reduced my stake significantly to less than 5% of my portfolio and that holding is under review pending the outcome of the imminent formal complaint I will be making to the FMA, with or without the assistance of the Chairman of the New Zealand Shareholders association's help, (presently awaiting another response from him).

You are right to be concerned Vaygor1. The board and management's response has been "interesting" to say the least. Tip of the iceberg ????

[winner69]

I was surprised at the time that Norah seemed to use the 5 days allowable to make that disclosure to her advantage.

Sold on Monday - sales announcement on Wednesday - disclosure on Friday (late afternoon).

Cynic in me says disclosing on Friday was to create the impression she sold after the announcement .... and used the late Friday afternoon and hope nobody will notice trick.

Of course that wasn't the case, my apologies for being so cynical

[Harvey Specter]

I've reduced my stake significantly to less than 5% of my portfolio and that holding is under review pending the outcome of the imminent formal complaint I will be making to the FMA, with or without the assistance of the Chairman of the New Zealand Shareholders association's help, (presently awaiting another response from him).

You are right to be concerned Vaygor1. The board and management's response has been "interesting" to say the least. Tip of the iceberg ????Other than the management/boards response, this really has nothing to do with SUM. It is Norah in her personal capacity that has traded on insider info.

[winner69]

Other than the management/boards response, this really has nothing to do with SUM. It is Norah in her personal capacity that has traded on insider info.

Isn't that response the issue.

SUM have a Director/Officer trading policy which appears to have been breached and done nothing but defend Norah by the sounds of it.

You/me break company rules and we get the boot.

[Vaygor1]

Other than the management/boards response, this really has nothing to do with SUM. It is Norah in her personal capacity that has traded on insider info.

Norah's actions as existing Director and recent ex-CEO of SUM has everything to do with SUM.
SUM's management/board response regarding enquiries about her actions has everything to do with SUM.

[forest]

Why is it, that the ongoing disclosure notice of 11 April 2014, from Norah Barlow, is missing on SUM website??

NZX Announcements

Recent announcements from Summerset on the NZX

Summerset listed on the New Zealand Stock Exchange (NZX) in November 2011 and became an NZX50 company in December 2012. Our ticker code is SUM.

You can view our page on the NZX and our latest NZD share price here.

2014 Announcements

Summerset Half Year Report 2014 – 8 September 2014
Notice of Allotment of Securities – 8 September 2014
DRP strike price and AUD FX Rate for 2014 Interim Dividend – 3 September 2014
SSH Notice – AMP Capital Investors (New Zealand) Limited – 2 September 2014
SSH (Milford Asset Management Limited) – 1 September 2014
SSH Notice – New Zealand Superannuation Fund Nominees Ltd – 29 August 2014
Media Release – 1H14 Results – 12 August 2014
Results Presentation – 1H14 Results – 12 August 2014
Interim Financial Statements – 1H14 Results – 12 August 2014
Appendix 1 – 1H14 Results – 12 August 2014
Appendix 7 – 1H14 Results – 12 August 2014
SSH Notice – (New Zealand Superannuation Fund Nominees) – 29 July 2014
SSH Notice – (AMP Capital Investors) – 21 July 2014
Timing of half year financial results – 8 July 2014
Summerset appoints General Manager of Marketing – 4 July 2014
2Q14 Metrics – Sales of Occupation Rights – 4 July 2014
Amendments to Dividend Reinvestment Plan – 11 June 2014
SSH Notice – (Fisher Funds Management Limited) – 28 May 2014
SSH Notice – Milford Asset Management Limited – 27 May 2014
SSH Notice – (NZ Superannuation Fund Nominees Limited) – 21 May 2014
SSH Notice – New Zealand Superannuation Fund Nominees – 14 May 2014
SSH Notice – (NZ Superannuation Fund Nominees Limited) – 1 May 2014
Summerset Buys Land to Extend Village in Auckland – 30 April 2014
Annual Meeting – Chairman and CEO Addresses – 30 April 2014
Annual Meeting – Outcome of Meeting – 30 April 2014
SSH Notice – Accident Compensation Corporation – 9 April 2014
1Q14 Metrics – Sales of Occupation Rights – 9 April 2014
Notice of Allotment of Securities – 25 March 2014
Summerset Annual Report 2013 – 25 March 2014
Notice of Meeting – 25 March 2014
Notice of Allotment of Securities - 24 March 2014
DRP Strike Price and AUD FX Rate for 2013 Final Dividend - 19 March 2014
Summerset Appoints General Manager HR - 18 March 2014
Media Release – FY13 Results - 25 February 2014
Results Presentation - FY13 Results - 25 February 2014
Audited Financial Statements – FY13 Results - 25 February 2014
Appendix 1 – FY13 Results - 25 February 2014
Appendix 7 – FY13 Results - 25 February 2014
Notification of Director Nomination and Annual Meeting Date – 21 February 2014
Summerset Welcomes Anne Urlwin to the Board – 19 February 2014
Summerset Invests NZ$500M in Auckland Developments – 17 February 2014
Summerset Gets Green Light for $55M Village in New Plymouth – 14 February 2014
SSH Notice - Accident Compensation Corporation ("ACC") – 31 January 2014
Timing of Full Year Result – 24 January 2014
SSH Notice – Accident Compensation Corporation – 24 January 2014
SSH Notice – Accident Compensation Corporation – 9 January 2014
4Q13 Metrics – Sales of Occupation Rights – 8 January 2014
SSH Notice – Accident Compensation Corporation – 6 January 2014

Why is it, that the ongoing disclosure notice of 11 April 2014, from Norah Barlow, is missing on SUM website??

[forest]

Its on the NZX website, so does it really matter?

Why have all the announcements except 1?

[bunter]

Why have all the announcements except 1?

Not trying to hide something, are they?

[forest]

why don't you ask them and tell us what they say? Better than guessing, right??

Normally I would but in the case of SUM management replies to share holders can be evasive and arrogant.
However I just made an observation which I tough was worth sharing.

[skid]

Forest, are you holding much SUM? If so, are you concerned about potentially undermining your own investment?

You can always sell and buy back in later when the dust settles.

[Vaygor1]

Vaygori -Thank you for that impartial comment. Particularly as it is free of sour grapes bias as a professed non shareholder. You stress a good point. Can we learn something of the culture of the Board from this lesson? Where do their greater loyalties lie? Should we use this background as a filter when listening to/reading any reports on the company`s progress into the future?

Disclosure - I have substantially sold down since. All I need are convincing and reassuring noises from the AGM to convince me that protecting my investment back-side as I did was an imprudent move.

Thanks Tevita.

The integrity of the any board (made up of a combination of both trust in them and confidence to do the job) is imperative to me.

This is evidenced in some of my posts in ST. ie in July-2013 http://www.sharetrader.co.nz/showthread.php?9163-A-Million-Dollar-Day&p=415533&viewfull=1#post415533 where I state "… never ever underestimate the value of an honest board."

The trouble is that when it comes to Board Integrity it can be very difficult to collect reliable data to form an accurate view. Opportunities to do so rarely present themselves in less-than-honest boards, because by virtue of their nature they will not announce any bad news until the horse has well and truly bolted. By the same token they will also spin average (or below average) news as great.

So in answer to your three questions:

Can we learn something of the culture of the Board from this lesson?
Yes. I think so. I know I have.

Where do their greater loyalties lie?
Hard to say. I think it is a fair call to say their greater loyalties lie with Norah than with the overall group of shareholders . But loyalty through respect or fear? The question begs.

Should we use this background as a filter when listening to/reading any reports on the company`s progress into the future?
I think so. At the vary least, anything emanating from any (actual or perceived) dodgy board should be treated more cautiously then would otherwise be the case. For me, I take it further than this and treat anything emanating from such a board with a fair amount of scepticism.

[macduffy]

Normally it would but in the case of SUM management replies to share holders can be evasive and arrogant.
However I just made an observation which I tough was worth sharing.

Fair point, forest.

If you follow up by asking the company, perhaps a cc to the NZX might elicit a reply? Or, perhaps not.

:sleep:

[Beagle]

Nice sleuthing Forest. Its no accident its not there, anyone who thinks otherwise is naïve. NG - FMA investigation if indeed they decide to do one won't undermine the company's financials. What it will do is to fire a very close shot across the bow of the board that this sort of behaviour is completly unacceptable and help the company directors be more honest and transparent in the future. Would you really be happy for instance if Julian Cook bought $4.8 million dollars of stock a day or two before the Q3 sales announcement knowing what the numbers are because according to the board and senior management they (at present), don't have any issue with directors or management trading using inside knowledge, in fact are happy to pre-approve this sort of transaction and defend their right to do so. Further I have it in writing that they think quarterly sales results don't contain price sensitive information. They have outright declined to impose a black-out period of 30 days on management and director trading prior to quarterly sales announcements despite my written request to amend their securities trading policies to that effect. I went to considerable effort and time to explain why I believe the quarterly sales results do indeed contain price sensitive information and why a 30 day black out period would be desirable. At present it would appear they are not interested in best practice corporate governance which is something of considerable surprise seeing as the Chairman is widely perceived to be highly experienced.
If they'd played nice and took their corporate governance issues seriously there wouldn't be a need to go to the FMA would there...

Philosophy 101 - "To thine own self be true" If something really gets under your skin and absolutely grates at the core principle's of what you believe in, (openness honest, transparency, directors acting in good faith e.t.c.e.t.c.) and it isn't right, you've got to do what you believe needs to be done. I hold shares in the company too.

[Vaygor1]

FFS guys. Please don't kill the stock in the name of your crusade. Yes, I agree that something is fishy here, but I don't really like the idea of the FMA sniffing around and destroying investor confidence. I have WAY too much invested to see this puppy derailed by keyboard warriors with an axe to grind. Cheers in advance. :)

This forum and FMA involvement can only enhance investor confidence.

My understanding from your earlier posts is you wish to hold for 3-4 years minimum.

The current issue of Norah's transaction will not affect the share price one iota in 3-4 years time, but a board with some rot in it might.

Would this forum impact even today's share price? I doubt it according to your post from the RYM thread... "Also, I have no vested interest in the future performance of RYM and certainly am not trying to influence its SP. To think that this forum could actually affect the SP of RYM in any meaningful way is even sillier than the spurious tech stock comparisons above :p".

Link: http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=468583&viewfull=1#post468583

[Vaygor1]

Nice sleuthing Forest. Its no accident its not there...


Dead right. Another sign.

[Vaygor1]

Why don't you man up and do it? I gather you're as capable as anyone else. You certainly appear to have a healthy stake in the matter.

… and I would appreciate it if you didn't 'FFS guys' me again. It doesn't help.

[Vaygor1]

One of you should man up and call their investor relations person to clarify the omission.

Given SUM's Investor Relations Person's responses on this issue to-date it would be a complete waste of time to call them. The response will be meaningless. If they say it was a mistake will you believe them? Please don't say Yes.

Anyway. I already 'know' the truth. Someone from the highest level made a conscious decision to either take it out, or not put it in. I have more chance of being struck by a meteorite than this being an accidental omission.

[Beagle]

Given SUM's Investor Relations Person's responses on this issue to-date it would be a complete waste of time to call them. The response will be meaningless. If they say it was a mistake will you believe them? Please don't say Yes.

Anyway. I already 'know' the truth. Someone from the highest level made a conscious to either take it out, or not put it in. I have more chance of being struck by a meteorite than this being an accidental omission.

LOL That's pure Gold !!!

[Bjauck]

FFS guys. Please don't kill the stock in the name of your crusade. Yes, I agree that something is fishy here, but I don't really like the idea of the FMA sniffing around and destroying investor confidence. I have WAY too much invested to see this puppy derailed by keyboard warriors with an axe to grind. Cheers in advance. :) SUM is one of my larger shareholdings too. However, I am of the opinion that any rules relating to insider trading should be rigorously enforced. The directors should be beyond reproach in their actions. She'll be right and brushing things under the carpet may build up into a bigger issue later on, with even greater impact on SP.

[Beagle]

Anyway....Ladies and Gents, I will do what I feel I must either next week or the one after depending on time available and will do my best to move on and leave it at that. Simply put this is a stone in my shoe that I feel I have to remove and put into the FMA's shoe as its their job to enforce the regulations. I expect the very highest standards of ethics and behaviour of experienced company directors and there is an extremely important matter of principle here that is well worthy of a proper investigation, in my opinion. Seeing as the company won't do it themselves then they leave me with no alternative, (and I would add that I forewarned them of that if they didn't take the matter seriously, which they didn't). NZSA are aware I want this progressed by the end of the month and as I haven't heard back from them again I will look to progress this in early October regardless of their support or otherwise. FMA enquiry, if any, is behind closed doors and it doesn't get into the media unless there's a public ruling and even then its a Norah Barlow thing not necessarily a SUM thing per se. I am very disappointed to have to go down this path but those who I've taken into my confidence and shared a copy of my correspondence to SUM and their response by PM know I've tried hard to resolve this through unofficial channells and SUM's response is woefully inadequate to say the very least.

I am looking forward to discussing SUM's (hopefully really positive Q3 sales announcement) early next month and genuinely hope none of the directors or management are silly enough to buy or sell shares close to a quarterly sales result again. Provided everyone else leaves this old cheastnut alone, I will do my level best to move on. The ball will be in the FMA's court shortly, which is where it belongs.

[forest]

Oops, just talked to Mrs forest, I should do that more often.
She pointed out that what SUM tables as 2014 announcements, is not a complete list of what I expected all announcements.
There are more announcements missing which I guess make Norah's 11 April omissions less cynical.
Why it is headed 2014 announcements puzzles me.

[Onion]

Why is it, that the ongoing disclosure notice of 11 April 2014, from Norah Barlow, is missing on SUM website??


I don't think they have specifically "hidden" Norah's share sale. All "Ongoing Disclosure Notices" are absent from their website -- not just Norah's.

[Vaygor1]

Oops, just talked to Mrs forest, I should do that more often.
She pointed out that what SUM tables as 2014 announcements, is not a complete list of what I expected all announcements.
There are more announcements missing which I guess make Norah's 11 April omissions less cynical.
Why it is headed 2014 announcements puzzles me.

Puzzles me too and could actually be cause for more concern.
There were 3 late March disclosures with the allotment of the Dividend Reinvestment Plan shares and the new director disclosure not there either.
The cynical side of me says 'Handy that'.

[winner69]

SUM still ASX listed, wonder if ASIC worry about these sort of things?

Don't know why they bothered listed other there. Very few small trades.

Maybe illusions of grandeur in days bygone ...but apparently expensive

[forest]

SUM still ASX listed, wonder if ASIC worry about these sort of things?

Don't know why they bothered listed other there. Very few small trades.

Maybe illusions of grandeur in days bygone ...but apparently expensive

The ASX listing is hard to see the sense of. Those anybody know what the likely yearly cost is for SUM?

[winner69]

The ASX listing is hard to see the sense of. Those anybody know what the likely yearly cost is for SUM?

Prestige in being ASX listed Forest

[winner69]

The ASX listing is hard to see the sense of. Those anybody know what the likely yearly cost is for SUM?

May last year in the Herald with the illusions of grandeur -

Summerset Group, New Zealand's second-largest listed retirement village operator and developer, plans to list on the Australian stock exchange, putting its shares in front of an investor pool more than 20 times larger than in its home market.

"The retirement village and aged care sector now accounts for nearly 8 per cent of the NZX 50," Summerset chairman Rob Campbell said in a statement. "As a result we have seen increased Australian investor interest in Summerset."

Some A$1.46 trillion of shares are traded on Australia's exchange, compared with New Zealand's $72.6 billion bourse.

Shares in Wellington-based Summerset rose 0.3 per cent to $3.20.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10882049

What the heck .... May last year price was 320 .....now 289 ...bit of a dog stock the last 18 months eh

[stoploss]

SUM still ASX listed, wonder if ASIC worry about these sort of things?

Don't know why they bothered listed other there. Very few small trades.

Maybe illusions of grandeur in days bygone ...but apparently expensive

Think they listed as quadrant previously a large shareholder wanted them to , to help liquidity ...and for it to make it easier to offload their stake ????

[Beagle]

Think they listed as quadrant previously a large shareholder wanted them to , to help liquidity ...and for it to make it easier to offload their stake ????

Bingo !!!!!

[Food4Thought]

It cost's a lot perhaps... maybe Australia as NZ's number one investor is a draw card for Summerset to list there. I think it is a clever move. Australians love New Zealand. Loads I talk to would move here, some do. I think in the future you will see a combination of several larger providers and some will be bought out. Will require clever thinking and previous forward thinking to create a smooth passage for such a tranz-action.

[troyvdh]

dear F4T....No offense here intended...you must be young...."OZ inc"...hate ..loathe...and betray "us"....i.e. Ansett..Telecom..and lets not forget "apples"......and perhaps...potatoes...and numerous other entites have fallen foul to ......whatever.....me thinks that Muldoon was right (goggle his quotes)...personally I am amazed at the progress that RYM are making ....given the 'environment"....ie industrial workforce et al...go well mate...I if I were you I would "eat" more....

[macduffy]

A bit unfair there, troyvdh?

After all, no-one twisted any arms to get Air NZ, Telecom, The Warehouse, Hallensteins etc buying into Australia. More a case of "big" NZ companies looking to expand overseas, having come to dominate their local markets. But that's by the by. I reckon stoploss has the answer - perhaps SUM will relinquish the ASX listing in due course " due to low turnover and to reduce administrative costs" or some such rationale.

[Beagle]

SP weakness in the lead-up to Q3 sales is a little disconcerting.

[winner69]

SP weakness in the lead-up to Q3 sales is a little disconcerting.

We should be hoping Norah is selling then, stabilises the shareprice for a while.

Did I really say this in such a sensitive world.

[Zaphod]

SP weakness in the lead-up to Q3 sales is a little disconcerting.

Yes, agreed. Although the market could be overly pessimistic due to being disappointed with the results announced in the last few updates + HY report.

If they miss the target again, I'll reconsider my remaining holding.

[Beagle]

We should be hoping Norah is selling then, stabilises the shareprice for a while.

Did I really say this in such a sensitive world.

LOL You're a good bugger so I can see the funny / ironic side :)

[skid]

Im no chartists but both SUM and Rym seemed to both been nailed by ''the cross of death''--whether its fundamentals or spooked traders its not great atm

[couta1]

Im no chartists but both SUM and Rym seemed to both been nailed by ''the cross of death''--whether its fundamentals or spooked traders its not great atm
Rule out fundamentals the whole market bar a few looking pretty sad eg Air now 3 weeks post dividend and not making any headway toward pre dividend price says a lot IMO.

[Goldstein]

Rule out fundamentals the whole market bar a few looking pretty sad eg Air now 3 weeks post dividend and not making any headway toward pre dividend price says a lot IMO.

Yes I think the NZX is really drifiting sideways. The news that the RB has been selling the NZD has possibly unsettled a number of offshore investors.
A journalist asking Key where he thought the NZD/USD should be and Key responding 65c probably didn't help.

[winner69]

I reckon Q3 sales to be at least 125

New sales 75 / resales 50

Bit on the low side? But I prefer to be conservative and pleasantly surprised when they come out with 140 plus

Wonder what Norah knows? Maybe not much as she is only just a director

[Tevita]

Provocateur.

[couta1]

Provocateur.
Definition of Provocateur-A person who provokes trouble, causes dissention or the like, an agitator or commonly know in kiwi language as a Stirrer:cool:

[winner69]

Definition of Provocateur-A person who provokes trouble, causes dissention or the like, an agitator or commonly know in kiwi language as a Stirrer:cool:

Ok let's forget my 'provocative' remarks about Norah

I say 125 sales at least to be announced next week.

Couta / Tevita have any expectations?

[couta1]

Ok let's forget my 'provocative' remarks about Norah

I say 125 sales at least to be announced next week.

Couta / Tevita have any expectations?
I reckon 125-130 sounds about right, that's double the increase between Q1 and Q2.

[couta1]

what were the figures for the last quarter again?
That would be 103.

[Toulouse - Luzern]

From a quick look at the chart SUM is at an area of past support in July 2013 (where it bounced) and in August 2014 small lift.

[Tevita]

I reckon 125-130 sounds about right, that's double the increase between Q1 and Q2.

What does it take for the Board to make an EARLY statement themselves given the state of the market ? Are they inured against shareholders concerns about the market simply because they by comparison earn director`s fees so that a lousy dividend matters not to them.. An early positive statement, if they can find one, might influence descent below 2-80.

[percy]

If we see Norah buying,would that give us an indication of improving sales?? lol.

[Tevita]

If we see Norah buying,would that give us an indication of improving sales?? lol.


Pigs might fly?

[Mista_Trix]

Pigs might fly?

Perhaps she did what the smart people did and applied TA to their FA holding :-S

[Beagle]

Ok let's forget my 'provocative' remarks about Norah

I say 125 sales at least to be announced next week.

Couta / Tevita have any expectations?

Did you like the way I swam straight past the bait :D
Fishing no good today.

[skid]

Rule out fundamentals the whole market bar a few looking pretty sad eg Air now 3 weeks post dividend and not making any headway toward pre dividend price says a lot IMO.

Add to that the US market on very shaky ground ATM--It may be nothing,but worth keeping an eye on.

[Goldstein]

What does it take for the Board to make an EARLY statement themselves given the state of the market ? Are they inured against shareholders concerns about the market simply because they by comparison earn director`s fees so that a lousy dividend matters not to them.. An early positive statement, if they can find one, might influence descent below 2-80.

Are you seriously suggesting the board should issue a statement like 'we think the Q3 results are going to be fantastic'?

The whole idea of quarterly sales reports is to keep the market informed.

[Tevita]

My qualifier was "if they can find one". I would be happy with an "our in-house build has proved a great change of strategy" (so far).

[forest]

My qualifier was "if they can find one". I would be happy with an "our in-house build has proved a great change of strategy" (so far).

As per announcement of 6 May 14 Tristan Saundres the general manager of sales sold 26,612 shares in SUM.

As per announcement of 10 Sep 14 Sadhana Raman the general manager of marketing had no shares in SUM.

Just an observation Tevita that the positive news for SUM might be some time away.

[Goldstein]

If we see Norah buying,would that give us an indication of improving sales?? lol.

According to some around here, the fact that she hasn't sold must mean that Q3 is at the very least in line with expectations.

[Tevita]

As per announcement of 2 May 14 Tristan Saundres the general manager of sales sold 26,612 shares in SUM.

As per announcement of 8 Sep 14 Sadhana Raman the general manager of marketing had no shares in SUM.

Just an observation Tevita that the positive news for SUM might be some time away.

Thank you for that belated (to me anyway) information. All dancing to the same tune as Norah. The shares I bought, given those dates, could have been tainted by those very same hands. There should be some very searching questions from institutional shareholders at the forthcoming meeting. Unless they fly under the radar too like some company officers.

[winner69]

As per announcement of 6 May 14 Tristan Saundres the general manager of sales sold 26,612 shares in SUM.

As per announcement of 10 Sep 14 Sadhana Raman the general manager of marketing had no shares in SUM.

Just an observation Tevita that the positive news for SUM might be some time away.

Give Sadhana a bit of leeway - she as just started with SUM

[winner69]

Thank you for that belated (to me anyway) information. All dancing to the same tune as Norah. The shares I bought, given those dates, could have been tainted by those very same hands. There should be some very searching questions from institutional shareholders at the forthcoming meeting. Unless they fly under the radar too like some company officers.

Company Secretary seems to have got things messed up a bit keeping track of the Chairmans shares

One notice says he got some DRP shares but and then a later notice says he didn't get any DRP shares and Leanne has had to update the number of shares Mr Chairman had because previous notices look like they had the wrong number on them.

Anyway it seems Rob has an interest in 40,225 shares and did not take any DRP shares

[couta1]

She closed down at $2.79 (52wklow) on low volume most waiting for Q3 I'd say and I'm hoping the result will be released at the beginning of next week rather than the end to stop any further decline and I don't think I'd be alone there:cool:

[Beagle]

She closed down at $2.79 (52wklow) on low volume most waiting for Q3 I'd say and I'm hoping the result will be released at the beginning of next week rather than the end to stop any further decline and I don't think I'd be alone there:cool:

No you're definitely not alone mate. Put me down as an unhappy holder in more ways than one at this stage.

[couta1]

RESULTS OUT: 99 for the quarter - 68 sales, 31 resales.

Highest sales in the company's history, but pretty low resales due to lack of stock. Bit of a bugger
Will be interesting to see how the market reacts to these figures, good growth but not enough residents dying to boost resale numbers so out of Sums control but those numbers can change quickly depending on the season if you get my drift. Must check Sums village entry age as Ryman is now 70, hope Sum is not still at 65, hatch and dispatch better at 70 aye.

[winner69]

Will be interesting to see how the market reacts to these figures, good growth but not enough residents dying to boost resale numbers so out of Sums control but those numbers can change quickly depending on the season if you get my drift.

Shouldn't do anything to the price

Roger mentioned earlier the company thinks sales figures are not price sensitive

[winner69]

Sales figures are not price sensitive???? Its about the only price sensitive news they post except for FY and HY results!

Did see they put a P next to it this time ... or is it the NZX who makes that call?

Was just mentioning something that Roger said on this thread earlier in that SUM said sales numbers are not price sensitive

[couta1]

Entry age is still 65, they need to put it up to 70 to match Ryman and free up more resale stock, there is always a much bigger pool of resale stock than new stock so there's a lot more to gain by losing a few 65s sales on new units and gaining much more on resales.

[percy]

Will be interesting to see how the market reacts to these figures, good growth but not enough residents dying to boost resale numbers so out of Sums control but those numbers can change quickly depending on the season if you get my drift. Must check Sums village entry age as Ryman is now 70, hope Sum is not still at 65, hatch and dispatch better at 70 aye.

Do you think SUM may be caring too well for their residents,making them delaying their departure from this world?

[couta1]

Oh, you mean the minimum entry age, not the average of new arrivals.
Yep, Ryman did the research a few years ago and bumped it to 70.

[Beagle]

Did see they put a P next to it this time ... or is it the NZX who makes that call?

Was just mentioning something that Roger said on this thread earlier in that SUM said sales numbers are not price sensitive

Yes they put the price sensitive P next to it on the NZX announcement , see NZX site, but if our "highly esteemed" director Norah Barlow has been selling in the lead-up to this announcement then provided the SP doesn't react then the official position of the company that I have in writing is they consider it does not contain price sensitive information. Yes, "lots" of credibility there.

[couta1]

Do you think SUM may be caring too well for their residents,making them delaying their departure from this world?
You could be onto something there Percy, they certainly are a happy bunch from my experience.

[winner69]

On a rolling four quarter basis sales seem stuck around 400.

They finished FY13 at 402 - last 4 quarters now 405

Sort of says that unless there is a decent boost in numbers in Q4 the FY14 underlying earnings will be much the sale as last year. That needed boost has to be on top of 111 sales in Q413 as well

My forecast of 125 for this quarter was to some extent based on a few posters saying sales would be strong in Q3 and Q4. Maybe the election stuffed up Q3 and we will see a real catch up in Q4 and a number of 150!

Julian says still on track for 250 new units this year. Sell all them and that will give about 80 new sales in Q4.

At least they mentioned highest in the company's history. The market just loves new highs and records.

Maybe 3 bucks plus today

[couta1]

couta were you not hoping for 125 combined sales.......... lets hope the market was not expecting this.
Easy to get hung up in the numbers....... I like SUM for their land bank.
Yep and with reasonable resales we would have achieved that but we can't control the dying season and that could change dramatically during Q4 and if the new sales keep coming we are well positioned IMHO

[James108]

^There is only 5 less resale units available than there were a quarter a go. Lets be generous and assume 10 less people died than normal and there were 10 less sales than normal. That is still a long way off the 125 combined sales.

[couta1]

^There is only 5 less resale units than there were a quarter a go. Lets be generous and assume 10 less people died than normal and there were 10 less sales than normal. That is still a long way off the 125 combined sales.
No there was 15 less resales this quarter 31 compared to 46 last quarter so still short of 125 but getting close.

[James108]

I ment there were 5 less resale units available for purchase than there were in the previous quarter. I propose sales of resale units is not entirely driven by (lack of) supply and is subject to overall demand for units.

[couta1]

I ment there were 5 less resale units available for purchase than there were in the previous quarter. I propose sales of resale units is not entirely driven by (lack of) supply and is subject to overall demand for units.
Okay, but on the second point there is a waiting list so lack of supply is the problem not demand.

[Beagle]

Just sent this to the communications person. Will let you know if/when I get a response. (note the six kisses - worked a charm with PEB!)

Hi Kimberley

I am a fairly significant shareholder in your company, and am slightly concerned with the occupation metrics released today. In particular, I am surprised at the very low number of resales. Can you please provide more information on this? The media release cites a lack of supply (of units for resale), which is difficult to understand given that the village portfolio continues to grow each year.

Is the issue related to an increase in average tenure? In other words, are the slow resales a reflection of people living longer and hence staying in the village for longer than they used to in the past?

I would sincerely appreciate a response at your earliest convenience.

Many thanks
xxxxxx

LOL LOL If you're lucky you'll get a load of public relations bull**** back in a few days time and a few months later you can look forward to them making up new excuses about how the profit on resales per unit was lower because as they claimed in the six month financials people are staying in their units for shorter periods. If she's pretty and single and you are too, why not ask for a date, that way you have a remote chance of getting something that's actually worth something.

[couta1]

NG another thing to consider re resales is that most people only want to purchase a unit in the area they live and as most of the villages are not building new units supply can only come from existing stock and if they have a waiting list well I think you get the picture so the village portfolio expanding doesn't always mean supply will meet or outstrip demand.

[Beagle]

In the six months to 30 June financials they claimed profits on resales were down because on average people were staying in their units for a shorter period. Now after a cold winter, (which we all know is the hardest on aged folks), suddenly they're staying in their units longer. Makes their previous excuse look weak.

Also, all the talk of very strong sales at Karaka and Hobsonville haven't actually come to all that much have they !!

I am now forecasting a profit of 10% down on last year, (yes that's right a profit decrease). I am very underwhelmed by the current quarters sales, ditto the previous two quarters.

[James108]

I looked into Hobnsonville and I believe stage 1 (the stage that is finished) was only in the order of 10 units.

[MAC]

Re-sales have been relatively flat for two or three years, just means at some point in the future, perhaps a few years away, respectfully remembering what re-sales means, we may see a flurry.

At the end of the day SUM growth comes from new construction and the re-valuation of assets. IMO long term it’s a demographic hold, short term it’s an asset valuation watch for those that do.

6303

http://www.scoop.co.nz/stories/BU1410/S00173/nz-property-values-rise-at-slowest-pace-in-15-months-qv.htm

[couta1]

Re-sales have been relatively flat for two or three years, just means at some point in the future, perhaps a few years away, respectfully remembering what re-sales means, we may see a flurry.

At the end of the day SUM growth comes from new construction and the re-valuation of assets. IMO long term it’s a demographic hold, short term it’s an asset valuation watch for those that do.

6303 Thats why I can't understand anyone investing in Sum without at least a 3 year minimum hold and 5 yrs is a better starting point.

[MAC]

Thats why I can't understand anyone investing in Sum without at least a 3 year minimum hold and 5 yrs is a better starting point.

Warren agreed with you just this morning Couta, apologies for the ad;


http://www.cnbc.com/id/102053601

[Beagle]

Mr S Scoullar

Chief Financial Officer

Summerset

Dear Sir,

Re: Shareholders concerns related to the timing of company director selling SUM securities immediately prior to the release of Q1 sales results:

You may be aware about recent disquiet on the well supported shareholder blog website www.shareterader.co.nz related to the timing of the disposal of SUM shares by Norah Barlow only 2 days prior to the release of 2014 Q1 sales results.

April 7th, 2014: Norah Barlow Family Trust interests sold shares for approximately $4.8 million consideration, as per disclosure notice dated April 11th to the NZX.

April 9th, 2014: release of SUM Q1 sales results

With today's computerised reporting systems and with Mrs's Barlow's role as CEO many shareholders I have communicated with struggle to see how she wouldn't at the very least had a very good gauge on sales figures for the quarter. Certainly she would have been well aware of January and February's sales and had a very good gauge of March 2014 sales, (at the very least), such that she was aware that SUM were about to announce what was ostensibly a flat sales result for Q1 2014).

Given that this disappointing and price sensitive announcement was both scheduled and imminent and given that most shareholders do not invest in Summerset for flat sales results, (i.e. it is widely perceived as you know to be a growth stock), it would appear Mrs Barlow acted with inside information in this sale and used that information to her pecuniary advantage to sell the significant majority of her family trust's stake in the company immediately prior to this announcement. Many shareholders were disappointed with this Q1 sales result and the subsequent Q2 sales result and the current share price reflects that. (Put colloquially, it would appear she acted with haste and scant regard to the Securities Act to dispose of the majority of her stake and get out before the **** hit the fan).

Notwithstanding that it is understood that many of these shares may have only recently been released as part of her long term CEO incentive plan and may have recently become tradable as a result of steeping down as CEO, many shareholders are struggling with reconciling the timing of this disposal with the company's own insider trading policy and the Securities Act and have serious concerns that there was only one clear business day between the execution of this sale on Monday 7th April and the release of Q1 sales results first thing on Wednesday morning 9th April.

Simply put, her record as CEO and director does not give her a free pass from insider trading laws (Securities Markets Act 1988) which prima facie appear to have been breached.

This sale also appears to be incongruous with Summerset’s own Securities Trading Policy. I am sure you don't need me to quote you own rules back to you but I, (on behalf of a number of very concerned shareholders) would appreciate a written explanation of how the directors feel Mrs Barlow's disposal in this instance was consistent with company policy surrounding Securities trading.

It is important to shareholders that our board of directors acts at all times with utmost integrity, but is also perceived to be doing so. In this instance there is a strong perception amongst some shareholders of a breech of insider trading regulations regardless of whether this has occurred or not. This isn't good for how one of the Directors is perceived by some shareholders and does nothing for the reputation of the company itself.

I am asking you on behalf of a number of very concerned shareholders to consult with the board to clarify:

a. The process which was applied to ensure that Norah Barlow had no insider knowledge about the Q1 sales results while selling SUM securities immediately prior to the release of the Q1 sales report or how otherwise this sale is consistent with the Securities Act and the company's insider trading policy.

b. Whether Directors have a view towards reviewing and improving the company's Security Trading policy and guidelines framework. This would ensure that in future the doubt or perception of insider trading can be completely eliminated. (This could be effected. by extending the "black out trading period" to include the period of thirty days prior to the release of scheduled price sensitive quarterly sales results).


Naturally I am aware that the Financial Markets Authority handles complaints regarding insider trading allegations but out of respect for the job Mrs Barlow has done and is doing for the company I am writing to address the board in this first instance to seek an explanation and would request this in writing within thirty days. I would be extremly disappointed if Summerset leave me with no option but to have to consider a formal complaint to the Financial Markets Authority and genuinely hope there is a satisfactory and plausible explanation forthcoming.

Yours sincerely,

Roger


Copy of e.mail sent on 26 August 2014.

Copy of their response received 9 September 2014 signed by CFO and CEO.

Dear Roger

Thank you for your email of 26 August 2014.
We take the matter of insider trading extremely seriously and strongly refute any allegation that
there was any insider trading in respect of the sale of shares by Mrs Barlow in April of this year.
Mrs Barlow followed at all times Summerset’s Securities Trading Policy in the sale of her shares,
and we do not believe that the 2014 sales results contained price sensitive information.
As you note in your email, Mrs Barlow sold her shares on April 7th 2014 with the 2014 Q1 sales
results released on April 9th. Summerset’s quarterly sales results provide the market with an
update of the number of units sold only and do not provide any financial information. The closing
price on the NZX for SUM on April 8th was $3.41. Following the release on April 9th, the closing
price was $3.39. The closing price one week later on April 16th was $3.44. On this basis it is clear
that this announcement was not price sensitive, supporting our original view on this matter.
Furthermore, Summerset’s share price continued to trade within a range of $3.32 to $3.58 over
the next three months.
Regarding our trading policies generally, we are always reviewing and where appropriate
updating these policies. At a recent board meeting on 11th of August 2014, the board resolved to
amend the policy such that executives who cease employment with the company must continue
to comply with the Securities Trading Policy for a period of six months post-employment. This
change is not linked in any way to Mrs Barlow’s share sales and indeed the new policy would not
have altered Mrs Barlow’s position in respect of the sale of her shares as she remained a director
of Summerset and therefore continued to be bound by Summerset’s Securities Trading Policy.

I'm now making this public so that people can judge for themselves whether they are happy that SUM's managment / board appears to have approved Norah Barlow's significant trade in securities immediatly before the Q 1 sales announcement.

I've done my bit. Shareholders would do well to consider carefully if they are happy with their board's decision on this matter and whether this is a relevant indicator of their professionalism or not.

Extract from SUM's security trading policy
2 POLICY STATEMENT 2.1 FUNDAMENTAL RULE – INSIDER TRADING IS PROHIBITED AT ALL TIMES 2.1.1 If you possess “material information” (refer to definition below), then whether or not you are a Restricted Person below, you must not: • trade Restricted Securities; • advise or encourage others to trade, or hold any Restricted Securities; or • pass on the material information to others. The prohibitions apply regardless of how you learn of the information, and regardless of why you are trading. The prohibition on insider trading applies not only to information concerning Summerset’s securities. If a person has material information in relation to listed securities of another issuer (including futures contracts listed on an authorised futures exchange) over listed securities, that person must not trade in those securities.
2.2 INSIDER TRADING LAWS 2.2.2 If you have any material information, it is illegal for you to: • trade Summerset’s listed securities; • advise or encourage another person to trade or hold Summerset’s listed securities; • advise or encourage a person to advise or encourage another person to trade or hold Summerset’s listed securities; or • pass on the material information to anyone else – including colleagues, family or friends – knowing (or where you ought to have known) that the other person will use that information to trade, continue to hold, or advise or encourage someone else to trade, or hold, Summerset’s listed securities. 2.2.3 This offence, called “insider trading”, can subject you to criminal liability including large fines and/or imprisonment, and civil liability, which may include being sued by another party or Summerset, for any loss suffered as a result of illegal trading.

[winner69]

not sure I understand, Norah sold out 3/4 of their holdings several month ago and current holdings (if sold) would not need a SSH announcement.

Would need to do a Directors and Officers Disclosure though

[couta1]

yay, up 1 to 280

(I'll take anything that i can get at the moment. No win is too small!)
Gee NG your easily excited, now aren't you going to be a very happy boy in a few years time dare I say it when the price has a 5 or 6 in front of it:cool:

[Tevita]

Roger,

The majority of present day shareholders have possibly held their shares a considerable time - but certainly not all. The former will have done well over time if not as well as certain officers of the company who sold down. Therefore their appropriate discontent will be more muted than the latter who would have far greater cause for grievance. Well done for being so proactive and not just mumbling in your beard about perceived irregularities.

[RTM]

Gee NG your easily excited, now aren't you going to be a very happy boy in a few years time dare I say it when the price has a 5 or 6 in front of it:cool:

They won't go down that far will they Couta1 ?
Might get some if they do.

Cheers

[couta1]

They won't go down that far will they Couta1 ?
Might get some if they do.

Cheers
No chance, try Rakon Youll probably be lucky:cool: Cheers

[Goldstein]

Roger, first of all, good on you for the work you've put in on this matter. Chasing things that hard makes you a very good investor.

However, the board has now said "Mrs Barlow followed at all times Summerset’s Securities Trading Policy in the sale of her shares,"

So, if there is fault here it is with the SUM board.

Mrs Barlow is a smart business woman, and would maximise her return while playing inside the rules. I suspect she advertised the sale of her shares to the board well in advance - it was possibly even brought up when she discussed the end of her tenure as CEO with the board.

[Beagle]

Roger, first of all, good on you for the work you've put in on this matter. Chasing things that hard makes you a very good investor.

However, the board has now said "Mrs Barlow followed at all times Summerset’s Securities Trading Policy in the sale of her shares,"

So, if there is fault here it is with the SUM board.

Mrs Barlow is a smart business woman, and would maximise her return while playing inside the rules. I suspect she advertised the sale of her shares to the board well in advance - it was possibly even brought up when she discussed the end of her tenure as CEO with the board.

Thanks Goldstein. Not necessarily a good investor its just that I expect the highest standards of compliance from directors from a legal, ethical and moral stand-point and find actions that are well short of expected behaviour morally and ethically repugnant quite apart from the legal ramifications, if any. I completely agree with you BUT what I find most disturbing from SUM's response is exactly what you've pointed out. The entire board between them could not see that Mrs Barlow was about to breech insider trading laws and approved the sale. How a bunch or apparently articulate and intelligent people could possibly reach that conclusion beggars belief. Remember you only have to have inside knowledge of material information and act upon it to be in breech of the Securities trading laws. Everyone to date I've sent a PM too agrees that the SP action after the Q1 sales announcement, (SUM's main defence) is completely irrelevant. All that is relevant is she clearly had inside information and made a major transaction just before the information was made public.
I can't see how any intelligent person would try and make the claim that at the time Mrs Barlow sold she wasn't in possession of inside information, let alone the whole board.
I think a far more plausible scenario is that Julian Cook is doing his best to cover Mrs Barlow's tracks.

P.S. Perhaps I should put it this way. If one takes the position that what's happened is wrong, who would you put your money on to have got it wrong, Mrs Barlow acting in her own interests without the consent of the board or the entire board lead by Rob Campbell with all his experience as a director after careful consideration granting approval for this transaction before it happened ? Which seems more likely to you especially given one party has a circa $5m vested interest ?

[winner69]

I am now forecasting a profit of 10% down on last year, (yes that's right a profit decrease). I am very underwhelmed by the current quarters sales, ditto the previous two quarters.

Updated my spreadsheet and adjusted some sales forecasts and I get the same sort of profit picture as you Roger

Assuming 75 new sales (about 250 for the full year) and 40 resales in Q4 one would expect underlying profit to be about $19m-$20m - 10% to 15% DOWN on last year

That's my considered forecast . One never knows what CB Richard Ellis might come up with as fair values and all those other variables

That's underlying profit of 9 cents odd a share - apply RYM long term average multiple of 20 and 'fair value' about $2

Buy at that price excessive long term returns eventuate - buy at $3 probably only average long term returns. I am patient and will wait until something closer to $2, Maybe after Xmas buts that isn't too far away

$2 to couta's $6 is better than $3 to $6

[forest]

Roger; I think a far more plausible scenario is that Julian Cook is doing his best to cover Mrs Barlow's tracks.

If that is the case, would it be possible he is publicly more upbeat about the 4th quarter then he should.
It would not look good to see the share price go down to quick, would it.

Nah, there must be a more respectable explanation. Please help me out I am not thinking clearly, I cant think of one.

[Beagle]

Updated my spreadsheet and adjusted some sales forecasts and I get the same sort of profit picture as you Roger

Assuming 75 new sales (about 250 for the full year) and 40 resales in Q4 one would expect underlying profit to be about $19m-$20m - 10% to 15% DOWN on last year

That's my considered forecast . One never knows what CB Richard Ellis might come up with as fair values and all those other variables

That's underlying profit of 9 cents odd a share - apply RYM long term average multiple of 20 and 'fair value' about $2

Buy at that price excessive long term returns eventuate - buy at $3 probably only average long term returns. I am patient and will wait until something closer to $2, Maybe after Xmas buts that isn't too far away

$2 to couta's $6 is better than $3 to $6

I honestly doubt they'll get 40. Remember opening stock at the start of Q4 is only 27 units vs 32 at the start of Q3 and without seeming crass the plain fact of the matter is a lot more old people die in the bitter cold of winter than the warmth of spring so where on earth are they going to get the stock from for the Q4 resales ? On the balance of probabilities they'd appear to be really struggling to get 30 which means SUM appear to be tracking for yet another quarter of circa 100 sales...oh dear.

I'm not looking to buy back in at any price to be honest mate. Better run companies on more realistic multiples are not difficult to find.

[Beagle]

Roger; I think a far more plausible scenario is that Julian Cook is doing his best to cover Mrs Barlow's tracks.

If that is the case, would it be possible he is publicly more upbeat about the 4th quarter then he should.
It would not look good to see the share price go down to quick, would it.

Nah, there must be a more respectable explanation. Please help me out I am not thinking clearly, I cant think of one.

LOL - Sorry mate I can't either :)

[Harvey Specter]

I honestly doubt they'll get 40. Remember opening stock at the start of Q4 is only 27 units vs 32 at the start of Q3 and without seeming crass the plain fact of the matter is a lot more old people die in the bitter cold of winter than the warmth of spring so where are they going to get the stock from for the resales ? n On the balance of probabilities they'd appear to be struggling to get 30 which means SUM appear to be tracking for yet another quarter of circa 100 sales...oh dear.
I wonder how many leave the village for the reason you state

[Casino]

Updated my spreadsheet and adjusted some sales forecasts and I get the same sort of profit picture as you Roger

Assuming 75 new sales (about 250 for the full year) and 40 resales in Q4 one would expect underlying profit to be about $19m-$20m - 10% to 15% DOWN on last year

That's my considered forecast . One never knows what CB Richard Ellis might come up with as fair values and all those other variables

That's underlying profit of 9 cents odd a share - apply RYM long term average multiple of 20 and 'fair value' about $2

Buy at that price excessive long term returns eventuate - buy at $3 probably only average long term returns. I am patient and will wait until something closer to $2, Maybe after Xmas buts that isn't too far away

$2 to couta's $6 is better than $3 to $6

Thank you for your assessment. I wasn't sure whether I should wait for a chance to get in lower but I think will.

[winner69]

I honestly doubt they'll get 40. Remember opening stock at the start of Q4 is only 27 units vs 32 at the start of Q3 and without seeming crass the plain fact of the matter is a lot more old people die in the bitter cold of winter than the warmth of spring so where are they going to get the stock from for the resales ? n On the balance of probabilities they'd appear to be struggling to get 30 which means SUM appear to be tracking for yet another quarter of circa 100 sales...oh dear.

I didn't want to get too pessimistic in my assumptions - so 10% drop in earnings likely to be bigger the?

Maybe they will sell more than 75 new ones to make up for the resales shortage?

Maybe their expenses are now under control and wont be as bad as H1

[Beagle]

I didn't want to get too pessimistic in my assumptions - so 10% drop in earnings likely to be bigger the?

Maybe they will sell more than 75 new ones to make up for the resales shortage?

Maybe their expenses are now under control and wont be as bad as H1

All the risks appear to be to the downside. From a technical perspective this is well and truly broken and any way you try and slice this the short term prognosis appears bleak.
CEO wasn't kidding when he said at the ASM that this would be a year of consolidation. No wonder he was so reluctant to give a profit forecast.
Good comedy about them getting costs under control in the 2H :)

[Beagle]

I wonder how many leave the village for the reason you state
The vast majority because they die with the second most common reason being people moving into another facility because they need more advanced care than their current village can provide, often brought on by respiratory issues caused by colder weather in winter. If people are leaving in significant numbers for reasons other than those, its a sign the village isn't being run well which doesn't appear to be the case with SUM villages.

[forest]

CEO wasn't kidding when he said at the ASM that this would be a year of consolidation.

I remember the talk about consolidating, but as far as I know it never progressed to, what needed to be consolidated.
So to me it was pointless bla,bla,bla.

[Beagle]

Norah's shareholding LOL LOL, sorry couldn't resist. Indeed Forest, it was nothing but a convenient way for him to dodge a question about profit growth, or as it appears its turning out, lack thereof.
I've done some more sleuthing which is showing things in a much worse light than first impressions this morning.
Going off last year's annual report the company makes considerably more per unit on resales than on new units. $55K v $45K per unit.
If we see 75 new unit sales in Q4 and 25 resales, which is my best guess based on their very low resale stock the current half year will have a much stronger bias towards new sales than resales which doesn't auger well for the company even matching their first half financial performance of only $9.4m.

I'm now estimating 2014 underlying profit of $18.2m compared to $22.1m last year.
$18.2m / 217.57m shares = 8.365 cents EPS. Apply whatever 2014 PE multiple you think is appropriate, sorry I cannot stretch past 25 all things considered and that gives estimated fair value of $2.09 :ohmy:
And recently it was reported there are now three retirement sector companies looking to list on the NZX sucking further wind out of the incumbent players sails.
Run for the hills !!!!

Disingenuous Dog Alert. Expect SUM to very conveniently shift their focus from underlying EPS to IFRS EPS at year end and still come up with creative bar charts showing every increasing trends that make for pretty pictures in the forthcoming annual report as research shows that many people simply look at the pictures and graphs and that's about it.

[winner69]

Disingenuous Dog Alert. Expect SUM to very conveniently shift their focus from underlying EPS to IFRS EPS at year end and still come up with creative bar charts showing every increasing trends that make for pretty pictures in the forthcoming annual report as research shows that many people simply look at the pictures and graphs and that's about it.

You beat me to it with that suggestion ....of course IFRS earnings a reflection of what the company makes. Not at an operational level but overall.

Next trick after that will be a change of balance date - who really wants December a date, stuffs everybody holidays up eh. A 15 month year to March 2016 gives a late of breathing space eh - and time to crank those development margins up

[ratkin]

Roger . suddenly you seem very keen on talking the company down. Sold your shares by any chance?

[winner69]

Jeez guys, let's not go overboard, huh? We know that you don't like the stock, but it can get a bit repetitive for those of us who are fully committed and won't be exiting until things improve. Cheers :)
All be OK

One well respected broker has a $4.50 target for Summerset

That's a 60% gain over the next 12 months and because I greedy and it wont go closer to $2 than today I probably miss out

[couta1]

[QUOTE=NewGuy;510153]Jeez guys, let's not go overboard, huh? We know that you don't like the stock, but it can get a bit repetitive for those of us who are fully committed and won't be exiting until things improve. Cheers :)[/QUOTE Gone skiing,keep the faith holders.

[gv1]

Its a positive to read that Karaka and hobsonvile already selling. Great locations. Read that Ryman in Remuera didn't have back up power after the major blackout.

[winner69]

All be OK

One well respected broker has a $4.50 target for Summerset

That's a 60% gain over the next 12 months and because I greedy and it wont go closer to $2 than today I probably miss out

Mind you that broker analyst has them making $14m underlying profit in H2 bringing FY15 to over $23m. IFRS earnings on a par with the $34m of last year

Jeez Roger and me must be pessimistic as buggery - we no where near those numbers

But we are more mortals

[Harvey Specter]

Its a positive to read that Karaka and hobsonvile already selling. Great locations. Read that Ryman in Remuera didn't have back up power after the major blackout.They had back up power but only for emergency equipment. I am not sure any village would have enough back up power to power the whole complex - that would probably be into the millions and would hardly ever get used. If they had enough density (ie. in the Auckland market) they could own a truck mounted one which they could share amount all villages, but to have an onsite one for each would be very costly.

Given the size of some of the complexes, I wonder if going forward, they will start to invest in solar panels, gas co-generation (put of alot of heat but they need that anyway for water and air temp) and even a wind turbine or two. Not to go fully off the grid but to minimize dependency and hedge future energy costs.

[gv1]

They had back up power but only for emergency equipment. I am not sure any village would have enough back up power to power the whole complex - that would probably be into the millions and would hardly ever get used. If they had enough density (ie. in the Auckland market) they could own a truck mounted one which they could share amount all villages, but to have an onsite one for each would be very costly.

Given the size of some of the complexes, I wonder if going forward, they will start to invest in solar panels, gas co-generation (put of alot of heat but they need that anyway for water and air temp) and even a wind turbine or two. Not to go fully off the grid but to minimize dependency and hedge future energy costs.

Ithought this should be the norm...esp they are involved in looking after vunerable people. I knew someone very close who was in charge of Hospitals, they have back up system.

[Beagle]

Roger . suddenly you seem very keen on talking the company down. Sold your shares by any chance?

Yeap, not a single one left.

W69 - Second half profit $14m - fantasy land stuff, whatever that analyst is smoking I want some LOL

[Harvey Specter]

Ithought this should be the norm...esp they are involved in looking after vunerable people. I knew someone very close who was in charge of Hospitals, they have back up system.There is a difference between the village part and the hospital part. The village part are effectively just houses or apartments - I dont know any houses or apartments that have installed back up generators other than for emergency lighting etc (in apartments, not houses). The hospital part is different I agree but even in hospitals, I dont think the generators back up 100% of power.

[Beagle]

I think they will struggle to match first half $9.4m as there's more money in resales than new units and as the product sales mix changes their profit declines. Anyone's guess what Q4 new unit sales will be, (mgmt. made lots of positive noise about sales at Karaka and Hobsonville but I am most underwhelmed by new Q3 sales), and signs are grim for Q4 resales with very low stock.

Look honestly what I've come to realise is that over the long term the company makes all its money from sales and there's virtually nothing in it for the company in terms of profit from operating the villages.
Resales over the long run will be swings and roundabouts and while the immediate prospects for resales do not look encouraging what's important is the company can only grow its profits by the increase in the build rate and for a certain period of time some margin improvement for new developments.

This year's growth in build rate is just on 20% 250 target v 209 last year, and next year is also 20%, (300/250). Management won't give guidance past that build number for 2015.
If i'm right about current year EPS, (obviously I've backed myself by selling my shares), the stock currently trades on a PE of2.80 / 0.084 = 33 times 2014 underlying earnings. This is simply too high for a company that I reckon has a medium term growth potential of no better than Ryman's i.e. 15% EPS growth per year.

Regarding future profits from resales I've come to realise a couple of things.
1. The rate of increase in national real estate prices is slowing and must slow because on a per capita basis we are apparently the third most expensive nation in the world for our real estate stock.
2. People are living longer.

Long term I believe these two things undermine resale profits going forward. I can't see past 25 times earnings as the maximum for a modest growth company which sheets me back to about $2.10 as fair value. 25 x .084.

I think the party is over for the retirement sector, its been a wild ride with massive PE expansion and anyone long on RYM in particular has had an exceptional ride. The favourable tailwinds and demographics in this sector are so well known you'd have to be living under a rock, (probably on Mars) to not already be well aware of them and they were fully priced into the sector a long time ago.

The recent correction is just a reality check and some more PE contraction in the medium term is highly likely in my opinion. I'm bowing out of the entire retirement sector as I believe a protracted period of under-performance is far more likely than any other outcome. PE's have simply got ahead of themselves and the hangover from such a wild ride will be painful and lengthy. My 3 cents :)

[Beagle]

Thanks Roger - appreciate the detailed and well explained post. I, too, am starting to fall out of love with the stock a little.

in fact, I just sent a detailed information request to the information person, so hopefully they come back soon. Didn't get a reply to yesterday's (friendly) email either, though, so not holding my breath!

LOL yeah the date thing was tongue in cheek mate. They have to put their public relations spin on things so PR speak responses take time :)

[Beagle]

Interesting you make that observation NG. According to the annual report as at 31 Dec 2013 they had 1855 units. CEO told me at the ASM that the average age of a new resident was 78 and the average term of residency was approx. 7 years. In a normal quarter you'd therefore expect 66 units to come available from deaths, (1855 / 7 divided by 4) plus a certain number to come available from residents moving into more advanced care at other facilities outside of SUM's villages, (Dementia, Hospital and rest home care and other sicknesses). I would have thought at least another 14 from these causes giving circa 80 units that should come available each quarter if what Julian Cook told me is correct.

As you've alluded too, (and well done to you for thinking along those lines) when you look at theoretical resale stock coming available vs what is actually coming available there is a really major discrepancy there that's been consistent for quite some time, (not just the last few quarters). As I suggested yesterday, its well known that more elderly folk succumb to illnesses in the winter quarter so maybe we have a super bunch of healthy folk that are so happy at SUM villages they'll live well beyond their normal life expectancy ? or on the other hand will we see resales climb to more normalised theoretical level's in 2015 and beyond, I dunno and it does my head in a bit trying to figure it out.

[MAC]

One can’t really make a long term valuation based on PE ratios for companies that are in a phase of transition from growth to cyclical, at best it will only provide a rough ‘feel’ for present and perhaps year ahead value. DCF valuation is best, that’s why the professional analysts rely on it.

The ability for SUM to grow from construction is limited by debt facility limits and how far they can resist any pressure to pay out larger dividends. I wouldn’t like to see their debt to equity ratio go any higher in a rising interest rate environment, but they are now also a dividend paying stock and the rate of growth we have seen in the past will be tempered going forward.

The thing to research carefully now is the methodologies applied to asset valuation, much of SUM and RYM income is derived from fair value adjustments in property, and if the commercial property market peaks then we may IMO see the first cyclical sector swing, if it has not started already.

Like it or not, the market assesses value on IFRS NPAT not on operating profit, this is perhaps why RYM has outperformed SUM, so much is taken on how assets are valued, perhaps even who is doing the valuation, the charts below paints the picture. Though, if assets have been over valued on the way up, they may well adjust more heavily going the other way.

6306

6307

[Harvey Specter]

Interesting you make that observation NG. According to the annual report as at 31 Dec 2013 they had 1855 units. CEO told me at the ASM that the average age of a new resident was 78 and the average term of residency was approx. 7 years. In a normal quarter you'd therefore expect 66 units to come available from deaths, (1855 / 7 divided by 4) plus a certain number to come available from residents moving into more advanced care at other facilities outside of SUM's villages, (Dementia, Hospital and rest home care and other sicknesses). I would have thought at least another 14 from these causes giving circa 80 units that should come available each quarter if what Julian Cook told me is correct.My understanding was the average 7 year term would include those going to higher care facilities so you cant add in that extra 14.

Another factor for a operator growing the number of units they have, you cant expect many resales from villages built in the last (say) 4 years so calculating 1855/7 will be misleading - you need to look at the weighted age of the villages.

[Beagle]

Fair comments gents. I've had a lot on my mind and hadn't really applied a lot of intellectual horsepower to it this morning. Still reeling from the 2014 PE of circa 33 and lack of growth to be honest.

[skid]

I think they will struggle to match first half $9.4m as there's more money in resales than new units and as the product sales mix changes their profit declines. Anyone's guess what Q4 new unit sales will be, (mgmt. made lots of positive noise about sales at Karaka and Hobsonville but I am most underwhelmed by new Q3 sales), and signs are grim for Q4 resales with very low stock.

Look honestly what I've come to realise is that over the long term the company makes all its money from sales and there's virtually nothing in it for the company in terms of profit from operating the villages.
Resales over the long run will be swings and roundabouts and while the immediate prospects for resales do not look encouraging what's important is the company can only grow its profits by the increase in the build rate and for a certain period of time some margin improvement for new developments.

This year's growth in build rate is just on 20% 250 target v 209 last year, and next year is also 20%, (300/250). Management won't give guidance past that build number for 2015.
If i'm right about current year EPS, (obviously I've backed myself by selling my shares), the stock currently trades on a PE of2.80 / 0.084 = 33 times 2014 underlying earnings. This is simply too high for a company that I reckon has a medium term growth potential of no better than Ryman's i.e. 15% EPS growth per year.

Regarding future profits from resales I've come to realise a couple of things.
1. The rate of increase in national real estate prices is slowing and must slow because on a per capita basis we are apparently the third most expensive nation in the world for our real estate stock.
2. People are living longer.

Long term I believe these two things undermine resale profits going forward. I can't see past 25 times earnings as the maximum for a modest growth company which sheets me back to about $2.10 as fair value. 25 x .084.

I think the party is over for the retirement sector, its been a wild ride with massive PE expansion and anyone long on RYM in particular has had an exceptional ride. The favourable tailwinds and demographics in this sector are so well known you'd have to be living under a rock, (probably on Mars) to not already be well aware of them and they were fully priced into the sector a long time ago.

The recent correction is just a reality check and some more PE contraction in the medium term is highly likely in my opinion. I'm bowing out of the entire retirement sector as I believe a protracted period of under-performance is far more likely than any other outcome. PE's have simply got ahead of themselves and the hangover from such a wild ride will be painful and lengthy. My 3 cents :)

Theres something wrong IMO with a company that depends on sales rather than operational issues--That just doesnt seem like the right mix to me--I wouldnt want my granny there.
But what do I know the SP has been going up(a little) in the last few days. Disc. not in (have some serious concerns with the market in general (at least in the US) Many wiser than me are anticipating a correction--Im letting my profits run but ready to bail if necessary.

[777]

Newguy have you considered that due to the higher standard of these villages, compared with what was previously available, encourages people to move into them at an earlier age. This would then mean a longer occupancy period. Also a lot more effort is being made to keep those needing extra care in their place of residence before they move to a higher care facility. Just some thoughts.

[forest]

Newguy have you considered that due to the higher standard of these villages, compared with what was previously available, encourages people to move into them at an earlier age. This would then mean a longer occupancy period. Also a lot more effort is being made to keep those needing extra care in their place of residence before they move to a higher care facility. Just some thoughts.

777 or is it possible because of a lack of dementia facilities (the hard part of running retirement villages) the older people (and their families) prefer to look for villages where they have those options. Remember if it looks that only one half of a couple might need dementia care in the future, the family is likely to appreciate specialised dementia care.

Consequently the units still get occupied but the average entry age in a SUM village could be lower then say RYM.

[ratkin]

Here is a suggestion, why dont Newguy and Roger write a weekly newsletter for residents. Im sure their negative and depressing tomes would soon have residents losing the will to live, taking years off the average tenure

[Snow Leopard]

Got a pathetic response to my email, which I directly replied to with the following:

Thanks for the response.

As you can hopefully appreciate, the resale numbers do not make sense to anyone that understand the industry well, which I do. Villages generally reach maturity by about 10 years, and provide a fairly constant supply of resales thereafter. Since you have several villages, volatility should largely even out. I have modelled the expected resales for your portfolio of villages (using models that I built as evidence before the high court) and reach an estimate of about 46 per quarter for 2014. 31 is significantly lower than this, and the only rational explanation is that tenure is increasing. Can you please therefore confirm the current and past average tenure of residents? Surely this is not commercially sensitive information.

Many thanks
xxxxxx

I guess the Summerset residents have not looked at your models and thus have not agreed upon a roster for when they move on.

Best Wishes
Paper Tiger

[777]

777 or is it possible because of a lack of dementia facilities (the hard part of running retirement villages) the older people (and their families) prefer to look for villages where they have those options. Remember if it looks that only one half of a couple might need dementia care in the future, the family is likely to appreciate specialised dementia care.

Consequently the units still get occupied but the average entry age in a SUM village could be lower then say RYM.

There is no guarantee that dementia will happen, so unless it is starting to show before deciding to purchase I believe people will just deal with it when and if it happens. Both my parents always said they wanted care(not necessarily dementia) facilities when they moved into a village, but one died before moving and the other lasted until 88 yrs and didn't need it. I have heard the figure that only about 15% of old people will need such care. Personally I would decide what village I wanted on the best place to live while fit and able. You can always find somewhere to go if and when the need arises. Both my inlaw's needed dementia care and that was found without too much difficulty. And they where good facilities luckily.

Not sure whether I have answered your question. Early dementia probably.

[forest]

There is no guarantee that dementia will happen, so unless it is starting to show before deciding to purchase I believe people will just deal with it when and if it happens. .

I agree that by far the majority wont make use of and might not even take it seriously into account when choosing a place to stay for retirement.
However there are also very independent and pride elderly who stay in the community for as long as possible. The day arrive that family realises something needs to be done because one of the couple is showing signs of dementia and this will be taken into consideration. The average age of those cases is likely higher than the average age of entry into retirement villages.

[777]

I agree that by far the majority wont make use of and might not even take it seriously into account when choosing a place to stay for retirement.
However there are also very independent and pride elderly who stay in the community for as long as possible. The day arrive that family realises something needs to be done because one of the couple is showing signs of dementia and this will be taken into consideration. The average age of those cases is likely higher than the average age of entry into retirement villages.

You are right and that would help balance out some of those going in earlier.

[winner69]

1. No resales within the first four years and a 1/6th chance of resale over the next 6 years (so that each village fully turns over once in the first 10 years, with an average age of 7.5 years)
2. From year 11 onward, each unit has a 1/8th chance of being resold.

Applying this to the historic rate of development gives me an expected resale figure in 2014 of 185, or about 46 per quarter. 31 is a lot lower than this, and very hard to explain IMHO.

Average over the last 4 quarters has been 43 9including the 31 number). The 31 stuffed the trend because the prior 4 quarters averaged 47.75.

Since achieving 50 and 51 in the last 2 quarters of last year the numbers have been rather weak, averaging only 39 per quarter this year

Seems something has happened in 2014 after looking so promising in 2013

[Goldstein]

My understanding was the average 7 year term would include those going to higher care facilities so you cant add in that extra 14.

Another factor for a operator growing the number of units they have, you cant expect many resales from villages built in the last (say) 4 years so calculating 1855/7 will be misleading - you need to look at the weighted age of the villages.

Yep bang on HS.

Here's the total number of units for the last 7 years (2007 - 2013)

921, 983, 1109, 1272, 1364, 1486, 1855

So over this period:
921 have been available for 7 years
62 have been available for 6 years
126 have been available for 5 years
163 have been available for 4 years
92 have been available for 3 years
122 have been available for 2 years
369 have been available for 1 year

So the expected number of deaths this year should be
(7/7)x921/7 + (6/7)x62/7 + (5/7)x126/7 + (4/7)x163/7 + (3/7)x92/7 + (2/7)x122/7 + (1/7)x369/7 = 183

So in a quarter we should expect 183/4 = 46

We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12

This gives a figure of 38 re-sales in a quarter based on their current stock.

The figure they have is 31 so yes a bit down (18%) on what one would expect. However, the next quarter could easily be higher.

If I had the time I would compare the quarterly results going back to the weigthed average above. That would tell you if there has been a step change.

[Goldstein]

that's exactly the problem, though. They've already told us that the stock available for resale at the beginning of this quarter is even less than at the start (27 vs 31/32), so there is definitely some sort of underlying trend playing out here.
I'm more concerned about ordinal - not specific cardinal - trends. Doesn't feel right to me.

NG, that's how population statistics work. They have low stock because not so many people have died. In 2013 more people died (bad flu year, who knows), meaning lots of stock, leading to high re-sales. But now there are a lot of relatively young tenants holding things up as it were. If the re-sales were continually going up without an ebb and flow (barring increased units) then there would possibly be something criminal going on.

[winner69]

Goldie, I not thinking very straight so forgive me if a stupid question

When you say 'We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12' wouldn't those 2/12ths you knocked just roll into the next year .....so no need to discount?

[Goldstein]

Goldie, I not thinking very straight so forgive me if a stupid question

When you say 'We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12' wouldn't those 2/12ths you knocked just roll into the next year .....so no need to discount?'

The logic is we have a death rate per year based on current stock. However the death rate is not converted 1 to 1 into re-sales rate for a given year (due to the times spent renovating and marketing).

The following year we recalculate the 7 year weighted average based on stock numbers, find the expected death rate, and then again apply the 10/12 conversion rate.

We are only applying this 10/12 to the expected deaths in a year. Next year - different deaths.

[winner69]

'

The logic is we have a death rate per year based on current stock. However the death rate is not converted 1 to 1 into re-sales rate for a given year (due to the times spent renovating and marketing).

The following year we recalculate the 7 year weighted average based on stock numbers, find the expected death rate, and then again apply the 10/12 conversion rate.

We are only applying this 10/12 to the expected deaths in a year. Next year - different deaths.

In your earlier post you knocked 8 units of the expected number for this year. Assuming they get sold when do pick up these sales in your calcs?

Wouldn't this year be as your calc of 38 plus the 2/12ths you knocked of last year

[Goldstein]

Dude, with all due respect, I understand how the demographics of villages work. The tenure profile is what drives the rate of exit and hence the rate of resales. This profile reaches maturity at about 10 years for each village, so will be a bit lumpy wrt to newer villages. Perhaps I should post the workings?

NewGuy, our calculations are the same. We both get a death rate of 46 per quarter for 2014. However, I don't assume that a new tenant is instantly in a unit once there has been a death. That is why I multiply 46 by 10/12 to get 38. Now my 10/12 may be too severe or not (Couta may be able to comment). But the conversion rate sure as hell aint 1 like you have.

[Goldstein]

Goldstein, Where does the other 2/12ths go? It goes into next year, and hence pretty much all washes out.

I'm comfortable with my assumptions and model. They've been checked/endorsed by several village owners.

Regardless, this is all an unnecessary distraction. The point remains that resales volumes are inexplicably low. I'm more interested in why. Cheers.

We actually get the same number of death rate per quarter for 2014 of 46. I've multiplied by a conversion rate 10/12 which brings me to 38.

I said in my email that this was very rough. There 's a lot that needs to be done to a unit before it is fit for a resale and I'm no expert in this (although back in my uni days I had a summer job renovating rest homes).

The fact is that I don't know whether there would be a quick turn around or whether a complete refit is needed, or even whether a unit might be re-purposed. So I simply apply an "I don't know factor". You have assumed that upon death there is an instantaneous new tenant. That's the only difference in what we are doing.

Maybe I'm not being clear. All I'm trying to do is see what is reasonable for the quarterly results for 2014.

[Gunny]

I was interested to see Rogers comment on the average age of new residents being 78. Hasn't this increased dramatically over the last 10 years. I remember when my parents moved into a Summerset village the minimim age was in the mid 50's. Is there any data on the current age band spread of actual residents.

My question is, if a significant number of younger people (55-65) got in early on this could have skewed the population current age downwards. If so, as time goes on with a 78 average age of new residents then the average age of Summerset residents will increase and the average stay rate decrease from current levels. Lots of other factors of course, people living longer etc. but is there a blip here that will further contribute to the resales in the comng years.

Gunny

[Gunny]

Perhaps I can get Dad to knock on everyones door and get their age and current health status to provide a one site sample. Suspect he is too busy playing pool though.

[winner69]

Doesn't really matter if have more or less sales than expected at the end of the day after revaluations SUM will make about $35m to $36m this year. The values still go up even if residents aren't dying to plan.

That will take Book Value (after paying some divies) to about $1.40 a share

So currently trading at 2 times prospective Book Value. RYM is well over 3 times BV. The SUM 2 times BV is a lot lower than what t was late last year when it hit 3 times BV

Institutions will be looking at in this light. They probably see it pretty fairly valued, if not on the cheap side at the moment

But compared to a real property company 2 times BV is not cheap

[winner69]

Curious about the seasonality of dying I was

By the looks of some charts on Stats NZ website it looks like the peak dying months are June, July and August when nearly 30% more die than in summer months (65 and over)

So using Goldies 2/12ths theory Q4 should be the boomer quarter for resales.

Long term climate change /global warming could change this as oldies don't do too well in heat waves either.

[percy]

Well I went down to Barrington Mall yesterday,and noticed "the wall of ageing" NZders has not slowed down.This confirms to me that NZders over the age of 65 years is on track to meet the projected increase from around 550,000 in 2009,to 1,000,000 in the 2020s.
Looks to me, well run companies like MET,SUM,and RYM's projected increases in build rate, will fall well short of the numbers required.
The tail winds in this sector are blowing a lot stronger,and I expect they will reach gale force in the not to distant future.!!!

[winner69]

NG ...but if units go up in value aren't shareholders richer because of it?

[couta1]

Now look what happens when you go skiing for the day you end up having a book to read when you come home. The whole resale thing is and always will be cyclical regardless of available stock, remember more stock becomes available whenever someone dies or moves into the care center which brings me to a point which most of you would not be aware of and that is there has recently been an increase in the number of serviced apartments tied up for rest home care. So for instance there is one village I know of which currently has 5 serviced apartments tied up and currently unavailable for resale until beds become available in the rest home for these 5 people(This may take many months or longer) So what are we to make of the low resales figures this quarter in the light of this, well maybe nothing at all it maybe just a blip in the great scheme of things. On a couple of other points re more people dying in the winter that is true in the community but not so in retirement villages with their constant temp monitoring and quick attention to care needs. Finally should Sum raise their entry age from 65 to 70 like Ryman, yes from a shareholders perspective. Should Sum be building dementia units on their new sites a definite yes for the reason of overall appeal to prospective buyers. Enough from me for now, I'm off skiing again tomorrow hope the weathers good:cool: