SUM - Summerset Group

[couta1]

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.!!!
Well sad Percy and the crunch line.

[Goldstein]

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.


If you are looking at this over a continuous period then you do have to account for the missed re-sales for the quarter.

But when considering an individual quarter I'm trying to answer the question is the number of re-sales (31) fair or should I be worried

To this end I assume 0 re-sales brought forward as it were (I don't have any information).

But I'll assume not all deaths are converted to re-sales in this quarter (this must be the case - I just don't know the lag. Couta1 probably has a fair idea).

Hence the figure of 38 I arrive at. It's an exercise in not reading too much into what data you have available - all you have is an average death rate, and a single number you are trying to test.

It's called hypothesis testing in statistics.

[couta1]

Goldstein the lag phase is dependant on many factors a major one being what I mentioned in my post above re rest home level care tying up serviced apartments and also serviced apartments have a longer turnover period compared to the larger 2 and 3 bedroom ones or cottages quite simply because they are small and less attractive to prospective buyers, they do come into their own however when an apartment resident is no longer able to care for themselves but not ready for hospital or dementia level care. The whole resale thing is quite complex and variable with many factors having an influence and depending on how many of those factors are present in any given quarter.

[Mista_Trix]

This debate is gold guys.

While I cant contribute myself - My knowledge on specifics isn't really high enough.
You guys are adding incredible amounts of value to this thread ... massive cheers all round :)

[Goldstein]

mate, with all due respect. You can't let stuff slip from one period to the next, without doing a corresponding adjustment for the period before. Its asymmetric and, quite frankly, incorrect. Also, what you are describing has nothing to do with hypothesis testing in a statistical sense. Cheers. :)

NG, You have made the assumption that all deaths have been converted to resales in this quarter.

That's fine when you are adding up over the long term and indeed you have to approach it that way - but when you are asking yourself whether this particular quarter is somehow very different you have to account for the possiblilty that not all deaths will be converted into re-sales.

As far as hypothesis testing goes:

Null hypothesis: 31 resales within confidence interval
Alternative hypothesis: 31 oustside confidence interval.

I could calculate these confidence intervals and even a p-value, assuming the time until next death has a poisson distribution and that any resident has a 1/7 chance of dying in a given year.

[Goldstein]

Thanks Goldstein. I have nothing further to add to this. Not sure what your background in maths/stats is, but it certainly looks different to anything that I've ever learned and taught.

Cheers.

That's OK. If I had a a self-proclaimed background in writing reports on this stuff, and then write an email to SUM based on a one-off Q3 re-sales figure of 31 and have somebody on a forum say are you sure about that - I'd be upset too.

[couta1]

Goldstein I can confirm that not all deaths were converted into resales during this quarter, I can affirm this first hand from at least 2 villages.

[Goldstein]

Goldstein I can confirm that not all deaths were converted into resales during this quarter, I can affirm this first hand from at least 2 villages.

Thanks Couta. I wonder what the typical turnaround is.

I find this stuff interesting. But I think I better be quiet for a while. Always a bad sign when somebody starts attacking your background. I just hope I didn't teach him stage 1 statistics during the 90s at a certain NZ University.

[couta1]

Of course they are not. How could a death in the last week of the quarter become a resale in the same quarter? It should be patently obvious that there are time lags between deaths and resales. Even my 7 year old understands that.
NG I was just confirming Goldstein basic premise and I'm not meaning the last week of the quarter,some units have been vacant for nearly the whole 3 month period, conversly in some villages with a waiting list the lag phase is very short indeed,cheers

[couta1]

I'll see if I can get together some average turnover time frames from all the sales reps I know at both Ryman and Sum villages,as you can see from my comments above it can vary from village to village depending on many factors including whether there is a waiting list or not,it may take me a while though especially if the snow keeps falling.

[skid]

NG I was just confirming Goldstein basic premise and I'm not meaning the last week of the quarter,some units have been vacant for nearly the whole 3 month period, actually in some villages with a waiting list the lag phase is very short indeed,cheers

That ,at the risk of seeming ill informed,was the somewhat obvious question I was going to ask--Is the lack of sale due to lack of demand in any of the villages.

Also ,if the article in the herald is anything to go buy,the lag in turnaround could be due to renovations (at the poor last occupants families expense)ie no capital gain +renovation expense for the occupants familiy.

I have a freind who has a mother in a care facility(not sure if its SUM) but is waiting for a space in a facility (in Royal Oak)that is run by a charitable trust and much more reasonable in price (and I would assume atmosphere) Is this the way of the future?

Do you know of this one Couts (if your in the area)

[skid]

What? Snow keeps falling? OK I guess your not in the Auckland area:)

[ratkin]

http://www.scoop.co.nz/stories/SC1409/S00019/climate-summary-a-mild-winter-for-much-of-the-country.htm

2013 and 2014 two of the warmest winters on record

Warm winters and a programme of flu vacines, are thankfully helping our elderly citizens to live a little longer.
Now stop being so bloody ghoulish, and move on

[couta1]

Provided the turnover length hasn't changed fundamentally over the last few months (which I sincerely doubt that it has), this won't explain the unusually low resales volumes...
No your right that's why I'm leaning toward the reason being rest home level care beds holding up resales during the last quarter as stated in a previous post I know of one village with 5 units currently being tied up so could very well be a blip for this quarter but with this situation becoming more common it could be an ongoing thing but too early to tell yet.

[couta1]

Skid please read post # 2759 re demand for the various units available, re snow no not in Auckland but sometimes I wish that Aucklanders could have their own skifield (Mt Eden could be made larger perhaps) Sorry don't know about Royal Oak.

[Gunny]

Longer term, assuming the demand is going to out strip the products with the aging population (which would drive more market players of course) can Summerset control / raise the entry level age or is it first in first served? From a brutal business point of view the older the better if it can be controlled i.e. pure demand and supply driving not only price point but length of average stay by age. Is this a possible future or do they already do this?


Not close to the ground as currently live in the Caribbean but love to read what others contribute.

Gunny


Gunny
Gunny

[macduffy]

http://www.scoop.co.nz/stories/SC1409/S00019/climate-summary-a-mild-winter-for-much-of-the-country.htm

2013 and 2014 two of the warmest winters on record

Warm winters and a programme of flu vacines, are thankfully helping our elderly citizens to live a little longer.
Now stop being so bloody ghoulish, and move on

Nice one, ratkin.

We need to move this conversation forward before someone suggests that village occupants are "moved on" after x years occupation!

:scared:

[skid]

Longer term, assuming the demand is going to out strip the products with the aging population (which would drive more market players of course) can Summerset control / raise the entry level age or is it first in first served? From a brutal business point of view the older the better if it can be controlled i.e. pure demand and supply driving not only price point but length of average stay by age. Is this a possible future or do they already do this?


Not close to the ground as currently live in the Caribbean but love to read what others contribute.

Gunny


Gunny
Gunny

A disturbing thought indeed--in terms of their sales strategy

[couta1]

I thought readers may be interested to know that Met have a minimum entry age of 55 yrs this seems way out of step with Sum at 65 and Ryman at 70 but when you consider than Met have small care centers compared to the other two, that entry age would be an advantage currently but as they want to expand their care center base I wonder how long before they push the entry age up, not long I'm picking.

[couta1]

Couta, the minimum entry age is a purely theoretical concept and really not meaningful, as virtually nobody ever enters at that age. Right?
NG its not theoretical as quite a few enter at the minimum age, eg I know a couple who recently entered a Sum village at 65 having waited for the husbands 65th birthday to arrive, they were on a waiting list. Quite a few on waiting lists were upset when Ryman put the age up to 70 from 65 and special arrangements were made to accommodate them at the time but the majority as you say would not enter at the minimum age.

[couta1]

Put it another way. If some DO enter at 65 (or even 70), how old must the others be on entry for the AVERAGE TO BE 78?
NG the main point I was making here is that Met are way out of step with the other two and will need to make a change when their care centers start getting bigger or they will run into trouble.

[Beagle]

NG its not theoretical as quite a few enter at the minimum age, eg I know a couple who recently entered a Sum village at 65 having waited for the husbands 65th birthday to arrive, they were on a waiting list. Quite a few on waiting lists were upset when Ryman put the age up to 70 from 65 and special arrangements were made to accommodate them at the time but the majority as you say would not enter at the minimum age.

My Mum knows a few at her retirement village, (The Peninsula Club on Whangaparaoa in Auckland) who have been there for over 25 years having moved in at 55. You wouldn't want too many of them on board at SUM villages to muck up the stock turn would you !! I think rapid advances in medication is a real headwind for this sector and we will see significant advances in the average life expectancy of our elderly folks over the foreseeable future. As usual RYM are ahead of the game and have done the business savvy thing of putting up the entry age and SUM are left fumbling in the dark wondering why stock turn is on the decline, dragging their heels. Warren Buffett is I concede absolutely right. Best of breed only. If you've made it to 65 I think the current stat's show the average life expectancy for women is for them to reach 85 and men about 82 but as rapid advances in drugs and new medical technology happen, maybe by the time they're 75 their average life expectancy will have shifted to nearly 90 ?

[winner69]

Oh NG - what an insult suggesting you compare your work with some of the research from investment banks that cover SUM

That's just another way of calling you stupid or something .....and don't bother us again please

What a hoot!!!!

[Beagle]

Here's the very weak response given at 8pm tonight to my latest query:

Hi xxxxxx,

Summerset currently has quite a mix of mature villages and developing villages, as well as a mix of different unit types (villas, apartment, care apartments). You will find on p32 of our Information Memorandum from July 2013 the average tenures by retirement unit type for mature villages at that particular time (http://www.summerset.co.nz/assets/Investor-Centre/NZX-2013/2013-7-17-Information-Memorandum.sml.pdf). As mentioned in my earlier email, some volatility is to be expected with units becoming available for resale given their nature.

In terms of your modelling of terminations, I can only suggest you may like to compare this with some of the research from investment banks that cover our stock.

Good luck with your analysis.

Kind regards,

I told you you'd only get a load of PR claptrap out of them.

[Beagle]

Let me give you some good advice mate. You're wasting your time. If management and the board allegedly couldn't work out that Norha's sale was a breech of the insider trading regulations between them before it happened then its safe to say they'd have not a single clue between them of any reason why their stock turn has diminished...which if you think about it is exactly what they are telling you, pointing to historical outcomes and then suggesting you go away and talk to analysts. They have no clues.:scared:

[couta1]

Roger your onto it re the age issue and Ryman were savvy enough years ago to recognize this just like they were by building dementia units in every village, Met have yet to face certain issues at this point due to their tiny care centres but I'm sure they will make changes to stay competitive when the time comes, obviously I like the potential of Sum but as you know I wasn't impressed with the arrogance of the board at the AGM nor their resistance to include dementia units in their upcoming builds but I'm going to keep pressing them on that issue because its too important to let rest:cool:

[couta1]

Yep, fair point mate. To be honest, I feel like I'm just finding out that a long term partner has cheated on me. I was in this for the LONG haul. Now, I just wanna get out (but will have to wait for things to turn a bit before I do!!!)
Remember NG its takes 2 years to get a divorce:eek2:

[Beagle]

Trust me I know the feeling mate. What worries me about this stock and its management is what you can't see. What I see worries me and if you can see issues where management could do better I always wonder if that's just the tip of the iceberg. OTOH Ryman run a slick operation so you've got to ask why bother with the immatators don't you ? When the PE on RYM is more reasonable and the TA looks good and there's a new clear uptrend emerging, (whenever than might be and it could be a long way away), like good old Arnold Swatzanagger "I'LL BE BACK"

[couta1]

Roger I'm going to have to gift a share to you off market just so you can come to the AGM next year:cool:

[Beagle]

Or better still, I'll just come down this summer and get on the piss with you and have a drive of that classic Jag of yours, (actually we'd better do those two things in the opposite order LOL).

[couta1]

Or better still, I'll just come down this summer and get on the piss with you and have a drive of that classic Jag of yours, (actually we'd better do those two things in the opposite order LOL).
Sounds like a good plan, we can always pick winner up and take him for a spin at the same time:cool: PS- I lose the last of my demerit points in a month after 2 years so back to zero and all good.

[Harvey Specter]

Oh NG - what an insult suggesting you compare your work with some of the research from investment banks that cover SUMI'm sure they have provided more detail to those investment banks, not just referred them to the prospectus.

[forest]

Just fired this off. Will let you know if I hear anything.

Hi Leanne

Thanks for your email, which I do not feel adequately addresses my genuine concerns. Below is a chart showing actual resales from 2010 to 2014 (with the fourth quarter of this year assumed equal to the stock available at the start of that period - 27). As you can see, this really defies any logic, and I would sincerely appreciate a more adequate response.

Regards
xxxxxx


6310

Good on you NewGuy for pursuing you line of questions on the number of resales, this can only help with your understanding of SUMs business model.

[nextbigthing]

Retirement village newbie question, why don't these places focus on making some money on the day to day operations rather than just unit sales?

[skid]

and that is the 6 million dollar question.....Mind you it is not an easy task ----good management doesnt grow on trees

[Harvey Specter]

Retirement village newbie question, why don't these places focus on making some money on the day to day operations rather than just unit sales?Probably a customer perception thing. Most would run for the hills at being charged $500+ a day to stay in a village but they have no problem 'buying' a unit for $500k+.

Have you noticed how the kids always complain when the find out that $500k unit is being bought of them for only $350k, despite the fact their parents got extremely cheap care over the past 8 years.

[Zaphod]

Retirement village newbie question, why don't these places focus on making some money on the day to day operations rather than just unit sales?

Perhaps SUM believe that focusing on the development side of the business will yield higher returns in a much shorter timeframe with less effort. IMO however, village operations need to start turning at least a small profit and quickly, given their re-sales are not performing comparative to competitors and that capital gain on the units is not assured in a real-estate market whose CG is beginning to flatten.

[skid]

Yes ,logically one would assume that a unit with good care would lead to better resale value (and vice versa)

[stoploss]

Retirement village newbie question, why don't these places focus on making some money on the day to day operations rather than just unit sales?

I've been in Rita Angus (RYM village in Wgtn ) when the booze order has turned up . I thought in the very nice atrium area etc someone must have been having a massive wedding ..... I enquired
and was told no that was "just the weekly order " so pretty sure they would be turning a profit on that bar for sure . Nice to see the residents can enjoy a quiet tipple amongst friends . :)

[Snow Leopard]

Sort of, but not really until the units are sold and hence the capital gains realised. The point is that it doesn't make sense to add up the valuation gains now, and then count them again later on resale. That is direct double counting.


Not sure if you are taking the piss, or whether you don't realise that unrealised gains are pretty meaningless and effectively lead to double counting. Those very same "unrealised gains" will one day be realised and comprise the underlying earnnigs of the year in which realisation occurs. Counting them ahead of them is pointless. Also, the valuation methods used by CBRE etc leave a lot to be desired. Almost complete rubbish to be perfectly frank.

You keep saying this. There is no double counting.

There is "fair value movement of investment property",
there is "realised gain on resale" + "realised development margin",
and there is the difference between the two:"Unrealised gains".

Best Wishes
Paper Tiger

[Goldstein]

Find attached two plots of death rates and re-sales.

The first allows for a fluctuation in the death rate, the second assumes the expected number will pass on each year.

The conversion lag of a vacated unit to a tenanted one is assumed normally distributed with mean of 2 months and std dev of 1 month.

I had to scale up the 2014 re-sales figure to 12 months. Unfortunately I can't get any of the re-sale figures going further back. I also had to use yearly values as the quarterly results have only been going for a couple of years.

The null hypothesis (average 7 year tenure rate, and the conversion time stated above) is rejected if the red dot (re-sales figure) is outside the bands given at the 80% level. I.e., something would have altered. We'll see how the next quarte plays out, but I'm reasonably sure it's not as bad as some think and is most likely an aberration of the death rate.


63116312

[Xirr]

Sorry, my use of language may have been a bit lose, but I'm pretty sure the sentiment remains. Happy to be proven otherwise, though.

The point is that realised gains on resale embody all previous fair value movements, hence my comment about double counting. Underlying earnings is designed to overcome this problem and, IMHO, is the only useful measure of real profitability for this sector.

What's your view, PT?

Hi new guy - I think you're wrong. I think that realised gains represent the actual profit realised from selling a unit above book value during the period. Book value being the previously revalued value at the end of the previous accounting period.

Realised profit also includes the profit from selling new units above cost.

There is no double counting that I am aware of.

[Xirr]

I'm also of the view that profit of any type is also pretty meaningless for Rv operators given it represents only what has happened over the year and includes a mix of new sale gains, resale gains, unrealised gains and an amortisation of the dmf.

I think to really know what's going on - you have to have a good grasp of the underlying cash flows which are reported in such a way that it is almost impossible to.

Just my personal opinion

[winner69]

I'm also of the view that profit of any type is also pretty meaningless for Rv operators given it represents only what has happened over the year and includes a mix of new sale gains, resale gains, unrealised gains and an amortisation of the dmf.

I think to really know what's going on - you have to have a good grasp of the underlying cash flows which are reported in such a way that it is almost impossible to.

Just my personal opinion

Great post there xirr

We do need to have faith that the assumptions around how much of the dmf is amortised are robust dont we

Also agree about thw cash flow statements. Reminds me to update some work on sums cash flow. Now a few more halves since listing something might fall out.

Hope we hear more from you over time

[Gunny]

New Guy

Current entry age is 78. Given the minimum is 65, doesn't seem to have any impact.


My first thought as well,

This would seem to suggest the average age of interest in going into Summerset is also 78, way above the minimim requirement unless Summerset are giving favour to older folk on the waiting list.

This could be interrupted in a number of ways. For example:

1) If the average age of interest holds around 78 then the baby boomer bubble would tend to flood into the market later. Must do some work on this to see the impacts if I get time.

2) The band between 65 - 78 could be seen as a risk point for change i.e. could Summerset tend towards Summercamp if more of the younger set want to apply. SUM is going to be a target over RYM with a 70 mimimum. Good for sales but bad for resales with increased length of stay i.e. exposure.

A mitigation strategy could be to do what RYM have already done, clever chaps, cherry picking an under supplied market to ensure good resales. If it becomes a problem they can always reduce it again later, just makes business sense.

Or maybe they could introduce "age based pricing". (Would this break any discrimination laws? Can't see how this differs from mimimum age of entry though.) Maximize market size and manage returns on resales rates.

So I suggest there is possible impact /risk and possible opportunity.

Gunny

[Goldstein]

NewGuy, You asserted in an email to SUM:

"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"

My position is that re-sales of 31 for Q3 does not indicate an average death (I should say tenure) rate change. This is more likley due to the tenure-rate moving about its average, and the lag rate between tenants (your reply from SUM alluded to this).

The onus is on you not just to show graphs of re-sale numbers compared with stock availability and average tenure rate, but to show that there has been a statistically significant change.

All you have done is throw stones at my arguments, methodologies and even background.

Investing is not my day job and I don't have the time to spend arguing this with you.

[winner69]

Hi Xirr.

Sorry, I don't seem to be explaining myself very well, partly because I'm being lazy with terminology.

My point is this: Resales earn two types of profit/income. DMF and capital gains on resale. Since the latter largely reflects past "Fair value movements in investment property" those fair value movements are removed when calculating underlying earnings each period. To put it slightly differently, if we count both fair value movements each year AND the capital gains on resale, we are double counting capital gains. To avoid this, fair value movements are ignored when calculating underlying earnings (the most reliable measure of actual profitability).

Here's what it says in the Summerset accounts:

Underlying profit differs from NZ IF RS net profit after tax. The directors have provided an underlying profit measure to assist readers in determining the realised and non-realised components of fair value movement of investment property and tax expense in the Group’s income statement. The measure is used internally in conjunction with other measures to monitor performance and make investment decisions. Underlying profit is an industry-wide measure which the Group uses consistently across reporting periods.

I hope that makes sense now. Again, happy to be proven wrong. However, any attempt to do so must clearly explain why fair value movements are stripped out when calculating underlying earnings. This is the crux of the matter, IMHO.

Cheers! :)

NG, do you agree with xirr when he says: realised gains represent the actual profit realised from selling a unit above book value during the period. Book value being the previously revalued value at the end of the previous accounting period.

[Beagle]

Underlying earnings will by my analysis decrease this year, that's all that is relevant at this stage. But we can expect an all new emphasis on their record build rate in 2014 and whatever other positive spin to generate positive graphs they can produce such as a possible increase in IFRS earnings.

[Snow Leopard]

1/. Never get emotionally involved, neither love nor hate, with a stock.
2/. Take care and time when reading the company accounts and ensure that you understand the derivation of the numbers.
3/. The price has been going down [for at least] 5 months now, is going down today and the future is not certain.

Best Wishes
Paper Tiger

PS If you are on Orchard Road later today and you see a Tiger - it may be me.

[Snow Leopard]

I don't know to be honest. As I said, my terminology is a bit loose. Also, be to frank, I don't really care. I'm just interested in debating the adjustment for fair value movements when calculating underlying earnings and the implication of that wrt double counting of capital gains.

1/. Loose terminology costs confusion.
2/. Fair value movements are completely excluded when calculating Underlying Earnings.
3/. There is no double counting.

Best Wishes
Paper Tiger

[Harvey Specter]

1/. Never get emotionally involved, neither love nor hate, with a stock.
2/. Take care and time when reading the company accounts and ensure that you understand the derivation of the numbers.
3/. The price has been going down [for at least] 5 months now, is going down today and the future is not certain.
I'm out. Sold my last part today. Never try catching a falling knife. And if the stock is bad enough to sell half, why not sell it all. Expensive lesson but lesson learned.

All out of the retirement sector (except MET via IFT). Was my largest sector at one point. Happy with my exits from RYM and MET. Sector faces a big headwind if 1, 2 or 3 more try to enter. I do plan to re-enter when things start heading up again.

[Tevita]

Since I started selling down the price has dropped 20 cents. It is annoying that posters who are not holders can be flippant about uncertainties. It is also annoying that the Board make no effort to allay concerns of those who bought in unwittingly particularly during the period Norah was bailing out. That same Board seeming to be indifferent to a price presently in disarray. Leadership or honesty please. Or both.

[Beagle]

Since I started selling down the price has dropped 20 cents. It is annoying that posters who are not holders can be flippant about uncertainties. It is also annoying that the Board make no effort to allay concerns of those who bought in unwittingly particularly during the period Norah was bailing out. That same Board seeming to be indifferent to a price presently in disarray. Leadership or honesty please. Or both.

I've had it put to me that the board approved Norah's sale just before the material price sensitive announcement as you will see this is clearly inferred from their response to my enquiry I posted a while back. I struggle to believe how an apparently intelligent group of men and women could not realise that selling $4.8m of shares immediately before a price sensitive quarterly sales announcement was not a blatant breech of the insider trading rules. If you take the cynical view that they're simply rallying around and protecting Norah after her selling on her own bat without pre-approval then one is forced to take an even dimmer view of the board.

This is either a really, really bad look for the entire board or an extremely bad look, take your pick. Remember this is just the sort of stuff we can see on the surface... Any wonder why the SP is in the toilet and going down further, I doubt any intelligent investor is impressed with this sort of conduct.

[Goldstein]

Since I started selling down the price has dropped 20 cents. It is annoying that posters who are not holders can be flippant about uncertainties. It is also annoying that the Board make no effort to allay concerns of those who bought in unwittingly particularly during the period Norah was bailing out. That same Board seeming to be indifferent to a price presently in disarray. Leadership or honesty please. Or both.

Tevita, I'm not sure whether that is directed at me. However,

1. I am a holder of SUM and not far off having a stop-loss triggered.
2. I'm trying to decide whether on balance there is something wrong with SUM's build rate or re-sales rate. Being as objective as I can I don't think there is.
3. This leaves me wondering about some of the macro issues Winner69 pointed to on the RYM thread.

There is a lot of negative sentiment towards SUM on this thread as people have bought in recently and are looking for somebody to blame, etc. In particular the insider trading allegations.

If you read the reply Roger got from SUM, the board does not use language like "we believe that Mrs Barlow followed the rules ...", they categorically state that she did follow the rules.

What I am saying is that IMHO most of the issues being discussed recently are red herrings. The real problem is that something is moving against SUM and to some degree the entire sector.

I am left feeling very uneasy at the moment.

Believe me I'm not being flippant.

[skid]

I don't know to be honest. As I said, my terminology is a bit loose. Also, be to frank, I don't really care. I'm just interested in debating the adjustment for fair value movements when calculating underlying earnings and the implication of that wrt double counting of capital gains.

So what do we call you Frank or New guy:):)

[Tevita]

Tevita, I'm not sure whether that is directed at me. However,

1. I am a holder of SUM and not far off having a stop-loss triggered.
2. I'm trying to decide whether on balance there is something wrong with SUM's build rate or re-sales rate. Being as objective as I can I don't think there is.
3. This leaves me wondering about some of the macro issues Winner69 pointed to on the RYM thread.

There is a lot of negative sentiment towards SUM on this thread as people have bought in recently and are looking for somebody to blame, etc. In particular the insider trading allegations.

If you read the reply Roger got from SUM, the board does not use language like "we believe that Mrs Barlow followed the rules ...", they categorically state that she did follow the rules.

What I am saying is that IMHO most of the issues being discussed recently are red herrings. The real problem is that something is moving against SUM and to some degree the entire sector.

I am left feeling very uneasy at the moment.

Believe me I'm not being flippant.

Not being pointed at anyone in particular. Put it down to hyper sensitivity (anger) on my part The Board are seemingly on another planet so I can`t use them as the more appropriate punching bag.

[winner69]

Haha.

Man, that SP is taking a thrashing. Ouch. :eek2:

Don't know what it means but SUM got worse as day went along while RYM started really bad and got better as day passed

[Beagle]

I might have to take Couta1 up on his offer of 1 free share off-market to come to next years ASM, should be a real fire cracker of a meeting and well worth the trip down.

I might lob a few thunder cracker questions in too just for good measure. I wonder if Bruce Sheppard will loan me his Viking hat. The tone will be interesting with lots of grumpy shareholders with the price in the low $2 range, (at best).

[percy]

I always thought Jag drivers had to own their own selection of funny hats,before taking ownership of a Jag.!!!
Sherlock Holmes type,or The Red Baron,country squire,duck hunter, etc.
Are the Jag running costs the main reason Bruce rides a bike?
ps Thank goodness for minimum holdings.

[couta1]

I won't be selling any of my Sum or Rym and realizing a large paper loss, I'm quite comfortable with that big gale force wind(I like that saying Percy) that's building behind the scenes and you can't stop a gale once it builds enough momentum , I mean let's face it the whole market is crap at the moment and so why just sell this sectors stock might as well just get out of the market altogether or go long. I think some like pointing out every little price drop, its gives them a kinda sadistic pleasure to know that others are losing big time while they are immune because they don't even own that particular stock.

[Beagle]

I always thought Jag drivers had to own their own selection of funny hats,before taking ownership of a Jag.!!!
Sherlock Holmes type,or The Red Baron,country squire,duck hunter, etc.
Are the Jag running costs the main reason Bruce rides a bike?
ps Thank goodness for minimum holdings.

Bugger I forgot about that, might have to buy a few hundred so I brought up the chart since June 2014, (down a whopping 23%, 80 cents in four months) and extrapolated the rate of decline for another six months, (deduct another $1.20) and that gets them more or less back to the IPO price of $1.40, so I should be good for that in April 2015 and then that only leaves the small matter of cleaning the board out.

[Beagle]

I won't be selling any of my Sum or Rym and realizing a large paper loss, I'm quite comfortable with that big gale force wind(I like that saying Percy) that's building behind the scenes and you can't stop a gale once it builds enough momentum , I mean let's face it the whole market is crap at the moment and so why just sell this sectors stock might as well just get out of the market altogether or go long. I think some like pointing out every little price drop, its gives them a kinda sadistic pleasure to know that others are losing big time while they are immune because they don't even own that particular stock.

Go into ANZ securities, bring up SUM, click on charts, bring up the chart for the last six months, then click on super charts and compare the NZX50 with SUM's performance over the last 6 months. They couldn't be more different. NZX 50 is up 2%, SUM down a whopping 22%. A lot of influential shareholders are now well aware of what Norah did with the boards approval and are not impressed. If the board can't even get basic stuff right like correct execution of insider trading policies what confidence do you think people have in their ability to run the company...it gets worse from here mate, you mark my words.

Why does that old saying of "you can lead a horse to water but you can't make it drink" so readily spring to mind...

[ratkin]

Go into ANZ securities, bring up SUM, click on charts, bring up the chart for the last six months, then click on super charts and compare the NZX50 with SUM's performance over the last 6 months. They couldn't be more different.
NZX 50 is up 2%, SUM down a whopping 22%. A lot of influential shareholders are now well aware of what Norah did with the boards approval and are not impressed. If the board can't even get basic stuff like blatant insider trading policies wrong what confidence do you think people have in their ability to run the company...it gets worse from here mate, you mark my words.

And im sure you will be here talking it down the whole way
Until you buy back in and start telling everyone how wonderful it is

[Snow Leopard]

Hopefully your re entry ticket will cost you a whole stack more than your sale price:cool:


I won't be selling any of my Sum or Rym and realizing a large paper loss, I'm quite comfortable with that big gale force wind(I like that saying Percy) that's building behind the scenes and you can't stop a gale once it builds enough momentum , I mean let's face it the whole market is crap at the moment and so why just sell this sectors stock might as well just get out of the market altogether or go long. I think some like pointing out every little price drop, its gives them a kinda sadistic pleasure to know that others are losing big time while they are immune because they don't even own that particular stock.

I would suggest you change your user name to Paper Loss but it would cause to much confusion

Best Wishes
Paper Tiger

[Carpenterjoe]

I'm completely comfortable holding this stock, yes I'm currently down 11 percent, but I treat this company like real estate. Ten years disappear, house prices double, mortgage reduces and suddenly its a great investment. Its just so boring waiting.

[couta1]

I would suggest you change your user name to Paper Loss but it would cause to much confusion

Best Wishes
Paper Tiger
All good PT just as well that was a good old tongue in cheek comment aye, the one about your re entry ticket I mean:cool:

[couta1]

On a more positive note Sum holders, the first 10 completed units at the Trentham site extension have now sold and there is strong demand in waiting for the next lot to be finished:cool:

[Goldstein]

Couta, do you have a sense of whether there are two different markets for new sales and re-sales. I get the feeling new units go like hot cakes.

At the moment they have 27 units out of 1646 units (as at the start of the year) empty.

Also, I'd like to say good on you for hanging in there. There has been a tsunami of bad feeling toward SUM management and board on this thread.

I think most are red herrings. I also remember those that got stuck into SUM over their awards - petty really - so what if the award is meaningless.

SUM management actively encourage their staff to become qualified and have careers. This in turn gives the staff a sense of job satisfaction, etc, and the clients a better standard of care.

I don't think the same can be said for RYM who had some terrible press about 14 months ago about patient neglect. The only bad things I hear about SUM management are from this thread.

Whether or not I hold on to my shares next week, I sincerely hope you have the last laugh.

[couta1]

Thanks Goldstein, yeah I think your right about the two different markets the new always surpasses the old even if the old is done up but of course eventually the new will slow down considerably and the resales will be the main income generator. The one thing I can say for certain and repeat once again is that 99% of Sum residents are very happy campers indeed.

[Chaowee88]

Couta, do you have a sense of whether there are two different markets for new sales and re-sales. I get the feeling new units go like hot cakes.

At the moment they have 27 units out of 1646 units (as at the start of the year) empty.

Also, I'd like to say good on you for hanging in there. There has been a tsunami of bad feeling toward SUM management and board on this thread.

I think most are red herrings. I also remember those that got stuck into SUM over their awards - petty really - so what if the award is meaningless.

SUM management actively encourage their staff to become qualified and have careers. This in turn gives the staff a sense of job satisfaction, etc, and the clients a better standard of care.

I don't think the same can be said for RYM who had some terrible press about 14 months ago about patient neglect. The only bad things I hear about SUM management are from this thread.

Whether or not I hold on to my shares next week, I sincerely hope you have the last laugh.

Of all the stocks Couta is holding onto as losses this is probably the one which I feel he has any chance of recouping his losses. The other ones like Xero, SLI, TTK, DIL either has been purchased at too high a price, fundamentally overvalued so bad, overburdened with debt or growth not expanding quick enough makes this investment SUM actually look sensible.

And no I'm not being sarcastic.

[Yoda]

Tevita, I'm not sure whether that is directed at me. However,

1. I am a holder of SUM and not far off having a stop-loss triggered.
2. I'm trying to decide whether on balance there is something wrong with SUM's build rate or re-sales rate. Being as objective as I can I don't think there is.
3. This leaves me wondering about some of the macro issues Winner69 pointed to on the RYM thread.

There is a lot of negative sentiment towards SUM on this thread as people have bought in recently and are looking for somebody to blame, etc. In particular the insider trading allegations.

If you read the reply Roger got from SUM, the board does not use language like "we believe that Mrs Barlow followed the rules ...", they categorically state that she did follow the rules.

What I am saying is that IMHO most of the issues being discussed recently are red herrings. The real problem is that something is moving against SUM and to some degree the entire sector.

I am left feeling very uneasy at the moment.

Believe me I'm not being flippant.
Would it be the headwind was the abnormally high P/E at $3.70. And that a p/e of 10 would be roughly $1.90 ?
I like KW,s thread of when to buy and sell. ( i,m the simple kind )

[Goldstein]

Would it be the headwind was the abnormally high P/E at $3.70. And that a p/e of 10 would be roughly $1.90 ?
I like KW,s thread of when to buy and sell. ( i,m the simple kind )

I think most of us have viewed this sector as somewhat of a darling of the NZX until recently with a justifiably high P/E. The P/E in itself isn't a driver, it's the change in growth outlook for the company or sector which pushes the P/Es lower.

If the sector had an average P/E of 10 then RYM (with a current P/E of 19) would possibly fall to $4.

[Vaygor1]

I think most are red herrings. I also remember those that got stuck into SUM over their awards - petty really - so what if the award is meaningless.

The actual subject matter in itself re awards is fairly meaningless, but the insight it gives one to the culture and attitude of the board is of the highest value.
The same culture and attitude reflected in:


Lack of forward guidance
Dodgy high-volume trading from within the board, subsequently backed up by the board
Spin in ASMs like 'consolidation'. Spin in the reasons to list on the ASX.
Poor (I would say dismissive and arrogant) responses to a variety of genuine share-holder questions related to directors transactions, volume of landbank, lower resale volume, policy on future dementia care facilities... and further detail regarding so-called industry awards.
Lengthy timeframes in gaining resource consent (attitude to the authorities probably mimics those to its shareholders).


I went through exactly the same drop with RYM that SUM is going through now and held on to a 35% loss (with an enormous amount of money at stake) for years until emerging out the other side of it. And I cannot convey enough how glad I am that I did not sell.
I have always encouraged those holding SUM to stick with the strength of ones analysis and convictions and hold.

The only caveat I have to the above is that with RYM, I trusted the numbers because I trusted the board.

[Goldstein]

I guess the mob have spoken.

At the heart of this bad sentiment are the re-sales figures. You people have assumed that they are very bad and Norah Barlow sold her shares prior to the Q1 results because she did too.

However, the board and management at SUM understand the fluctuations of tenure rates about an average, and the varying amount of time between tenures of any given unit. They saw the Q1 results and saw nothing out of the ordinary. Mrs Barlow has been doing this for over a decade.

Let me give you an idea of what would happen if somebody tried to make a case through the FMA against Norah Barlow or the SUM board for insider trading. First of all the FMA would realise there was no case to answer. But let's say for argument it went to court. The SUM board would hire a statistician or industry representative as an independent expert. This expert would then show the judge that there was nothing in the Q1 report that couldn't be explained by variability of tenure rates, etc. They would show that this is the nature of the business. The judge would then throw the case out.

I see they have added a sentence to the Q3 report:

"Resales for the quarter reduced due to low numbers of stock becoming
available."

So maybe you guys are having an effect.

Disc: Hold SUM, no other relationship with them.

[Tevita]

Thanks for that advice. But, have you ever had the feeling

http://www.youtube.com/watch?v=5_H-LY4Jb2M

[forest]

The actual subject matter in itself re awards is fairly meaningless, but the insight it gives one to the culture and attitude of the board is of the highest value.
The same culture and attitude reflected in:


Lack of forward guidance
Dodgy high-volume trading from within the board, subsequently backed up by the board
Spin in ASMs like 'consolidation'. Spin in the reasons to list on the ASX.
Poor (I would say dismissive and arrogant) responses to a variety of genuine share-holder questions related to directors transactions, volume of landbank, lower resale volume, policy on future dementia care facilities... and further detail regarding so-called industry awards.
Lengthy timeframes in gaining resource consent (attitude to the authorities probably mimics those to its shareholders).


I went through exactly the same drop with RYM that SUM is going through now and held on to a 35% loss (with an enormous amount of money at stake) for years until emerging out the other side of it. And I cannot convey enough how glad I am that I did not sell.
I have always encouraged those holding SUM to stick with the strength of ones analysis and convictions and hold.

The only caveat I have to the above is that with RYM, I trusted the numbers because I trusted the board.

Good post Vaygor1, I feel the same, confidence for reasons above has been lost. It will be hard to regain and might not regain until some changes in management and board members.
I would not be surprises to see SUM P/E to be substantially below MET P/E in time to come.

[Goldstein]

If anybody is remotely interested, I will try to track down some more detailed information on the historic build rate (breaking it down into villas, apartments etc), overlay specific tenure profiles for each, and determine a more accurate statistical estimate of likely resales for the past and current quarter. Then, I'll be in a better place to assess whether a structural break appears to be occurring. Then again, I might just drink some beers. :)

NewGuy, I would be interested. Just note though that in the argument we have had we have both come up with the same estimate of re-sales for Q3, i.e., 46 versus an actual figure of 31

You can make a more accurate estimate of the '46' with more refined data - but ultimately I'm after a measure of the variability of the re-sales (which will tell me how good or bad 31 is).

I would just calculate an historical variance of re-sales but there is not enough data in the public domain to do so, which is why I have been trying various ways to estimate this variability.

[Beagle]

If anybody is remotely interested, I will try to track down some more detailed information on the historic build rate (breaking it down into villas, apartments etc), overlay specific tenure profiles for each, and determine a more accurate statistical estimate of likely resales for the past and current quarter. Then, I'll be in a better place to assess whether a structural break appears to be occurring. Then again, I might just drink some beers. :)

Go with the beers, its more fun.


Good post Vaygor1, I feel the same, confidence for reasons above has been lost. It will be hard to regain and might not regain until some changes in management and board members.
I would not be surprises to see SUM P/E to be substantially below MET P/E in time to come.

I couldn't agree more.

[winner69]

The real problem/impact about low resales may not be evident yet

The H1 result showed stuff all margins on these resales (just over 10%). The reason given was short tenure.

If these margins carry on into H2 and resales stay on low side we have a real problem and even my FY forecast o $19m underlying earnings is in peril.

Need a significant (not just good but bloody good) increase in new unit sales to give this year financials some respectability.

[Beagle]

Something doesn't add up. Company says H1 resale profits were down because average tenure was shorter but there's less resale stock coming to the market and the only reason for that can be because average tenure is longer, Go figure ????

[winner69]

Something doesn't add up. Company says H1 resale profits were down because average tenure was shorter but there's less resale stock coming to the market and the only reason for that can be because average tenure is longer, Go figure ????

Dissecting their Cash Flow Statement and overlaying other data throws up some interesting things

Like what they 'bought /'repurchased' units for 14H1 was $60k more than they have averaged for the last few years. Sort of ties in with the shorter tenure excuse. Interestingly the resale price per unit appears to be only $10k more than what they getting in FY13 (all averages). Hence this dramatically reduced resale margin of just over 10%

A few other things don't look quite right either - thinking about what it might mean

Just a morbid fascination I have in analysing possible impending train wrecks .... seen a few train wrecks in my life time and I reckon value in understanding whats behind them. Might save me money but importantly improves my thinking in other fields as to make sure they don't happen.

[couta1]

Something doesn't add up. Company says H1 resale profits were down because average tenure was shorter but there's less resale stock coming to the market and the only reason for that can be because average tenure is longer, Go figure ????
Not necessarily Roger as i have alluded to in an earlier post the tying up of serviced apartments occupied by rest home residents would be adding to the less resale stock coming to market, even if an average of just one unit is tied up in each village for that quarter that's a significant number across the companies portfolio. It may very well be that the last quarter had significantly more units tied up in this manner as opposed to previous quarters and hopefully is a blip in the scheme of things.

[Goldstein]

Something doesn't add up. Company says H1 resale profits were down because average tenure was shorter but there's less resale stock coming to the market and the only reason for that can be because average tenure is longer, Go figure ????

It is completely reasonable to have resale numbers down across the whole company due to longer tenure rates than average and at the same time, of those re-sales that actually occurred (90 out of 1646 for H1) these were due to shorter tenure clients.

To put this in a very crude way to get the point across, not many moved on, but those that did hadn't been at SUM a long time.

[Beagle]

It is completely reasonable to have resale numbers down across the whole company due to longer tenure rates than average and at the same time, of those re-sales that actually occurred (90 out of 1646 for H1) these were due to shorter tenure clients.

To put this in a very crude way to get the point across, not many moved on, but those that did hadn't been at SUM a long time.

Yes, I see where you're coming from, effectively due to the small sample size, (if you'll excuse the use of statistical reference) significant statistical anomalies can occur, i.e. a couple of standard deviations outside normal parameters. Chalk that particular one up for an explanation from management that seems plausible.

[Goldstein]

My plan is to compare the implied tenure profile with the historic average, and to figure out the underlying probability (p-value) of the current profile being consistent with the long term average. The issue is that I don't have enough information about the standard deviation of the tenure profiles to do it properly, so will need to make a few assumptions. Should be a good start, though.

Great. We're finally saying the same thing.

To anybody who thinks this is a waste of time or point proving I'll outline why it is important.

What we are seeing with the downturn in SUM's share price may be completely to do with fluctuations in death rates around an average, and how this plays out across SUM's portfolio. This being the case we could well see a veritable tsunami of re-sales next year. So if nothing fundamental has changed SUM may represent an outstanding buy opportunity over the next 3-4 months, with a natural variation having had an enormous impact on current share price (low-flu year, etc).

The other side of the coin is that something has changed. Perhaps all of SUM's construction people are tied up with the new build and little resource is left for the renovations required prior to re-sale. Perhaps the profiles of some of the more recently built facilities are targeting younger folk.

This exercise becomes much easier as a company matures and makes more of their historical data available (I've written to SUM and requested data going back further than the 5 years or so we have at the moment).

NewGuy, if you can come up with something useful (I had to make very gross assumptions), you will be very well placed to use your statistical model on the new companies entering the sector for which there won't be any historical data available. So IMHO, it would be time well spent. If you can get your employer to pay for the time you spend doing it, even better.

[RTM]

"Roger has exceeded their stored private messages quota and cannot accept further messages until they clear some space."



Yes, I see where you're coming from, effectively due to the small sample size, (if you'll excuse the use of statistical reference) significant statistical anomalies can occur, i.e. a couple of standard deviations outside normal parameters. Chalk that particular one up for an explanation from management that seems plausible.

[Deej5]

Can someone offer this stock a parachute? Please!

[couta1]

Can someone offer this stock a parachute? Please!
Sure can but it is missing a pull cord at the moment,dont jump out of the plane just yet:cool:

[Beagle]

Sure can but it is missing a pull cord at the moment,dont jump out of the plane just yet:cool:

LOL are we talking about SUM or AIR or both...

[JayRiggs]

Insert the cord and deploy the parachute at $2 I reckon, so we can buy more!

[Chaowee88]

I initially considered buying a bit of SUM at 280 but with the charts looking so bad I'm finding the entry point difficult despite the fundamentals looking more attractive by the day

[Tevita]

I initially considered buying a bit of SUM at 280 but with the charts looking so bad I'm finding the entry point difficult despite the fundamentals looking more attractive by the day

The most fundamental of fundamentals that I see are people bailing out all around. The Board as though with blinkers on apparently as sang froid about the sight as those who bailed out before the queue even started forming. Or those rewarded by sinecure appointments and assured remuneration therefrom.

Perhaps my read is wrong.

[QOH]

I had a sell order on Friday that wasn't hit, pulled it over the weekend.Should have kept it in but as they say hindsight is 20/20.

[Tevita]

Sorry, but I have no idea what you are saying.

You will be in select company. Nor will the Board.

[skid]

Great. We're finally saying the same thing.

To anybody who thinks this is a waste of time or point proving I'll outline why it is important.

What we are seeing with the downturn in SUM's share price may be completely to do with fluctuations in death rates around an average, and how this plays out across SUM's portfolio. This being the case we could well see a veritable tsunami of re-sales next year. So if nothing fundamental has changed SUM may represent an outstanding buy opportunity over the next 3-4 months, with a natural variation having had an enormous impact on current share price (low-flu year, etc).

The other side of the coin is that something has changed. Perhaps all of SUM's construction people are tied up with the new build and little resource is left for the renovations required prior to re-sale. Perhaps the profiles of some of the more recently built facilities are targeting younger folk.

This exercise becomes much easier as a company matures and makes more of their historical data available (I've written to SUM and requested data going back further than the 5 years or so we have at the moment).

NewGuy, if you can come up with something useful (I had to make very gross assumptions), you will be very well placed to use your statistical model on the new companies entering the sector for which there won't be any historical data available. So IMHO, it would be time well spent. If you can get your employer to pay for the time you spend doing it, even better.

So let me get this straight--Your saying that the success of SUM is dependent on its customers dieing at a faster rate so they can flip the unit to the next oldie?:scared:

I think Ive got material for my first novel

[Buffett Jr]

Blood in the streets.

I'm loading up big time today.

[Goldstein]

So let me get this straight--Your saying that the success of SUM is dependent on its customers dieing at a faster rate so they can flip the unit to the next oldie?:scared:

I think Ive got material for my first novel

Let's just say their whole business plan is built around an average tenure rate for their different assets.

[macduffy]

Blood in the streets.

I'm loading up big time today.

Yes, but the blood's from the market generally - or rather the shareholders of stocks therein. Have you figured out how much of it is SUM-specific - or are you buying the market in general?

;)

[Goldstein]

Blood in the streets.

I'm loading up big time today.

Yep, some of that is mine BJ. My Stop-loss was triggered.

Technically, I don't know where the bottom is, but I suspect that is very good buying on your part.

[Vaygor1]

I initially considered buying a bit of SUM at 280 but with the charts looking so bad I'm finding the entry point difficult despite the fundamentals looking more attractive by the day

If you trust the data and you are happy with fundamentals then my advice is to look at simple technicals and buy when the SP gets to 10% above its low point.

Until quite recently the low point was $2.80 meaning my entry point would have been at $3.08 if they recovered that far, as it would be a clear enough sign (imho) that the the trend has reversed.

But it didn't reach $3.08. As I type, the low point is now $2.64 meaning I wouldn't be buying (if I was interested which I'm not) until they rebound to $2.90, as long as $2.90 is below what you believe is fundamentally a good entry point.

Now this method means you won't skin all the meat off the bone (you'll miss out on the lowest possible buy), but you should most certainly get 90% of it. It does mean that you will likely avoid disappointment of watching the SP move too much lower, if at all, after you've secured your position.

As with everything, there's no guarantees here. The SP could rebound 10% and then drop away 20% or more after you've purchased, but I believe that scenario is fairly unlikely.

[Beagle]

Read the thread by KW on using technical analysis to time entry and exit points. KW knows her stuff when it comes to combining technical analysis and fundamental analysis.
http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits
Using a simple 100 day moving average, (freely available in the charts menu in ANZ securities) clearly shows we are well below the 100 day moving average.
Waiting until there's a clear and confirmed break back through the 100 day moving average line to the upside, (caution this may take weeks, months or even years), makes compelling sense when looking for an entry point in my opinion. If you want to play it really safe, (I strongly recommend you do so with this company), wait until its broken back above its 200 day MA before taking a small stake as part of a well diversified portfolio of other NZX stocks.
Better off using the same technical analysis 100 day MA technique on Ryman in my opinion.

[skid]

yes exactly. Skid - not sure if you just don't want to admit this or actually don't understand the business model itself??

The point I was making is that it does not provide much motivation for the actual care of the people--This may well not be the case,but the posts were starting to sound like some were stressing about not enough deaths (ie resales)-[not to be confused with the''cross of death on the chart]-If thats the business model ,then yes ,I dont understand it.
Each to their own but I think I would rather be involved in an outfit that placed more emphasis on the care side of things.
If they are really good at caring for their clientele,then I stand corrected.

[Beagle]

I think they really are very good at caring for the elderly folks Skid. Its their skill set in every other aspect of running a publicly listed company that concerns me. I often wonder if they realise that shareholders own the company and that their ultimate fiduciary responsibility is to shareholders. Honestly based on my experience with them I have cause to wonder if they think shareholders are nothing more than another extremely pesky nuisance they have to deal with, you know viewed in for instance much the same light as city councils and their nuisance town planning requirements.

[percy]

BUT WAIT !!!!!
Rob has brought more!!!!

[MAC]

I think we have had this discussion before... but just a note of caution to readers. Studies in the US suggest that there is no evidence/only very weak evidence that the use of TA produces any positive results.

I have found that predictive statements made by TA followers tend to be wrong as often and they are right. They are also often simply statements of the obvious ie; X stock went down today, X stock went up today.

It would be prudent in my view, to be very carefully with an TA advice posted by anonymous members on an internet forum.

Applicable though on rare occasions wouldn’t you say for entering and exiting though, although it does even then seem that by the time many TA folk await their confirmations they are buying higher and selling lower than the valuation thresholds that many FA’s would apply.

I’m not sure anyone has really ever got wealthy trying to time markets, there is probably a very good sound reason why the wealthiest folk like Buffet et al are long investors and not short term timers of markets.

[Beagle]

good advice....... but for me the more I refer to the charts for TA the better investor I become.......... know when to hold em know when to fold em and the charts have certainly helped me with these important decisions.
But still use FA as well.

Totally agree. The main thing they help you with is not too try and fight the trend.

[MAC]

My buy threshold is $2.60 (IV less a large margin for error). I reckon the most likely reason for the lack of resales is a statistical blip.

On the same page here too BK, I've got value at FY14 $2.62, we may see a dip below that between now and then who really knows, would be content though happy to re-enter sometime in the next couple of months at that valuation less 20% for SUM.

[Beagle]

This purchase of a few thousand dollars worth needs to be viewed in the context of Norah's sale of $4.8m worth and other directors with either no shares or very few but are happy to collect $80,000 a year in directors fees.
Mr Campbell's share purchases are only a tiny fraction of the fees he's received over the years as chairman, hardly what I'd call an inspirational or meaningful investment effort on his part.

[percy]

This purchase of a few thousand dollars worth needs to be viewed in the context of Norah's sale of $4.8m worth and other directors with either no shares or very few but are happy to collect $80,000 a year in directors fees.
Mr Campbell's share purchases are only a tiny fraction of the fees he's received over the years as chairman, hardly what I'd call an inspirational or meaningful investment effort on his part.

I would expect I would hear your bellow from here, should he sell any!!!! lol.

[Beagle]

LOL, selling his very modest holding wouldn't move the market and wouldn't concern me unless he did a Norah.

[ratkin]

Well said Roger. As I have already noted several times, too many people unduly discount the benefits of entering a village, and appear to take a cold, calculated and potentially-misinformed approach to establishing the true value of village operators from the perspective of prospective entrants. However, IMHO, it is a key driver of enterprise value. :)

This post from earlier in the year made me laugh. NewGuy has in a short time gone from caring about the residents to complaining not enough are dying. Quite a turnaround

[percy]

Far from it. My concern is that the latest resales volumes signal a marked change in tenure, which has significant implications for the overall business model. As a heavily committed investor, that causes me considerable disquiet and warrants further discussion and analysis.

Lift your game, Ratkin.

Anyone who has been on sharetrader awhile knows the big problem with Ratkin.
He does not post often enough!!!!!!!!!!!!!!!!
A very astute investor we can all learn a lot from.
His game is at a high level we can all aim for.

[percy]

Well I am let to learn anything from him/her, but I'm happy to sit tight and be amazed in due course :p

Just because people are not posting all the time,does not mean they are not watching the market.
There are a lot of very astute people who make very little noise and can easily be missed.
It is very easy to read a whole thread from start.That way you can quickly see who was right and who was wrong.
Ratkin is one whose judgement is very sound.

[ratkin]

Also, how much time did you spend dredging the thread trying to find "dirt?"

I guess online papparazzi have a lot of time on their hands. Tragic but hilarious. :cool:


Was first page i looked at , there you were in tandom with Roger, both dancing to the same tune.both either excessively optimistic or pessimistic based on your position, which seems to change every few months

[nextbigthing]

What concerns me on this thread (about investing and financial markets in general) is that seemingly about 10 obviously very intelligent people with significant accounting knowledge can't even seem to agree/work out how to value this company and how the accounting policies work exactly. And that there's the scope for companies to so easily hide poor results etc but just changing a few reporting methods etc. This is terrible. A spade should be a spade.

[couta1]

Shame you bailed Goldstein (Hopefully you'll be back) I'm sitting tight as you would expect ,I don't see any change in the company fundamentally just a blip in Q3 resale numbers but good new unit sales ( I'm expecting even better in Q4) I've got my own ideas on the reasons why Q3 sales were down as do others of you. As I see it as a blip trying to work things out mathematically is not necessary at this point IMO, just look at it as a blip and see what the next quarter brings.I suppose working at the coal face gives you more reason to relax and sit tight when you see the happy lives in the Sum villages and Rym also. All I see is a whole lot of red ink everywhere(Not just Sum) at the moment and I'm hurting big time believe me but I won't be selling this stock and I've been consistent about my outlook right through which doesn't mean I agree with everything the board does and the likes of their reluctance to build dementia units but when a baby cries do you give it away?

[Beagle]

Was first page i looked at , there you were in tandom with Roger, both dancing to the same tune.both either excessively optimistic or pessimistic based on your position, which seems to change every few months

I think you'll find that post is factually incorrect, (faulty observation skills). He holds I don't. Furthermore the outlook for the company has changed dramatically in the last few months as has my position. The SP is tanking for very good reasons not the least of which are genuine concerns regarding short term loss of growth momentum.

What concerns me on this thread (about investing and financial markets in general) is that seemingly about 10 obviously very intelligent people with significant accounting knowledge can't even seem to agree/work out how to value this company and how the accounting policies work exactly. And that there's the scope for companies to so easily hide poor results etc but just changing a few reporting methods etc. This is terrible. A spade should be a spade.
You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion :)

[Goldstein]

Shame you bailed Goldstein (Hopefully you'll be back) I'm sitting tight as you would expect ,I don't see any change in the company fundamentally just a blip in Q3 resale numbers but good new unit sales ( I'm expecting even better in Q4) I've got my own ideas on the reasons why Q3 sales were down as do others of you. As I see it as a blip trying to work things out mathematically is not necessary at this point IMO, just look at it as a blip and see what the next quarter brings.I suppose working at the coal face gives you more reason to relax and sit tight when you see the happy lives in the Sum villages and Rym also. All I see is a whole lot of red ink everywhere(Not just Sum) at the moment and I'm hurting big time believe me but I won't be selling this stock and I've been consistent about my outlook right through which doesn't mean I agree with everything the board does and the likes of their reluctance to build dementia units but when a baby cries do you give it away?

Absolutely Couta1. A part of me wanted to buy today instead of sell - and I actually thought about you and almost decided to hold tight. However, I would have had to break one of my investing rules and ignore a stop-loss. I also reasoned the following way:

(i) I think that the recent fall in the share price is due to lower than average re-sales.
(ii) I'm guessing that the quarterly resale numbers within a year are correlated. (If the tenants get through the winter then they're likely to make it through until the following year). So we may also see Q4 results down as well. This will hopefully give me some time to get back in.

However, after selling I then see the Chairman buying shares who has an unfair advantage over me - having access to information about current tenures. It is possible that a number of tenures ended in Q3 and these will show up as re-sales in Q4. Had this notice come out earlier I may not have sold. He will know the answer to what I am guessing at in (ii).

At the end of the day though, this is not how I make a living. I design wind forecasting systems for wind farms in the northern hemisphere amongst other things. So I know a little about physical and statistical modelling. There's an on-call component to my job, and sometimes it just gets really stressful - and I just don't have the time to keep an eye on the market. I've actually been drawn off task more than I would have liked over the past week - and found it a bit stressful.

As far as SUM goes, I think I smell a buck to be made. I posted a plot on #2812

You can see that after the company went public there were lower than expected re-sales in 2010 and 2011, just accounting for historical stock becoming available. However, during 2012 and 2013 there were higher than expected re-sales. It's my view that the market over-rewards for high re-sales and absolutely hammers the stock for low re-sales, when in actual fact nothing has fundamentally changed at the company.

I suspect I'll be back with SUM by Christmas.

[couta1]

Just another quick comment on why I think Q3 was a blip, this winter was most unusual in the care centers in that winter occupancy is normally full or close to it with Dec-Feb being the low occupancy period but this year all the care centers that I know of all suffered from low occupancy during the winter until about 2 weeks ago when occupancy has suddenly picked up with most facilities getting full again. I'll let you draw your own conclusions, I've drawn mine:cool:

[Snow Leopard]

...You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion :)


Whilst accepting that you could be an accountant and agreeing that you repeat yourself like a parrot I otherwise fundamentally disagree with everything else you assert.

I hope that stirs things up again. :)

Best Wishes
Paper Tiger

[Carpenterjoe]

I think you'll find that post is factually incorrect, (faulty observation skills). He holds I don't. Furthermore the outlook for the company has changed dramatically in the last few months as has my position. The SP is tanking for very good reasons not the least of which are genuine concerns regarding short term loss of growth momentum.

You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion :)

I read on stuff today house/land prices are up again, I would think making a few percent on 950million dollars of assets is pretty important. But hey I'm just a carpenter what would I know.

[JayRiggs]

After Mr Campbell's SUM purchase, watch out for Julian Cook to followup with his own purchase of 20k+ shares.

[Harvey Specter]

Just another quick comment on why I think Q3 was a blip, this winter was most unusual in the care centers in that winter occupancy is normally full or close to it with Dec-Feb being the low occupancy period but this year all the care centers that I know of all suffered from low occupancy during the winter until about 2 weeks ago when occupancy has suddenly picked up with most facilities getting full again. I'll let you draw your own conclusions, I've drawn mine:cool:??? I thought you previously said units were tied up as care beds were full. Now you say the care beds were empty. Have I got something wrong or can you elaborate on the timeline.

[skid]

I think you'll find that post is factually incorrect, (faulty observation skills). He holds I don't. Furthermore the outlook for the company has changed dramatically in the last few months as has my position. The SP is tanking for very good reasons not the least of which are genuine concerns regarding short term loss of growth momentum.

You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion :)

Dont forget the outside markets-They may not be directly related to the running of SUM but its not just noise

[couta1]

??? I thought you previously said units were tied up as care beds were full. Now you say the care beds were empty. Have I got something wrong or can you elaborate on the timeline.
In some villages the rest home sections had full care beds leading to serviced apartments being tied up for care but as I pointed out previously just one unit times X villages can add up to a few however don't forget that the hospital section occupancies were down during this period and this has no influence on resales excepting the gist of what I was alluding to in the above post is that the normal free flowing cycle had a stagnation period What do I mean by that? well quite simply people in apartments sell for health reasons and buy a serviced apartment then someone buys their apartment(That equals 2 resales) some people with failing health move from their serviced apartment into the rest home(That equals1 resale) Hopefully you can see what I'm saying here, basically an unusual last quarter where this flow was stagnant including the normal healthy flow from the community during this unusual winter period.

[skid]

Was first page i looked at , there you were in tandom with Roger, both dancing to the same tune.both either excessively optimistic or pessimistic based on your position, which seems to change every few months

Doesnt everyone?

Psychiatrist tells his patient "I believe you are suffering from Schizophrenia--Have you bought or sold any shares lately?''

[Beagle]

Dont forget the outside markets-They may not be directly related to the running of SUM but its not just noise


Doesnt everyone?

Psychiatrist tells his patient "I believe you are suffering from Schizophrenia--Have you bought or sold any shares lately?''

Agree 100% x 2.

[Vaygor1]

Doesnt everyone?

Psychiatrist tells his patient "I believe you are suffering from Schizophrenia--Have you bought or sold any shares lately?''

Roses are red,
Violets are blue,
I'm a schizophrenic,
And so am I.

:eek2:

[couta1]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)
I've been saying that all along NG but good to have your faith in the company reaffirmed:cool:

[Vaygor1]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)

That is good news and encouraging to hear.

The content, though good too, is not the main reason for saying this. It is the fact the CFO responded directly, and more than that, picked up the phone to respond instead of just emailing.

[cyclist]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)

Thanks NG.

As a general aside, I am slowly learning that sentiment on these threads is a good indicator of when to buy. I feel reasonably confident that nothing of note has changed with Summerset, as long as you ignore the shorter term fluctuations. But the sentiment on the thread has changed dramatically in a few short months (from confident certainty earlier in the year, to maligning everything about them at the moment). If you like the company, now is very clearly a much better time to buy than it was a few months ago when everyone was so confident.

[nextbigthing]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)

Can you offer more detail?

[macduffy]

Lots of warm fuzzies here but the fact remains that SUM's SP has been - and continues to be - in a steep downtrend. I'll wait for the trend to reverse before considering adding to my own modest holding in the company.

[Goldstein]

I've received some earlier re-sales figures back from Leanne Walker. They prefer me not to release the data and I won't.

I'll just say there are no surprises for me.

Interesting the change of tune on this thread. I was feeling a bit lonely there for a while.

[ratkin]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)
Translation-- have just bought more shares, and was panicking over nothing

[ratkin]

On a serious note , calls from the cfo would surely be price sensitive information? Unless of course Newguy is talking bollocks

[Beagle]

Lots of warm fuzzies here but the fact remains that SUM's SP has been - and continues to be - in a steep downtrend. I'll wait for the trend to reverse before considering adding to my own modest holding in the company.

You're a wise man :) My absolute best possible case scenario is for a flat EPS result this year, this in a company that's still be priced as though its currently enjoying strong growth and lets not forget the tsunami of new IPO's in this sector just around the corner.

[Beagle]

I agree NG that 2015 should see solid EPS growth and am already thinking ahead to 2016 and 2017. The problem with this company is that its anyone's guess whether that 2015 EPS growth will be replicated in 2016 or even if 2015 EPS will be maintained in 2016 ? That simply haven't got the runs on the board that RYM has so predictions about 2016 EPS and beyond are complete guesswork and therein lies the essence of the conundrum on how to value SUM.
Add in all the other previously articulated concerns I have with them and I'm in the doubting Thomas camp so I'll wait for a clear break back through the 100 day MA to the upside.

[couta1]

Roger, have you ever built a financial model for a retirement village and see how new sales morph into resales over time? Its pretty amazing. When you put SUM's recent strong build rate in this context, it paints a very favourable picture for the medium to long term. Better than any other sector on a risk-adjusted basis, IMHO (especially at current prices!)
Yep as I've pointed out in a few posts above she's a continual chain with the only link missing being the supply of dementia units but hopefully this important link will be included going forward, from one new sale 3 resales can occur within a relatively short space of time, great model. PS-For those worried about the effect the possible listings of Hercules and Oceania will have on the current big 3, you will need to do your homework behind the scenes to understand the space these companies are currently operating in and how long if ever they will present any real challenge to the likes of Sum, you may be surprised just how far behind they really are with their current models and ability to step it up in the short to medium term:cool:

[ratkin]

Newsflash - people on here talk to staff from publicly listed companies all the time. This is nothing new, and they were pretty careful about what they said because I could be anyone.

Then post it

[skid]

I've received some earlier re-sales figures back from Leanne Walker. They prefer me not to release the data and I won't.

I'll just say there are no surprises for me.

Interesting the change of tune on this thread. I was feeling a bit lonely there for a while.

That sounds like inside information that could lead to insider trading--one way or another ,there is something dicey about this--esp coming off the back of the Nora issue--Is this suppose to make us feel optimistic?

[Harvey Specter]

PS-For those worried about the effect the possible listings of Hercules and Oceania will have on the current big 3, you will need to do your homework behind the scenes to understand the space these companies are currently operating in and how long if ever they will present any real challenge to the likes of Sum, you may be surprised just how far behind they really are with their current models and ability to step it up in the short to medium term:cool:I am not concerned about them impacting SUM (or RYM) business. Tehre is enough room in the market even if they were as good. My concern is a short term, irrational investor impact as some investors move their money out of SUM, RYM, Met into the new IPO's.
And remember we dont know how they are priced yet. If they are priced knowing that they have a lot of room for improvement, they could be a good buy. I bought MET on that basis and have now sold out as the price jumped on IFT involvement before the improvement actually happened.

[Beagle]

Roger, have you ever built a financial model for a retirement village and see how new sales morph into resales over time? Its pretty amazing. When you put SUM's recent strong build rate in this context, it paints a very favourable picture for the medium to long term. Better than any other sector on a risk-adjusted basis, IMHO (especially at current prices!)

As discussed by PM sector dynamics are well understood but on record I'll say that I think people need to carefully reflect upon the track record of the three incumbent players, the credibility of their management and board and the efficiency in which they execute their business plan. Does one company deserve to be trading on a significant multiple premium to the others and if so what is the best entry point to add to one's investment.

[ratkin]

then post what?

This earth shattering information that has caused you to change your position 180 degrees
I have your name filed under bull****ter, its been there a few weeks now, so not expecting much of a response

[Beagle]

I am not concerned about them impacting SUM (or RYM) business. Tehre is enough room in the market even if they were as good. My concern is a short term, irrational investor impact as some investors move their money out of SUM, RYM, Met into the new IPO's.
And remember we dont know how they are priced yet. If they are priced knowing that they have a lot of room for improvement, they could be a good buy. I bought MET on that basis and have now sold out as the price jumped on IFT involvement before the improvement actually happened.

Good post and SUM's, (excuse the pun) the price pressure concerns up nicely in respect of the proposed forthcoming IPO's.

[Beagle]

Anyone who has been on sharetrader awhile knows the big problem with Ratkin.
He does not post often enough!!!!!!!!!!!!!!!!
A very astute investor we can all learn a lot from.
His game is at a high level we can all aim for.

Maybe there is something wrong with my glasses ?

[nextbigthing]

Just got a call from the CFO in response to my emails.

I am now VERY satisfied that all is good, and that the recent low resales volumes are easily explained by the natural dynamics of the market. We are still on course here for greatness over time - IMHO :-)

Hey New Guy,

Care to post any more detail for those who care?

Cheers,

NBT

[Goldstein]

That sounds like inside information that could lead to insider trading--one way or another ,there is something dicey about this--esp coming off the back of the Nora issue--Is this suppose to make us feel optimistic?

Skid, inside information? That is completely absurd.

(i) It was a request from SUM - not a directive.
(iii) There is nothing material there.
(iv) Anybody else can get in contact with them.

As to whether I'm trying to make you feel optimistic - I have sold my SUM shares due to a stop-loss and I'm looking to re-enter (as I have informed everybody). Why on earth would I be trying to make you feel optimistic.

I've seriously had enough of this. I was hoping to learn some things on this forum, but a lot of you are carrying on like a bunch of school kids with conspiracy theories.

[ratkin]

You cannot blame Skid. You are the one who is making a mystery of the whole thing.
You say there is nothing material there, yet inform us that the company would rather you didnt pass the information on.
Why?

[Goldstein]

You cannot blame Skid. You are the one who is making a mystery of the whole thing.
You say there is nothing material there, yet inform us that the company would rather you didnt pass the information on.
Why?

Because I asked them what they would prefer. I was being courteous. It is their data which they produced before becoming a publicly listed company.


Actually there was some mention of SUM being an IS training facility. The tenure rate was slightly down as previously the training was too hard. However, after some complaints over slippers wearing out too fast things are getting back to normal. It is hard to wage Jihad in worn slippers after all.

[skid]

I have the same information. Its not that interesting and certinaly provides no basis for insider trading. As Goldstein said, some of you guys should get out an enjoy the sunshine a little more rather than concocting endless half-based conspiracy theories. Cheers

It was indeed the ''company requesting you not to pass the info on''that prompted me to make the comment--So its not sensitive info(got it) just them being silly with their comments.:)

Anyway I officially retract my comment ''but I would like to ask you not to pass this information on'':)

[couta1]

Bounce time this week I reckon and why not with that good news from the New Plymouth site plus those Trentham sales going well plenty of good numbers stacking up for Q4 aye. PS- I wonder who sold that 100k share block at 9.05 at $2.63, hopefully no one on here was silly enough to do a thing like that:cool:

[skid]

Yep,As long as the US doesnt spoil the party you should get some relief

[skid]

Bounce time this week I reckon and why not with that good news from the New Plymouth site plus those Trentham sales going well plenty of good numbers stacking up for Q4 aye. PS- I wonder who sold that 100k share block at 9.05 at $2.63, hopefully no one on here was silly enough to do a thing like that:cool:

The same thing happened to PEB last week--perhaps its institutions that just want to rebalance at market price

[ratkin]

Bounce time this week I reckon and why not with that good news from the New Plymouth site plus those Trentham sales going well plenty of good numbers stacking up for Q4 aye. PS- I wonder who sold that 100k share block at 9.05 at $2.63, hopefully no one on here was silly enough to do a thing like that:cool:

Put them away in the bottom draw and forget about them. Markets just doing what they always do, going up and down. Makes little odds in the long run. Dont be caught up in the skittishness seen on these boards. The retirement business still has long term trends on its side.
Be pleased the company you have invested in , is putting its residents first, because in the long run their good reputation will pay off

[couta1]

Put them away in the bottom draw and forget about them. Markets just doing what they always do, going up and down. Makes little odds in the long run. Dont be caught up in the skittishness seen on these boards. The retirement business still has long term trends on its side.
Be pleased the company you have invested in , is putting its residents first, because in the long run their good reputation will pay off
Yep Ratkin I'm very pleased with Sums focus on residents, I just like to share a bit of good news to encourage holders amongst all the negativity that the stock has had of late, I think the stock is great buying at these levels and the future will show that but that's my opinion.

[ratkin]

Yep Ratkin I'm very pleased with Sums focus on residents, I just like to share a bit of good news to encourage holders amongst all the negativity that the stock has had of late, I think the stock is great buying at these levels and the future will show that but that's my opinion.

Yep i agree, however around here people think of the future as next week.

[winner69]

Bounce time this week I reckon and why not with that good news from the New Plymouth site plus those Trentham sales going well plenty of good numbers stacking up for Q4 aye. PS- I wonder who sold that 100k share block at 9.05 at $2.63, hopefully no one on here was silly enough to do a thing like that:cool:

Sure was bounce time

Up, up and away it is

Back to 3 bucks in no time at all

[couta1]

Sure was bounce time

Up, up and away it is

Back to 3 bucks in no time at all
Roger and yourself have been banished to the naughty corner for forecasting prices of $2 and $1.68 respectively for Sum and while your there give yourselves a good old soap mouthwash for so much swearing:cool:

[ratkin]

Dont sweat the small stuff

6387

[JayRiggs]

Long term this will be an excellent hold... but we're more interested in the short term!

Having a little go at charting.
A rise of 15c the past week, but SUM looks to still be in a downtrend at this stage.
Where can we expect it to turn and fall back down again? According to my red lines, it looks to be around 2.85?

disc: holding and keen to buy more

6391

[couta1]

An undisclosed established retirement home operator has bought a site in Queenstown which will be home for 300 residents it has the hallmark description of a Ryman build minus the Dementia unit so it could be Summerset or maybe someone else, all will be revealed in due course no doubt:cool:

[Joshuatree]

Makes sense ;dementia has no place on the Ski slopes.:D

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349927

No surprise at all to see SUM as one of the very worst (non-tech) losers on the NZX this year. Directors should take note that many shareholders are not impressed one iota when they're treated like nothing more than some problematic pesky supplier. I certainly take the view that some in the organisation view shareholders in much the same light as the extremely problematic local councils they have to deal with. Still....as long as residents needs are being put first nothing else matters and everything is fine and dandy right ?, (WRONG). AVOID - Still heavily over-priced.

[winner69]

interesting list though Roger

Craic has a theory - the more space a share takes up on sharetrader the bigger the loser it is .... this could be proof eh

The bottom few defy well constructed DCF valuations .... maybe the assumptions behind some of those valuations are a bit dodgy

These 20 are down the bottom of the ladder .... some still overvalued as well ... that be interesting

[ratkin]

interesting list though Roger

Craic has a theory - the more space a share takes up on sharetrader the bigger the loser it is .... this could be proof eh



Does that also apply to posters :D

[Beagle]

interesting list though Roger

Craic has a theory - the more space a share takes up on sharetrader the bigger the loser it is .... this could be proof eh

The bottom few defy well constructed DCF valuations .... maybe the assumptions behind some of those valuations are a bit dodgy

These 20 are down the bottom of the ladder .... some still overvalued as well ... that be interesting

Certainly has been a year of reckoning for tech and some poorly managed companies on very stretched multiples. Wouldn't surprise me to see some repeat offenders on this list again in 2015.
SUM still on my best guess 2014 EPS of 8.4 cps on a forward PE of 32, LOTS of room for plenty more SP dissappointment. All is well though because next month we have the famed retirement village operator of the year award, the one SUM have won for many years running. I'd like to issue my own award, the wooden spoon award for worst corporate governance. SUM win's this award by a country mile, in fact its a one horse race as everyone else in this sector appears to understand the rudimentary basics required. I will supply said award duly engraved if someone else undertakes to apply it firmly to a certain directors backside :D

[kiora]

Does that also apply to posters :D

Great post Ratkin .LOL

[winner69]

Does that also apply to posters :D

good response mate .... now stop posting before you lose some more

[couta1]

Its okay Roger you've got nearly 6 months to re enter the fold before the AGM. PS- I reckon the shares are great buying at current levels but then again I'm holding quite a few (Truckloads) so a bit biased aye:cool:

[Beagle]

Its okay Roger you've got nearly 6 months to re enter the fold before the AGM. PS- I reckon the shares are great buying at current levels but then again I'm holding quite a few (Truckloads) so a bit biased aye:cool:

If it gets down to my buy price maybe but otherwise I could always attend with someone's proxy and hand out the wooden spoon award at the ASM :D

[Goldstein]

I'd like to issue my own award, the wooden spoon award for worst corporate governance.

I'm not sure you could be any more hyperbolic Roger. You're starting to sound like Maxwell Smart.

[BlackPeter]

I'm not sure you could be any more hyperbolic Roger. You're starting to sound like Maxwell Smart.

Well, agreed ... there are lots of examples of much worse corporate governance around: Feltex, South Canterbury Finance, Blue Chip, Hanover, and the list is endless. Compared to that the SUM board looks like a flock of innocent sheep (and who knows, maybe that's what they are?).

However Roger has a point - it feels they demonstrate some impaired judgement related to the insider trading laws (and their own rules). Just remember the timing of Norah's share sell down related to the publication of the Q1 sales results.

However - making mistakes is human. What makes things worse in my eyes is that they don't admit their mistake and clean up their systems, but are looking for weak excuses (hey, the share price didn't tank after all immediately after the release ...) and hope people will forget.

Looks like a slippery slope to me - and I don't want to know where it ends if they don't address their selective blindness. I'd prefer my holdings to have boards where I can be confident that everything they do is above board. Not sure, how high my confidence level is currently related to the SUM board, but I wish it could be higher.

[Beagle]

Some superb examples of corporate malfeasance there BP all of which were before 2014 so are ineligible for possible consideration in this year's wooden spoon award. For some strange reason nobody's put their hand up yet for the role of repeat ably applying same to Mrs Barlow's posterior :laugh:

[winner69]

Head finance guy increasing his holding is GOOD news

(Might be his bonus for he year though as LTI mentioned)

[BlackPeter]

Some superb examples of corporate malfeasance there BP all of which were before 2014 so are ineligible for possible consideration in this year's wooden spoon award. For some strange reason nobody's put their hand up yet for the role of repeat ably applying same to Mrs Barlow's posterior :laugh:

Fair enough. From the top of my head I can't come up with worse 2014 governance cook ups, however remember - these things typically take years before they become visible (as in the examples before). It is quite unusual that a board is that incompetent that they get caught on the spot. Maybe you need to allow for a bit of lag time with this award.

Re the application of your proposed spoon - wasn't it a "progressive" Leftie who introduced and supported the anti-slapping bill? Maybe she wanted to protect greedy and self serving board members? This would explain as well why most of the other politicians supported her. ;)

[BlackPeter]

Director buying, though not a lot:

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=3734942

And hey - he did wait for the Q3 sales announcement ... Maybe the board did learn after all?

[bunter]

Why not start a new thread, 'worst managed company'.

NZX deserves consideration IMO for putting gender before merit AND abusing their position of power to inflict their beliefs on other companies.

If a company can make one bad decision, how many more is it making?
If NZX can't prosper in this environment, with huge new listings, when will it?

SUM is worth 82c BTW.

[Baa_Baa]

... SUM is worth 82c ...

Care to share your analysis?

[couta1]

Why not start a new thread, 'worst managed company'.

NZX deserves consideration IMO for putting gender before merit AND abusing their position of power to inflict their beliefs on other companies.

If a company can make one bad decision, how many more is it making?
If NZX can't prosper in this environment, with huge new listings, when will it?

SUM is worth 82c BTW.
Blatant down ramping re Sum.

[Goldstein]

Blatant down ramping re Sum.

Yes, I'm a little tired of the extremely polar positions people take on this forum.

[ratkin]

Blatant down ramping re Sum.

I shouldnt worry Couta, its not like anyone listens. There are certain posters who only seem to appear when SUM is having a down day, why im not sure. Maybe they fear they have made a mistake selling and feel better about themselves when it drops.

[Baa_Baa]

http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Baa_Baa http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=514168#post514168)Care to share your analysis?



I can't believe you care. Obviously a troll and should be treated accordingly IMHO.

FWIW NewGuy, I do care, I have the aged care companies on my watchlist and will buy when the current SP weakness plays out to a bottom. I like RYM, and MET and have been looking at SUM, hence reading what's going on here. I have not seen bunters analysis before and wondered how he arrived at a valuation well south of the current SP.

As for trolling, well perhaps you could look to your own behaviours, as you seem to take satisfaction from swiping randomly at other posters comments.

[winner69]

Give bunter his due he ha admitted his model is rough and ready and from what he has explained how it works I can see how he gets 87 cents for sum

He said it no good for high growth companies. And as it based on current dividends obviously gives low valuations for low dividend stocks.

Bunter no troll methinks ....just a keen poster on a few threads

If he said "SUM worth 7 bucks BTW" he be a hero eh

[Beagle]

Ryman's long term ten year average PE is 20 is it not W69 ? If we assume, (I think that's a stretch but others will have a different view), that SUM's management are good enough to match RYM's long term growth rate then apply a PE of 20 to your best guess estimate of SUM's 2014 EPS. They're not growing EPS this year so I think that's a more than reasonable approach to take.

[Beagle]

http://tvnz.co.nz/national-news/elderly-stroke-robotic-seals-cure-loneliness-6119863

Robotic seals to provide comfort for the elderly. Good grief...here's an idea, what about using real pets for goodness sake. This isn't aimed at SUM per se, in fact SUM are one of the most pet friendly retirement companies which is very much to their credit.

[Beagle]

D...d....did you just say something nice about summerset?

*faints*

:p

Yeah I was surprised too lol, it leaped off my keyboard before I had time to edit it :) One supposes from their marketing that someone in their organisation likes dog's so they can't be an entirely bad bunch.

[winner69]

SUM shareprice heading in opposite direction to Ryman's over the last few days.

Ryman having a good run - must be the best in breed is wanted leaving the others to struggle

Is that how it works Roger

[Beagle]

You got it mate. Buffett knows a thing or two about best of breed.

[couta1]

SUM shareprice heading in opposite direction to Ryman's over the last few days.

Ryman having a good run - must be the best in breed is wanted leaving the others to struggle

Is that how it works Roger
Tut Tut boys you should all know by now that Rymans price heads north in the few weeks leading up to its half and yearly results (Let's hope she's a good result) Might be tempted to sell and buy back in December if she goes high enough.

[bunter]

... best of breed.
My div-adjusted charts say that's MET - especially since those clever folk at IFT decided to buy in.
6439



bunter is a troll... blatant slagging off of SUM....or whatever...etc
If a troll's someone who genuinely holds a different opinion to you - then get off my bridge!

I sold RYM at $4.10 18 months or so ago, believing it to be overpriced.

The whole sector seems frothy *to me*. But good luck to all holders.

[couta1]

You sold at $4.10 so left more than double that on the table, wished I had bought at that price. Not that keen on Met myself regardless of their current share price, Ryman still best of breed and a slick machine but Sum have the most potential upside from their current price IMO if they get their ducks lined up.

[winner69]

My div-adjusted charts say that's MET - especially since those clever folk at IFT decided to buy in..

Best in breed is more than short term shareprice movements .... its all about proven performance from a fantastic company over a sustained period of time

[Beagle]

Best in breed is more than short term shareprice movements .... its all about proven performance from a fantastic company over a sustained period of time

Wise words indeed. Reputations aren't built in 5 minutes and I reckon people need to have a long hard think about the fact that SUM is still trading on very similar PE multiples to RYM and ask themselves if that is warranted ? If SUM directors and management can't even get basic governance issues right...

[BlackPeter]

SUM shareprice heading in opposite direction to Ryman's over the last few days.

Ryman having a good run - must be the best in breed is wanted leaving the others to struggle

Is that how it works Roger

There must be a reason they put the disclaimer "past performance is no guarantee of future results" into all financial prospects.

But anyway, I agree that RYM is a good performer (depending on the timeframe you consider, you might even call it stellar). SUM is currently doing not that flash (though it still doubled its SP over the last three years, I know of shares, which did worse), but it has in my view at this stage more potential.

Yes, there are some questions around the competence (and/or integrity) of some of the SUM directors, but I don't think they are related to their general competence in running a business, though errors in judgement are obviously always a problem. On the other hand - their current "stone walling" on having a lapse of judgement on Norahs share trading prior to releasing price sensitive information is not worse than what I think other boards might do as well. Just part of the system - never admit guilt. Directors with competence, integrity and the backbone to admit having made a mistake are a rear breed, indeed.

IMHO Sum has currently the bigger potential than RYM, but admittedly as well greater risks. If the board turns to become a real problem, it can be replaced.

[Beagle]

BP - Thanks again for your assistance with the N.B. matter. I take an iceberg view with these sort of things. If such an appalling breech of basic governance is so blatantly in public view a wise person needs to question the competence or arrogance, (perhaps both) of the board and management. What other substantive matters lurk beneath the surface ? The other issue is that since referring this matter to the Shareholders association for their kind assistance a lot of influential investors are now well aware of what's gone on. Shortly after I referred this to the Shareholders association for their assistance some time back at around the time the SP was $3.00 the stock started coming under a lot of pressure, coincidence or influential shareholders deeply unimpressed with the board, you decide... How much more stock is waiting to be sold on the side-lines if there's the makings of some recovery up towards $3.00 ?
Serious questions are being asked about the integrity and competence of the board and management and rightly so. Reputations take years to be built and five minutes to be trashed. How the board could possibly have approved that sale with even the briefest of reads of their own securities trading policy completely beggars belief so its quite obvious to me they're circling the wagon's after the fact to protect Norah and in so doing seriously compromising the reputation of the other board members, in my opinion. Why trust them with your money when there's such a good alternative with a long, clean and stellar track record ? They might have potential based on their land bank but honestly questions need to be asked if they are competent enough to execute their business plan properly... For my money I'd need to see Norah Barlow resign and the PE back to about 20 before I'd even consider reinvesting again.

[stoploss]

http://www.stuff.co.nz/dominion-post/news/hutt-valley/10702611/Summerset-told-to-talk-to-neighbours

[Beagle]

http://www.stuff.co.nz/dominion-post/news/hutt-valley/10702611/Summerset-told-to-talk-to-neighbours

Classic case of what I was talking about earlier

but honestly questions need to be asked if they are competent enough to execute their business plan properly...

[skid]

There must be a reason they put the disclaimer "past performance is no guarantee of future results" into all financial prospects.

But anyway, I agree that RYM is a good performer (depending on the timeframe you consider, you might even call it stellar). SUM is currently doing not that flash (though it still doubled its SP over the last three years, I know of shares, which did worse), but it has in my view at this stage more potential.

Yes, there are some questions around the competence (and/or integrity) of some of the SUM directors, but I don't think they are related to their general competence in running a business, though errors in judgement are obviously always a problem. On the other hand - their current "stone walling" on having a lapse of judgement on Norahs share trading prior to releasing price sensitive information is not worse than what I think other boards might do as well. Just part of the system - never admit guilt. Directors with competence, integrity and the backbone to admit having made a mistake are a rear breed, indeed.

IMHO Sum has currently the bigger potential than RYM, but admittedly as well greater risks. If the board turns to become a real problem, it can be replaced.

your humble opinion is noted but IMHO there is no greater way to asses fundamentally a co. than its management--Comapanies dont run themselves--In terms of replacing them (no easy task) they dont grow on trees

[winner69]

Just out of curiosity thought I would see how long I have to wait for the $2 mark or somewhere near that

Need to be more patient methinks but a pretty strong downtrend

IMPECCABLE TIMING BY OUR NORAH EH .....METHINKS SHE COMPLEMENTS HER UNDOUBTED FUNDAMENTAL ANALYSIS WITH A BIT OF TECHNICAL ANALYSIS

BUT BRILLANTLY TIMED SELL

(Vaygor - these only hand drawn down lines, not calculated but look like they should be bit higher)

[winner69]

Spose only time will tell whether Norah sold out at the top but heck she did well as price down 20% since.

[Beagle]

Just out of curiosity thought I would see how long I have to wait for the $2 mark or somewhere near that

Need to be more patient methinks but a pretty strong downtrend

IMPECCABLE TIMING BY OUR NORAH EH .....METHINKS SHE COMPLEMENTS HER UNDOUBTED FUNDAMENTAL ANALYSIS WITH A BIT OF TECHNICAL ANALYSIS

BUT BRILLANTLY TIMED SELL

(Vaygor - these only hand drawn down lines, not calculated but look like they should be bit higher)

Picture says a thousand words and that paints it clearly. No technical analysis is required when you have inside knowledge that Q1 sales are flat and inside knowledge that due to the timing of various developments Q2 sales are also very likely to be flat and you also know resale stocks are low. Hard to win for normal humans who haven't received accolades and recognition and are only working with publicly available information especially when the company is so arrogant they won't issue a forecast profit. what are normal investors left with.....I know, nice clear technical analysis like you've just painted the picture for them :) I'm still sticking with my EPS forecast of 8.4 cents so investors have soooo much to look forward too in February 2015 don't they !! :D Forward PE is 32 with the calibre of their management I reckon that's a joke. I'm happy to wait for a PE of 20 which is $1.68 and Norah's resignation.

[couta1]

Roger you'll be pushing up daisies before the price hits $1.68 unless there's a nation wide massive earthquake in which case you could still be pushing up daisies so why wait, just buy at the current discounted price:cool:

[BlackPeter]

Picture says a thousand words and that paints it clearly. No technical analysis is required when you have inside knowledge that Q1 sales are flat and inside knowledge that due to the timing of various developments Q2 sales are also very likely to be flat and you also know resale stocks are low. Hard to win for normal humans who haven't received accolades and recognition and are only working with publicly available information especially when the company is so arrogant they won't issue a forecast profit. what are normal investors left with.....I know, nice clear technical analysis like you've just painted the picture for them :) I'm still sticking with my EPS forecast of 8.4 cents so investors have soooo much to look forward too in February 2015 don't they !! :D Forward PE is 32 with the calibre of their management I reckon that's a joke. I'm happy to wait for a PE of 20 which is $1.68 and Norah's resignation.

Hi Roger, I understand your sentiments re SUM and agree that it is better to play it safe than to be later sorry. However wondering, whether your EPS forecast might be a bit too cautious.

According to the SUM half year report they had already 7 cts EPS in the first 6 months of 2014. If you assume just 8.4 cents for the full year - are you saying that the second half of the year (with somewhat larger sales) will contribute only another 1.4 cents per share to this years earnings?

Why do you think that?

[Beagle]

Hi BP,

Its all about underlying profit mate. That's the key metric and strips out the revaluations required under IFRS. Underlying profit is what they actually made from resales and new unit sales in the period and includes any minor profit they made from the operation of the villages if any.

Underlying profit for the HY was $9.409m on a weighted average shares on issue of 214.927m = underlying profit of 4.37 cps in the first half.
Q3 sales results were ostensibly flat compared to the pcp but showed a strong bias towards new sales, much stronger than in the first half and they make less on new units than they do on resales so this gives an indication that second half profit to date is slightly lower than 1H. Further, there was exceptionally low resale stock available at the end of Q3, (27 IIRC) so this gives us the heads-up that resales for Q4 are also likely to be very low.
My 8.4 cps is based on 2H underlying of only 4.0 cps down circa 10% on IH due to the significant change in the sales mix.

Couta1 - Mate we have the last two digits of the SP right this morning, now we just have to get the first one right. "Don't fight the trend my friend". That's your new investment mantra for 2015 :)

[Master98]

what are normal investors left with.....I know, nice clear technical analysis like you've just painted the picture for them :) I'm still sticking with my EPS forecast of 8.4 cents so investors have soooo much to look forward too in February 2015 don't they !! :D Forward PE is 32 with the calibre of their management I reckon that's a joke. I'm happy to wait for a PE of 20 which is $1.68 and Norah's resignation.

RYM Underlying profit 118m with 500m shares issued, EPS is 23.6c currently PE33, why do you think SUM PE32 is joke?

[Beagle]

Look at the relative track record of RYM and SUM. RYM will grow profits and SUM are shrinking profits this year. Add in the aforementioned issues with Norah and SUM's arrogant approach towards shareholders and councils and I see no reason to believe the SP won't continue to under-perform the market like it has this year. Leaving out the two tech players XRO and PEB its the second worst stock performer on the NZX this year...why do you think that might be ?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349927

Mr market takes a long time to react so I reckon with SUM's declining EPS, (my estimate), they are red hot favourites to be somewhere in the worst 10 performers again next year.

[Master98]

Look at the relative track record of RYM and SUM. RYM will grow profits and SUM are shrinking profits this year. Add in the aforementioned issues with Norah and SUM's arrogant approach towards shareholders and councils and I see no reason to believe the SP won't continue to under-perform the market like it has this year. Leaving out the two tech players XRO and PEB its the second worst stock performer on the NZX this year...why do you think that might be ?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349927

Mr market takes a long time to react so I reckon with SUM's declining EPS, (my estimate), they are red hot favourites to be somewhere in the worst 10 performers again next year.

Did not follow this stock discussions and thank you for explanations.

[couta1]

Seems the NZ Super Fund has been buying Sum recently,maybe they recognize a bargain when they see one and perhaps they also have a long term view.

[MAC]

I don’t think we can have enough activist investors, don’t think the unions will get in the door though, aside from employee shareholders.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11354492

I sold Summerset back in May on what I perceived to be a fundamental shift after a two year hold.

I was content with Quadrant pushing Summerset along, build, build, build, build, it seemed to me that as soon as they left, Summerset management leaned back in their comfy chairs, lit up the cigars, started paying dividends, and contented themselves with a forward build rate at 300units per year. Not a bad growth rate, but lower than what could have been continued from potential.

SUM management could have continued to grow for another 10 years at consistent growth rates but without investors pushing them it seemed to me that they just gave it up to live the fat cat executive life.

That’s not to say that SUM won’t present a good cyclical value investment or perhaps a yield investment in the future, I really do think they will, it just does seem a shame to me that we investors allowed them to take their foot off the accelerator.

[NZSilver]

I don’t think we can have enough activist investors, don’t think the unions will get in the door though, aside from employee shareholders.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11354492

I sold Summerset back in May on what I perceived to be a fundamental shift after a two year hold.

I was content with Quadrant pushing Summerset along, build, build, build, build, it seemed to me that as soon as they left, Summerset management leaned back in their comfy chairs, lit up the cigars, started paying dividends, and contented themselves with a forward build rate at 300units per year. Not a bad growth rate, but lower than what could have been continued from potential.

SUM management could have continued to grow for another 10 years at consistent growth rates but without investors pushing them it seemed to me that they just gave it up to live the fat cat executive life.

That’s not to say that SUM won’t present a good cyclical value investment or perhaps a yield investment in the future, I really do think they will, it just does seem a shame to me that we investors allowed them to take their foot off the accelerator.


I agree with you MAC, I havnt sold (but havnt bought anymore either), however did enjoy the run up over the last few years. I really thought it would be hard pressed to see it go below $3 after it hit mid 3's. Its very disappointing to see the share price languish which sounds as though its secondary to managment languishing. Underlying buisness and industry tailwinds are the goods, however you still need a strong team - especially when you have slick operators like ryman!

[winner69]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

[Xerof]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

yes, agree, good shareholder activism Roger.

I initially gave NB the benefit of the doubt, thought about it overnight, then sold out the next day.

[iceman]

Well done to Roger

https://www.nzx.com/files/attachments/204633.pdf

Yes great to see. Your hard work and consistency has paid off for all of us Roger. Thank you.

[percy]

Yes great to see. Your hard work and consistency has paid off for all of us Roger. Thank you.

I too would like to thank you Roger for putting so much effort into this very important area of concern .
Job well done,and all investors will benefit from you work.
I am sure other companies will tidy up their act too.

[Beagle]

Thanks guys for your kind words. I am pleased to have been instrumental in initiating the process but it was John Hawkins Chairman of the NZSA that did most of the heavy lifting working with the company and NZX. Whilst something of a good result for somewhat levelling the playing field it is disappointing that they only chose to have a black out period of 14 days prior to the release of quarterly sales metrics as in my view directors would have a very good idea what those metrics looked like by the middle of the final month in any given quarter.

Also disappointing is that whilst I made an initial e.mail enquiry to the FMA, (not formal complaint), they never even had the courtesy to acknowledge my enquiry, let alone answer it. It is very disappointing to note that the FMA have never initiated a prosecution for insider trading in New Zealand. My own research has shown the FMA is woefully under-funded on an international comparative per capita basis for all the legislation it is tasked with governing. If you want / value stricter compliance standards and a more rigorous enforcement regime why not let your feelings be known in correspondence to John Key or Bill English ?

John Hawkins assures me that NB had the permission of the board to sell two days before the Q 1 sales metrics in Q1 2014. How the board could not have already realised this was a breech of their existing insider trading policy almost beggars belief ? I'd be the first to acknowledge that I've already vented my spleen fully in regard to this matter so I will simply conclude by suggesting people carefully consider for themselves whether the board and NB have acted with integrity in this matter, whether they can be trusted in other matters to lead this company and whether a 14 day black-out period is sufficient ? For me, I no longer have confidence in the board or CEO of Summerset. I am no longer a shareholder and won't be at any time in the future.

This small victory is bitter sweet for me. On one hand it is nice to be able to contribute towards helping this company and hopefully others that will take notice to improve their governance standards, on the other its a sad that the FMA appear to be so woefully under-funded and that Board and NB between them needed this shareholder activism in the first place. Thankfully there are many other well managed companies to invest in.

[BlackPeter]

This small victory is bitter sweet for me. On one hand it is nice to be able to contribute towards helping this company and hopefully others that will take notice to improve their governance standards, on the other its a sad that the FMA appear to be so woefully under-funded and that Board and NB between them needed this shareholder activism in the first place. Thankfully there are many other well managed companies to invest in.

Hi Roger, I understand what you are saying ... but I don't think you should underrate the size of the achievement nor your contribution. Your preparedness to act and to contact the right people did help to make the world a (little bit) better place - and I am sure, it is not just the SUM board learning from this experience.

Directors are humans, they make mistakes as all of us - and many of them are opportunistic as humans tend to be. Actually - I don't think that they are in average better or worse than any other (randomly selected) group of people on this planet. Some people are criminals, some are saints, some are highly competent and others absolutely clueless. Most of them are "average" (as per the definition of this word) and do probably little harm as long as not challenged. Many of them might behave professional (whatever this means), but if nobody watches than it it is easy to become lazy.

What this little intermezzo did was to make them (and other boards) aware that there are people out there who are watching. This is likely to improve their game - we just need now to make sure we keep the pressure on.

So - Thank you for not just moaning on this forum, but for actually doing something about the problem ... and I think it is as well appropriate to highlight again the contribution of NZSA in listening and doing something about this problem - maybe more of us should join and support them ... I certainly put this on my "To-Do-list!

Thank You.

[couta1]

Thanks Roger for your work and hopefully Sum can up their game going forward, in comparison to the Rym board I see them as inexperienced and a bit high minded they could learn a lot from Simon Challies in his utterly professional approach and humility. Sum is a good company but will have to up their game in a few areas to reach their potential IMHO. Disc-Hold

[Harvey Specter]

Well done Roger - I tried to give you some 'reputation points' but it said I had to spread the love elsewhere first before I give you any more. Well done.

Out of interst, did you get the NZSA involved or did they get involved on their own? Either way, a small win for shareholder activism.

[jmsnz]

Yes, well done from me too Roger.


John Hawkins assures me that NB had the permission of the board to sell two days before the Q 1 sales metrics in Q1 2014. How the board could not have already realised this was a breech of their existing insider trading policy almost beggars belief ?
Just putting whatever 'rules' were in place for the board, it is quite disturbing that a bunch of supposedly highly qualified people charged with leading the organisation could ever think that this action was a good idea!!! Does make you think about their overall decision making process and strategy.

[gv1]

Who are the major s/holders. Maybe have to ask them to do something seriously about mgt.

[Beagle]

Well done Roger - I tried to give you some 'reputation points' but it said I had to spread the love elsewhere first before I give you any more. Well done.

Out of interst, did you get the NZSA involved or did they get involved on their own? Either way, a small win for shareholder activism.

Thanks again guys. I contacted John Hawkins of the NZSA expressing my serious concerns, back-grounding the matter and copied him in on my correspondence to SUM directors and their response back to me. John worked with the directors and used his contacts in the NZX to help them understand the shortcomings of what had transpired.

I also want to thank Blackpeter for his support in helping draft the original correspondence to SUM directors. Thanks mate and thanks for what you've said.

I think this underscores the value of the NZSA and their relevance in the market so I've put joining up with them on my too do list for early 2015.

[forest]

I think this underscores the value of the NZSA and their relevance in the market so I've put joining up with them on my too do list for early 2015.

I think this is one of the best thing a investor can do for her/him self. Support the organisation which support you as an independent share holder investor.

[Beagle]

I see this as a new initiative for me for the new year mate. I'm almost in Xmas mode now :)

[Vaygor1]

I see this as a new initiative for me for the new year mate. I'm almost in Xmas mode now :)

A pint or two on me when we meet one day Roger (I am in NZ now for a few months). When I read the news the day it was announced I grinned from ear to ear. :t_up:

[Ginger_steps_]

Couta - been a while since we had an insider update - anything news worthy going on at any of the villages you work at?

[couta1]

Couta - been a while since we had an insider update - anything news worthy going on at any of the villages you work at?
One interesting little snippet re the Boulcott site is that Sum have refused to change its plans for the site(At councils request) and consult more with the local residents who are opposed to its plan proposal. Julian Cook says it would open up a can of worms to change its plans at this point and there is plenty of time for the locals to enter further discussion once resource consent has been granted, let's see who gives in first.

[Ginger_steps_]

Cheers mate!

[Beagle]

One interesting little snippet re the Boulcott site is that Sum have refused to change its plans for the site(At councils request) and consult more with the local residents who are opposed to its plan proposal. Julian Cook says it would open up a can of worms to change its plans at this point and there is plenty of time for the locals to enter further discussion once resource consent has been granted, let's see who gives in first.

Yet another example of their arrogance...why am I not surprised...honestly these guys have very few clues on how to deal with shareholders and the public in a professional and respectful manner.
Even their NZX announcement regarding change to security trading policies where they stated
The changes have been made as part of a regular review of policies to ensure best practice is a blatant lie. They only did this under duress because in conjunction with the NZSA I put a rocket up their arse and threatened to make a formal complaint to the FMA. They don't mention in their NZX announcement that they're so inept they had to consult with the NZX to get confirmation on what Blind Freddy already knew and what I and the NZSA was telling them, that quarterly sales metrics contained price sensitive information...seriously how totally bizarre that the board wouldn't know that already...what does this tell you about the competence of the board...sorry I must now go into the very naughty corner for getting on my soap box yet again :lol:

[Beagle]

A pint or two on me when we meet one day Roger (I am in NZ now for a few months). When I read the news the day it was announced I grinned from ear to ear. :t_up:

A good accountant never turns down a free beer :) Actually its been quite a while since we had an Auckland ST meeting. Maybe late January / early February when everyone's is back from holiday, any interest folks ?

[noodles]

A good accountant never turns down a free beer :) Actually its been quite a while since we had an Auckland ST meeting. Maybe late January / early February when everyone's is back from holiday, any interest folks ?
sounds like a plan

[forest]

Excellent plan, count me in Roger.

[couta1]

Resource consent granted for Wigram site:t_up: but no dementia unit once again:t_down: so all those people that develop dementia have to be moved out of the village meanwhile Ryman now add them as a matter of course, come on Sum up your game and watch your main competitor and learn from them.

[couta1]

Mate, learn to read between the lines. They are aware of the option to add dementia but obviously don't see a business case for it!!! :)
NG mate unfortunately they have got their heads in the sand on this issue and ive been on their case about it before and will do so again. The early Ryman villages of which i work in a couple are constantly sending dementia cases elsewhere and i also work at some of the elsewhere places they end up so see those same people again.

[couta1]

Well, if they are already aware of it and you've also told them and they STILL choose not to, says it all IMHO. No offence mate!
Unfortunately just stubbornness to change their business model.Why put yourself at a commercial disadvantage when you don't have to, the people in these units have no effect on the rest of the village in a negative way as they are stand alone lockup units.

[iceman]

Well, if they are already aware of it and you've also told them and they STILL choose not to, says it all IMHO. No offence mate!

Does make you wonder why Ryman has come to a different conclusion though does it not NG ?

[Beagle]

Resource consent granted for Wigram site:t_up: but no dementia unit once again:t_down: so all those people that develop dementia have to be moved out of the village meanwhile Ryman now add them as a matter of course, come on Sum up your game and watch your main competitor and learn from them.

Metlifecare also now marketing fixed fee for life but Julian and Norah know best eh :lol:
SUM one of the very worst market performers for 2014 and NB still has 500,000 shares in her Family Trust, this and the recent securities trading policy change makes me smile that there is some justice in this world, less than i'd like but some justice is better than none. Give up mate, they have NO clues.

[couta1]

Does make you wonder why Ryman has come to a different conclusion though does it not NG ?
Exactly iceman and Ryman have seen the advantage of offering the total package for reasons I highlighted above plus those of us in the industry know that dementia is growing at a faster rate than ever before.

[couta1]

Actually and as my final post for the day some of you may be interested to know that due to the rise of dementia in all villages with apartment/serviced apartment living there are a good number of dementia sufferers present at any one time mixed in with all the other residents, they are only moved on upon assessment which in some cases can take months or even years depending on the tempermant of a given individual and how much disruption they may or may not cause. Even some rest homes have a large number of dementia cases now but are not easily assessed for dementia care after all where are you going to put them with such a shortage of specific units?

[MAC]

Couta, just out of interest, have you a feel for relative staffing, how much additional staffing is required for a dementia unit relative to a regular unit, inc direct, medical, support and overhead staff, based on your observation above. Is it 2:1, 3:2, 3:1, more ?

[couta1]

Couta, just out of interest, have you a feel for relative staffing, how much additional staffing is required for a dementia unit relative to a regular unit, inc direct, medical, support and overhead staff, based on your observation above. Is it 2:1, 3:2, 3:1, more ?
Mac the staff ratios for dementia units are the same as rest homes its only the hospital sections that are required to have greater staff to resident ratios and round the clock nursing care, remember dementia sufferers are mobile as opposed to hospital residents and don't require double handling and hoisting etc. The ratio at Resthome and dementia level care is around 1:7( 1 staff to 7 residents) compared to hospital at around a 1:5 ratio. Resthome and dementia are only required to provide 40 hrs of nursing care a week where as hospital sections must have round the clock cover. Given this and previous points already mentioned i cant understand why Sum aren't building dementia units on their new sites, just plain crazy and shortsighted IMHO. I'm shutting up now on the dementia unit thing before I get accused of being a dog with a bone.

[iceman]

Mac the staff ratios for dementia units are the same as rest homes its only the hospital sections that are required to have greater staff to resident ratios and round the clock nursing care, remember dementia sufferers are mobile as opposed to hospital residents and don't require double handling and hoisting etc. The ratio at Resthome and dementia level care is around 1:7( 1 staff to 7 residents) compared to hospital at around a 1:5 ratio. Resthome and dementia are only required to provide 40 hrs of nursing care a week where as hospital sections must have round the clock cover. Given this and previous points already mentioned i cant understand why Sum aren't building dementia units on their new sites, just plain crazy and shortsighted IMHO. I'm shutting up now on the dementia unit thing before I get accused of being a dog with a bone.

Quite to the contrary couta1. Thanks for this info and for you bringing this issue to our increased attention. It has certainly added to our "warehouse of knowledge" about this industry and SUM in particular and pointed to a difference in strategy between RYM and SUM on this point.

[Joshuatree]

Actually and as my final post for the day some of you may be interested to know that due to the rise of dementia in all villages with apartment/serviced apartment living there are a good number of dementia sufferers present at any one time mixed in with all the other residents, they are only moved on upon assessment which in some cases can take months or even years depending on the tempermant of a given individual and how much disruption they may or may not cause. Even some rest homes have a large number of dementia cases now but are not easily assessed for dementia care after all where are you going to put them with such a shortage of specific units?

Spot on . Extra cost for care can have an influence on peoples decisions too , re assessing for dementia .

[percy]

I read SUM have opened their Katikati village with an official function.
What a lovely location.

[BlackPeter]

Mac the staff ratios for dementia units are the same as rest homes its only the hospital sections that are required to have greater staff to resident ratios and round the clock nursing care, remember dementia sufferers are mobile as opposed to hospital residents and don't require double handling and hoisting etc. The ratio at Resthome and dementia level care is around 1:7( 1 staff to 7 residents) compared to hospital at around a 1:5 ratio. Resthome and dementia are only required to provide 40 hrs of nursing care a week where as hospital sections must have round the clock cover. Given this and previous points already mentioned i cant understand why Sum aren't building dementia units on their new sites, just plain crazy and shortsighted IMHO. I'm shutting up now on the dementia unit thing before I get accused of being a dog with a bone.

Hi Couta, just found this information on the alzheimers website (http://www.alz.org/alzheimers_disease_facts_and_figures.asp): Every third senior dies either with Alzheimer or another form of dementia. If we look at this numbers - and even if we discount them somewhat, given that they are US numbers and given that retirement village inhabitants are not necessarily representative of the general (not just US) population (people with better education, more language skills and a mentally and physically active lifestyle have a lower risk of developing dementia) - it certainly looks like there is a case for providing dementia care in every retirement village.

Just wondering - anybody seen yet a business case for or against dementia units? I could imagine that the poor state funding plays a role in making them economically unattractive. SUM might just see the costs of running them as another drain for the profits they make in building and selling retirement villas.

Another question ... lets assume the economical framework might change at some stage - how hard would it be to add dementia units to existing retirement villages?

[couta1]

Hi Couta, just found this information on the alzheimers website (http://www.alz.org/alzheimers_disease_facts_and_figures.asp): Every third senior dies either with Alzheimer or another form of dementia. If we look at this numbers - and even if we discount them somewhat, given that they are US numbers and given that retirement village inhabitants are not necessarily representative of the general (not just US) population (people with better education, more language skills and a mentally and physically active lifestyle have a lower risk of developing dementia) - it certainly looks like therare s a case for providing dementia care in every retirement village.

Just wondering - anybody seen yet a business case for or against dementia units? I could imagine that the poor state funding plays a role in making them economically unattractive. SUM might just see the costs of running them as another drain for the profits they make in building and selling retirement villas.

Another question ... lets assume the economical framework might change at some stage - how hard would it be to add dementia units to existing retirement villages?
Some NZ stats for you BP In 2008 there were 40746 people suffering from dementia, by 2026 these figures will almost double to 74831 people and by 2050 an estimated 146699 people will live with the condition. Furthermore the number of beds provided at dementia level will increase by 150% by 2026 and a minimum of an extra 250 beds will be needed each year. Re adding dementia units at a later date it can be done at great cost assuming it is possible space wise and rest home or hospital care beds would otherwise have to be sacrificed to allow it to happen, so why not build them from the start when your competition are and the need is so great?

[forest]

Some NZ stats for you BP In 2008 there were 40746 people suffering from dementia, by 2026 these figures will almost double to 74831 people and by 2050 an estimated 146699 people will live with the condition. Furthermore the number of beds provided at dementia level will increase by 150% by 2026 and a minimum of an extra 250 beds will be needed each year. Re adding dementia units at a later date it can be done at great cost assuming it is possible space wise and rest home or hospital care beds would otherwise have to be sacrificed to allow it to happen, so why not build them from the start when your competition are and the need is so great?

Maybe early stages of dementia are starting to show in SUM management? :)

[Beagle]

Maybe early stages of dementia are starting to show in SUM management? :)

:lol: :lol: :lol: :lol: :lol: :lol: :lol:

[MAC]

Thanks Couta, appreciated, Mac

[Deej5]

:lol: :lol: :lol: :lol: :lol: :lol: :lol:


¡sn ɟo ʇsǝɹ ǝɥʇ ɯoɹɟ ʇuıod ʍǝıʌ ʇuǝɹǝɟɟıp ɐ ǝʌɐɥ ʇsnɾ ʇuǝɯǝƃɐuɐɯ