SUM - Summerset Group

[Beagle]

^^ That's very cryptic and clever. (In case its not obvious folks, read that cryptic message upside down).
Rym make good money from the day to day operation of their village, (unlike SUM) and their operation includes dementia units, coincidence or smart best of breed operation ?
Maybe SUM don't want to include dementia units because they wouldn't have the faintest clue how to run them ?

[Beagle]

Something strange has happened. Isn't November the month when the Australasian retirement village of the year award is announced ? November passed and no mention by SUM this year...Hmmm
Anyone know who the winner was this year ?

[winner69]

http://seniorshousing.co.nz/core/activist-shareholders-trigger-rejig-of-summerset-directors-share-trading-windows/

Activist shareholders trigger rejig of Summerset directors share trading windows

December 2, 2014


WELLINGTON: Activist shareholders have built pressure on Summerset Group Holdings Limited (NZX:SUM) and triggered the adoption of a new behavioural code in relation to the buying and selling of Summerset securities by directors and senior executives.

The lightning rod for the campaign was the sale of almost $5m in Summerset shares by Norah Barlow a couple of days prior to the release of a price sensitive company announcement.

The transaction ignited fury on a shareholder forum…
… Full story covered in the NZ AGED CARE HOUSING WEEKLY

[Beagle]

Sweet. I'm really happy that's getting some press coverage. Justice is sweet. Of course the board have circled the wagon's to defend their former leader and said that they pre-approved that insider trading sale...but they would say that wouldn't they considering she's still a director.

[winner69]

Sweet. I'm really happy that's getting some press coverage.

Wonder what the full story said in the Aged Care Weekly

No doubt read by industry insiders ..... bit embarrassing eh

[Beagle]

Wonder the full story said in the Aged Care Weekly

No doubt read by industry insiders ..... bit embarrassing eh

How sad, never mind. Makes a mockery of many of the business awards she's received. Blatant greed at work here. Worked hard and quite obviously enjoyed her rewarding career working with old folks and then everyone showers her with awards just for doing her extremely well paid and well incentivised job, go figure. Company can't even provide decent facilities for the tidal wave of dementia sufferers, best practice for all inclusive facilities that meets the full continuum of care or just following a tried and true model that's now outdated and no longer seems to be generating growth ? Ever since I referred this to the Chairman of the NZSA for his assistance the word has got around amongst influential people and the SP has tanked and stayed low. Nobody with even a modicum of governance knowledge is impressed with what's transpired here and while she remains on the board I expect SUM to suffer from an ongoing lack of influential shareholder support. She should show some decency and honour and resign. The usual B.S. excuse about health should provide some cover for the truth Norah. Just wait till late February 2015 when the market sees meaningful EPS contraction for 2014 for a so called growth company. The custard will hit the fan even more then.
To anyone wondering why I still have such strong feelings about this...honestly our securities laws are woefully inadequate and the policing of same is woefully underfunded. FMA have admitted they have never prosecuted a director in N.Z. for insider trading. they didn't even bother to acknowledge my inquiry. In the States a director would be locked up for what's transpired here.

[percy]

I think anyone who has been in the sharemarket, for any length of time, would agree with you about the FMA's dismal performance.
It has certainly been very positive for share investors to see the growing strength of The NZ Shareholders Assc.
The growing awareness of the power of social media,such as Sharetrader,has seen the importance of posters like Roger.
Roger presented his case well.He was right to follow through with his disgust of "not right" directors' actions.
Roger job well done.Thank you.

[Beagle]

Thanks mate. I really appreciate those kind words and thanks also to Winner 69 for finding that article. She has been shamed publicly in front of her peers and the principle's of natural justice have played themselves out very nicely. Its really satisfying to make a difference in the financial markets and I am sure other companies will also take note. Time to close this crusade and take a rest:sleep:.

[enzed staffy]

Is Aged Care weekly NZ related to Aged Care Weekly housing Australia - the same publisher of the aforementioned awards that summerset had trumpeted?
The awards this year were made by October and awarded on Nov 7 but I could not find a winner for the retirement village section just one for an Australian CEO- they did comment that if no suitable nominees were received they would not award.


http://seniors-housing.net/core/awards-2014/

[cyclist]

I wonder if any of the TA'ers could please chime in on SUM for me. I'm sure it has probably wiggled sideways through W69's downtrend channels by now, and it seems well supported at anything below $2.70. Despite all the noise I am still pretty comfortable with SUM. I'd like some more, but I've already topped up once on the way down at $2.92 - and so far that hasn't worked out so well :scared:.

FA'ers thoughts also very welcome.

[Beagle]

Is Aged Care weekly NZ related to Aged Care Weekly housing Australia - the same publisher of the aforementioned awards that summerset had trumpeted?
The awards this year were made by October and awarded on Nov 7 but I could not find a winner for the retirement village section just one for an Australian CEO- they did comment that if no suitable nominees were received they would not award.


http://seniors-housing.net/core/awards-2014/

Yes same organisation.

[winner69]

I wonder if any of the TA'ers could please chime in on SUM for me. I'm sure it has probably wiggled sideways through W69's downtrend channels by now, and it seems well supported at anything below $2.70. Despite all the noise I am still pretty comfortable with SUM. I'd like some more, but I've already topped up once on the way down at $2.92 - and so far that hasn't worked out so well :scared:.

FA'ers thoughts also very welcome.

Trouble is that the squiggly line has 'wiggled' sideways for the last 44 days between 261 and 277 but with a downward bias meaning it has not quite wiggled through the channel lines yet. Today it would have had to be at 278 to do so

So for me I still patiently wait

[Vaygor1]

Kinda blows vaygor's theory away, doesn't it?

Nothing of the sort NG.
I have yet to see any evidence this award is bond fide. On the contrary, I have seen plenty so suggest it is not.
Who's the winner this year again?

[Beagle]

Mate, it was an off the cuff remark, and certainly not something I have the time/energy/motivation to debate. Was merely stating that its interesting that the same organisation that you believe hands out dodgy awards to summerset would post such a comment.

Having become well aware of the insider trading scandal they can't be seen to be giving an award to SUM this year no matter how much "encouragement" might have been forthcoming from Norah, her friends or SUM itself.

[BlackPeter]

New Zealand Super Fund topped up - they brought their holding from 8.2% up to 9.3% (i.e. bought another roughly 2.5 Million shares). They are typically quite good in recognising value ...

[Harvey Specter]

New Zealand Super Fund topped up - they brought their holding from 8.2% up to 9.3% (i.e. bought another roughly 2.5 Million shares). They are typically quite good in recognising value ...
Well they seem to have put a floor on the shareprice. Will sentiment change before they stop buying?

[couta1]

Well they seem to have put a floor on the shareprice. Will sentiment change before they stop buying?
Next sales metrics around Jan 8th could start a turn.

[couta1]

I reckon the next set of metrics is already quite accurately priced in.
We will agree to disagree on that one:cool:

[percy]

I reckon the next set of metrics is already quite accurately priced in.

I am not sure where the sp is going, but have noted the low was on 16/10/2014 at $2.61,then on 11th Nov the next low was $2.64 and on the 9th December it was $2.67.So it could be forming a base.The 50 day EMA is $2.74 so maybe ???
I am watching with interest.!

[couta1]

Really? Let me have a stab, then.

Mediocre resales but record sales i.e. same as last quarter.

There, I said it.
Last quarter 99 in total, I say 90 new sales and 32 resales equals 122 ish in total, there I said it.

[BlackPeter]

Love it. I'll go same resales as last quarter (can't remember the figure) and 80 new sales.

Anyone else wanna have a stab? Never know, might even be a bit fun!

Poll?? :t_up:

O.K. without any insider knowledge - here is my (optimistic) stab in the dark:

40 resales (a bit better than last quarter - we just went through winter ...) and 84 new sales (roughly one third of their yearly production - it was spring after all ...). I.e. my estimate is a total of 124 sales for this quarter (edit: didn't manage initially to correctly add 40 and 84 together :blush:. Maybe I better get an accountant to check my posts before I post them?).

[winner69]

Q1 was 3 up on last year. Q2 was 3 up but Q4 was 3 down so some loose logic would say Q4 would be 3 down as well - being 108

But to get annual growth back on track I say 166 - that means annual growth in 2012 of 43% followed by 21% in 2013 and 166 would take 2014 growth to 14%. Sounds fair enough

[Snow Leopard]

the Walrus said, "That they could get it clear?"


...and I will just keep an eye on the Share Price & Volume.

Best Wishes
Paper Tiger

[couta1]

I am not sure where the sp is going, but have noted the low was on 16/10/2014 at $2.61,then on 11th Nov the next low was $2.64 and on the 9th December it was $2.67.So it could be forming a base.The 50 day EMA is $2.74 so maybe ???
I am watching with interest.!
There you go Percy just for you it finished up at $2.74:cool:

[percy]

There you go Percy just for you it finished up at $2.74:cool:

Great effort there Couta1.
Poised??!!!!!

[BlackPeter]

First time for a while that there are more bidders than sellers in the market - and the price is trending upwards. Maybe the NZ Super purchases have been inspirational - might be the start to a nice little rally?

[winner69]

Yep, the NZ super purchases are the only catalyst that I can see. Interesting how influential its been. very noticeable/abrupt shift in sentiment. Long may it last!

Talk of 166 sales in Q4 has set the share price alight

NZ Superfund was just topping up, had to something with all the new dosh coming. That took them over the 5%

[ratkin]

Maybe people have begun dying at a faster rate due to summer being cancelled
That should improve the mood of the forum

[Tevita]

Maybe people have begun dying at a faster rate due to summer being cancelled
That should improve the mood of the forum

Have just returned from an Australian holiday. Sydney Morning Herald death notices are regularly quarter the number of the NZ Herald. If only for the sake of greater longevity we are considering
moving back. Local medication here is no panacea..

[winner69]

$2.80. that is a nice climb.

Close at this would be highest close for more than 2 months

And a sales announcement coming up

[percy]

Close at this would be highest close for more than 2 months

And a sales announcement coming up

Do you think Norah is buying?

[winner69]

Hoping this was a lame troll. Otherwise, it appears that you are trying to say that death rates in Sydney are four times less than NZ....

Will be a greater factor than 4 if one assumes catchment area of the SMH is three times that of the NZ Herald

[Tevita]

Will be a greater factor than 4 if one assumes catchment area of the SMH is three times that of the NZ Herald

Or that the SMH has not cornered all the death notices published in a greater number of Dailies.

[Vaygor1]

Have just returned from an Australian holiday. Sydney Morning Herald death notices are regularly quarter the number of the NZ Herald. If only for the sake of greater longevity we are considering
moving back. Local medication here is no panacea..

It costs money to put a death notice in the paper. Speaks volumes really.

[Tevita]

Careful Vaygor. I was issued yet ANOTHER infraction notice for making a harmless joke about Tevita's post (even though I added an emoticon that made it clear it was in jest).

This place is turning to crap. Very close to deleting my profile and moving on.

Has been fun.

My interest has now been piqued and I am not even ticklish. But spare a thought for moderators. Like a policeman their lot is not an easy (happy) one according to G.S Gilbert. Provocation has been known to start bush fires during a drought. (excuse the sanctuary of excessive use of metaphor)

Perhaps over a beer sometime.

[BlackPeter]

SUM is compared with RYM, MET or even INA (as well "directed" by Norah) the worst performer this year (well, so far). However - it looks like the SP just moved on its own private upleg ... maybe the market feels they punished them a bit too hard? Or is Norah buying again - the Q4 sales numbers are only 3 weeks away ...?

[Beagle]

SUM is compared with RYM, MET or even INA (as well "directed" by Norah) the worst performer this year (well, so far). However - it looks like the SP just moved on its own private upleg ... maybe the market feels they punished them a bit too hard? Or is Norah buying again - the Q4 sales numbers are only 3 weeks away ...?

Craigs sees little value in the sector with MET being best value by quite a margin. I see around 8.5 cps for 2014 but even consensus broker estimates of about 10 cents they're on a forward PE now of 28...for a company with declining EPS and that's before we take a discount for the "Norah" factor. I wish there was an easy way to short this pup.

[percy]

Not sure whether Craig's have a good history in this sector?
I prefer to back my own judgement.
MET $4.33 Sell..
RYM $8.25 Buy..
SUM.$2.87 Just about buy.Has gone through 50day EMA $2.75 but needs to go through the 200day EMA $2.99 for a buy to be confirmed..!!
The Rugby Players Village.Avoid.

[couta1]

Not sure whether Craig's have a good history in this sector?
I prefer to back my own judgement.
MET $4.33 Sell..
RYM $8.25 Buy..
SUM.$2.87 Just about buy.Has gone through 50day EMA $2.75 but needs to go through the 200day EMA $2.99 for a buy to be confirmed..!!
The Rugby Players Village.Avoid.
I just felt compelled to agree with all of this post and if craigs think Met is the best value then perhaps they need to do a bit more research:cool:

[Beagle]

12 months to 17/12/2014 off super charts menu ANZ securities.
NZX 50 up 16%
Sum down 11% (27% underperformance compared NZX 50)
RYM up 5% (11% underperformance)
MET up 9% (7% underperformance)

Maybe Craigs not so silly after all....called the whole sector fully priced...whole sector under-performs the NZX 50...called MET best value and its the best of a bad bunch.

Like you Percy I prefer to rely on my own analysis which tells me the whole sector is still poor value and with moderating growth rates I will continue to avoid in 2015.

[JayRiggs]

Looking forward to the quarterly sales report. Only a few hours away!

[macduffy]

The "potted" life of Julian Cook.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11383752

[winner69]

Talk of 166 sales in Q4 has set the share price alight


Sticking with this forecast

All on track to greatness

[winner69]

Looking forward to the quarterly sales report. Only a few hours away!

Looks like you have to wait to next week mate

Julian still down at his bach

[JayRiggs]

Looks like you have to wait to next week mate

Julian still down at his bach

Oooooh hope not! That'll mean they're going back on their word with regards to:

Quarterly metrics on occupation right sales are provided by the 10th of the month following the end of each quarter.

[winner69]

Oooooh hope not! That'll mean they're going back on their word with regards to:

Nearly always out first thing in the morning

And today's only the 9th anyway

And maybe waiting for couta to get back from South Africa to give the go ahead

[winner69]

Or maybe waiting for Norah to say she has finished buying ......poor Norah, she asked for that

[Beagle]

Every dog has its day and there's an exception to every saying. SP has woefully under-performed the sector...sorry there's no prizes for guessing why :)
I'm still picking a dreadful result for calendar year 2014, why ?
Well look at the first 3 quarters and EPS for first half. Then add in all the deferred maintenance that wasn't done in 2013, (but has had to be done this year), so they could jack-up the profit last year so Norah could exit at the best price, and factor in that they're now having to build up large on common area buildings before rolling out unit builds AND catch up on common area buildings that weren't built last year to jack-up 2013 profit.

Factor all that in and you'll see underlying EPS for 2014 of less than 9 cps, down around 20% on last year...but they'll dress that crappy result up as we're positing for growth and you'll see very little emphasis on underlying earnings in the 2014 annual report.

They say to never kick a dog when its down...but like I said there's an exception to every saying and Norah deserves it.

[winner69]

Oooooh hope not! That'll mean they're going back on their word with regards to:

Maybe the old 5 o'clock on Friday afternoon trick with bad news and hope Jay doesn't notice.

No never, Summerset wouldn't pay hose sort of games. Besides why hide the good news

[Beagle]

Q4 sales metrics were posted on 8 January last year....taking longer this year because they have to run it past the PR spin merchants to try and make a silk purse out of a sow's ear :)

[pierre]

Q4 sales metrics were posted on 8 January last year....taking longer this year because they have to run it past the PR spin merchants to try and make a silk purse out of a sow's ear :)

You seem pretty sure about this Roger. You been talking to Norah?

[Beagle]

You seem pretty sure about this Roger. You been talking to Norah?

Yeah we're best mates now :lol: :lol:

[BlackPeter]

Q4 sales metrics were posted on 8 January last year....taking longer this year because they have to run it past the PR spin merchants to try and make a silk purse out of a sow's ear :)

Hi Roger, just wondering - anything (other than rolling up their toe nails) SUM could do to bring you back into a more forgiving mood?

Just looking at the sales numbers so far ... if they managed to sell in Q4 at least 77 new units, than they would have achieved their 250 target ... and as long as the number of empty units haven't materially grown (27 last time), we can't really beat them up for the resales either. Given Julian Cooks upbeating remarks in the Q3 sales report "We are pleased with the rate of new sales and progress on our developing villages" would I expect nothing less (i.e. achieving the new sales target and having not substantially more empty units than last quarter).

So - maybe you are right and they disappoint again, but at this stage I still would still give them the benefit of the doubt. I know, you had a tough Christmas, but lets still remember the spirit of the season, shall we?

[Beagle]

Its not uncommon at all for retiring CEO's to try and go out with the absolute best profit that's possible so when they sell their shares they get the best price possible. Easy enough to defer repairs and maintenance, systems upgrades, advertising, staff hire and a wide range of other expenses from the 2013 year to the next financial year. Given the circumstances surrounding her sale I think an astute investor would want to be on alert for this sort of profit "creativity" in the 2013 year and its downstream effects on the 2014 year.

[macduffy]

Its not uncommon at all for retiring CEO's to try and go out with the absolute best profit that's possible so when they sell their shares they get the best price possible. Easy enough to defer repairs and maintenance, systems upgrades, advertising, staff hire and a wide range of other expenses from the 2013 year to the next financial year. Given the circumstances surrounding her sale I think an astute investor would want to be on alert for this sort of profit "creativity" in the 2013 year and its downstream effects on the 2014 year.

Any actual evidence that this is the case - or just a gut feel resulting from past events?

[ratkin]

Any actual evidence that this is the case - or just a gut feel resulting from past events?

Bitter ramblings by the sound of it

[Beagle]

Any actual evidence that this is the case - or just a gut feel resulting from past events?

Where there's smoke there's usually fire. Look at 1H 2014 results...a bunch of excuses why underlying EPS was down despite what was ostensibly a flat sales result. Gut feel says there will be more excuses in late February.

[Beagle]

Bitter ramblings by the sound of it
The critique of a realist who's had first hand experience of seeing how ineptly they handle governance and shareholder issues.

[Joshuatree]

Ive heard first hand from a worker; not saying which village; just using this thread;saying that they are not allocated enough time to look after the residents that need care. So pressure is put on workers to dress and wash residents for example in a hurry making it very unpleasant and disrespectful to the residents and shortcuts taken e.g. dentures not cleaned and possibly nappies not replaced soon enough. It comes back to not enough staff.

[BlackPeter]

Ive heard first hand from a worker; not saying which village; just using this thread;saying that they are not allocated enough time to look after the residents that need care. So pressure is put on workers to dress and wash residents for example in a hurry making it very unpleasant and disrespectful to the residents and shortcuts taken e.g. dentures not cleaned and possibly nappies not replaced soon enough. It comes back to not enough staff.

Hmm - so this could mean:
1) You met somebody with an agenda (e.g. lazy worker being disciplined)
2) You met somebody who likes to make up stories (ever heard the one about the big fish they caught?)
3) You might have an agenda yourself (btw - do you hold or not?)
4) Any large organisation has somewhere and somewhen problems and you happened to speak with the person who was sitting in the centre of the problem
5) You forgot to ask for which retirement home this person worked ... lots of evidence for bad apples in this business
6) You spoke with a union member - they hardly have anything but bad stuff to tell about their employers (whoever they are)
7) You just uncovered an amazing problem and you are going to immediately inform the authorities. The outfall will change age care in NZ forever

Which one is it, Joshuatree?

BTW - isn't it amazing how easy it is to spread malicious rumours?

[Joshuatree]

I know this person well and know the retirement village.It is their honest experience so far.
Nothing malicious but i understand that with nom de plumes one has to be careful re what anyone else says ;can be agendas galore ,esp on H/C.
Resthomes/villages are way better than they used to be. Trouble is speed and efficiency conflict with compassion and caring some of the time. I acknowledge its a tricky thing to balance caring for the elderly and making a profit. Just choose carefully when pacing a family member.Imagine it is yourself.

[AndyLP]

Meanwhile, an uptrend is tentatively laying down roots.. ?

[gv1]

How about looking after the elderly yourself...afterall they took great care of you. I think rest homes are doing a great job.
I think SUM is only a handful of CO'S in NZX undervalued at present BUT for how long?

[Vaygor1]

The "potted" life of Julian Cook.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11383752


Short article.

Julian's "I never fail but ...." comment is cause for concern. Self-contradictory, delusional, and arrogant.... nice.

Kind of like hearing someone say "I am the humblest person I know".

[forest]

I never fail but I left school and I didn't have a clue what I was going to do so I bummed around at university and had a good time.

Quote NZ Herald.

I wonder if this comment from Julian Cook builds confidence for SUM share holders.

[BFG]

I never fail but I left school and I didn't have a clue what I was going to do so I bummed around at university and had a good time.

Quote NZ Herald.

I wonder if this comment from Julian Cook builds confidence for SUM share holders.

Jeez, if he's CEO of SUM I should I be GM of, well, GM!!!

[rbel038]

Ive heard first hand from a worker; not saying which village; just using this thread;saying that they are not allocated enough time to look after the residents that need care. So pressure is put on workers to dress and wash residents for example in a hurry making it very unpleasant and disrespectful to the residents and shortcuts taken e.g. dentures not cleaned and possibly nappies not replaced soon enough. It comes back to not enough staff.

Its basically the state of elderly healthcare in NZ. Missus is a RN in auckland hospital and is always completely run off her feet, most wards are understaffed and its not common to have to miss your lunch due to patient workload. I dont really get to complain about my office job at home haha. I wouldnt say what your contact is saying is anything other than the norm

[JayRiggs]

Yay finally it's out!
https://www.nzx.com/companies/SUM/announcements/259667

Not too far off your prediction winner69!

[winner69]

Talk of 166 sales in Q4 has set the share price

You thought I was joking eh ......but talk is talk, sometimes informed

Two sales fell through at the last minute

[winner69]

Yay finally it's out!
https://www.nzx.com/companies/SUM/announcements/259667

Not too far off your prediction winner69!

That'll send share price way over 3 bucks .....maybe new high in March

[percy]

That'll send share price way over 3 bucks .....maybe new high in March

A brilliant achievement.

[couta1]

Patience has its own reward aye:cool:

[pierre]

Q4 sales metrics were posted on 8 January last year....taking longer this year because they have to run it past the PR spin merchants to try and make a silk purse out of a sow's ear :)

Looks like a silk purse - but no sow's ear. You can't say this is a pig of a result.

Maybe humble pie's on the menu today.

[BlackPeter]

Magic ... if my maths is right, than this makes for the year a total of 286 new sales (vs 228 in 2013) and 172 resales (vs 174 in 2013). Given that the number of empty units is very low (26) do I not think that we can hold the slightly dropped resales number against the company. Just shows that (despite some bad-mouthing on this thread) the residents like the service and flourish under the provided service ... and like to hang around. Good stuff!

Congratulations to Summerset and the SUM management team - great they are able to show that they managed to move on from the governance blunder of their board in earlier 2014!

Discl: holding (and bought some more during the time the shares have been cheap - looking forward to a friendly SP recovery ...)

[percy]

I added to our holding at the open $2.92.Was prepared to go to $2.95 so pleased.
Has brought our average to approx. $1.42ps.
I note the share price has moved above both the 50 day EMA $2.79 and the 200 day EMA $2.96,so looks as though we are back in the new uptrend?

[gv1]

I said it earlier its undervalued....

[Food4Thought]

Makes for a nice paper gain for today...
Not surprised, yet very welcoming news and positive spin to todays start. SUM's up a good start for the year for this company.

[winner69]

aaaaaaaaand back to $3 (at least for now!)

Only 75 cents off all time high.

It'll get back there soon

[Beagle]

Patience has its own reward aye:cool:

Good result for one quarter out of fourbut on a 12 month view its down just on 20% while the market is up 17%...so a relative underperformance of 37% !!!
Yep sales overall for the year are up modestly but expenses for the first half were also well up so if one assumes that expense trend to continue in the second half maybe circaa flat EPS result for the year depending on tax situation.
Somewhere around 10 cps underlying EPS puts SUM of a 2014 PE of 30. Cheap for a stock that's not materially growing EPS ? Not it my book.

[winner69]

Interesting comments from our boy Julian

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11385185

Methinks just keeping a cap on the exhuberence so he can pleasantly surprise again come April

[Beagle]

Good to see that your repeated earlier forecast of a 20% fall in earnings is almost certainly wrong.

Don't count your chickens yet son.

[BFG]

Interesting comments from our boy Julian

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11385185

Methinks just keeping a cap on the exhuberence so he can pleasantly surprise again come April

Understate and overperform. Always a winning combo ;)

[ratkin]

Excellent result. What was all the fuss about??? Poor Roger will be mortified

[couta1]

Good result for one quarter out of fourbut on a 12 month view its down just on 20% while the market is up 17%...so a relative underperformance of 37% !!!
Yep sales overall for the year are up modestly but expenses for the first half were also well up so if one assumes that expense trend to continue in the second half maybe circaa flat EPS result for the year depending on tax situation.
Somewhere around 10 cps underlying EPS puts SUM of a 2014 PE of 30. Cheap for a stock that's not materially growing EPS ? Not it my book.
The thing is this sector has a massive tailwind Roger and as your old mate Norah stated a couple of years ago Sum is a long term investment(Sorry mate couldn't resist) Ryman may be best of breed but they can't meet the demand on their own so Sum is well positioned as the second biggest developer and IMHO offers the most upside from its current price of all the listed companies despite their failings.

[Beagle]

Excellent result. What was all the fuss about??? Poor Roger will be mortified

Not at all. Surprised by Q4 sales but I take a longer view. Holders are the ones who should be mortified with a whopping 37% under-performance v the NZX50 in the last 12 months.
Don't feel sorry for me mate, my portfolio comfortably outperformed the NZX50 last year and I'm "well positioned" for 2015.

Couta1 - So am I to take it that the arrogant manner in which SUM management have mishandled the Boulcott development, their slowness to see the need for dementure units, and their inaction in matching RYM and MET's fixed fee for life leaves you with no current concerns whatsoever over management's / directors abilities ?

[winner69]

Fine tuned forecast NPAT for FY14

Up a tad because housing market still on a roll - forecast now $45m

That's 21 cents per share

[Bjauck]

I added to our holding at the open $2.92.Was prepared to go to $2.95 so pleased.
Has brought our average to approx. $1.42ps.
I note the share price has moved above both the 50 day EMA $2.79 and the 200 day EMA $2.96,so looks as though we are back in the new uptrend?

Looking at Yahoo! sp stats, I don't think that the SUM sp has been under $1.42 since the first 3 months or so after its listing at the end of 2011. Does that mean that this is your first additional purchase since then? If so, it seems like a big vote of confidence from yourself on the back of the latest metrics.

[Beagle]

Fine tuned forecast NPAT for FY15

Up a tad because housing market still on a roll - forecast now $45m

That's 21 cents per share

I think I'll take that as confirmation you're now long this stock. Average brokers 2015 forecast according to Reuters is about 14.5 cps...but how they can guess that when the company itself refuses to issue a forecast, is presently talking down the outlook and they haven't even released 2014 EPS is anyone's guess. 13.9% growth in annual sales is hardly stellar.

[couta1]

Roger note I said despite their failings, personally I've pushed the company regarding the Dementia unit issue and fixed fees and its up to other shareholders to do the same if they feel strongly enough about it ( The AGM isn't far off so a good chance for others to speak up)

[couta1]

so what you are saying is even poor management can achieve good results in a booming sector.
Probably very true........ but we have all heard the saying it is not till the tide goes out that you can see who has been swimming with no pants on
Are you still holding Snapiti?

[Beagle]

Roger note I said despite their failings, personally I've pushed the company regarding the Dementia unit issue and fixed fees and its up to other shareholders to do the same if they feel strongly enough about it ( The AGM isn't far off so a good chance for others to speak up)

Fair enough mate. For me it sheets back to a valuation issue. Best of breed is always worth a PE premium and then when looking at other competitors you need to discount the PE back further again for any specific identifiable issues and concerns. No question there's tailwinds in this sector and no question in my mind the RYM and SUM's PE multiple's and current SP fully encapsulate the net present value of those tailwinds.
MET I am not so sure...there could be more upside there, PE is far cheaper and development margin most recently reported was 21%. Lets see where 2014 EPS ends up but I see much better upside elsewhere.

[MAC]

It certainly provides for a prospective picture, statistics coming into play perhaps with four villages coming to fruition close together, but that’s the nature of the lumps and bumps. Still a good result though even with that in mind I'd say.

SUM need to provide a guidance update now on the forward build rate IMO, they are on track for 300 at FY15, perhaps even a little ahead on that result, but what is the intention for FY16 and beyond now they seem to be leaning toward a future as cyclical dividend paying stock, that’s what I would like to know.

Levelling growth and a comfy life for directors, or, another step up in plan and a maintaining some zip ?

Well done holders for now either way.

6651

[Hoop]

Might take a technical breather around the 3.00 - 3.01 with possible increased profit takers at this level...due to
1...Resistance Area
2...Trading Target price*** is met......2.80 + [2.80 (breakout) - 2.60 (low)] = $3.00

*** Mass buy signals triggered on 12th December with the $2.80 bull/bear line breakout

[winner69]

Looking at Yahoo! sp stats, I don't think that the SUM sp has been under $1.42 since the first 3 months or so after its listing at the end of 2011. Does that mean that this is your first additional purchase since then? If so, it seems like a big vote of confidence from yourself on the back of the latest metrics.

Think percy's sums includes those he has sold along the way for a profit. Like total of what he paid over the years less the proceeds of sales divided by current number of shares. Snoopy does calcs like this as well

so not really an average price as you and I would calculate

On the way that percy does this calculation I once owned a stock where average price was -$1.25 (minus, they paid me to take them) but current price was $3.50 odd

[winner69]

I think I'll take that as confirmation you're now long this stock. Average brokers 2015 forecast according to Reuters is about 14.5 cps...but how they can guess that when the company itself refuses to issue a forecast, is presently talking down the outlook and they haven't even released 2014 EPS is anyone's guess. 13.9% growth in annual sales is hardly stellar.

Bugger bugger made a typo.

Its $45m NPAT for FY14 (in the excitement getting the years mixed up)

Haven't tried to review FY15 yet

[percy]

Looking at Yahoo! sp stats, I don't think that the SUM sp has been under $1.42 since the first 3 months or so after its listing at the end of 2011. Does that mean that this is your first additional purchase since then? If so, it seems like a big vote of confidence from yourself on the back of the latest metrics.

Yes you have it right.I have been waiting to buy back in.Although I agree with Hoop's post that buy signals appeared in December,I prefer to wait for the share price to move up through both the 50 and 200 day EMA moving averages.It is just what suits me.
Brought a parcel and doubled up .Then when the market over shot what I thought was reasonable value, I sold down,then I sold more,and then I sold even more. Turned a large holding into a very small holding.Today is the first time I have paid over $1.78 for SUM shares.
On my own maths our RYM owe us approx -$25 per share..
Sorry if I caused confusion.!

[Beagle]

Bugger bugger made a typo.

Its $45m NPAT for FY14 (in the excitement getting the years mixed up)

Haven't tried to review FY15 yet

You did notice the big jump in first half expenses and commentary that higher level's of common area buildings were to be completed first didn't you mate ? We have annual sales up 13.9% for the year and expenses up quite materially on last year going by the first half result...anyone's guess what tax will be but common sense suggests it can't be negligible like it was last year forever. You talking underlying earnings or going for the creative IFRS stuff ? (I always work with underlying earnings with these companies).

[ratkin]

Why are you trying so hard to be negative? It isnt healthy, positive people live longer. Your time would be better spent finding good news stories, rather than dwelling on the bad, its all rather pointless.

[Beagle]

Some of us like to try and get an accurate gauge on underlying EPS, you know, its a very useful means of valuing stocks. And on the subject of some criticism earlier today from another person. If its okay for analysts to re-evaluate their forward earnings estimate after a sales announcement, (e.g. Craig's lowered their valuation on Kathmandu from $4 to $2.50 in December 2014 on downwards sales information from the company), then you'd expect intelligent investors to do the same, hence why I have upgraded my underlying EPS from 20% negative to flat / very mildly positive for the 2014 year.
If all anyone did on here was pump each others tyres in every thread it wouldn't be a very interesting place would it !!

[davflaws]

I have upgraded my underlying EPS from 20% negative to flat / very mildly positive for the 2014 year.
If all anyone did on here was pump each others tyres in every thread it wouldn't be a very interesting place would it !!

It seems to me from following this thread for the last year, that you have a strongly negative view of the Company. I get that you were outraged by what you saw as insider trading and unethical behavior from Norah and also by the Board's failure to deal with it in the way you believed they should. Fair enough.

What I can't gauge though, is how much that has coloured your subsequent judgement. Before the latest results were published, I think you were predicting disaster, and claiming that sales would be down. As far as I can understand, the results were good, but you still seem to be unhappy with their performance. How much do you think your judgement of SUM's performance has been affected by the governance/ insider trading shenanigans? 5%?, 10%? 50%?

[troyvdh]

Dear dav ...how many shares do you have in Sum...Roger ...likewise ...cheers..

Me ..about 7000

Sorry ..why not all contributers to this post disclose holdings....

[Beagle]

I am starting to see why many of the wealthy and intelligent investors have left this forum. Many people seem to have forgotten that if it weren't for me you'd still be operating with directors free to conduct insider trading as and when they saw fit in and around quarterly sales announcements. I won't waste my time posting on this thread again or working hard behind the scenes in an activist way unless there a direct pecuniary advantage in it for me. Quite obviously all people want to do is hear good news. Shrug...what would I know having sold at an average price of $3.56 early in 2014 and made significant returns on that money since then. Good luck folks.

[Onion]

You don't need to agree with Roger. If he starts to annoy you then stop reading his posts.

At least he offers an opinion and backs it with reasons (he may even be wrong at times). This forum would become boring and pointless very quickly if everyone followed a consensus view.

[davflaws]

I am sorry that Roger is departing and I hope my post did not contribute to that decision. I was genuinely asking him to think about the extent to which his obvious outrage at the governance issues might have coloured his judgement on other issues.

Disc: Neither wealthy nor intelligent (investment wise). A learner. In at 359, out at 335. Currently watching.

[Harvey Specter]

At least he offers an opinion and backs it with reasons (he may even be wrong at times). This forum would become boring and pointless very quickly if everyone followed a consensus view.Agree. Rogers position is clear. He doesn't like the governance and there are plenty of other good shares out there that he is not willing to risk investing in SUM.

He possibly does go on a bit on the same point but I always like reading the counter arguments when most others are bullish on stock. He did revise his EPS targets so shows he isn't stuck to his views but adjusts them as info changes which is what all investors should do.

[skid]

Why are you trying so hard to be negative? It isnt healthy, positive people live longer. Your time would be better spent finding good news stories, rather than dwelling on the bad, its all rather pointless.

They dont live longer if they lose all their money being positive

[Tevita]

They dont live longer if they lose all their money being positive

That advice brings back memories of you tube with John Cleese and others being crucified singing "always look on the bright side of life". Sound advice - but only to a bystander.

[Hoop]

In general, an opinion is a judgment, viewpoint, or statement about matters commonly considered to be subjective (https://en.wikipedia.org/wiki/Subjectivity), i.e. based on that which is less than absolutely certain, and is the result of emotion (https://en.wikipedia.org/wiki/Emotion) or interpretation of facts (https://en.wikipedia.org/wiki/Fact)....[wikipedia]

Everyones opinions should be respected irrespective of how far away from your personal reasoning it is....Why??

Mr Market is made up from every traders opinions and Mr Market behaves according to the outcome of the majority of that Trading Group Behaviour

I read ST Forum to gain a feeling on how Mr Market is thinking at the time..so I value everyones opinion whether I believe they are right or not....Over the years I have learn't that being wrong is sometimes the right thing to do.

After graduating when dinosaurs ruled the earth, I thought (compared to most others) I was a financial genius within the fundamental world of Share Investing and I was going to make a killing...After falling on my arse many times blaming Mr Market as a total idiot..the penny dropped that I was trading in a world where group opinions ruled...so to make a bob I had to gauge group opinions and follow that trend..This was a very hard thing to do as it mean't I had to part with money into an area which often with my educated feelings (opinion) was not a correct thing to do....Over time as my experience grew my fundamental uneasiness waned and I became much more "street smart" and developed a sense of cunning and a nose to detect invisible smoke..

I hear some long term investor readers mutter the share price will at some point reflect it "fundamental values"....Yes there will be a fleeting moment that it will as the Company's share price trends from one end of the market spectrum to the other (overvalued/undervalued state)...however in a few cases this could take years and by then the Company may be a completely different animal.
Notice my " "...assessing what the fundamental value can in itself be reflected by emotion..A lot of FA is forward looking..so it should come as no surprise to find Fundamental Analysts with differing valuations..depending on their pessimistic/optimistic feeling (emotion) at that moment in time..

I still use FA with TA buy/sell timings and with forward fundamental valuations ...We all use slightly different techniques.I take the mean valuation from % weightings of the worst case scenario to the best case scenario...Often the bell curve is skewed to favour the best or worst case end of the spectrum or if life is a bitch the bell shape is off shaped with an extra bump or two as it is very seldom in real life a bell curve is symmetry around the 50% mean or normal (Gaussian) shaped ..so the probability distribution outcome to help you buy or sell shares can and often is buggered up to some extent..

So....for me to gauge some sort of maximum reliability of probability I need peoples opinions .....therefore all posters opinions are respected...

To Roger and Others..please stay posting..

As to SUM... it is shedding some of its negative attitude traders that it had accumulated over the last 6 months...when this opinion shift happens a cyclic reversal usually occurs with it...

[Bjauck]

Agreed, but this forum also becomes boring when the same posters say the same thing day after day. The phrase "ad nauseum" springs to mind.
I think where some serious breaches are concerned as in the case of apparent insider trading they may need to be mentioned "ad nauseam". Disappointingly, the Summerset board was dragging its feet over reform and I think Roger's staunch activism helped get a change. However I suppose it boils down to: what is one person's tireless champion is another's repetitive bore. We need them all!

[BlackPeter]

Might take a technical breather around the 3.00 - 3.01 with possible increased profit takers at this level...due to
1...Resistance Area
2...Trading Target price*** is met......2.80 + [2.80 (breakout) - 2.60 (low)] = $3.00

*** Mass buy signals triggered on 12th December with the $2.80 bull/bear line breakout

That's what I thought as well ... however it appears breaking through the barrier of $3 was no problem at all for SUM. Last time I looked it stood at $3.07!

[couta1]

That's what I thought as well ... however it appears breaking through the barrier of $3 was no problem at all for SUM. Last time I looked it stood at $3.07!
Just coming back to its underlying fundamental value after a seasonal blip.

[BlackPeter]

In general, an opinion is a judgment, viewpoint, or statement about matters commonly considered to be subjective (https://en.wikipedia.org/wiki/Subjectivity), i.e. based on that which is less than absolutely certain, and is the result of emotion (https://en.wikipedia.org/wiki/Emotion) or interpretation of facts (https://en.wikipedia.org/wiki/Fact)....[wikipedia]

Everyones opinions should be respected irrespective of how far away from your personal reasoning it is....Why??

Mr Market is made up from every traders opinions and Mr Market behaves according to the outcome of the majority of that Trading Group Behaviour

...

To Roger and Others..please stay posting..



I second that. I think there would be only losers if we lose posters publicising their opinion (particularly if its well researched, like Roger's).

I think as well that Roger should get some additional Brownie points for pushing through the recent change in SUM's policies .... yes, I did review some of his letters, but it was his persistence to make it happen! Thank You!

Maybe we all need a bit thicker skin ... and maybe we need to demonstrate more often that we appreciate each other's view, even if we don't necessarily agree with them.

So - lets be nice to all of us ... and keep the discussion going.

[Bjauck]

I agree that Roger's work in this regard was outstanding, and a real benefit to all shareholders. However, I disagree with the need to keep bringing it up once the board had implemented new rules (to hopefully avoid a repeat). I think that, for most people, that was the point of closure and hence the time to move on...

Anyway, back to the great company that is Summerset :)

The thing about pivotal events is that they are continually discussed. For example, discussions about the present-day USA will often see mention and reference to unsavoury aspects (of which there are many) of that great country's past along with its positive aspects (of which there also many). Reference to pivotal events is made as a benchmark to gauge any subsequent changes in attitude and action.

I am sure that the board's attitude has changed positively and Summerset becomes even greater.

Disc: SUM shareholder

[noodles]

A short but bullish update on SUM by Forbar
http://podcast.radionz.co.nz/business/bus-srpt-20150113-0828-summerset_shares_jump_xx_percent_after_record_sale s-048.mp3

[winner69]

Full profit soon

I reckon $44.6m or there abouts will be reported

Boomer of a result eh

[MAC]

“chief executive Julian Cook said earnings growth may not be as fast in the current year as the company spends money to acquire sites and build villages ahead of making sales”

http://www.nbr.co.nz/article/summerset-second-quarter-sales-growth-stalls-development-focus-bd-158721

[couta1]

“chief executive Julian Cook said earnings growth may not be as fast in the current year as the company spends money to acquire sites and build villages ahead of making sales”

http://www.nbr.co.nz/article/summerset-second-quarter-sales-growth-stalls-development-focus-bd-158721
Notice he said May not be as fast,classic case of under promise and overdeliver I'd say.

[winner69]

“chief executive Julian Cook said earnings growth may not be as fast in the current year as the company spends money to acquire sites and build villages ahead of making sales”

http://www.nbr.co.nz/article/summerset-second-quarter-sales-growth-stalls-development-focus-bd-158721

He said that after an underwhelming half year result ...plenty of sales since and property prices still very good so irrespective of how many residents died or not heaps of fair value adjustments.

Um ...maybe I underestimate?

[percy]

Maybe I have missed the point,but that article was dated 4th July 2014.

[winner69]

Milford reduced their position, interesting eh couta

[MAC]

They do seem to have sold most in November around $2.70 with a little more recently at $3.07 taking advantage of the bounce probably. But then they have been both buying and selling off and on since August last year, they really are a bit all over the place, whatever their models just spit out on the day perhaps.

https://www.nzx.com/files/attachments/207797.pdf

[Food4Thought]

Why has Summerset lost so much chat interest? Was it all getting too repetitive, negative sentiment? This company isn't going away, they do a good job of what industry they are in. Even if the performance does not outperform the market expectations, the performance is more so positive and consistent. Long term game

[MAC]

I think they are perhaps more cyclical now Food4thought, previously more so a growth company coming under the usual focus of those concerned, or even obsessed, with growth company risk.

I would have liked to have seen them aggressively increase their forward growth rate goals rather than becoming dividend paying stock, just seemed a few years too early to me given the untapped potential within the sector.

But yes, the demographic still remains a tail wind and they will still grow at a moderate rate. Perhaps, the risk reward has altered a little though in the last six months, a little less growth outlook beyond FY15 and perhaps a bit more risk from bubbly land valuations.

A perfectly good long term investment to have in ones portfolio though, income paying now for those that like dividends. We still retain a little SUM within our family’s portfolio.

[Bjauck]

Maybe Norah's departure etc. turned Cinderella into an ugly sister for some.
Disc: A long term holder neither looking to reduce or add

[skid]

I would imagine anyone holding since the start of Jan. would be relatively happy--I havnt been following closely but an wondering if the increase in SP is the result of the divi.
Im still not keen on their business model of relying so heavily on capital gain of their property,but cant argue with the SP.

[MAC]

Ok, SUM have paid out $15.4M in dividends thus far that could otherwise have been reinvested into growth, and within a sector with good enough demographic tailwinds to have provided a good risk/reward proposition for that re-investment.

Debt financing aside, less cash available for re-investment represents an attenuation in forward growth rate from what would have otherwise been possible, assuming of course that margins remain consistent.

Then there is the matter of forward guidance.

When Quadrant were on board as an activist investor we had quite an aggressive growth plan laid out in front of us though to FY15, per diagram below, that was a plan set at IPO time and adjusted around a year later.

Quadrant are gone now and we have not since received any further forward guidance beyond FY15.

That’s not to say that further guidance will not come, it’s just when I do the math, the ability of the company to continue a linear growth rate appears more limited than what it did, it’s likely to curve off or attenuate a little now.

I would have liked to have seen FY17 guidance of 400 units per year or something like that, I think that is entirely unlikely now, it’s more likely SUM will continue at 300 units per year from FY15, for a couple of years at least, whilst paying out ever increasing dividends.

The FY13 dividend payout was 3.25c

Analyst consensus for forward dividend payouts is FY14 at 4.1c and FY15 at 4.9c.

7038

[MAC]

Fair enough. I see it differently. I think that SUM management know that long term growth depends critically on build rate, and I expect that to continue increasing over time. Only time will tell which of us is correct!

As do I NewGuy, I just think the growth rate will stabilise at 300 for a couple of years or so as available capital bleeds away a little into dividends, it may probably increase after that time at a gentler rate.

Nothing wrong with that either from a long term investor’s perspective, a modest growth rate plus a dividend is fine. The context of land valuation risk needs to be kept in mind though.

Disc: I'm a content holder for now

[BlackPeter]

Ok, SUM have paid out $15.4M in dividends thus far that could otherwise have been reinvested into growth, and within a sector with good enough demographic tailwinds to have provided a good risk/reward proposition for that re-investment.


7038
Its not quite as bad - don't forget SUMS DRP. From a quick back of an envelope calculation roughly 30% of the paid out dividends are reinvested (based on March 2014, haven't looked at the other dates but suppose they are similar).

[huxley]

I think he means that of the 15.4m that was paid out in dividends 30% was reinvested back into sum through the DRP?

[winner69]

Cash paid out for dividends shown as $5.3m in FY13 accounts and $7.0m in HY14

The $7m in HY14 accounts is last years final dividend and suggests a pretty low DRP uptake

As does this
A dividend reinvestment plan applied to the dividend paid on 24 March 2014 and 585,959 ordinary shares were issued in relation to the plan (2013: 1,099,175 ordinary shares).

[BlackPeter]

I think he means that of the 15.4m that was paid out in dividends 30% was reinvested back into sum through the DRP?

Correct - cheers.

[BlackPeter]

Cash paid out for dividends shown as $5.3m in FY13 accounts and $7.0m in HY14

The $7m in HY14 accounts is last years final dividend and suggests a pretty low DRP uptake

Hi winner, you really need to look a little bit deeper. Of the 7 million paid out in 2014 nearly 2 million have been reinvested using the DRP and creating nearly 600k new shares. So yes, they pay out between 30 and 50% off the profit - and off this payout roughly 30% come back through the DRP. Clear like mud now?

[winner69]

Hi winner, you really need to look a little bit deeper. Of the 7 million paid out in 2014 nearly 2 million have been reinvested using the DRP and creating nearly 600k new shares. So yes, they pay out between 30 and 50% off the profit - and off this payout roughly 30% come back through the DRP. Clear like mud now?

So to summarise $7.0 in cash paid and $1.8m in shares

gives about 20% of dividends reinvested back through DRP

[BlackPeter]

So to summarise $7.0 in cash paid and $1.8m in shares

gives about 20% of dividends reinvested back through DRP

Oh dear .... still feeling the hangover from your "kill-CRP" celebration?

2014 September
$M 3.05 dividends (1.4c)
275k shares reinvested @ $2.9131 = 0.8 M
2014 Sept reinvestment rate = 26%

2014 March
$M 7.1 dividends (3.25c)
586 k shares reinvested @ $3.388 = 1.99 M
2014 March reinvestment rate = 28%

2013 March
$M 5.37 dividends
1.099 M shares reinvested @ $ 3.388 = $M 3.72
2013 reinvestment rate = 69%

Note: numbers rounded ....


So - yes, I guess we can see that the reinvestment rate dropped in 2014 compared to 2013 (no wonder given the SP issues and all the negative publicity), but still not sure where your 20% come from?

[winner69]

Oh dear .... still feeling the hangover from your "kill-CRP" celebration?

2014 September
$M 3.05 dividends (1.4c)
275k shares reinvested @ $2.9131 = 0.8 M
2014 Sept reinvestment rate = 26%

2014 March
$M 7.1 dividends (3.25c)
586 k shares reinvested @ $3.388 = 1.99 M
2014 March reinvestment rate = 28%

2013 March
$M 5.37 dividends
1.099 M shares reinvested @ $ 3.388 = $M 3.72
2013 reinvestment rate = 69%

Note: numbers rounded ....


So - yes, I guess we can see that the reinvestment rate dropped in 2014 compared to 2013 (no wonder given the SP issues and all the negative publicity), but still not sure where your 20% come from?

OK I bow to your superior knowledge

Obviously my blurred vision from yesterday saw the $7.1m as Cash Out on the Cash Flow statement as what went out in cash and overlooked the Cash In from issuing DRP shares.

Still have the last word as usual .... 28% is lowish uptake eh .... but probably a high % of retail investors (and directors of course} with stuff all from instos

Sprry for questioning you in first place and wasting your time ... hope not too many ERA decisions go our way

[Bjauck]

For SUM, a big jump in price (admittedly on light volume) up 3.4% so far today! No announcement on the NZX site. Just some keen small purchasers?

[couta1]

Okay folks now don't go into shock but I have sold out my Sum holding over the last week or two, I do intend buying back a portion that makes up around 5% or so of my portfolio at some point. You may ask why? well I looked at my gain in Sum and Ryman over the last couple of years and until recently there wasn't any (My Ryman holding is currently in the red so won't be getting reduced until the next run up) Some would say why not wait until next week, well as you all know selling on report day doesn't always go well( I think Sum will have an average to good result next week by the way) As I have a lot of tech/ biotech stock heavily in the red its nice to have some money to move and play around with instead of watching most of your portfolio in stagnation mode.

[ratkin]

Okay folks now don't go into shock but I have sold out my Sum holding over the last week or two, I do intend buying back a portion that makes up around 5% or so of my portfolio at some point. You may ask why? well I looked at my gain in Sum and Ryman over the last couple of years and until recently there wasn't any (My Ryman holding is currently in the red so won't be getting reduced until the next run up) Some would say why not wait until next week, well as you all know selling on report day doesn't always go well( I think Sum will have an average to good result next week by the way) As I have a lot of tech/ biotech stock heavily in the red its nice to have some money to move and play around with instead of watching most of your portfolio in stagnation mode.

Would it not be wiser to divest yourself of the speccy in the red stocks, before they sink without trace, and hang on to your quality retirement stock.
It sounds like you are danger of using your Sum money to take more gambles on speccy bios

[huxley]

That seems like a pretty big turn around given you had been one of the most optimistic posters on SUM and retirement villages generally. Any insights other than the flat share price over the past year or so?

I took a modest position in SUM recently (under $3) and see them as a long term hold (could top up at some point).

[percy]

Would it not be wiser to divest yourself of the speccy in the red stocks, before they sink without trace, and hang on to your quality retirement stock.
It sounds like you are danger of using your Sum money to take more gambles on speccy bios

Very sound advice..

[couta1]

Would it not be wiser to divest yourself of the speccy in the red stocks, before they sink without trace, and hang on to your quality retirement stock.
It sounds like you are danger of using your Sum money to take more gambles on speccy bios
No money going into any more tech stocks ratkin, my last big average down was Xro and that's paying off, I still hold a decent amount of Rym. So far have bought some more HNZ/IFT/Air/DPC /Spk and even some MPG to keep winner company. Time to diversify and keep all stocks at roughly no more than 10% of portfolio level.

[troyvdh]

dear couta ..how sir ...with all due respect given you've been on this site for 14. Years. How on earth did you manage to be in the red re rym.I must hastily add however I'm not about to divulge my mistakes. Cheers

[couta1]

That seems like a pretty big turn around given you had been one of the most optimistic posters on SUM and retirement villages generally. Any insights other than the flat share price over the past year or so?

I took a modest position in SUM recently (under $3) and see them as a long term hold (could top up at some point).
You'll do alright buying at that level, I'm still optimistic on retirement villages as someone who's worked in them for the last 25yrs but I temper my optimism with inside knowledge of where the industry is at at any given point in time, enough said.

[couta1]

dear couta ..how sir ...with all due respect given you've been on this site for 14. Years. How on earth did you manage to be in the red re rym.I must hastily add however I'm not about to divulge my mistakes. Cheers
Only in the red on my purchase from two years ago, did well on my prior holdings,cheers

[troyvdh]

as an aside ...like I have been saying for a while it's hp that the 3 retirement companies will continue to flourish as long as houses continue to appreciate in value in our countries largest cities.

[Mista_Trix]

Okay folks now don't go into shock but I have sold out my Sum holding over the last week or two, I do intend buying back a portion that makes up around 5% or so of my portfolio at some point. You may ask why? well I looked at my gain in Sum and Ryman over the last couple of years and until recently there wasn't any (My Ryman holding is currently in the red so won't be getting reduced until the next run up) Some would say why not wait until next week, well as you all know selling on report day doesn't always go well( I think Sum will have an average to good result next week by the way) As I have a lot of tech/ biotech stock heavily in the red its nice to have some money to move and play around with instead of watching most of your portfolio in stagnation mode.

I'm sorry to see you say that Couta, especially as the 50 EMA has just crossed the 200 EMA. Please take this with all the best intention - you should take a look at the 'using TA to time your exists and entries' thread, it really helped me define my entry and exist strategies. Especially as the two of us started investing at roughly the same time, into roughly the same companies - CNU, XRO, DIL, SUM. I think your timing on all of them has not followed a strategy, more your gut, which I think has lead you poorly at times, and given I don't think you're FA skills are particularly strong (neither are mine) I wonder how you're justifying your movements.

:)

[couta1]

I'm sorry to see you say that Couta, especially as the 50 EMA has just crossed the 200 EMA. Please take this with all the best intention - you should take a look at the 'using TA to time your exists and entries' thread, it really helped me define my entry and exist strategies. Especially as the two of us started investing at roughly the same time, into roughly the same companies - CNU, XRO, DIL, SUM. I think your timing on all of them has not followed a strategy, more your gut, which I think has lead you poorly at times, and given I don't think you're FA skills are particularly strong (neither are mine) I wonder how you're justifying your movements.

:) Fair enough MT but as long as iI make a profit when I sell something I'm happy and the way I look at it is some of the other stocks I've purchased with my Sum money are currently showing good entry and top up points so six one half a dozen the other but I hear what your saying re gut instinct but having said that I have given myself to studying TA of late but I have many reasons for selling my Sum holding,cheers

[gv1]

Indeed. Really hope you were joking Couta. Why would you sell out now that the stock has truly begun to recover???

Today was a great day indeed, nearly $20k up in one day just on SUM....

Yeah you are right mate.

[Mista_Trix]

I'm sorry to see you say that Couta, especially as the 50 EMA has just crossed the 200 EMA. Please take this with all the best intention - you should take a look at the 'using TA to time your exists and entries' thread, it really helped me define my entry and exist strategies. Especially as the two of us started investing at roughly the same time, into roughly the same companies - CNU, XRO, DIL, SUM. I think your timing on all of them has not followed a strategy, more your gut, which I think has lead you poorly at times, and given I don't think you're FA skills are particularly strong (neither are mine) I wonder how you're justifying your movements.

:)

Well you know a LOT more than me about the entire sector so I can't fault you on that part - just make sure to keep posting on other threads... and this one if you have anything to share :)

[couta1]

Well you know a LOT more than me about the entire sector so I can't fault you on that part - just make sure to keep posting on other threads... and this one if you have anything to share :)
Cheers and good wishes to all holders, will keep you all informed if anything relavent comes to my knowledge that im free to share with you, i should really post less often overall as its easy to catch forumitis aye:)

[troyvdh]

New guy and gv...in the past I've been cocky....no offence but you guys must be young...nothing wrong with that at all. It's a funny old world sometimes.....do not forget a bloke called Murthy...go we'll

[gv1]

New guy and gv...in the past I've been cocky....no offence but you guys must be young...nothing wrong with that at all. It's a funny old world sometimes.....do not forget a bloke called Murthy...go we'll
Yeah as you see it. I made my mistakes but since last yr, you can see I have done the homework. I have given honest opinions on stocks that was pumped up and advised against it. With SUM, I bought over few years and have accumulated recently below $3. I know Mgment has not been upright with things But as s/holders you can do something about..This CO is not GFC type or SNK. Producing income and pays Div + growth.

[PartyPooper]

All the retirement companies on the ASX are rallying. SUM could be getting attention because it was seen as the only undervalued aged care company on the NZX?

Like most on here I would have been happy to top up SUM for below $3 before the whole drama started flying and the directors not taking responsibly. I'll keep watching and decide my course of action as to hold or accumulate.

Right now RYM has my attention and will continue to if it heads towards $7-$7.50.

[ratkin]

Good for you couta..........I became a better investor after I learnt more about TA......certainly teaches you about when and when not to enter.

It can also make you too twitchy, a watched pot never boils. Every few months most stocks throw off one sell signal or another. People have no patience anymore. Just have a look at a ten year chart or Ramsay healthcare to see what patience can do for you.

If you want to be a trader then you will need to know TA inside out , if on the other hand you want to be an investor then you need to learn patience.

[macduffy]

It can also make you too twitchy, a watched pot never boils. Every few months most stocks throw off one sell signal or another. People have no patience anymore. Just have a look at a ten year chart or Ramsay healthcare to see what patience can do for you.

If you want to be a trader then you will need to know TA inside out , if on the other hand you want to be an investor then you need to learn patience.

Yes, a lot of truth in that, ratty. I'm basically a longterm investor but application of a few simple TA "rules" has kept me out of a few bad "longterm" investments and improved my timing in other cases. As for SUM, I'm there - longterm?

[Bjauck]

I must admit - given past history with SUM - I am a bit sceptical that there may be some inside information trading or leaked information with this latest price increase so close to a results announcement.

[NZSilver]

I must admit - given past history with SUM - I am a bit sceptical that there may be some inside information trading or leaked information with this latest price increase so close to a results announcement.

I have to agree, thought about selling some of my holding today but LT shes a goody I think & it does seem to be a leaky ship...

so holding

[BlackPeter]

Director nomination time ... just wondering, given that the board seemed to be at least in the past sometimes in need of direction - anybody on here wants to give it a go?;)

[huxley]

I nominate Roger.

[Beagle]

I nominate Roger.

Norah loves me :D I'd love to but I doubt my blood pressure pills would be effective working with SUM's management and other board members. I'd have to double down on my meds :D
Sorry, as you were folks I couldn't resist. I did refrain from commenting on the recent SP rise just before the annual announcement so I did well to hold my tongue there and made no reference whatsoever to more leaks than a sieve.

[percy]

I nominate Roger.

The market moved the sp up 2 cents on your nomination of Roger.
May I 2nd the nomination.?? lol.

[pierre]

The market moved the sp up 2 cents on your nomination of Roger.
May I 2nd the nomination.?? lol.

SP should go sky high if you do that Percy!

[Beagle]

I think i'd prefer a less hostile working environment, even battling ISUS would probably be less hostile for me :lol:

[Harvey Specter]

:lol:Are you suggesting heads would roll if you were appointed director? ;)

[BlackPeter]

Hi Roger, you certainly would have my vote ... but no point in getting somebody to do a job he does not like to ...

Looking at the share price - amazing pre result trading - and the bulls are really on it.

No matter whether it was a leaking ship or just a SUM special bull stampede (SUM's spike stands currently out of the crowd of the otherwise flat lining retirement stocks): will be interesting to see the results tomorrow.

Discl: despite all reservations related to the board (and one particular board member) still holding ...

[Beagle]

You're tenacity is admirable BP and thank you for your vote of confidence. I think the recent strong run-up in the SP is indicative of a very leaky ship. Guess we'll know more tomorrow.

[Food4Thought]

Volumes are pretty low. Nothing out of the ordinary. I wonder about insider information. I wonder about Australian investors, looking at where there next profits will come from( oh quick, buy up the struggling kiwi shares, they don't know a good thing till we buy it/claim it). I wonder how high the share price will go this round. I wonder when it will reach $4. I know one day SUM will be $4+ (easy). Possibly this year at this rate, and it is due for this leap, I just wonder when. I guess tomorrow will show something. Health & care... we all need it. And there certainly aren't any less of us every day are there. Release the brakes already. Artificial deflation is how I saw the last tumble, due to negative sentiment. Emotion. Positive at the moment. Happily holding...

[drcjp]

You're tenacity is admirable BP and thank you for your vote of confidence. I think the recent strong run-up in the SP is indicative of a very leaky ship. Guess we'll know more tomorrow.

I tend to think of it as related to recent good Q4 announcement and also exit of MAM in tranche of its SSH. I personally think the latter is more impt, especially as the probe into them widens into the depths of Mordor.

[BlackPeter]

Feels like a case of "don't make any promises, but deliver ...". So far all good - SUM is starting to develop into the star of the New Zealand retirement housing industry ...

[percy]

And look at those development margins. Looks like the transition to inhouse hasn't been the potential clusterf**k that some predicted...

The development margin on new retirement units sold increased to 15.7% in 2014, up from 13.2% in the prior year. Development margin achieved in the second half of the 2014 financial year was 16.6%.

Certainly very pleasing seeing the in house development achieving growing margins.
Commentary very positive"We expect the level of investment in 2014 to support a higher level of earnings growth in the future."

[Beagle]

"Rising tide lifts all boats" (notwithstanding the ability of the captain or otherwise). In an extremely buoyant Auckland property market at a time when they're selling their main Auckland developments they've raised underlying EPS by what I would describe as a fairly modest 10% to 11.17 cps. On a SP of $3.40 that puts them on a PE of 30.4.

[Harvey Specter]

s they've raised underlying EPS by what I would describe as a fairly modest 10% to 11.17 cps. On a SP of $3.40 that puts them on a PE of 30.4.Thats what I was thinking. Does 10% growth justify a PE of 30?

I sold out of this (too early) so haven't read the full detail. Does the improvement in margins suggest growth will be above 10% going forward?

[Beagle]

At least it wasn't the 20% fall underlying earnings that you had so adamantly predicted, eh Roger? :cool:

Upgraded recently on the back of the strong Q4 sales result. Analysts update their forecasts but accountants are exempt from this right according to some :rolleyes:

[Bjauck]

All round a better result than I was expecting - but as earlier trading seemed to indicate, this was not news to some traders.

[Beagle]

Thats what I was thinking. Does 10% growth justify a PE of 30?

I sold out of this (too early) so haven't read the full detail. Does the improvement in margins suggest growth will be above 10% going forward?

Hi Harvey,
Not in my opinion mate. Company is saying they're positioned for better growth going forward and while forecast development margin looks okay the crucial bit of information that's lacking IMO is an update to forward build guidance for 2016. We've known about the 300 build guidance for 2015 for over a year but for reasons unknown they're not updating 2016 build guidance, go figure ??? That would worry me if I was a shareholder. Personally I don't buy stocks on a PE of 30 unless I'm confident they can grow at a minimum of 20% on a sustainable basis AND I have full confidence in the directors and management.

[BlackPeter]

Thats what I was thinking. Does 10% growth justify a PE of 30?

I sold out of this (too early) so haven't read the full detail. Does the improvement in margins suggest growth will be above 10% going forward?

Depends on what numbers you look at:

Revenue grew from 25m in 2009 to 54.3m today. This is in my books a CAGR of 16.8%.
EPS for 2014 is 25 cents - and they make positive noises that next year should be still better. By how much? Don't know, so lets add another 10% and take 27 cents.

If I put that into the famous "Share Value = EPS * (8.5 + 2 * growth)", than I end up with a dollar number in the lower two digits.

Obviously - numbers above contain total earnings ... if we assume that property prices go through a sharp reduction (and stay low from now on for ever), than you need to use the underlying earnings. Formula still would return a number higher than the current SP.

Not saying, it will come that way and assume the truth is somewhere in between the current value and what the formula returns, but maybe its time to remove these black coloured sunglasses with blinkers ...

[Beagle]

Sure, but some of us didn't even need to update our forecasts...

You must be in good with Norah and Julian then and get the insider information because nobody could have predicted that Q4 sales result and resulting effect on 2014 earnings without it.

[Beagle]

Depends on what numbers you look at:

Revenue grew from 25m in 2009 to 54.3m today. This is in my books a CAGR of 16.8%.
EPS for 2014 is 25 cents - and they make positive noises that next year should be still better. By how much? Don't know, so lets add another 10% and take 27 cents.

If I put that into the famous "Share Value = EPS * (8.5 + 2 * growth)", than I end up with a dollar number in the lower two digits.

Obviously - numbers above contain total earnings ... if we assume that property prices go through a sharp reduction (and stay low from now on for ever), than you need to use the underlying earnings. Formula still would return a number higher than the current SP.

Not saying, it will come that way and assume the truth is somewhere in between the current value and what the formula returns, but maybe its time to remove these black coloured sunglasses with blinkers ...

IFRS numbers are completely irrelevant. Underlying earnings are the only way to measure fair value.

[BlackPeter]

IFRS numbers are completely irrelevant. Underlying earnings are the only way to measure fair value.

Hi Roger, you sound very fundamental - and are probably still bruised from last years events. I do understand your statement, but I think the real answer is (as so often in life): it depends (on what you want to measure).

I agree, if you want to measure the value adding work of a company and its management and compare them with other organisations working under different conditions, than it makes a lot of sense to use underlying earnings. As well - if trying to predict the future it makes sense to exclude one offs which never ever will happen again. However - the measured NPAT is real (even if it includes as well the impact of increasing property values). I do like real profit :t_up: - and in the long term the share price is determined by real earnings, not by underlying ones.

Now - it is everybody's best guess what property values will do in coming years. I hear for 20 years from some people that they will drop (obviously depending with whom you are talking), but I haven't yet seen a long term driver for dropping or stagnating property prices (give and take the odd correction) in New Zealand's main centres. Obviously - if one of Auckland's volcanoes starts to blow, this might make a difference ;).

If you use the real earnings to assess the share value, than you just need to re assess the reasons for holding a stock like this if & when the real estate price trend starts turning - but this is not different for many other parameters determining a companies success.

[Beagle]

Hi Roger, you sound very fundamental - and are probably still bruised from last years events. I do understand your statement, but I think the real answer is (as so often in life): it depends (on what you want to measure).

I agree, if you want to measure the value adding work of a company and its management and compare them with other organisations working under different conditions, than it makes a lot of sense to use underlying earnings. As well - if trying to predict the future it makes sense to exclude one offs which never ever will happen again. However - the measured NPAT is real (even if it includes as well the impact of increasing property values). I do like real profit :t_up: - and in the long term the share price is determined by real earnings, not by underlying ones.

Now - it is everybody's best guess what property values will do in coming years. I hear for 20 years from some people that they will drop (obviously depending with whom you are talking), but I haven't yet seen a long term driver for dropping or stagnating property prices (give and take the odd correction) in New Zealand's main centres. Obviously - if one of Auckland's volcanoes starts to blow, this might make a difference ;).

If you use the real earnings to assess the share value, than you just need to re assess the reasons for holding a stock like this if & when the real estate price trend starts turning - but this is not different for many other parameters determining a companies success.

The debate about underlying earnings vs IFRS is nothing to do with last year's events mate. Underlying profit fully encapsulates the realised profit made by the company during the year including all profit on resale of existing units and all development profit on new units.
The only use for the IFRS numbers which encapsulates all future unrealised profits on all existing stock is to give some indication or future realisations that will only occur as and when the properties are sold and should be accounted for in those future periods when the profit is crystalized. All companies in this sector place emphasis on underlying profits and model their dividend pay-out ratio's on the realised cash profit.
FWIW real estate prices in Auckland have hit a record level in terms of number of years of average family income to buy an average house. How long circa 8 years household income can be sustained is anyone's guess.
Anyway folks that's it for my analysis on the result.

[Ginger_steps_]

Very quiet in here of late - sum looking healthy again then?! Can someone please confirm sum went Xdiv yesterday?

[777]

No it didn't but if go to their website or to the NZX you can find out for yourself when it does.

[Ginger_steps_]

No it didn't but if go to their website or to the NZX you can find out for yourself when it does.

Fair enough - called me on being lazy. And rightly so. Haha.

[ratkin]

Overlayed a chart RYM on top of the SUM chart, and was surprised to see a big dichotemy between the two over the last six months or so. Previously they both tended to move in the same direction, however recently SUM has been easily outperforming RYM.
Can it continue?

[BlackPeter]

Overlayed a chart RYM on top of the SUM chart, and was surprised to see a big dichotemy between the two over the last six months or so. Previously they both tended to move in the same direction, however recently SUM has been easily outperforming RYM.
Can it continue?

Just looking at the numbers:

SUM had in 2014 EPS of 25 cents (i.e. PE = 13.7). They said that they expect 2015 to be better - so lets assume 10 % better - 27 cents, resulting in a (admittedly - just my guess) forward PE of 12.6

RYM had in 2014 EPS of 39 cents (i.e. PE = 20.8). Expected EPS for 2015 (Reuters) is 29 cents - this would result in a forward PE of 28.

Which one would you rather hold?

[skid]

Very odd--thats a 10% drop down to to bid price

[noodles]

Very odd--thats a 10% drop down to to bid price
gone ex-div. All bids deleted

[Beagle]

Just looking at the numbers:

SUM had in 2014 EPS of 25 cents (i.e. PE = 13.7). They said that they expect 2015 to be better - so lets assume 10 % better - 27 cents, resulting in a (admittedly - just my guess) forward PE of 12.6

RYM had in 2014 EPS of 39 cents (i.e. PE = 20.8). Expected EPS for 2015 (Reuters) is 29 cents - this would result in a forward PE of 28.

Which one would you rather hold?

If you must use international financial reporting standards (IFRS numbers) which includes all revaluations on all units to market value every year regardless of whether units were sold or not and is a bit like saying you've made money because your house has gone up in value, (note my comment above about the true measure of earnings, underlying operating earnings), then you need to compare apples with apples on IFRS numbers.
MET http://www.4-traders.com/METLIFECARE-LIMITED-10089401/ Forward PE 8.70
SUM http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/?type_recherche=rapide&mots=Summerset Forward PE 19.24
RYM http://www.4-traders.com/RYMAN-HEALTHCARE-LTD-6492072/?type_recherche=rapide&mots=RYman Forward PE 21.62

Best of breed and their extremely long and highly credible track record of growth would see most people selecting RYM over SUM on those numbers.
Value investors would say that MET looks the best value by miles.

[BlackPeter]

If you must use international financial reporting standards (IFRS numbers) which includes all revaluations on all units to market value every year regardless of whether units were sold or not and is a bit like saying you've made money because your house has gone up in value, (note my comment above about the true measure of earnings, underlying operating earnings), then you need to compare apples with apples on IFRS numbers.
MET http://www.4-traders.com/METLIFECARE-LIMITED-10089401/ Forward PE 8.70
SUM http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/?type_recherche=rapide&mots=Summerset Forward PE 19.24
RYM http://www.4-traders.com/RYMAN-HEALTHCARE-LTD-6492072/?type_recherche=rapide&mots=RYman Forward PE 21.62

Best of breed and their extremely long and highly credible track record of growth would see most people selecting RYM over SUM on those numbers.
Value investors would say that MET looks the best value by miles.

Hi Roger, looks like we have a different standpoint on this issue (and therefore see different perspectives). I guess this is life - if everybody would stand on the same spot, than this would be a very crowded place, indeed. Maybe we just agree to disagree?

However not sure, whether your example relating IFRS numbers to the increased value of your house is totally appropriate.

If you buy a house for say $1 Million and live in it and it increases by 10%, but you still need a house to live in, than yep, I agree - you didn't really make money.

If however you own a share in a company buying and selling houses and the value of their stock went up by 10% - than you made of course these 10%, as long as there is nothing stopping you to realise your gain.

For me SUM (and any other retirement stock) falls into the second category, given that there is no restriction for me to realise any gains.

Of course - any retirement village operator has a number of different income streams - but at the end of the day it is only the sum which counts (no pun intended) - and any revaluation is clearly a part of that.

BTW - agree that MET is as well very worthwhile looking into - I didn't mention them in my post because just responding to a comparison between SUM and RYM.

Discl: hold SUM and MET. Don't hold RYM.

[Beagle]

Hi Roger, looks like we have a different standpoint on this issue (and therefore see different perspectives). I guess this is life - if everybody would stand on the same spot, than this would be a very crowded place, indeed. Maybe we just agree to disagree?Indeed it would. Happy to agree to disagree but consider the following

However not sure, whether your example relating IFRS numbers to the increased value of your house is totally appropriate.

If you buy a house for say $1 Million and live in it and it increases by 10%, but you still need a house to live in, than yep, I agree - you didn't really make money.Unless you actually sell it and move to a cheaper town which is what a lot of people retiring are doing with their over-priced Auckland homes

If however you own a share in a company buying and selling houses and the value of their stock went up by 10% - than you made of course these 10%, as long as there is nothing stopping you to realise your gain.The company only makes the money when they re-sell the licence to occupy. These companies are generally priced on a multiple of earnings, not asset value. If the unrealised value has only gone up by 3% like SUM's units have but cost of construction has gone up faster than 3%, which it has then you could make the argument their unrealised gain is worthless in terms of being earnings accretive

For me SUM (and any other retirement stock) falls into the second category, given that there is no restriction for me to realise any gains. You're confusing your position with complete flexibility on when to buy and sell shaes with the earnings issue that the company itself only makes money when they re-sell a licence to occupy

Of course - any retirement village operator has a number of different income streamsSUM is unusual in that it only makes money from new developments and re-sales, profit from operations of its villages is ostensibly nothing - but at the end of the day it is only the sum which counts (no pun intended) - and any revaluation is clearly a part of that. Its not mate. Unrealised revaluations are only part of the profit when they're realised.

BTW - agree that MET is as well very worthwhile looking into - I didn't mention them in my post because just responding to a comparison between SUM and RYM.Agreed and fair enough.

Discl: hold SUM and MET. Don't hold RYM.

Leaving aside the issue of whether IFRS profits or underlying earnings are the more appropriate measurement base, (as really I feel I've already made a fulsome effort to explain this to people from an accountants point of view so I'll leave it at that), its imperative for any meaningful comparative analysis between these companies that whichever methodology you use you're comparing apples with apples. From my analysis it doesn't matter which way you slice and dice this thing MET looks like the stand-out value investment in this sector, (Craigs underlying earnings forecast has them on a 2015 PE of 17.5 for a company growing at circa 13%.) If people are silly enough to use IFRS EPS then MET looks insane value at a 2015 PE of 8.7

Disc Now own some MET. I believe they'll lift their build rate over time as opportunities present themselves.

[BlackPeter]

Another annual meeting and opportunity to either confirm and / or dismiss the board (well, the one third which is up for re-election).

One of my criteria of how to vote is to assess how the board did over the last 3 year term. Given that it is these days much more in fashion to beat the SUM board up ... did I come up this morning when doing the numbers with a small surprise:

NZX 50 performance over the last 3 years: +70% (well, we knew that before) ...
SUM share price performance (same time frame) : + 115% (which compares to MET - +105% and RYM + 165%).
(edit / note: this is not considering the divvies paid, they would still slightly improve the performance of
all 3 companies compared to the NZX50 - but hardly in a material way)

So SUM is not the best of the three (well, over the last 3 years anyway), but not bad for an underdog either - isn't it?

Based on this result, based on the board showing last year at least some flexibility and openness to correct their behaviour (at last) ... and based on that it is not Norah standing, am I inclined to re-elect the 2 candidates standing for reelection.

[BlackPeter]

same AGM, different subject: I noticed two somewhat cryptic resolutions in the voting paper:


Ordinary Resolution 4: Shareholder proposal in relation to Summerset’s philosophy
Summerset has received the text of Resolution 4 from Gareth Worthington on behalf of Luzo Limited (a
Summerset Shareholder). Luzo Limited provided an explanatory note for this resolution which has not been
included in the notice of meeting in accordance with Clause 9(6)(a) of Schedule 1 to the Companies Act 1993,
as the Board of Directors considers the statements in it to be defamatory, frivolous or vexatious.
Luzo Limited (through its appointed corporate representative) will be provided with an opportunity to speak at
the Annual Meeting about this shareholder proposal.
Pursuant to the Companies Act 1993, Resolution 4, if passed, will not be binding on the Board of Directors.
The Board of Directors consider that the Board and management consistently act in accordance with
Summerset’s philosophy to be upfront, open and honest. The Board of Directors also does not consider that
management have conducted themselves in a way that has caused harm to Summerset’s reputation.
The Board considers this resolution unnecessary and recommends that you ABSTAIN from voting on
it.
Ordinary Resolution 5: Shareholder proposal in relation to the Resource Consent application in
Boulcott, Lower Hutt
Summerset has received the text of Resolution 5 from Gareth Worthington, on behalf of Luzo Limited (a
Summerset Shareholder). Luzo Limited provided an explanatory note for this resolution which has not been
included in the notice of meeting in accordance with Clause 9(6)(a) of Schedule 1 to the Companies Act 1993,
as the Board of Directors considers the statements in it to be defamatory, frivolous or vexatious.
Luzo Limited (through its appointed corporate representative) will be provided with an opportunity to speak at
the Annual Meeting about this shareholder proposal.
Pursuant to the Companies Act 1993, Resolution 5, if passed, will not be binding on the Board of Directors.
Summerset is currently engaged in seeking to consent land in Boulcott, Lower Hutt for development. This
consent is being sought through the processes laid out by the Hutt City Council and the Resource Management
Act 1991. The Board considers that management have acted in an appropriate manner throughout the
process, and in accordance with the Resource Management Act 1991.
The Board considers that Summerset has consulted extensively with interested parties and has made changes
to its plans following feedback from interested parties. The Board also considers that the development, if
approved, will provide a first class retirement village facility for Lower Hutt and provide an option for people to
retire locally in their community without having to move outside of the city. The Board confirms that at no stage
has any individual in Summerset ever indicated to the Hutt City Council, or any other party, that the
development would be no more than two levels high.
The Board confirms that Summerset is committed to working through the resource consenting process. This
process is the proper forum in which the merits of the development should be debated.
The Board does NOT support the passing of this resolution and recommends that you vote AGAINST
it.


Does anybody around here know more about these 2 resolutions? Could be just a disgruntled Lower Hutt neighbour who happened to buy some SUM shares to bring their complaints to the AGM - or could be more.

[macduffy]

I don't know the gist of these resolutions, Blackpeter, but the meeting seems to have potential for some lively entertainment. I might make an exception to my usual nonattendance at AGM's and go along to this one!

[BlackPeter]

I don't know the gist of these resolutions, Blackpeter, but the meeting seems to have potential for some lively entertainment. I might make an exception to my usual nonattendance at AGM's and go along to this one!

A report afterwards would be much appreciated - Wellington is not really the next way for me.

[winner69]

WOW -125 sales for Q1 and a RECORD

Rolling 4 quarters now 491 and heading to 600 for the full year

Another boost to the share price methinks

[Beagle]

WOW SP nearly back to where it was a year ago. Lets not talk about the NZX50 being up over 16% eh ? I guess shareholders will take some comfort from Norah not selling before the announcement this time around...oh wait, she's not allowed too now. What makes you think they're heading to 600 sales W69 seeing as the company won't give forward guidance on an increase in their build rate beyond 300 this year ?
600 sales would thus require an average of 75 resales each quarter, (300 new and 300 resales per annum) which is quite a stretch don't you think ?
Could it just be that the company has hit a sweet spot this summer with a number of new developments coming to fruition contemporaneously ?...and when that sweet spot is over...

[couta1]

The sales will slow over the next 2 quarters, you heard it here first. Sum price in May 2013 was $3.20 compared to $3.30 ish now.

[BlackPeter]

WOW -125 sales for Q1 and a RECORD

Rolling 4 quarters now 491 and heading to 600 for the full year

Another boost to the share price methinks

I think something like 480 to 500 for the year sounds more likely - assuming the 300 units they plan to build new and in average 45 to 50 per quarter resold.

Unless, of course, they deliver more units this year than the promised 300 (which might be possible, in the past they typically delivered a handful more than predicted - and their new strategy of building the community centres together with the first units rather than later is likely to make the early selling more successful).

What might continue to increase is the (re)-sell value, depending on what the property market decides to do (but the indications seem to keep upwards).

Overall - not a bad result - and Julian seems to have a tendency of under-promising and over-delivering.

[winner69]

I think something like 480 to 500 for the year sounds more likely - assuming the 300 units they plan to build new and in average 45 to 50 per quarter .......

WOW .....how pessimistic mate

BP, if its 480 they will be going backwards from here (rolling 4 quarter is 491 sales) and 500 is stagnation

[winner69]

WOW

SUM top of the winners board this morning

[Bjauck]

WOW -125 sales for Q1 and a RECORD

Rolling 4 quarters now 491 and heading to 600 for the full year

Another boost to the share price methinks
I think sales of 500 for the year would still be a good result as it would still be a yoy increase of 10%. However, who knows what will happen as sales and resales figures for units are lumpy not smooth. At least there are no shenanagins this year.

[percy]

I think sales of 500 for the year would still be a good result as it would still be a yoy increase of 10%. However, who knows what will happen as sales and resales figures for units are lumpy not smooth. At least there are no shenanagins this year.

I like the sector,and think SUM is well directed/managed and will be a good steady performer.Happy to hold.

[BlackPeter]

WOW .....how pessimistic mate

BP, if its 480 they will be going backwards from here (rolling 4 quarter is 491 sales) and 500 is stagnation

So - where do you see the additional 100 to 120 units coming from? Expect the sudden departure of a larger percentage of occupants (which btw might be bad for business ...) or do you expect them to build this year 100 more units than they promised and planned for? If it is the second alternative - where do you see these units go? I guess somebody needs to plan them, some council needs to consent them, somebody needs to build them and somebody needs to sell them - and all this before the end of this year ... is this how people distinguish between reasonable and unreasonable optimism?

[couta1]

WOW .....how pessimistic mate

BP, if its 480 they will be going backwards from here (rolling 4 quarter is 491 sales) and 500 is stagnation
Winner you can't use rolling quarters to predict yearly sales in this industry mate.

[Bjauck]

I like the sector,and think SUM is well directed/managed and will be a good steady performer.Happy to hold.
Agreed.
MET and RYM are in the bottom drawer too.

[BlackPeter]

WOW SP nearly back to where it was a year ago. Lets not talk about the NZX50 being up over 16% eh ?

Actually their SP (-2.5%) performed over the last 12 months better than Ryman's (-4.5%). The better performer in this contest was MET (+17% over the same period), but than ... previous performance is no indication for future performance - and it is not difficult to let any of these three win, depending on how you set your time period ...

Discl: hold SUM and MET;

[Ginger_steps_]

Couta, Im still baffled as to what you saw that caused you to sell? was it the whole care beds scenario??

[couta1]

Couta, Im still baffled as to what you saw that caused you to sell? was it the whole care beds scenario??
A few factors, will pm you at some point,cheers

[Beagle]

I like the sector,and think SUM is well directed/managed and will be a good steady performer.Happy to hold.

:lol: :lol: :lol: Thanks mate I needed a bit of humour to kick start me at work after Easter.

[percy]

:lol: :lol: :lol: Thanks mate I needed a bit of humour to kick start me at work after Easter.

My pleasure.!!!!!
Even funnier is how profitable SUM has been for me.!!!!
Luckily enough to sell down when it ran too high last year,and brought back in at $2.92 on 12th January this year.!!!!

[Beagle]

My pleasure.!!!!!
Even funnier is how profitable SUM has been for me.!!!!
Luckily enough to sell down when it ran too high last year,and brought back in at $2.92 on 12th January this year.!!!!

You been reading KW's posts on TA techniques haven't you mate :)

[winner69]

Winner you can't use rolling quarters to predict yearly sales in this industry mate.

New Guy said looking at the 4 quarter rolling total was the ONLY way to go. It took the lumpyness out of the data. I agree with him.

If SUM is growing than the 4 quarter rolling total will steadily increase. Isn't SUM a growth company?

After today's number he 4 quarter rolling total is 491 so any future quarter less than that is going backwards.

[percy]

You been reading KW's posts on TA techniques haven't you mate :)

Yes,.................. and it really works...............!!!!

[Beagle]

Yes,.................. and it really works...............!!!!

First and foremost FA then TA, then filter using principle's, ethics, a highly sensitive B.S. meter and stocks I think have poor management. That's my approach and I'm sticking with it :)
Disc - Own MET and very happy with that selection.

[winner69]

WOW and more WOW

Share still going up ........and spilling over to MET and RYM

Maybe punters thinking that if SUM can have a record quarter then The others must be doing well as well, even better if SUM are so bad.

[Beagle]

Sentiment in the sector is no doubt boosted by this news today
http://www.sharechat.co.nz/article/65a867e5/barfoot-breaks-records-for-auckland-home-sales-in-march.html?utm_medium=email&utm_campaign=Barfoot+breaks+records+for+Auckland+h ome+sales+in+March&utm_content=Barfoot+breaks+records+for+Auckland+ho me+sales+in+March+CID_f63b57e9730f6b547f44adeaa78a 3c9f&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle65a867e5barfoo t-breaks-records-for-auckland-home-sales-in-marchhtml

Little pop quiz for ya. Which company in this sector has by far the greatest proportion of its assets in the super hot Auckland market and thereby stands to gain the most from the ongoing torrent of new immigrants forcing Auckland's prices relentlessly higher ?

[winner69]

Still looking positive for SUM share price

As the market realises that 600 (ok maybe 550 then) sales is on the card for this year I reckon we will soon see. an all time high again ....maybe by end of month

C'mon 4 bucks, c'mon ......WOW

[Bjauck]

Sentiment in the sector is no doubt boosted by this news today
http://www.sharechat.co.nz/article/65a867e5/barfoot-breaks-records-for-auckland-home-sales-in-march.html?utm_medium=email&utm_campaign=Barfoot+breaks+records+for+Auckland+h ome+sales+in+March&utm_content=Barfoot+breaks+records+for+Auckland+ho me+sales+in+March+CID_f63b57e9730f6b547f44adeaa78a 3c9f&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle65a867e5barfoo t-breaks-records-for-auckland-home-sales-in-marchhtml

Little pop quiz for ya. Which company in this sector has by far the greatest proportion of its assets in the super hot Auckland market and thereby stands to gain the most from the ongoing torrent of new immigrants forcing Auckland's prices relentlessly higher ?
When/if a needle pops the bubble many have said has eventuated, which company will be hardest hit? Medium term Auckland has the demographic tail wind. A reason why I invested into MET, which, at that time I bought in,was out of favour for a number of reasons. Anglo-celts tended to settle all over NZ. When the recent immigrant groups become more established they may also spread out through NZ. Once other centres have diverse ethnic communities well-established then subsequent immigration may become more diffuse NZ-wide. Also if Auckland land development becomes easier and cheaper...that may affect moderate future price rises.

After previous Auckland property price surges, the rest of NZ has played catch up. I cannot quote comparative figures, maybe others can. I think over many decades Auckland has averaged an extra 1% pa over and above average NZ house price growth. That's off the top of my head - DYOR! Once recent immigrants become established, they may well decide their money can go further if they moved from Auckland to other localities.

[drcjp]

SUM to crack $3:50 today - can feel it in the waters :)

[winner69]

SUM to crack $3:50 today - can feel it in the waters :)


And 4 bucks by the end of the month. I have that feeling.

Hey Roger, it will catching up to MET soon. Parity in the retirement sector?

[macduffy]

Once recent immigrants become established, they may well decide their money can go further if they moved from Auckland to other localities.

That goes for all of us, not just recent immigrants! But it's no accident that Auckland is growing faster than other localities - it's where the jobs are! And growth feeds on itself as more population needs more services which needs more workers which attracts more businesses which need more workers - and so it goes on. Still a good future for future growth of retirement companies in Auckland, IMO.

[Beagle]

When/if a needle pops the bubble many have said has eventuated, which company will be hardest hit? Medium term Auckland has the demographic tail wind. A reason why I invested into MET, which, at that time I bought in,was out of favour for a number of reasons. Anglo-celts tended to settle all over NZ. When the recent immigrant groups become more established they may also spread out through NZ. Once other centres have diverse ethnic communities well-established then subsequent immigration may become more diffuse NZ-wide. Also if Auckland land development becomes easier and cheaper...that may affect moderate future price rises.

After previous Auckland property price surges, the rest of NZ has played catch up. I cannot quote comparative figures, maybe others can. I think over many decades Auckland has averaged an extra 1% pa over and above average NZ house price growth. That's off the top of my head - DYOR! Once recent immigrants become established, they may well decide their money can go further if they moved from Auckland to other localities.

They don't like it anywhere outside Auckland, too cold. Like it or loathe it there's simply no appetite at a central government level to turn off the immigration tap. If anything it appears as a nation we are so politically correct as to embrace substantial volumes of all races and creeds.


And 4 bucks by the end of the month. I have that feeling.

Hey Roger, it will catching up to MET soon. Parity in the retirement sector?

:lol: :lol: :lol: I love it, two good laugh's from two good mates in two days, I'm really starting to enjoy this thread again :)
Get out now mate before Norah dumps the rest of her 500K shares.

[Bjauck]

They don't like it anywhere outside Auckland, too cold. Like it or loathe it there's simply no appetite at a central government level to turn off the immigration tap. If anything it appears as a nation we are so politically correct as to embrace substantial volumes of all races and creeds.

Young working immigrants are needed to fill the spaces left in the workforce by the retiring boomers!

So all those migrants from Blighty should have gone to Stewart Island & Chathams - rest of NZ being too hot and sunny:) Would perhaps reduce the skin cancer rate...

[troyvdh]

Man alive...why are so many posters wanting/wishing the SP to assume a steep trajectory...(have a look at CEN)....are you folk intending to sell at 4 bucks ???? why not sell at 10 bucks...maybe in 5 years time after a share split !!!!

Surely (Im not perfect at all) but why cannot we adopt a more sophisticated approach to investing in our sharemarket ..like view the SM as an investment ......bloody hell if we don't ....no wonder folk keep on buying bloody houses...(OK I have a few !!1).....get my drift !!!!

[percy]

I think Auckland is a wonderful city.
NZ's wealth is not centred only in Auckland.
There are some very wealthy people living in ,The Bay of Islands,Whangarei,Coromandel,Tauranga,Taupo,Hastin gs,New Plymouth,Napier,Palmerston North,Kapiti Coast,Wellington,Masterton, Hamilton and perhaps Wanganui.,..
But the real wealth is off course in the South Island;Nelson,Blenheim,Motueka,North Canterbury,Culverden,Rangoria,Christchurch,Akaroa, Ashburton,Geraldine,Temuka,Timaru,Dunedin,Invercar gil and Queenstown..
So any retirement business operating solely in Auckland will do well in Auckland,and miss the golden opportunities the likes of Ryman and Summerset are taking the advantage of .!!

[troyvdh]

Great post..I could not agree more.But is not MET....expanding here as we'll....or am I wrong....anyways I'm holding all three till.........cheers

[winner69]

Man alive...why are so many posters wanting/wishing the SP to assume a steep trajectory...(have a look at CEN)....are you folk intending to sell at 4 bucks ???? why not sell at 10 bucks...maybe in 5 years time after a share split !!!!

Surely (Im not perfect at all) but why cannot we adopt a more sophisticated approach to investing in our sharemarket ..like view the SM as an investment ......bloody hell if we don't ....no wonder folk keep on buying bloody houses...(OK I have a few !!1).....get my drift !!!!

Have a few more mate, you are talking sense. I agree with everything you say.

It's all because the world has developed a gambling culture. That's why I want SUM to get to 4 bucks quick so I can move onto the next 'gamble'

Not good eh

Have a read of this great article. I am sure you will agree with every word. We all should read this

http://www.mckinsey.com/insights/strategy/our_gambling_culture?cid=other-eml-nsl-mip-mck-oth-1504

The start -

We tend to speak of short-termism as though it’s a problem that only afflicts investors or corporate leaders, but that’s not the case. Short-term thinking pervades our most important institutions, from government to households.We’ve created a gambling culture in which we tune out everything except the most immediate outcomes. If we’re going to meet our commitments to our children and grandchildren, and to society as a whole, we need to open up the lens and start taking a more responsible, longer-term view of the challenges we face.

There’s a host of reasons short-termism has taken hold in our culture, both in the United States and more broadly. Greed and the media’s reliance on daily bombardments of bad news certainly play a part, but more important, we’ve lost sight of our actual goals. It’s in everyone’s interest to provide opportunities for education, a reasonable level of healthcare, and a secure retirement for the most people possible, just as we should all be working to conserve our natural resources to assure that clean air, clean water, and renewable fuel sources are available to our children.

[Bjauck]

That goes for all of us, not just recent immigrants! But it's no accident that Auckland is growing faster than other localities - it's where the jobs are! And growth feeds on itself as more population needs more services which needs more workers which attracts more businesses which need more workers - and so it goes on. Still a good future for future growth of retirement companies in Auckland, IMO.

It would be interesting to see comparative population age profiles for AK, WGTN, CHCH, & DND. I suspect that AK would have the lowest proportion of oldies in its population. However in a few decades that could change as the recent migrants to Auckland approach retirement age (assuming that they continue to stay in Auckland and NZ)...maybe like the British colonials in the former Empire, the recent migrants to NZ will seek to retire back to their mother countries.

[ratkin]

There’s a host of reasons short-termism has taken hold in our culture

I blame the internet, buying and selling shares just so easy now, then you have all the forums etc tempting people from one stock to another. It not just stocks it everything. People cant be bothered even to read these days, for example i didnt even make it to the end of your post :-)

[winner69]

I blame the internet, buying and selling shares just so easy now, then you have all the forums etc tempting people from one stock to another. It not just stocks it everything. People cant be bothered even to read these days, for example i didnt even make it to the end of your post :-)

Agree, the worlds gone mad eh ratkin

Tried to say that in emoji talk but emojis don't seem to work on Sharetrader

Then you wouldn't have to read my post

[Mista_Trix]

http://www.pbs.org/newshour/rundown/dutch-retirement-home-offers-rent-free-housing-students-one-condition/

Really interesting idea.

[Beagle]

I think Auckland is a wonderful city.
NZ's wealth is not centred only in Auckland.
There are some very wealthy people living in ,The Bay of Islands,Whangarei,Coromandel,Tauranga,Taupo,Hastin gs,New Plymouth,Napier,Palmerston North,Kapiti Coast,Wellington,Masterton, Hamilton and perhaps Wanganui.,..
But the real wealth is off course in the South Island;Nelson,Blenheim,Motueka,North Canterbury,Culverden,Rangoria,Christchurch,Akaroa, Ashburton,Geraldine,Temuka,Timaru,Dunedin,Invercar gil and Queenstown..
So any retirement business operating solely in Auckland will do well in Auckland,and miss the golden opportunities the likes of Ryman and Summerset are taking the advantage of .!!

Shucks mate, you're making me want to change jobs and become a travelling salesman :)

[gv1]

Strangely, one of only few stocks which gets 70% margin lending. This says something about the stock.

Discl: sold most of mine though.

[winner69]

SUM to crack $3:50 today - can feel it in the waters :)

Today eh mate?

Getting closer hour by hour

[troyvdh]

Some people may have heard about this experiment before.....

Behaviour psychologists did an experiment with 4 year olds....I went something like this.

These kids were offered a piece of chocolate i.e. placed in front of them.

They were then told they could eat same know.

However if they were prepared to wait 15 min they would get two pieces.

Some waited some did not.

Years later "they" followed up these kids...probably approaching adulthood....

The experiment determined that those kids who were prepared to wait were in general ..more balanced and "successful" in their lives and did not display of any/or minimal narcissistic traits.

The above is I believe fairly accurate.I heard same on the national programme.

Just saying is all.

[neyney2010]

up mut lun yea ar

[macduffy]

An interesting article in today's Herald about a block of land in St John's Rd Auckland, owned by the St John's College Trust which is being offered for a 127 year lease, payment for use for that period up front. Known as "Parsons' Paddock", it's 2.5ha and touted as being suitable for a retirement village as well as a housing development. It would be a great location for the former, IMO, but is 2.5ha a viable size for one of the big three? Probably.

[sammiesmiles]

It seems SUM has started to take off again!

[macduffy]

It seems SUM has started to take off again!

May or may not be "informed" buying. AGM to be held tomorrow.

[NZSilver]

FNZC put out buy recommendation over last few days

[couta1]

Read the AGM spiel a couple of times,one thing that stood out to me is the comment that they have enough landbank for 6 years at their TARGETTED build rate of 300 retirement units per annum so looks like they are basically happy to chug out that number for a long time to come,hmmm a bit different from the Ryman approach.

[Beagle]

Read the AGM spiel a couple of times,one thing that stood out to me is the comment that they have enough landbank for 6 years at their TARGETTED build rate of 300 retirement units per annum so looks like they are basically happy to chug out that number for a long time to come,hmmm a bit different from the Ryman approach.

Once Quadrant sold out they appear to have simply hit the cruise control button.

[percy]

Read the AGM spiel a couple of times,one thing that stood out to me is the comment that they have enough landbank for 6 years at their TARGETTED build rate of 300 retirement units per annum so looks like they are basically happy to chug out that number for a long time to come,hmmm a bit different from the Ryman approach.

On my third read I came to the conclusion, that at some not too distant future, they will update the market with a bigger build number.I also think we will see an increase in the development margin.I also thought they were achieving their objectives,get the basics right,ie give the residents what they want,and the rest will fall into place.

[Harvey Specter]

Aren't they moving things in house? In which case, why ramp up till they get their systems/processes in place. High risk of multiplying errors.

[Beagle]

Has Norah resigned yet :)

[couta1]

Aren't they moving things in house? In which case, why ramp up till they get their systems/processes in place. High risk of multiplying errors.
The 300 unit build rate is basically priced into the current price so unless they ramp things up you wouldn't expect much upside for a long while.

[skid]

Yes,we dont want mora Nora :)

[couta1]

I've been working for another operator with lots of dementia and care in their portfolio and they are not performing half as well as SUM.

Seems not everybody is fixated on that aspect of the continuum...
Is the other operator one of the big 3? because if they are not it doesn't count.

[Beagle]

They have a portfolio of 17 villages

Must be that new tin-pot one that listed a while back, I forget the name, who cares ?

[drcjp]

tree fiddy.........interesting to see how long it lasts.