SUM - Summerset Group

[Ggcc]

Ok dr evil lol

[Food4Thought]

Ok dr evil lol

1 Billion Market Cap ...Soon

Wooooopsie - there are 220 million shares on market - they are now in the 1 Billion club and I recon there will be a few beverages in celebration tonight in a few board rooms and living rooms.

[Food4Thought]

5% increase in a day...Is there something I should know?
In sider knowledge?

Those fish are biting today

[winner69]

5% increase in a day...Is there something I should know?
In sider knowledge?

Those fish are biting today

Expected - punters realising Summerset grossly undervalued

Remember f16 NPAT likely to be $120m plus = 55 cents a share = multiple of 12 = share price >$6 by year end

Thats all you need to know

[Beagle]

Agree 110% with Winner on this one. Still very cheap considering the sector and the growth rate for this stock. $10+ with 3-4 years for those happy to enjoy a longer cruise.

[troyvdh]

I always get somewhat worried when there is so much ebullience .....that's when it tends to s... it itself...

[Food4Thought]

I always get somewhat worried when there is so much ebullience .....that's when it tends to s... it itself...

Sometimes you have to be excited when things are exciting as well. Have followed a few good ones and watched many bad ones. This one for me, is very good. I don't think it is over excitement at all. Over $8, then I may get a little nervous. It'll be right

[winner69]

Is this an all time high close today?

Nothing to get too excited over

It will be $6 before too long

Ryman getting back to its record high by the looks of it - long two years or so

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11626366

N.Z. posts new annual migration record
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11626329

Summerset are extremely well positioned with excellent pricing power on their new developments which will further boost development margins, maybe 22-24% margins are where we're headed !

Winner, mate I think we might have to have another look at our forecasts with a view to a further upgrade for 2016 and 2017.

One day the penny will drop that they can charge even more money for their units if they lock in weekly management fees for life. Just add 10 - 15%% to current expected weekly management fee to cover average inflation for the seven year average term and then add another 10 - 15% to the price of each unit up front and then focus your marketing on the fixed weekly fee for life, simple :D = massive further increase in development margins.

You should wander down to the annual meeting and suggest this revised pricing power model Winner...maybe give Norah a hearty farewell handshake after the meeting too eh, don't want any hard feelings remaining do we...she's probably responsible for originally encouraging their dog friendly policy...think how much good that's done for all our senior citizens :)

[Jinx]

Over a million dollars and 100 trades, this week I've seen stocks plummet while Sum stays strong, despite market sentiment.

[Food4Thought]

Over a million dollars and 100 trades, this week I've seen stocks plummet while Sum stays strong, despite market sentiment.

Too right. SUM hasn't taken off yet, how ever small holders and traders selling up. Super common scenario playing out. Love watching this. Happy holding

[trader_jackson]

I'm not sure what stocks you have been watching... or "market sentiment" you have been following...

Code | Friday Finish (22 April) | Most recent Finish | % change
SUM | 4.65 | 4.50 | -3.2%
NZX50 | 6858 | 6790 | -1.0%
DJIA | 18005 | 18041 | 0.2%

(Please correct me if I have any figures wrong with the above)
(most recent finish includes today's finish)

Not exactly a plummet, but I would certainly not say SUM is "staying strong"

[Beagle]

Anyone going to the annual meeting at 1.00 p.m. today ? What about you Couta1 ?

[winner69]

Anyone going to the annual meeting at 1.00 p.m. today ? What about you Couta1 ?

From what I hear it was a non event and hardly worth attending unless you wanted to give Norah a big hug.

[sb9]

From what I hear it was a non event and hardly worth attending unless you wanted to give Norah a big hug.

Could be the reason why the price didn't move up y'day or in fact dropped few cents...

[BlackPeter]

From what I hear it was a non event and hardly worth attending unless you wanted to give Norah a big hug.


Could be the reason why the price didn't move up y'day or in fact dropped few cents...

You mean hugging Norah drops the price? And I thought saying "good bye" to her should rise it?

[fungus pudding]

You mean hugging Norah drops the price? And I thought saying "good bye" to her should rise it?


Hugging Norah certainly wouldn't raise anything. :eek2:

[winner69]

Summerset ASM just seem to be another advertising/marketing tool - telling punterswhat a great place to live and work in

Very little else of substance - directors must hate them and see them as a necessary burden that comes with the job.

[winner69]

Bloody Norah (as the saying goes) - the SUM share orice collapsing

Stay strong winner - it'll get to $5 by xmas - have faith in your numbers

[NZSilver]

Haha classic popping of the share price after sharetrader ramping over the last month! Watch it fall....

[Beagle]

Bloody Norah (as the saying goes) - the SUM share orice collapsing

Stay strong winner - it'll get to $5 by xmas - have faith in your numbers

Ha, classic post but wasn't it $6 by Xmas ? Sounds like the annual meeting wasn't much more than a farewell to Mrs Norah Barlow event. I'm absolutely gutted I didn't have time to fly down to enjoy that unique opportunity.

[winner69]

Ha, classic post but wasn't it $6 by Xmas ? Sounds like the annual meeting wasn't much more than a farewell to Mrs Norah Barlow event. I'm absolutely gutted I didn't have time to fly down to enjoy that unique opportunity.

No $5 by xmas and then $6 after they announce the $120m plus earnings with the suggestion that another 30% growth n F17

[Beagle]

No $5 by xmas and then $6 after they announce the $120m plus earnings with the suggestion that another 30% growth n F17

Ah yes, That's the one, right you are. No worries here mate, we're on to a winner :)

[Food4Thought]

Ah yes, That's the one, right you are. No worries here mate, we're on to a winner :)

Definitely onto a winner. Many trades today. Where can I get a historical day # of trades, want to do a mini investigation.

[777]

Definitely onto a winner. Many trades today. Where can I get a historical day # of trades, want to do a mini investigation.


http://www.stocknessmonster.com

[777]

Haha classic popping of the share price after sharetrader ramping over the last month! Watch it fall....


Still waiting.

[NZSilver]

Patience..... Very important in investing

[Jinx]

Patience..... Very important in investing

Yea I agree, the suspense that's building up before the report comes out later this month is killing me ;)

[troyvdh]

Jinx...the market moves in mysterious ways...your comment "that's building up"....so has the SP....maybe the news has already been anticipated...?...As you know SP's go down as well......cheers

[Food4Thought]

http://www.stocknessmonster.com

What a good thing to share. Thank you 777, appreciate it. I shall look at numbers. How exciting.

I am getting a bit bored of refresh and don't have the time. Yet, my overview lately when ever there is a AGM, meeting etc is that the not very active people who want their money out of market with *often* not many shares, sell up. Yet some bigger holders keep on happily consuming these little guys up. Has happened for GXH too. Wish I would have had more patience there... yet saw a few different coloured lights that looked interesting. There may have been rainbows

Does anyone know the day Summerset was born?

[Food4Thought]

Jinx...the market moves in mysterious ways...your comment "that's building up"....so has the SP....maybe the news has already been anticipated...?...As you know SP's go down as well......cheers

Perhaps the future is already told, maybe it is not. Building up, a small drop down after a recent high. Rebuilding confidence after a few years of bad press. I would love to wager on this SUM SP hitting $6.00 before Monday PM April 30, 2018. Anyone know of anywhere this can be done?:t_up:

[NZSilver]

Yea I agree, the suspense that's building up before the report comes out later this month is killing me ;)

Which report?

[Lewylewylewy]

...I would love to wager on this SUM SP hitting $6.00 before Monday PM April 30, 2018. Anyone know of anywhere this can be done?:t_up:

Up, I'll take that wager. Buy my SUM shares off me and if you win, I'll buy them back for $6. If you lose wager, I win my shares back... I must say, I like your options here. ;)

[Food4Thought]

Yea I agree, the suspense that's building up before the report comes out later this month is killing me ;)

Is this report due soon? Bit of a drop to quick recovery... Delightful

[Jinx]

Is this report due soon? Bit of a drop to quick recovery... Delightful

As it turns out I'm silly and thought the annual report & forecast was due out in May, this was wrong and it won't be out until July

[Grunter]

Is this report due soon? Bit of a drop to quick recovery... Delightful

It seems the drop was a healthcare sector-wide drop. FPH did exactly the same thing, and then rebounded. MET dropped slightly then jumped.

[winner69]

Based on the revaluations that Ryman have reported i think i need to revisit my Summerset FY16 forecast

Probably NPAT will now be over the $120m forecast - heck thats more than 55c eps, enough to support a $6 share price later this year

[Food4Thought]

Based on the revaluations that Ryman have reported i think i need to revisit my Summerset FY16 forecast

Probably NPAT will now be over the $120m forecast - heck thats more than 55c eps, enough to support a $6 share price later this year


Yes, this is good. Rather exciting, and within my prediction. Certainly won't complain with a $6 share price. That would make for a good year

[Beagle]

More growth, rumour has it that's a very nice part of the country, ask Iceman :)
https://nzx.com/companies/SUM/announcements/282790

[winner69]

More growth, rumour has it that's a very nice part of the country, ask Iceman :)
https://nzx.com/companies/SUM/announcements/282790


And .... Summerset is on track to deliver 400 retirement units across its 21 villages in 2016.

Keep saying it so must be happening

So 400 times $X plus resales times $Y equals heaps - enough tosupport a$6 share price early next year

I think $X and $Y are goingbto be a lot higher than i first thought havingba look at Rymans numbers.

[Beagle]

Yes saying it so often that they seem extremely confident of a 33% increase in build rate this year like its a certainty.

[iceman]

Too true Roger. SUM already have their biggest village down here, RYM also a big one and apparently are nowhere near keeping up with demand

[Bjauck]

More growth, rumour has it that's a very nice part of the country, ask Iceman :)
https://nzx.com/companies/SUM/announcements/282790 Everywhere in NZ is nice part of the country.

[777]

Everywhere in NZ is nice part of the country.

You have never been to Otira.

[bohemian]

And what's wrong with Otira? I have fond memories of it.

[winner69]

You have never been to Otira.

Amazing piece of construction work that tunnel

Is the pub still there?

[couta1]

Apparently Boulcott in the Hutt Valley is very nice.:eek2:

[Beagle]

Apparently Boulcott in the Hutt Valley is very nice.:eek2:

Perhaps you could give Julian Cook a call and have a chat about the way forward.

[longy]

Perhaps mate you should give Julian a call and have a chat about the way forward. I hear they need some help and with your expertise in the industry maybe you could help ?

Yeah... it is nice. Surrounding by some of the most expensive St in the Hutt. Just a stone throw distance to where I'm living. I have not read much into the progress... I don't have issues with retirement village but parking for the staff, visitors and residence around there would be a worry though.

[Lewylewylewy]

It's not when the residents are parked that you should worry... It's when they're driving around lol

[Cricketfan]

It's not when the residents are parked that you should worry... It's when they're driving around lol

I live on the same road as one of their other developments (Ellerslie), now you have me worried!

[Bjauck]

It's not when the residents are parked that you should worry... It's when they're driving around lol
20-40 year olds have higher car insurance premiums than 70+ (presumably they have fewer accidents and thefts)
However the 70+ may well travel less and have a higher accident rate per km travelled. A neighbourhood with more seniors could well see the number of accidents drop.
http://www.carinsurance.org/2012/07/how-age-relates-to-car-insurance-premium-price/

[Gunny]

Got back in at 4.30 odd a little while back so pretty happy.

However if I listened to Dad, who is a resident, wouldn't have. Dad says "price to get in now crazy, they are advertising a lot when they didn't have to before".

And after regular visits of late where I have eaten the café lunch have to say the food service is great but the quality of the meals themselves get boring very quickly. Dad says "same supplier as the hospital with all the complaints" Mum says "pass the ginger nuts"

Dad is 90 and Mum is 85. Dad is still driving, god forbid.

All good overall

Gunny

[percy]

Got back in at 4.30 odd a little while back so pretty happy.

However if I listened to Dad, who is a resident, wouldn't have. Dad says "price to get in now crazy, they are advertising a lot when they didn't have to before".

And after regular visits of late where I have eaten the café lunch have to say the food service is great but the quality of the meals themselves get boring very quickly. Dad says "same supplier as the hospital with all the complaints" Mum says "pass the ginger nuts"

Dad is 90 and Mum is 85. Dad is still driving, god forbid.

All good overall

Gunny

Best time to advertise is when you are busy.

[Vaygor1]

Best time to advertise is when you are busy.

Normally I would agree with this statement, but not necessarily in this case...

8069



8070

[percy]

Normally I would agree with this statement, but not necessarily in this case...

8069


ATTACH=CONFIG]8070[/ATTACH]

Looks as though they will be extremly busy over the next 22 years.
This means we will be subjected to a lot of advertising.

[Food4Thought]

Looks as though they will be extremly busy over the next 22 years.
This means we will be subjected to a lot of advertising.

Summerset will have to compete with other aged care providers, and they are all after the same dollar. Marketing has to be kept classy and competitive. Crucial they keep their quality and service high in their cafes as word of mouth spreads quickly. People do not want to hear that the food at "so and so retirement village" is average. My experience with hospitality work is above average and I would thoroughly recommend that if you wish to keep customers happy, both permanent and visiting, you do not lower your level of quality, or increase prices by much if you have increased costs.

Better to have a busy happy cafe with more frequent visitors (and *insert any other business*) then to have a decreasing customer size who are put off by quality. Keep the customers happy and surprised with quality and above all exceptional service. Food is one of our primary needs and if you skimp on quality, you will see the result in many other areas of your business/life. Happy days for Summerset though, they will keep growing, because demand will outstrip supply and they are doing a solid job at keeping up their build rate.

[percy]

Summerset will have to compete with other aged care providers, and they are all after the same dollar. Marketing has to be kept classy and competitive. Crucial they keep their quality and service high in their cafes as word of mouth spreads quickly. People do not want to hear that the food at "so and so retirement village" is average. My experience with hospitality work is above average and I would thoroughly recommend that if you wish to keep customers happy, both permanent and visiting, you do not lower your level of quality, or increase prices by much if you have increased costs.

Better to have a busy happy cafe with more frequent visitors (and *insert any other business*) then to have a decreasing customer size who are put off by quality. Keep the customers happy and surprised with quality and above all exceptional service. Food is one of our primary needs and if you skimp on quality, you will see the result in many other areas of your business/life. Happy days for Summerset though, they will keep growing, because demand will outstrip supply and they are doing a solid job at keeping up their build rate.

Totally agree.
Ryman set the standard.
Now SUM and others have to raise the standard to be competitive.

[clips]

late surge.....

[Fox]

late surge.....
Was across the index, mostly affecting 1b+ capped stocks by the looks of it. Couta1 says it was index re-balancing, so someone needed some SUM shares quick, and a lot of them.

[Food4Thought]

Was across the index, mostly affecting 1b+ capped stocks by the looks of it. Couta1 says it was index re-balancing, so someone needed some SUM shares quick, and a lot of them.

Fox, you have sniffed something out. Think this will happen again, as SUM will get some big buy ins as they are seen to be more favourable with their brand improving in peoples perceptions. Think I have missed the boat for my next buy in opportunity...there is always a opportunity

[Fox]

Still a few more opportunities for those that can see them imo. As per the chart below, it seems we are edging on the upper boundary of the uptrend once again. Also there are quite a few large sell offers on the market at $4.75 and beyond, so there would be more downwards pressure at this point in time.

http://puu.sh/pcp8I/ab0af18fc6.png

[Food4Thought]

Still a few more opportunities for those that can see them imo. As per the chart below, it seems we are edging on the upper boundary of the uptrend once again. Also there are quite a few large sell offers on the market at $2.75 and beyond, so there would be more downwards pressure at this point in time.

http://puu.sh/pcp8I/ab0af18fc6.png

Typo I assume at $2.75... or I am very interested

[trader_jackson]

Typo I assume at $2.75... or I am very interested

Could be getting confused with ARV's target price this time next year?;););) :t_up:

[Food4Thought]

Could be getting confused with ARV's target price this time next year?;););) :t_up:

Trader_jackson - I sure hope not... then again I would be selling up everything I own and taking a major stake in SUM

Fox...I see what you did there...Nice recovery ;)

[winner69]

Still a few more opportunities for those that can see them imo. As per the chart below, it seems we are edging on the upper boundary of the uptrend once again. Also there are quite a few large sell offers on the market at $4.75 and beyond, so there would be more downwards pressure at this point in time.

http://puu.sh/pcp8I/ab0af18fc6.png

More recent view is better - start drawing a channel from about mid-January and see where its going

Mid-Jan was when punters started to really realise whats going to happen over the next year (from the 400 new builds)

Extend your channel lines out to 600 plus and watch with excitement as the squiggly line folows that channel up

[Beagle]

More recent view is better - start drawing a channel from about mid-January and see where its going

Mid-Jan was when punters started to really realise whats going to happen over the next year (from the 400 new builds)

Extend your channel lines out to 600 plus and watch with excitement as the squiggly line folows that channel up

What !...no beautiful gorgeous looking graph to go with this statement...come on mate, you're slipping and getting lazy :)

[winner69]

What !...no beautiful gorgeous looking graph to go with this statement...come on mate, you're slipping and getting lazy :)

Fox needs to do it for himself

That way he will appreciate the huge opportunity - more so than his long term chart

He'll be saying to himself - heck winner was right, this really is a pretty steep uptrend at the moment and not just edging up a bit as I thought

[Fox]

Fox needs to do it for himself

That way he will appreciate the huge opportunity - more so than his long term chart

He'll be saying to himself - heck winner was right, this really is a pretty steep uptrend at the moment and not just edging up a bit as I thought

Absolutely, cheers for you input Winner. I bought a parcel a couple of weeks ago and am just on the look out to add to that in the near future. I'm all for doing it myself and gaining knowledge so I can replicate my findings on other opportunities across the board.

[Food4Thought]

Why would P/E ratio be 11.64 on ASX and 12.27 on he NZX. I gather it is in relation to their market price. I thought they would be on par in relative terms.

[Food4Thought]

Anyone familiar with searching age groups for people immigrating to New Zealand?

[artemis]

Anyone familiar with searching age groups for people immigrating to New Zealand?

I'm sure the info is available from Immigration, meantime this artiicle yesterday has some broad info - it is mainly under 35s.

http://www.stuff.co.nz/business/80804893/the-migrant-debate-by-the-numbers-whos-really-coming-to-new-zealand

[Lewylewylewy]

Go to the gov stats website

[Food4Thought]

Thanks. Will have a good look at that. Looks like there is a bit of a sell down going on.

[cyclist]

Looks like there is a bit of a sell down going on.

That may well turn out to be the understatement of the day ....


(and from 1/6/2016) Think I have missed the boat for my next buy in opportunity...there is always a opportunity

Yep, there is always another time, or so it seems.

[Cricketfan]

Thanks. Will have a good look at that. Looks like there is a bit of a sell down going on.

That's quite a bit of a drop. Topped up a bit just now.

[Food4Thought]

That may well turn out to be the understatement of the day ....



Yep, there is always another time, or so it seems.

Wow, that's a bit more of a hammering than I realised. Is something going on we are not being told? Did Nora sell her parcel? :p

[percy]

Yes a big drop to $4.30 falling below the 100 day EMA $4.39 but still ahead of the 200day EMA at $4.17.
Looks as though there is a support level at $4.25 and another at $3.95.
I like the company and the sector they are in,so I will watch with interest.

[troyvdh]

Guys...look at the NZ 50....over the last 3 years...no offence intended ...look at the big picture...please...like when a market is reaching new highs...like how much potential exists for this trend to continue.....Just saying....Troy...

[Food4Thought]

Guys...look at the NZ 50....over the last 3 years...no offence intended ...look at the big picture...please...like when a market is reaching new highs...like how much potential exists for this trend to continue.....Just saying....Troy...

I agree with your statement Troy. Something that has been puzzling me for some time. Each drop another bigger gain.

My feeling and view is, New Zealand is a place where people want to live, not have to. So New Zealand share market will ultimately grow, and keep having demand for stocks. People with money, will keep buying into businesses, making money.

So current holders, sell up, sell in fear, yet the long term, the share market will grow. Long term, this is one worth having. Short term there will always be the ups and downs. Currently a opportunity for those thinking long term. New Zealand is one of the ultimate destinations of many many current foreigners, who have to put their money somewhere. And if New Zealanders sell up the rights to the ownership of businesses, they will feel the pain in the long term.

New Zealand in 10 years...20 years, as well as the world, in the future. That's one major consideration I think about when investing.

[Bjauck]

I agree with your statement Troy. Something that has been puzzling me for some time. Each drop another bigger gain.

My feeling and view is, New Zealand is a place where people want to live, not have to. So New Zealand share market will ultimately grow, and keep having demand for stocks. People with money, will keep buying into businesses, making money.

So current holders, sell up, sell in fear, yet the long term, the share market will grow. Long term, this is one worth having. Short term there will always be the ups and downs. Currently a opportunity for those thinking long term. New Zealand is one of the ultimate destinations of many many current foreigners, who have to put their money somewhere. And if New Zealanders sell up the rights to the ownership of businesses, they will feel the pain in the long term.

New Zealand in 10 years...20 years, as well as the world, in the future. That's one major consideration I think about when investing.
An opinion: Perhaps it is immigration which is actually propping up the NZ economy. I think Productivity growth has stalled. Without the necessary infrastructure which has not been built (as capital has been used for increasing the price of land) there will come a time when foreign immigration will have to be moderated and/or investment diverted to infrastructure needs. And there may come a time when the government may have to concentrate on increasing labour productivity without relying on immigrants for economic growth. What then will happen to the relentlessly increasing land values and the land owning companies such as SUM?

Disclaimer: SUM RYM and MET shareholder

[troyvdh]

Thankyou Bj...re productivity AUK is a basket case..seriously it is being propped up by res property valuations.....I ..as many others listen to RNZ..this morning a seemingly well informed (an economist) stated that Auckland was no where near any economic status...it has been rated as 69 th ....out of 85...I'm not joking...and beat this ...this info came from the Auckland council...!!!!!!

[Bjauck]

Thankyou Bj...re productivity AUK is a basket case..seriously it is being propped up by res property valuations.....I ..as many others listen to RNZ..this morning a seemingly well informed (an economist) stated that Auckland was no where near any economic status...it has been rated as 69 th ....out of 85...I'm not joking...and beat this ...this info came from the Auckland council...!!!!!! The NZ govt determines the investment environment and the scale of foreign immigration whilst the Auckland Council is left with coping (or not) with the influx of people and blamed for high land values, and lack of investment in new housing and infrastructure.

[longy]

Does any one have an idea as to why its SP diving in such a rush?

[Bjauck]

Does any one have an idea as to why its SP diving in such a rush?

In the last couple of weeks SUM sp is down about 9%; RYM down 5%; MET down 7%
With the polls showing Brexit risk is now over 50%, risk is off around the World. Perhaps with "risk" being "off", it is making the well-bid land values (particularly in Auckland) look more precarious.

[BlackPeter]

Does any one have an idea as to why its SP diving in such a rush?

Probably just sympathies with Metlifecare and Ryman ... and driven by the recent market dip. To be fair - MET and RYM had in the last 4 months a still much better run than SUM, but now they are dropping in sync. I don't think there is anything in the current trend due to any SUM specific events - and i don't see a industry specific problem (other than profit takers after a stellar run) either.

Pretty sure it just started with some people realising their nice recent earnings ... and than the flock of sheep following.

Personally not too worried - it just touched the MA100 - but obviously, always a good idea to be aware of the action.

Discl: used the recent drop to accumulate ... but than - I am not infallible either.:sleep:

[Bjauck]

Probably just sympathies with Metlifecare and Ryman ... and driven by the recent market dip. To be fair - MET and RYM had in the last 4 months a still much better run than SUM, but now they are dropping in sync. ...:sleep:
Ah yes...but in the last 6 months RYM and SUM are up by about the same %; MET considerably more. However, in the last 12 months SUM is up by 25% and RYM and MET by only 12%.

[Onion]

Ah yes...but in the last 6 months RYM and SUM are up by about the same %; MET considerably more. However, in the last 12 months SUM is up by 25% and RYM and MET by only 12%.

When I have compared the SP performance of these in the past it has been possible to select a period that shows that all of them perform "best" at some stage or another. Same now:

3m, 6m => MET wins (+16%, +26%)
12m => SUM wins (+24%)
5y => RYM wins (+233%)

[Fox]

For the TA's out there, is this a HS pattern?

[troyvdh]

Guys...have a look at the NZ50 over past 3 years.....steep huh...Ive been around a wee while....PLEASE remember...its my belief...I could be wrong...if one is achieving a return of around 7 %.....consistently ...be happy...just saying...troy...

[percy]

For the TA's out there, is this a HS pattern?

Well I see the long term trend is still intact.
Today the sp is $4.29 which is above the 200 day EMA at $4.17.

[Food4Thought]

...And there we go again:t_up:

[kizame]

For the TA's out there, is this a HS pattern?

No. It's not a head and shoulders. If that were to be a head and shoulders you might find RYM following the same pattern as they tend to be more or less in step with one another.

[BlackPeter]

No. It's not a head and shoulders. If that were to be a head and shoulders you might find RYM following the same pattern as they tend to be more or less in step with one another.

Hmm - I guess we agree that this is unlikely to turn into a HS pattern ... but maybe you could explain for us lay-people what RYM has to do with it? I can't see why a correlation with RYM should prevent a HS pattern?

Obviously - it depends as well at what you are looking at. If you take the most recent 3 peaks in SUM's graph, than obviously - this is no HS pattern, given that the 3rd peak is higher than the second.

8118

However - if I take the last 2 peaks and assume that the last peak is a head, than yes, it might turn technically into a HS pattern, but so may basically any ripple in any uptrend (i.e. highly insignificant) ... the thing about HS patterns is that you only can identify them when they are finished, and this one certainly is not (yet) and in my view not likely to do so.

8119

However again - what do you think has RYM to do with that?

[Hoop]

A sea of red in my watchlist - some of them I can understand (like AIR, THL, various banks), some I am somewhat surprised about. I wouldn't have thought that retirement villages (SUM, MET, RYM) and gentailers (CEN & Co) will be hard hit due to the decision of the English to leave the EU, but on the other hand - given that I can't understand the English people, why should I be able to understand the markets?

Any ideas how NZ retirement villages and power generators are linked into the English exitus?

Well I sold my SUM on Friday for $4.40.

My rationale was that if this turns into some form of credit squeeze (look at how European banks got hammered), it will have a negative impact on borrowing and that generally leads to housing corrections.

I will be watching closely and there may be a chance to buy in once the dust has settled or opportunities in other areas.

I pulled these comments from the Black Monday thread before they get lost in the flood of posts..

From the chart below.... the 14 June was a Technical breakdown for SUM as for some others on the NZX..Actually the NZX50 also got TA damaged on the 14th and has been trending down since then..

Why should retirement villages feel the heat from a NZX correction?
I guess investors look at history and remember what could happen...especially relating to Property Crashes..
SUM hasn't the history yet but RYM has...RYM got absolutely pounded by the bear during the GFC..it lost nearly 60% of value during 18 months downtrend and it took 5 years to get that capital value back...
OK..the crash and many other financial nasties (apart from Finance Company sector crash) never eventuated for NZ or Australia..so the doom for RYM wasn't real... but the technical damage to RYM shares was real and it took 5 years to rectify..

At the moment what has been rather unfortunate for NZ stocks is the timing..NZ stocks are having a breather after its solid record breaking rally and therefore weakening and correcting ..then Brexit entered the scene adding extra downward pressure..

SUM fell to test its critical conjuncture (black dotted circle)...then Brexit entered the scene.. the good news today is that SUM tested (low 203) and bounced up off it...This Chartist can say today that so far, the Brexit has had technically no additional effect on SUM

http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2024062016.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2024062016.png.html)

[Grunter]

I'm amused that there are those trying to use TA to predict the direction of a stock during a "grey swan" event.

[Fox]

Thank you for your input and clarifying the H&S pattern Hoop, I always appreciate your TA.

[Grunter]

This Chartist can say today that so far, the Brexit has had technically no additional effect on SUM



I'm sorry, that is absolute garbage. You are saying that Brexit has no effect on the pullback in SUM's share price, yet Brexit and the lead up to it has been the dominant reason for a pullback in stocks across the board as as a flight to safety has taken shape. Look at the retirement village sector as a whole (or even the market as a whole) and you will see that RYM and MET have also pulled back - this means that there is no company-specific driver for SUM's share price - which there must be for your analysis that Brexit has not affected SUM to be correct from a TA point of view.

[Hoop]

I'm amused that there are those trying to use TA to predict the direction of a stock during a "grey swan" event.

Grunter..please open your mind to allow TAer's to analyse investor's behaviour during these events...it adds to our knowledge of how we could able to take advantage of a situation...sometimes these black swan events are windows of opportunities and sometimes they are omens leading to sharp corrections...Just taking an emotional guess using your rearview experience to drive your investments forward is fraught with danger..The wise and successful investor uses all the tools in their toolbox for their decision making...there minds are open and flexible to possible change..

Grunter I suggest you add this tool to your toolbox..you don't have to use it but I strongly suggest you learn how to use it..as you never know it may come in handy for you later...

Remeber TA is just a graphic result of what has happened in the past up to what is happening now...TA can not predict the future..TA can however analyse the odds of a happening reasonably well,

TA is a tool for all investors...used properly it can aid you in your decision making process..It can also help some who either forgotten or wrongly perceived past share price and share trends ..It also used to correct personal thought biases, thereby correcting investors logical decisions...

[Fox]

I'm sorry, that is absolute garbage. You are saying that Brexit has no effect on the pullback in SUM's share price, yet Brexit and the lead up to it has been the dominant reason for a pullback in stocks across the board as as a flight to safety has taken shape. Look at the retirement village sector as a whole (or even the market as a whole) and you will see that RYM and MET have also pulled back - this means that there is no company-specific driver for SUM's share price - which there must be for your analysis that Brexit has not affected SUM to be correct from a TA point of view.

I think he is talking in terms of TA signals and the fact that the 200 day MA and upward trend lines are still in tact. There haven't been a cascade of selling signals, so as of today, the TA on SUM remains sound.

[BlackPeter]

cheers Hoop, I do appreciate your view and analysis.

However still not understanding why you think that the Brexit had no impact on SUM (and supposedly the other retirement stocks)? You might have noticed that SUM started already to rise this week from the latest drop (up to 440) and it only turned red on Friday afternoon when the unexpected BREXIT output became clear. Are you saying it would have done that otherwise as well? Why?

[Grunter]

Grunter..please open your mind to allow TAer's to analyse investor's behaviour during these events...it adds to our knowledge of how we could able to take advantage of a situation...sometimes these black swan events are windows of opportunities and sometimes they are omens leading to sharp corrections...Just taking an emotional guess using your rearview experience to drive your investments forward is fraught with danger..The wise and successful investor uses all the tools in their toolbox for their decision making...there minds are open and flexible to possible change..

Grunter I suggest you add this tool to your toolbox..you don't have to use it but I strongly suggest you learn how to use it..as you never know it may come in handy for you later...

Remeber TA is just a graphic result of what has happened in the past up to what is happening now...TA can not predict the future..TA can however analyse the odds of a happening reasonably well,

TA is a tool for all investors...used properly it can aid you in your decision making process..It can also help some who either forgotten or wrongly perceived past share price and share trends ..It also used to correct personal thought biases, thereby correcting investors logical decisions...

Appreciate your enthusiasm for TA, however I believe TA to be a load of rubbish and there is a weight of academic evidence to back me up on that.

[Beagle]

Grunter..please open your mind to allow TAer's to analyse investor's behaviour during these events...it adds to our knowledge of how we could able to take advantage of a situation...sometimes these black swan events are windows of opportunities and sometimes they are omens leading to sharp corrections...Just taking an emotional guess using your rearview experience to drive your investments forward is fraught with danger..The wise and successful investor uses all the tools in their toolbox for their decision making...there minds are open and flexible to possible change..Grunter I suggest you add this tool to your toolbox..you don't have to use it but I strongly suggest you learn how to use it..as you never know it may come in handy for you later...

Remeber TA is just a graphic result of what has happened in the past up to what is happening now...TA can not predict the future..TA can however analyse the odds of a happening reasonably well,

TA is a tool for all investors...used properly it can aid you in your decision making process..It can also help some who either forgotten or wrongly perceived past share price and share trends ..It also used to correct personal thought biases, thereby correcting investors logical decisions...

I have learned to respect and value your input so thanks again for continuing to share it. This bit I especially agree with.

[Grunter]

Furthermore, it is probably best to clarify that Brexit is a Grey Swan, not a Black Swan.

Whilst we did not know which way Brexit would vote, we could reasonably see this event coming (and had time to position accordingly), whereas a true Black Swan is entirely unpredictable - such as The Twin Towers Attack.

[Hoop]

I'm sorry, that is absolute garbage. You are saying that Brexit has no effect on the pullback in SUM's share price, yet Brexit and the lead up to it has been the dominant reason for a pullback in stocks across the board as as a flight to safety has taken shape. Look at the retirement village sector as a whole (or even the market as a whole) and you will see that RYM and MET have also pulled back - this means that there is no company-specific driver for SUM's share price - which there must be for your analysis that Brexit has not affected SUM to be correct from a TA point of view.

Grunter...The rot set in 10 days before the Referendum result...The result is a black swan event because the Mr Market had factored in a perceived remain result so not foreseen.. A Black Swan is a sudden unforeseen action causing sudden Systemic destruction, Financial/Political/ Behavioural/Cultural/Geographical and others which I can't think of)...A Back Swan effect doesn't have to look like a Block Buster Disaster Movie and be a physical in nature (Twin Towers)...actually the physical nature of Twin Towers was in terms of size of Global population and buildings a tiny to insignificant happening..It was the sudden financial data lost and sudden "systems" breakdown (Financial/Political/ Behavioural/Cultural/Geographical) that created that Black Swan Effect....

Therefore SUM chart had the "remain vote mostly built in to it last Thursday...

The SUM chart (investor) behavioural attitude has not changed by the black swan... We Chartists know this as there has been no major TA breakdowns nor anymore Technical damage since last Thursday...therefore the Brexit effect is not visible.....Yet!!

It doesn't mean the Brexit factor may not appear to play a part at some future point..it just means that Brexit did not start the SUM (and other NZX stocks) rot....The rot started 10 days before Brexit..Can't blame the Brits, but the charts do tell us we can blame ourselves, Investor exuberant behaviour of making our Equities too expensive..

This is the main problem I have with Media...they will blame Brexit "if" the NZX tanks and peoples finances start evaporating .... the English people will cop the Public (global) wraith thanks to the less educated media..Globally there could be lives lost due to some maniac over-enmotional reactions..

TA is showing that there are other more significant factors in play which caused the start of this rot.. not Brexit (I do realise it is a theoretical bear factor)..but the SUM chart hasn't showed this up yet as other bear factors are in play and masking any (if any) brexit effect.

Disc.....Edited several times

Disc: not a Pom

[BlackPeter]

Appreciate your enthusiasm for TA, however I believe TA to be a load of rubbish and there is a weight of academic evidence to back me up on that.

I never found name calling a particular helpful or convincing means in a discussion, but if it works for you, than I guess it clarifies for us the context you are coming from :p.

Nobody requires you to use TA ... it just means you close your eyes to one important factor (and yes, there are many other factors as well) influencing stock markets - and this is the human psyche. In my view one of the reasons TA works (sometimes) is because people are using it ... ignoring this fact just deprives you of one useful tool.

But hey - everybody to their own.

[Grunter]

Grunter...The rot set in 10 days before the Referendum result...The result is a black swan event because the Mr Market had factored in a perceived remain result as well as an action that has gone against the "systems commonsense" and has the potential of causing mass Systemic destruction, Financial/Political/ Behavioural/Cultural/Geographical and others I can't think of)...Therefore SUM chart had the "remain vote mostly built in to it last Thursday...The SUM chart (investor) behavioural attitude has not changed by the black swan... We Chartists know this as there has been no major TA breakdowns nor anymore Technical damage since last Thursday...therefore the Brexit effect is not visible.....Yet!!

It doesn't mean the Brexit factor may not appear to play a part at some future point..it just means that Brexit did not start the SUM (and other NZX stocks) rot....The rot started 10 days before Brexit..Can't blame the Brits, but the charts do tell us we can blame ourselves, Investor exuberant behaviour of making our Equities too expensive..

This is the main problem I have with Media...they will blame Brexit "if" the NZX tanks and peoples finances start evaporating .... the English people will cop the Public (global) wraith thanks to the less educated media..Globally there could be lives lost due to some maniac over-enmotional reactions..

TA is showing that there are other more significant factors in play which caused the start of this rot.. not Brexit (I do realise it is a theoretical bear factor)..but the SUM chart hasn't showed this up yet as other bear factors are in play and masking any (if any) brexit effect.

Disc: not a Pom

Brexit started weighing on markets well before the vote on Friday as investors repositioned portfolios and took views as to how they believed the vote would go. In the two weeks leading up to the events, the markets would swing based on which way the latest polling showed the result was likely to lean. Because of the above, Brexit therefore is not a Black Swan in the truest sense of a completely unexpected event. A Grey Swan is a more fitting description.

[winner69]

First time poster here, have been following this thread for a while since I became interested in Summerset.

Just want to say I believe a lot of you worry about a lot of things that don't matter in the long run to the performance of this company.

The guy with the best ideas on this company is Roger - he's hit the nail on the head on how to value retirement villages - it's all to do with underlying earnings. The drivers for underlying earnings growth are:

1) house price growth
2) the number of units that can be built, sold and resold

Everything else to do with this company is just noise.

Looking at Summerset, I see it as grossly undervalued - Summerset should be a similar performer to Ryman in terms of earnings growth in the long term, and I believe their P/E should converge to a similar level. For a growth company, a P/E of 11 is low, therefore RYM's 15 is more sensible in this climate of inflated P/E ratios. Given this, the value of SUM should be $5.85 at their current earning level.

I'm working on building a DCF model for SUM, but a year ago, their DCF valuation was $4.30. Since then they have had significant increases in underlying earnings as well as increased build rates, so this points to even better than predicted underlying earnings growth than originally modelled.

I think we worry about a lot of things that don't matter - even Brexit

Currently share price activity just the ups and downs (noise) as the share price steadily increases to $6 (based on all the things grunther mentioned about)

And TA is telling that story well

[Hoop]

I think he is talking in terms of TA signals and the fact that the 200 day MA and upward trend lines are still in tact. There haven't been a cascade of selling signals, so as of today, the TA on SUM remains sound.

True ..Only Short to medium sell signals have fired...Long term investors will still be "in" as their sell signals have not fired....but I would assume Long Termers will be watching to either sell out or accumulate depending on future SUM shareprice movements..

[RupertBear]

I am a newbie trader and very interested to learn more about TA. Can someone direct me to a good TA website or beginners guide to TA or any charting programes I could buy?? Many thanks

[Grunter]

I think we worry about a lot of things that don't matter - even Brexit

Currently share price activity just the ups and downs (noise) as the share price steadily increases to $6 (based on all the things grunther mentioned about)



Exactly. Brexit is a short term shock that hasn't changed the fundamental drivers for SUM

[Joshuatree]

I am a newbie trader and very interested to learn more about TA. Can someone direct me to a good TA website or beginners guide to TA or any charting programes I could buy?? Many thanks

"Using T/A to time entries and exits" in the Investment Strategies section a good place to go Rupert.

[RupertBear]

"Using T/A to time entries and exits" in the Investment Strategies section a good place to go Rupert.
Thank you Joshuatree

[Hoop]

I am a newbie trader and very interested to learn more about TA. Can someone direct me to a good TA website or beginners guide to TA or any charting programes I could buy?? Many thanks.

Hi Rupertbear...As a newbie I recommend playing around with free version charting software..When I started I got similar advice and I still often use the free stuff as over the years the free charting software has continued to improve..

To learn TA today is inexpensive and easy to locate....Use Google..

To start you on your TA journey click here...It is the Incredible Chart Homepage (https://www.incrediblecharts.com/)....The education section is one of the best around and they have a free version of charting software for you to download...Many charts posted on this forum site are products from Incredible Charts (free version)...
Enjoy
Hoop

Oh..I should mention ..if you want to chart Summerset group for example, for NZ stocks you have to go through a 3rd party (Yahoo) and use the Yahoo address Y_SUM.nz
Fletcher Building Y_FBU.nz The upper lower case is not sensitive Y_sum.nz will work.
You don't have to use Yahoo data for Aussi stocks..Tassal Group for example is TGR_ax
American stuff usually have a $ sign in front e.g S&P 500 is $SPX_us
Forex stuff end in _fx
Comparisions are joined e.g NZ$ V A$ is nzdaud_fx

[winner69]

Back over 460 and heading to new all time highs .....and over 5 bucks ....pretty soon

Quarterly sales out later this week should confirm on track to meet, if not exceed, the 400 new units they said they would achieve this year

And property prices still looking pretty good as well.

[winner69]

I reckon in the quarterly announcement they will include some quidance as to H1 profit will be - a huge increase over last year I reckon

[Grunter]

Looking for 39 Million revenue for 1H16, realised NPAT of 20 million.

Hopefully we hit 100 new units this Quarter.

[RupertBear]

.

Hi Rupertbear...As a newbie I recommend playing around with free version charting software..When I started I got similar advice and I still often use the free stuff as over the years the free charting software has continued to improve..

To learn TA today is inexpensive and easy to locate....Use Google..

To start you on your TA journey click here...It is the Incredible Chart Homepage (https://www.incrediblecharts.com/)....The education section is one of the best around and they have a free version of charting software for you to download...Many charts posted on this forum site are products from Incredible Charts (free version)...
Enjoy
Hoop

Oh..I should mention ..if you want to chart Summerset group for example, for NZ stocks you have to go through a 3rd party (Yahoo) and use the Yahoo address Y_SUM.nz
Fletcher Building Y_FBU.nz The upper lower case is not sensitive Y_sum.nz will work.
You don't have to use Yahoo data for Aussi stocks..Tassal Group for example is TGR_ax
American stuff usually have a $ sign in front e.g S&P 500 is $SPX_us
Forex stuff end in _fx
Comparisions are joined e.g NZ$ V A$ is nzdaud_fx


Thank you for that Hoop, I always read your posts and find them very informative. That Incredible Chart link is fantastic thank you its just what I was wanting.

[Mickey]

A $100 million Summerset retirement village has been approved by Nelson City Council as a Special Housing Area against the advice of council staff.

http://www.stuff.co.nz/business/industries/81767317/nelson-city-council-approves-retirement-village-for-sha

[beetills]

Isee according to the NBR Radius which hand intended to list is no longer
The article was behind a paywall so reasons not available.

[artemis]

There must be more to the planning staff objections to a SHA, as reported in the media. For example, these 'objections' look vague and I have to wonder if the planners tried to find a way to make it work, rather than ways to stop it. There does appear to be strong demand. I get that they have to say if the development meets the rules or not, but I hope they also offered solutions and not just problems.

The application for Saxton did not meet the Nelson City Housing Accord, did not align with the district plan and it was unknown whether the developer would be able to provide required storm water, water and transport infrastructure, however it was found the area could support the development. Other comments made to the councillors surrounded flood hazards due to a farm dam upstream and incomplete work on the Saxton Creek upgrade.

Then there was Councillor Mike Ward with an objection that the development should be near the shops.

[winner69]

Still on track for 400 sales new units .....and resales going better than i expected

FY real profit $120m is 55 cents a share - easily supports a share price witha 6 in front of it later this year

Oneday the market will wake up

https://www.nzx.com/files/attachments/239056.pdf

[Beagle]

Very strong result, very happy with that :t_up:

[Grunter]

Good result - am expecting 350 new sales for FY16, so 183 is ahead of target.

[BlackPeter]

Very strong result, very happy with that :t_up:

Agreed - SUM going from strength to strength. I do love positive surprises and two digit growth rates (particularly when holding) ...
Glad I topped up during the recent Brexit dip. Unlikely they will be that cheap again anytime soon. Thank you to the Brexiteers!

[winner69]

Good result - am expecting 350 new sales for FY16, so 183 is ahead of target.

Don't you believe what your management say?

Several times they have said 400 new units this year

A 350 result would be a disaster and send the share price into a tail spin.

[winner69]

Strong sales numbers

Wonder how much they realised per sale - i reckon more than most expect

That's the key number that will see reported profits higher than forecast

[Beagle]

Tony Alexander on Breakfast T.V. yesterday saying all of N.Z's housing stock is being re-priced upwards due to record low interest rates and the prospect of them staying ultra low for the foreseeable future. Predicts further strong gains to come. Auckland's rampant house price gains spreading to many popular places in N.Z. will see incredibly strong revaluation gains for the foreseeable future.
Prospects for strong profit growth over the medium term for SUM considering the lift in build rate for this year 400 v 300 last year and the above strong tailwind and strong development margins, looks very, very good.

[Grunter]

Don't you believe what your management say?

Several times they have said 400 new units this year

A 350 result would be a disaster and send the share price into a tail spin.

They have said they will build 400 new units, not sell 400 units. They said that they expect that they will sell close to the their build rate over the next few years, so I have been slightly conservative in my estimate.

[Beagle]

They have said they will build 400 new units, not sell 400 units. They said that they expect that they will sell close to the their build rate over the next few years, so I have been slightly conservative in my estimate.

Regardless, that's mere semantics as build rate and new sale rate are almost identical over time.

I can't help the feeling that the stock has been significantly derisked by today's announcement. Its quite a milestone to lift targeted build rate from 300 to 400 units per annum and they look like being on target to achieve that.

Resales were also very encouraging and the macro economic environment is highly supportive especially in Auckland where SUM have a lot of their new developments / stock.

The SP rerating today is well justified IMO.

[winner69]

Back on topic

rough and dirty way to estimate/guess/project/forecast Summerset underlying earnings is to take the number of expected sales and multiply that by a realised fair value adjustment number. Method has worked pretty well over the last few half years so must be pretty robust

See a trend in this series of numbers - $43k, $61k, $63k, $70k?

Hint - it reflects improved development margins and rising property prices in general

All part of the reason why Summerset reported NPAT will be ~$120m this year - about 55 cents a share - at a PE of 12 share price over $6 later this year / early next year

That trend noted above will accelarate this year. The $70k likely to be $75k - one reason why reported profit will be $120m plus this year (55 cents a share)

[Beagle]

That trend noted above will accelarate this year. The $70k likely to be $75k - one reason why reported profit will be $120m plus this year (55 cents a share)

I agree mate. Market conditions are highly supportive.

[Grunter]

That trend noted above will accelarate this year. The $70k likely to be $75k - one reason why reported profit will be $120m plus this year (55 cents a share)

I don't think it's particularly wise to go off the "unrealised" figure for the retirement village sector. Best to consider the realised NPAT.

In any case, realised NPAT was $37.8 million last year, and this year could be $45 million if Summerset exceed expectations.

[Beagle]

I don't think it's particularly wise to go off the "unrealised" figure for the retirement village sector. Best to consider the realised NPAT.

In any case, realised NPAT was $37.8 million last year, and this year could be $45 million if Summerset exceed expectations.

Yes and No. I think more to the point with the significant repricing of most of N.Z's housing stock, (certainly in all the popular locations), this really underwrites their realised profit for many years to come.

Metlifecare call this embedded value, (the difference in the current value of all their stock less what current residents historically paid for their occupation licences). Embedded value is growing at an extremely rapid pace which augers extremely well for medium term profit growth and as we all know its profit growth that drives the SP :t_up:

[winner69]

Real investment pros when valuing companies like Summerset tend to look at what the assets are worth - thus put a relative heavy weighting when assessing value on things like book value (which includes unrealised gains). After all a $500k unit is worth $500k whether its sold or not.

Underlying profit a good ongoing measure of how management is performing in their role of building and selling things.

Price book ratios a better guide than PE ratios

[Grunter]

Real investment pros when valuing companies like Summerset tend to look at what the assets are worth - thus put a relative heavy weighting when assessing value on things like book value (which includes unrealised gains). After all a $500k unit is worth $500k whether its sold or not.

Underlying profit a good ongoing measure of how management is performing in their role of building and selling things.

Price book ratios a better guide than PE ratios

No, they don't. You can't use unrealised profit in a DCF because there is no cash flow generated from the value of the asset increasing on paper. The only time that the asset affects the valuation of the company is when it generates a cash flow by being sold. These cash flows are unable to be determined as to when they will be generate because you can't determine when the asset will be sold/resold etc etc, nor for how much. The value of the asset stays on the balance sheet, not the cash flow sheet.

Retirement Villages are valued using a DCF model by professional analysts.

[Beagle]

The embedded value is one of the most critical factors in any valuation methodology because it underpins assumptions used by analysts in their DCF model's. There's already a vast body of evidence around how frequently these units change hands so analysts will be looking at the embedded value to assess future profit expectations.

[Grunter]

The embedded value is one of the most critical factors in any valuation methodology because it underpins assumptions used by analysts in their DCF model's. There's already a vast body of evidence around how frequently these units change hands so analysts will be looking at the embedded value to assess future profit expectations.

Which is factored in when they assume house price growth and sales figures to project future revenue. Unrealised adjustments are set to zero for future estimates.

[winner69]

NZ Super Fund sold a few shares - things like Yum and Coke must be seen as better bets

[Beagle]

Which is factored in when they assume house price growth and sales figures to project future revenue. Unrealised adjustments are set to zero for future estimates.

Seen plenty of DCF models and know how they work...just a whole bunch of estimations. Hardly surprising that we don't agree, it seems the analysts using their fancy DCF models don't either !
Five different analysts using five different sets of assumptions arrive at five completely different end results resulting in...you guessed it, five completly different recommendations, see so called consensus detail, scroll down a bit on the page that comes up with this link...looks like five different colours to me !
http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/

Never seen such a wide spread of opinion on a stock before. DCF valuations must be a really exacting process :)

[Grunter]

Seen plenty of DCF models and know how they work...just a whole bunch of estimations. Hardly surprising that we don't agree, it seems the analysts using their fancy DCF models don't either !
Five different analysts using five different sets of assumptions arrive at five completely different end results resulting in...you guessed it, five completly different recommendations, see so called consensus detail, scroll down a bit on the page that comes up with this link...looks like five different colours to me !
http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/

Never seen such a wide spread of opinion on a stock before. DCF valuations must be a really exacting process :)

Yep, you're right on that one. Comes completely down to the assumptions you make!

Sitting my CFA level 2 in December so trying to learn as much as humanely possible about them! I do have have a professional analyst's DCF for Summerset - target 5.15 and they set unrealised adjustments to zero so the model only goes by realised profits in future years.

Actually, I've noticed NZ analysts are using risk free rates of 4.5% in most of their models - maybe that's their long-term average, but I don't believe we will get anywhere near that over the next 5 years or so.

[winner69]

Yep, you're right on that one. Comes completely down to the assumptions you make!

Sitting my CFA level 2 in December so trying to learn as much as humanely possible about them! I do have have a professional analyst's DCF for Summerset - target 5.15 and they set unrealised adjustments to zero so the model only goes by realised profits in future years.

Actually, I've noticed NZ analysts are using risk free rates of 4.5% in most of their models - maybe that's their long-term average, but I don't believe we will get anywhere near that over the next 5 years or so.

I take it your professional analysts $5.15 is the same analyst who 4-traders have as the highest target - or just coincidence?

[winner69]

Actually, I've noticed NZ analysts are using risk free rates of 4.5% in most of their models - maybe that's their long-term average, but I don't believe we will get anywhere near that over the next 5 years or so.

One thing I've noticed is that most of (broker) analysts Use the same discount rate over all periods - you don't see many DCFs where an appropriate discount rate for each period of cash flow (ie lower discount rate in earlier years and higher discount rate in later years if there is an upward sloping yield curve just as one example)

[Grunter]

One thing I've noticed is that most of (broker) analysts Use the same discount rate over all periods - you don't see many DCFs where an appropriate discount rate for each period of cash flow (ie lower discount rate in earlier years and higher discount rate in later years if there is an upward sloping yield curve just as one example)

You would use the yield you get currently on a treasury with the same time period as your DCF model - i.e 5 year maturity if you only model out the next 5 years, rather than adjust the risk free rate on a year by year basis over the duration of the model, as you are trying to compare what you can invest your capital for right now, not in a year or three or five year's time

[Beagle]

Ms Troute looks like a good addition to the board to me with vast experience in customer services industries.

[Food4Thought]

Waiting with anticipation for the results approx 15th August :)

[Food4Thought]

Waiting with anticipation for the results approx 15th August :)

Early release of the cat?

[winner69]

I think today an all time high close .... yippee

Still very much undervalued

Real NPAT about $120m I reckon - 55 cents a share

[Fox]

What was the Winner69-prediction-o-meter for this one, $6 by Christmas?

[winner69]

Guru Ben Graham said 'Buy not on optimism, but on arithmetic.'

The arithmetic is -

Share price end of year $6 - 40 weeks to go - so 4 cents a week - so in 5 weeks sUM about $4.65

The optimism is -

Over $5.00 as the market realises this years earnings will be in excess of $120m

Fox - that was last March view

Price was $4.40 then

[Fox]

Should be in the $5's come next week assuming the game goes according to plan, so that view might not be too far off (I hope).

[couta1]

Summerset at $6, that means Ryman will be $12, I can live with that. Disc-Dont hold.

[trader_jackson]

Summerset at $6, that means Ryman will be $12, I can live with that. Disc-Dont hold.

Probably also means ARV will be $1.50... I can also live with this

[Fox]

Nice lead up to $5 as buyers get in on the last trading day before half year results on Monday morning. Things have been fairly subdued with the rest of sector (RYM, MET, ARV), so always nice to see this one stand out.

[trader_jackson]

Nice lead up to $5 as buyers get in on the last trading day before half year results on Monday morning. Things have been fairly subdued with the rest of sector (RYM, MET, ARV), so always nice to see this one stand out.

Yes, certainly now 0 room for SUM to produce 'average' results

[Beagle]

Nice lead up to $5 as buyers get in on the last trading day before half year results on Monday morning. Things have been fairly subdued with the rest of sector (RYM, MET, ARV), so always nice to see this one stand out.

Does this weary hound gather the faint sense of an information leak here ?...maybe. Whatever... I am very happy to see a nice big green arrow in this part of my portfolio this week.

[Beagle]

I've been soooooooo busy these last few weeks I haven't even had a chance to think about what we're looking for here tomorrow. Anyone got some thoughts they'd like to share on the subject ?

[winner69]

Firstly apologies for saying $120m noat this week. I was getting so excited and so far ahead of myself I didn't realise it was only the 1/2 year

But $51m for H1 is stunning, stupendous or whatever superlative you want to use

So well on track to $120m (plus) for full year

Thats 55cents / share - multiply by 12 and thats $6.60

Full bore ahead

[winner69]

Hey Roger - I reckon they read his forum

They mention and show Embedded Value a lot in their presentations - not often they have done that

[BlackPeter]

Firstly apologies for saying $120m noat this week. I was getting so excited and so far ahead of myself I didn't realise it was only the 1/2 year

But $51m for H1 is stunning, stupendous or whatever superlative you want to use

So well on track to $120m (plus) for full year

Thats 55cents / share - multiply by 12 and thats $6.60

Full bore ahead

Yep - nice one. 23.1 cents EPS - for only 6 months ... and a bullish outlook. This is definitely more than the analysts expected (consensus forecast was 40 cents for the full year) - i.e. expect the SP to adjust accordingly. Great start of the week - something for our Golden Monday thread?

Here is the summary of the success story:


o Underlying profit for 1H16 NZ$24.7m, up 44% on 1H15
o Net profit after tax of NZ$50.6m, up 42% from 1H15
o Total assets of NZ$1.5b, up 31% on 1H15
o 306 total sales of occupations rights, up 13% on 1H15
o 190 new retirement homes delivered, up 35% on 1H15
o Interim dividend of 2.6 NZ cents per share announced
o Development margin of 20.3%

https://www.nzx.com/companies/SUM/announcements/287174

[winner69]

Ryman seen as 'best in class' of the retirement village sector and used as a benchmark for perormance

Summerset metrics closing in Ryman's - and Summerset growth seems a lot higher at the moment

Price/book a good valuation metric. If Summerset was valued like Ryman on this metric SUM would be at $7.15

[Fox]

Great result and confirmed guidance for the 400 build rate target. Applying the same metrics as 2015, we get 23.30 * (38.94/16.53) = 54.88cps, which gives a PE of 9.04 (crude way of comparing earnings multiple for 2016 vs 2015, but gives a general idea). Sounds good eh Winner.

[Beagle]

Firstly apologies for saying $120m noat this week. I was getting so excited and so far ahead of myself I didn't realise it was only the 1/2 year

But $51m for H1 is stunning, stupendous or whatever superlative you want to use

So well on track to $120m (plus) for full year

Thats 55cents / share - multiply by 12 and thats $6.60

Full bore ahead

Yes a superb result by any measure / metric one wishes to use. So many positive things to say...but honestly its all there in the report so I will simply highlight a couple of real stand-out's for me.
5 year CAGR of Underlying Profit 44%...surely this is an absolutely outstanding achievement and surely makes this company the fastest growing retirement company by miles.
7 Years land bank of supply so there's heaps of room for this company to continue its rapid expansion
Cash flow up 33% - Cash flow the life blood of any business.
Nice move's shouting all residents across all villages drinks at happy hour and implementing exercise programme, "Use it or Lose It" Taken notes of that for myself :)
The move toward a full continuum of care model with Dementia unit will please Couta1.
Development margin at a record level and staying above 20% was also very nice to see.

Really coming of age this company. My updated valuation. Forecast underlying profit to Dec 16 $56m Underlying EPS 25.5 In my view a PE of 25, (only 5 more than the average NZX 50 stock) is easily justified on this company given the extremely favorable tailwinds prevalent in this sector as well as the companies superb track record of a compound average growth rate for 5 years of 44% per annum.
25.5 x 25 my Fair value now $6.38. Target price 12 months $8.00.

Yes mate they probably mention embedded value per unit now because its so high or maybe they do read this thread, if so,well done team !

[OldGuy]

Great to have my unwavering faith in this company validated....again :)

[silu]

Let's get the share price over $6 so I can tick off diving off the Galapagos Islands of my bucket list ok?

[Beagle]

If you can wrap your head around high long term compound growth rates you will begin to understand why a company like Ryman and now SUM has / is going to create tremendous long term wealth for its shareholders.

First up this is a fantastic business model with little or no tax ever paid and shareholders getting all future capital gains tax free !

The traditional Ben Graham formula V = historic EPS x (8.5 + 2g)

This formula has now been updated by many who realise that Ben Grahame was using a historical risk free rate of 4.4%, (current 10 year rate for Govt stock is ~ 2.3%

It now looks like this V = [U]eps x (8.5 + 2g) x 4.4 /2.3

Annualising the current result we get underlying EPS historic of 22.44 cps.

Now the big question what's a reasonable future growth rate for the next 7-10 years ?

Considerations - We know their compound average growth rate for the least 5 years has been 44%
We know they have an assured land bank supply for the next 7 years on hand currently.

Lets be conservative here and assume future growth is half the average growth rate for the last 5 years , say 22%, seems very reasonable to me.

Input that into the formula and we get V = 22.44 x (8.5 +44) x 4.4/2.3 = $22.54

Of course brokers will have the growth tailing off dramatically after 5 years in their DCF models with probably only 2% terminal growth rate after that...B.S. if you ask me.

If I use my cheap as chips 1g formula based on historical average growth rate and current years underlying projected earnings $56m (24.34 cps) and assume long term the risk free rate reverts to a more normal level of 4.4% I get v = 24.34 x (8.5+ 44) = $12.78.

Conclusion - I reckon the stock is very cheap and people are not understanding the outstanding growth rate that's being achieved and that's likely to be achieved going forward.

Bias / Disc: I own.

[OldGuy]

Correct, Roger. The market has systematically underpriced this stock since I started watching it 4 years ago...

[winner69]

If you can wrap your head around high long term compound growth rates you will begin to understand why a company like Ryman and now SUM has / is going to create tremendous long term wealth for its shareholders.

First up this is a fantastic business model with little or no tax ever paid and shareholders getting all future capital gains tax free !

The traditional Ben Graham formula V = historic EPS x (8.5 + 2g)

This formula has now been updated by many who realise that Ben Grahame was using a historical risk free rate of 4.4%, (current 10 year rate for Govt stock is ~ 2.3%

It now looks like this V = [U]eps x (8.5 + 2g) x 4.4 /2.3

Annualising the current result we get underlying EPS historic of 22.44 cps.

Now the big question what's a reasonable future growth rate for the next 7-10 years ?

Considerations - We know their compound average growth rate for the least 5 years has been 44%
We know they have an assured land bank supply for the next 7 years on hand currently.

Lets be conservative here and assume future growth is half the average growth rate for the last 5 years , say 22%, seems very reasonable to me.

Input that into the formula and we get V = 22.44 x (8.5 +44) x 4.4/2.3 = $22.54

Of course brokers will have the growth tailing off dramatically after 5 years in their DCF models with probably only 2% terminal growth rate after that...B.S. if you ask me.

If I use my cheap as chips 1g formula based on historical average growth rate and current years underlying projected earnings $56m (24.34 cps) and assume long term the risk free rate reverts to a more normal level of 4.4% I get v = 24.34 x (8.5+ 44) = $12.78.

Conclusion - I reckon the stock is very cheap and people are not understanding the outstanding growth rate that's being achieved and that's likely to be achieved going forward.

Bias / Disc: I own.

Now you being just plain stupid. (No offence mate)

Ben's formula not that good on super high growth companies - such growth didn't exidt much in his days and I would assume in his day it worked for normal stocks

The maths alone is just saying SUM should be on PE of 52.5 (using your g of 22%). See what I mean?

But whstever SUM completely undervalued at moment - put in on RYM mltiples it should be $7 to $8 at the moment ....and sum reckon RYM is still undervalued (cheap)

[Beagle]

All I will say my friend is look at the incredible wealth RYM has generated for long term shareholders. No broker was predicting that when they were growing fast.

Stock trades on a PEG rate based on underlying earnings of only just over 0.5, if we use your IFRS earnings including revaluations then :ohmy:

Maybe old Ben's formula not so stupid after all... Fantastic long term hold.

[winner69]

All I will say my friend is look at the incredible wealth RYM has generated for long term shareholders. No broker was predicting that when they were growing fast.

Maybe old Ben's formula not so stupid after all... Fantastic long term hold.

Agree

But Ben's formula gives Intrinsic Value as at today

So not $22 SUM share price today ......but sure but $22 one day ....sometime

All that embedded value

[Beagle]

Perfect retirement stock for this hound. Average compound growth rate over 5 years 44%...that's the key metric people need to try and get their head around.

[couta1]

Sum is a good company for sure but don't underestimate Ryman, they are the top dog around here and always will be especially with the compounding effect from Aussie, they are not just the top dog in terms of sale numbers but in every other way also.

[percy]

Sum is a good company for sure but don't underestimate Ryman, they are the top dog around here and always will be especially with the compounding effect from Aussie, they are not just the top dog in terms of sale numbers but in every other way also.

Happy to hold both.!!.lol.

[couta1]

Happy to hold both.!!.lol. Nothing wrong with holding Ryman senior and Junior that's for sure.

[percy]

Couta1,
I think this statement in today's announcement is significant;"It is intended that new villages will incorporate dementia capability."

[couta1]

Couta1,
I think this statement in today's announcement is significant;"It is intended that new villages will incorporate dementia capability." Certainly is and some may remember I said in a post a couple of years ago that Sum would incorporate this within a couple of years for a variety of reasons, a main one being not putting yourself at commercial disadvantage compared to the competition. I personally spoke to management about the dementia issue on several occasions whilst I had a large holding. Dementia demand is on a steep growth curve with many other companies currently adding on extra dementia capacity.

[percy]

Certainly is and some may remember I said in a post a couple of years ago that Sum would incorporate this within a couple of years for a variety of reasons, a main one being not putting yourself at commercial disadvantage compared to the competition. I personally spoke to management about the dementia issue on several occasions whilst I had a large holding. Dementia demand is on a steep growth curve with many other companies currently adding on extra dementia capacity.
Good on you,and well done.

[voltage]

would someone have a current PE for SUM. I have conflicting data, PE 22, PE 13

[winner69]

would someone have a current PE for SUM. I have conflicting data, PE 22, PE 13

Depends on whether one uses Reported NPAT or underlying earnings

I reckon NPAT for F16 will be 55 cents so on a PE of 9.2 forward earnins

Isn't that ridiculous

PS - roger says F15 underlying earnings will be 25.5 cents (earlier post) so on this basis on a PE of 20

[Fox]

would someone have a current PE for SUM. I have conflicting data, PE 22, PE 13
Lower PE would be for overall NPAT (incl. fair valuation gains on investment property) whilst the higher one would be for underlying profit. Have a look on the results presentation from todays announcement on slide 23 for the calculation of underlying profit.

[winner69]

Higher PE would be for overall NPAT (incl. fair valuation gains on investment property) whilst the lower one would be for underlying profit. Have a look on the results presentation from todays announcement on slide 23 for the calculation of underlying profit.

Other way around for the PEs fox

NPAT higher (lower PE) than underlying earnings (higher PE)

[voltage]

Other way around for the PEs fox

NPAT higher (lower PE) than underlying earnings (higher PE)

thanks but as a non accountant I find this confusing trying to establish a current PE. I notice gearing is around 33%. Is this high?

[Snow Leopard]

So big questions, and on which we will base our current and future values for this:

How are they achieving such rapid growth in numbers?
What pace can they sustain over the next few years?

Best Wishes
Paper Tiger

[Beagle]

Depends on whether one uses Reported NPAT or underlying earnings

I reckon NPAT for F16 will be 55 cents so on a PE of 9.2 forward earnins

Isn't that ridiculous

PS - roger says F15 underlying earnings will be 25.5 cents (earlier post) so on this basis on a PE of 20

Which is clearly cheap in my view for a company with a compound average growth rate of 44% for the last 5 years currently growing underlying earnings at 44%. PE of 20 is only the market average for the NZX50.

[Beagle]

So big questions, and on which we will base our current and future values for this:

How are they achieving such rapid growth in numbers?
What pace can they sustain over the next few years?

Best Wishes
Paper Tiger

They internalised their construction over the last couple of years and have lifted the build rate from 300 units per annum to 400 and expanded the development margin.

I anticipate a further lift in build rate in the next two years and further economies of scale with their procurement and development programme so I am comfortable with my assumptions of sustainable growth at about half the five year average they've experienced to date 44/2 = 22% CAGR for the next half decade. They have 7 years of land bank at the current build rate. I reckon they'll only take 5 years to utilise that.

[winner69]

So big questions, and on which we will base our current and future values for this:

How are they achieving such rapid growth in numbers?
What pace can they sustain over the next few years?

Best Wishes
Paper Tiger

That South African sprinter Van Niekirk at the Olympics was amazing this morning

Smashed he 400m world record that Malcolm Johnson set 17 years ago

Now the 2nd man to break 10 secs for 100m and 20 secs for 200m and now 44 secs for 400m

Summerset a bit like that - extra distance not really slowing this guy down

[Beagle]

Back over 460 and heading to new all time highs .....and over 5 bucks ....pretty soon

Quarterly sales out later this week should confirm on track to meet, if not exceed, the 400 new units they said they would achieve this year

And property prices still looking pretty good as well.

You're a legend mate. This from 5 July just over a month ago.... and some doubting thomas's thought we were really silly talking about $6 by Christmas :D

[Beagle]

Based on the revaluations that Ryman have reported i think i need to revisit my Summerset FY16 forecast

Probably NPAT will now be over the $120m forecast - heck thats more than 55c eps, enough to support a $6 share price later this year

This from 20 May 2016...pure Gold that post mate.

[winner69]

Roger - it's your mate Ben Graham that brings it home to me why Summerset has been a buy over the last few years and probably for a few more years as well

Not his formula but this piece of advice - 'Buy not on optimism, but on arithmetic.'

The arithmetic has always said a buy ... and I have faith in my arithmetic

[Raz]

I don't comment on this one as it is obvious where the share price is heading however...the movement of late is showing a touch of optimism

[winner69]

I don't comment on this one as it is obvious where the share price is heading however...the movement of late is showing a touch of optimism

The arithmetic said buy some time ago .......the optimism is will it reach over $7 to be on same price / book multiple as Ryman

[couta1]

The arithmetic said buy some time ago .......the optimism is will it reach over $7 to be on same price / book multiple as Ryman Your talking as if Ryman are standing still winner, which of course quite the opposite is true.

[Raz]

The arithmetic said buy some time ago .......the optimism is will it reach over $7 to be on same price / book multiple as Ryman

It has been a good buy on their model and management track record for a long time although it an't Ryman and as Couta states their competition an't standing still.

[winner69]

Your talking as if Ryman are standing still winner, which of course quite the opposite is true.

No I'm not, Ryman still great company

Big difference is that at this point in timevSummerset is accelsrsting at greater rate .....and it is being reflected in the share price movements of both over the last few years.

Last 2 years Sum +80% and RYM +20% on yahoo chart

[couta1]

No I'm not, Ryman still great company

Big difference is that at this point in timevSummerset is accelsrsting at greater rate .....and it is being reflected in the share price movements of both over the last few years. Thats how it appears when you compare the NZ scene but to put it in perspective, Sum are busy building a town whilst Ryman with their Aussie expansion are building a city,so over the long term who do you think will give you a better return?

[Bjauck]

Thats how it appears when you compare the NZ scene but to put it in perspective, Sum are busy building a town whilst Ryman with their Aussie expansion are building a city,so over the long term who do you think will give you a better return? RYM certainly have a good business model in NZ. Expanding to Oz brings greater risk. Other successful NZ companies have had mixed Australian ventures - Australia may seem misleadingly similar to NZ.

[Beagle]

No I'm not, Ryman still great company

Big difference is that at this point in timevSummerset is accelsrsting at greater rate .....and it is being reflected in the share price movements of both over the last few years.

Last 2 years Sum +80% and RYM +20% on yahoo chart

No surprise there as SUM's compound annual growth rate in underlying earnings over the last 5 years is 44% per annum, vastly outstripping the CAGR of RYM. SUM undoubtedly the fastest growing stock in the sector.
Long term shareholders in RYM will be very pleased but anyone who's bought in the last couple of years has every right to be disappointed with how the SP has underperformed relative to the sector and the NZX50.

Perhaps time for one of your superb charts mate, (picture says 1000 words) comparing MET, SUM @ RYM to the NZX50 over the last two or three years ?

P.S. I seem to recall that we did try and tell people a couple of years back that RYM had got well ahead of itself and we predicted 2 or 3 years of underperformance but the faithful didn't want to know.
SUM still my top pick in the sector for fast growth and most reasonable valuation. Seems a remarkable "Coincidence" that the market seems to be really starting to appreciate this stock since Mrs Barlow resigned.

[couta1]

RYM certainly have a good business model in NZ. Expanding to Oz brings greater risk. Other successful NZ companies have had mixed Australian ventures - Australia may seem misleadingly similar to NZ. They had the Aussie market sussed long before they committed themselves to it and have proven that to date, Aussie needs their model.

[OldGuy]

I've been saying it for ages that SUM will significantly outperform RYM over the next 5 years purely because it is at an earlier stage of maturity and hence diminishing returns are yet to kick in. I expect SUM to keep growing much faster than RYM for the rest of this decade, and happy to place a friendly wager on it :)

[couta1]

I've been saying it for ages that SUM will significantly outperform RYM over the next 5 years purely because it is at an earlier stage of maturity and hence diminishing returns are yet to kick in. I expect SUM to keep growing much faster than RYM for the rest of this decade, and happy to place a friendly wager on it :) Life is fragile, one of us may not be around by then to collect but hey I'd be happy to take a wager that Ryman will still be top dog in 5 years time.:)

[OldGuy]

no, the bet is that SUM will grow much quicker than RYM over the next 5 years, not that it will be bigger than RYM in 5 years! :cool:

[Raz]

Life is fragile, one of us may not be around by then to collect but hey I'd be happy to take a wager that Ryman will still be top dog in 5 years time.:)

So true, life and even companies are fragile, anyone for a wager they will keep growing at 44% pa underlying earnings for the next five years??

[Fox]

anyone for a wager they will keep growing at 44% pa underlying earnings for the next five years??

I think it would be foolish to assume that growth rate, but as Roger pointed out a more modest CAGR of 22% (very conservative for the next 5 years imo) would be more inline as growth tails off with larger operations.

[Bjauck]

Last 3 years sp: SUM ahead; MET not far behind; RYM below the NZX50 performance. Chart courtesy of the FT.com site.
8229

[OldGuy]

That chart looks funny. They don't all start from the same point, so not really a valid comparison :)

[Fox]

They start together at 0% at the XY origin at the end 1/3 of the graph. Overall it is just zoomed out a little to get the grand scheme of things :)

[OldGuy]

which means that its not actually comparing performance over the last three years as stated, then :)

[Beagle]

I think it would be foolish to assume that growth rate, but as Roger pointed out a more modest CAGR of 22% (very conservative for the next 5 years imo) would be more inline as growth tails off with larger operations. The dog has been known to be conservative from time to time, not usually around the food bowl LOL

[silu]

FWIW

Last 2 years they returned as follows:
RYM +23.11%
MET +37.15%
SUM +86.83%

5 year comparison
MET +193.50%
RYM +264.09%
SUM +281.88%

discl. obviously happy as I hold all 3

[Beagle]

FWIW

Last 2 years they returned as follows:
RYM +23.11%
MET +37.15%
SUM +86.83%

5 year comparison
MET +193.50%
RYM +264.09%
SUM +281.88%

discl. obviously happy as I hold all 3

The five year thing underscores the veracity of the business model IMO. Food for thought. In what other business is the vast majority of the profit tax free...handy having that IRD ruling on tax free resale of occupation licences isn't it !

[Bjauck]

They start together at 0% at the XY origin at the end 1/3 of the graph. Overall it is just zoomed out a little to get the grand scheme of things :)
I think I see what happened ...I selected the S&P index for a 3 year comparson. So the chart was recalibrated to 0% at the date that S&P took over management of the index. Sorry folks. How about this one...MET comes out on top.
8231

[OldGuy]

Thanks BJ. I see that your chart stops at 1 August 2016. Is it possible to show what it looks like up to today??

[stoploss]

No surprise there as SUM's compound annual growth rate in underlying earnings over the last 5 years is 44% per annum, vastly outstripping the CAGR of RYM. SUM undoubtedly the fastest growing stock in the sector.
Long term shareholders in RYM will be very pleased but anyone who's bought in the last couple of years has every right to be disappointed with how the SP has underperformed relative to the sector and the NZX50.

Perhaps time for one of your superb charts mate, (picture says 1000 words) comparing MET, SUM @ RYM to the NZX50 over the last two or three years ?

P.S. I seem to recall that we did try and tell people a couple of years back that RYM had got well ahead of itself and we predicted 2 or 3 years of underperformance but the faithful didn't want to know.
SUM still my top pick in the sector for fast growth and most reasonable valuation. Seems a remarkable "Coincidence" that the market seems to be really starting to appreciate this stock since Mrs Barlow resigned.

Sharesight tells me 10 K invested into each of the three returned all up profit incl dividends from 14/08/2014 -14/08/2016 the following profit.

SUM $ 8358.84 35.44 % PA
MET $ 3825.20 17.56 % PA
RYM $ 2546.46 12 % PA

Fair call Roger but you are rewriting history a bit .Remember your SUM love affair , then you were jilted by Norah and you got a bit upset. Declared RYM best of breed ,then wrote RYM off saying FV was $ 6.50 and thats where you would buy it . Then fell in love with both of them again, maybe SUM more so ...More flip flops than David Cunliffe .......
Overall great sector to be involved with , I still rate RYM best of breed , great we all making more than the bank pays .Happy that you made the most of the opportunity cost .

[OldGuy]

LOL. Was just thinking the same thing, stoploss. In fact, I recall having quite a few debates with Roger over the last couple of years where I declared SUM to be the best and he instead backed RYM. Knew he'd come to his senses eventually, though :)

[Bjauck]

Thanks BJ. I see that your chart stops at 1 August 2016. Is it possible to show what it looks like up to today?? No Problems...here is a 3 year and a 3 month comparison.
8232
8233

[OldGuy]

awesome, thanks BJ

[winner69]

Bjauck - so SUM is the best since 18/8/2013?

[LAC]

Surely the comparisons need to be done at the same stages of the business? And how can we really compare them with such a huge difference in start times? RYM would have had more risk as they were doing the R&D in the sector?

[Bjauck]

Bjauck - so SUM is the best since 18/8/2013? Only since S&P took over management of the NZ indices - I did not originally make an allowance for the recalibration to 0% at the time S&P took over. I think MET is the best performer over the full 3 year period.

[stoploss]

Sharesight tells me 10 K invested into each of the three returned all up profit incl dividends from 14/08/2014 -14/08/2016 the following profit.

SUM $ 8358.84 35.44 % PA
MET $ 3825.20 17.56 % PA
RYM $ 2546.46 12 % PA

Fair call Roger but you are rewriting history a bit .Remember your SUM love affair , then you were jilted by Norah and you got a bit upset. Declared RYM best of breed ,then wrote RYM off saying FV was $ 6.50 and thats where you would buy it . Then fell in love with both of them again, maybe SUM more so ...More flip flops than David Cunliffe .......
Overall great sector to be involved with , I still rate RYM best of breed , great we all making more than the bank pays .Happy that you made the most of the opportunity cost .

5 Year numbers ,obviously RYM paid out more in dividends .
SUM $ 27907.02
MET $ 20563.28
RYM $ 28560.40

[Beagle]

LOL. Was just thinking the same thing, stoploss. In fact, I recall having quite a few debates with Roger over the last couple of years where I declared SUM to be the best and he instead backed RYM. Knew he'd come to his senses eventually, though :)

I suffered from "Noragate" and sat out two whole years when the SP went from $3.60 to $4.00...didn't miss much in that timeframe. Back on board in March 2016 for $4.00...coincidence that the SP has taken off since Mrs Barlow announced her resignation ? :) I guess this post is evidence that sometimes it can be a rewarding experience to stick to one's investment principle's.

[winner69]

The last few years I have believed that SUM to be a better investment/trade than RYM. You know I think that Ryman has been overvalued for a few years time (reflected in it's share price) and that SUM has been undervalued (in actual terms as well as relative to RYM). SUM been my sector choice

RYM multiples are now lower. One could say getting to about fair value.

So how do SUM multiples today compare to RYM multiples? These are shown below. The highlighted bits is what SUM is worth (today) if priced at same multiple as RYM

That is why I'm sure there is more legs (greater profit) in SUM over the next year or so than Ryman

Even if applies a 'best in breed' or whatever to Ryman SUM is still relatively undervalued (by some way)

Essentially saying that SUM share price likely to increase by earnings growth PLUS a continuing rerating to somewhere near RYM multiples ..... and RYM will likely to increase by earnings growth as well. It appears as SUM earnings growth next few years going to be higher than RYM (as per oldguy and others comments) So whichever way you look at it likely to be (heaps) more made from SUM than RYM over the foreseeable future.

That's how I see it anyway

[winner69]

Then again one could look at those multiples and say SUM is fairly valued at the moment

Meaning RYM is still 20% over valued

(PS only $7.50 Roger - ha ha)

[couta1]

Then again one could look at those multiples and say SUM is fairly valued at the moment

Meaning RYM is still 20% over valued

(PS only $7.50 Roger - ha ha) Graphs can be made to say what we want them to depending on how far back we take them etc, each of the big 3 have had their times in the spotlight over the last five years in terms of SP acceleration, you'll make money out of all of them but in terms of setting the standard and management ,Ryman are the top dog without question.

[Beagle]

Graphs can be made to say what we want them to depending on how far back we take them etc, each of the big 3 have had their times in the spotlight over the last five years in terms of SP acceleration, you'll make money out of all of them but in terms of setting the standard and management ,Ryman are the top dog without question.

No question Ryman are the BIG / TOP DOG but also no question SUM are growing at the fastest pace...moving at a speed similar to when one of my Sydney Silky Terriers sees the neighbours cat. Its the earnings growth rate that rewards shareholders the most not who's the top dog and besides that big dog's can only grow at a more moderate speed because they're so big already.

[couta1]

Anyway I've said more than enough for now, I see no point in chasing ones tail, a playful experience but gets you no where.

[Beagle]

Fair enough mate but it can be fun eh having a good debate.

I see Harbour Asset Management filed an increased SSH notice this afternoon raising their stake by about 1% to 6%. I rate those guys and while I still prefer to manage my own money if someone put a gun to my head and said I had to pick an asset manager they'd be on a very short list of mine. No doubt they'll want more. Onwards and upwards eh folks !

[winner69]

Closed at 434, whoops forgot it had a 5 in front of it now, which is a pretty strong day in any ones language

Was 500 odd on Friday so up about 6% this week

We will get that 6 in front of it one day

[huxley]

What ever happend to new guy? I remember when this thing was trading @ $2.60ish and everyone thought it was going to the dogs... 😅💸

[couta1]

What ever happend to new guy? I remember when this thing was trading @ $2.60ish and everyone thought it was going to the dogs...  New Guy is now Old Guy so Old Guy is the New, New Guy but of course he's now Old Guy.:cool:

[Grunter]

130,000 shares gone through already today in the first 10 mins of trading. Institutional buying for sure, still some way to run yet

[Beagle]

130,000 shares gone through already today in the first 10 mins of trading. Institutional buying for sure, still some way to run yet

Harbour Asset Management have deep pockets and plenty of Grunt :)

[Raz]

130,000 shares gone through already today in the first 10 mins of trading. Institutional buying for sure, still some way to run yet

someone need the money for a private placement....

[Grunter]

430k now gone through, with a 100k single off market trade

[Ggcc]

Glad to be on board with this company and that I chose not to sell.

[winner69]

Close 543 - another solid day of gains

More to come I reckon

[couta1]

Close 543 - another solid day of gains

More to come I reckon She'll become overbought soon and then those that want a sub $5 entry will just have to bide their time aye.(Might even pick a parcel up myself at around $4.80)

[winner69]

She'll become overbought soon and then those that want a sub $5 entry will just have to bide their time aye.(Might even pick a parcel up myself at around $4.80)

If that happens could be tempted with RYM at $8.50 - maybe not, doubling up on SUM would be better bet



Had to say that mate after one of your comments the other dat

[couta1]

If that happens could be tempted with RYM at $8.50 - maybe not, doubling up on SUM would be better bet



Had to say that mate after one of your comments the other dat I always reckon Sum is worth around half of the Ryman share price when both are running hot(Ryman cold at moment) so that's means Ryman true value around $10.86 currently, at $8.50 I'd be loading the truck up big time, probably buy quite a few Sum as well at $4.25.

[winner69]

I always reckon Sum is worth around half of the Ryman share price when both are running hot(Ryman cold at moment) so that's means Ryman true value around $10.86 currently, at $8.50 I'd be loading the truck up big time, probably buy quite a few Sum as well at $4.25.

Interesting concept. Always interesting to find out different things

Chart is SUM share price (the blue line) while red dotted line is what % of RYM share price it was. Your 'half way' point is the straight line at 50%

For long periods SUM has been about 50% of RYM ....your method has some sense.

From mid-2013 to mid-2015 the relationship broke down. At one point SUM share price was only 30% of RYM share price. (either SUM was really 'undervalued' or RYM really 'overvalued'. Doesn't really matter but highlights (again) why getting into SUM during this time was the going to produce better returns (from a short/medium/long term trading perspective) than RYM until things 'normalised'. That is what I did - this just shows it another way

Yes the dotted line is heading up - wonder how far up it will go? If it goes above 60%/65% maybe time to switch to RYM (ha ha but I am opened minded). Worth updating every now and again

Thanks couta for bringing this up

[winner69]

One thing that chart highlights is that since listing SUM share price has increased by ~35% pa ....with dividends not a bad return for the buy and hold punters

But over 50% pa from late 2014 - that's what short/medium term traders aim for

[Raz]

Sold down substantial parcels in RYM & SUM today as have another investment commitment...ran out of time to hang in any longer..haha love the banter on here although my AIR weighing overall has taken the hardest hit..hardly surprising.

[Grunter]

She'll become overbought soon and then those that want a sub $5 entry will just have to bide their time aye.(Might even pick a parcel up myself at around $4.80)

Believed that SUM was valued at $5-$5.50 before the latest results. Now with that raised, perhaps another 15c to 20c has been added in that latest result.

Am watching for signs of profit-taking to get out if necessary and buy back in later

[couta1]

No worries winner, thanks for the wee chart.

[Beagle]

SUM been growing underlying earnings at 44% compound per annum so in effect just over doubling every two years whereas RYM been growing earnings at about 20% a year and takes four years to achieve exactly the same earnings growth so its no surprise really that their price relativity has been changing.

[couta1]

SUM been growing underlying earnings at 44% compound per annum so in effect just over doubling every two years whereas RYM been growing earnings at about 20% a year and takes four years to achieve exactly the same earnings growth so its no surprise really that their price relativity has been changing. But that's the thing, apart from the spurts and dips, Ryman SP has always been roughly double what Sum has and Sums 44% versus Rymans 20% hasn't to date changed that pattern because Ryman is baking a significantly larger pie if you get my drift. Admittedly it is drifting toward 60% at the moment but Ryman is currently off the boil.

[Beagle]

But that's the thing, apart from the spurts and dips, Ryman SP has always been roughly double what Sum has and Sums 44% versus Rymans 20% hasn't to date changed that pattern because Ryman is baking a significantly larger pie if you get my drift. Admittedly it is drifting toward 60% at the moment but Ryman is currently off the boil.

2016 was always going to be SUM's year with the massive increase in build rate from 300 to 400 units per annum...
RYM a great company, no question but SUM are the fastest growing and I believe you'll see that continue to be reflected in their relative SP performance going forward from here mate. I believe you'll see that relativity move to 70-75% or possibly even more over the next year or two. My mate the late Ben Graham tells me from his grave that SUM are going to be massive wealth generators for patient long term investors.

[winner69]

It started off at this 50% but because SUM have 'grown up' and now do most of development in house (and making bigger margins) that factor needs to change to reflect that

I see the factor going to 65% plus

Interesting concept - more 'rule of thumb' maybe?

Can't go past real numbers though - and one of those is that SUM was on the same Price/Book multiple as RYM it would be $7.12 (today). OK allow a premium for Ryman top dog status but SUM should really be at $6.50 plus

That's what I am trading to - earnings growth plus higher multiples over the next year

[couta1]

2016 was always going to be SUM's year with the massive increase in build rate from 300 to 400 units per annum...
RYM a great company, no question but SUM are the fastest growing and I believe you'll see that continue to be reflected in their relative SP performance going forward from here mate. I believe you'll see that relativity move to 70-75% or possibly even more over the next year or two. My mate the late Ben Graham tells me from his grave that SUM are going to be massive wealth generators for patient long term investors. We will agree to disagree, 70-75% would be a pipe dream IMO when you consider Rymans target of 850 units for 2017 and that doesn't include the Aussie numbers, furthermore they are aiming for their Aussie build rate to match their NZ build rate by 2020. If you do the projected maths on those combined unit numbers, we are looking at some serious compounding growth by 2020, a growth Sum will be unable to match unless they expand beyond NZ. All of the big 3 will/ have generated massive wealth for patient long term holders and astute traders have probably done just as well.

[Beagle]

We will agree to disagree, 70-75% would be a pipe dream IMO when you consider Rymans target of 850 units for 2017 and that doesn't include the Aussie numbers, furthermore they are aiming for their Aussie build rate to match their NZ build rate by 2020. If you do the projected maths on those combined unit numbers, we are looking at some serious compounding growth by 2020, a growth Sum will be unable to match unless they expand beyond NZ. All of the big 3 will/ have generated massive wealth for patient long term holders and astute traders have probably done just as well.

Totally respect your point of view mate and always a good idea to bat different viewpoints around to gather perspective. It seems to me (for suitable sites) that land prices in Melbourne have gone crazy with Ryman being outbid once or twice and / or paying lots when they do win a competitive tender process and yet on the other hand Local Government has recently placed some sort of major tax on foreigners buying their houses, (was it 7% stamp duty or something even higher I forget ?) which could have the effect of being somewhat off-putting to foreigners and dampen house prices down. Maybe a little squeeze coming both ends for Ryman do you think in terms of their margin's ?

On the other hand SUM have 7 years land supply, (assuming they have learned something from the Boulcott site), that gives them heaps of land bank to develop.

For what its worth mate (and I bow to your greater expertise with knowledge of the sector), but I think there's heaps of room for SUM to grow in N.Z.