SUM - Summerset Group

[bull....]

superfund buying not really moving the market?

[Xerof]

Their 'style' would almost certainly be "absorb selling", not to reach for offers with urgency. And IMO, almost everything they do will be off-market (code SP for NZX reporting)

[bull....]

looks like it wants to test the bottom of the range

[Beagle]

Their 'style' would almost certainly be "absorb selling", not to reach for offers with urgency. And IMO, almost everything they do will be off-market (code SP for NZX reporting)

Bang on the money I reckon.

[bartholemew]

Interesting there's been a 9% slide in share value over the past 30 days; is there a fundamental reason for this, or are we still seeing election jitters in the market as a whole?

[Beagle]

Weak sentiment in the sector due to lower forecast immigration possibly impacting the medium term price of housing I would say.
At present the following companies are trading at these percentages relative to their one month high.
SUM 92%
RYM 95%
OCA 91%
MET 95%
ARV 94%

[oldtech]

Thanks for that Beagle, that puts the sector into some perspective.

I have noticed the 50-day EMA heading towards the 200-day EMA, so I continue to keep a close eye on this.

[Lewylewylewy]

Anyone here buying at these prices?

I'm reducing my exposure to the SM, but nut selling SUM at these prices.

[JeremyALD]

Anyone here buying at these prices?

I'm reducing my exposure to the SM, but nut selling SUM at these prices.

Not selling, but not buying either. I see SUM as a solid long term hold, but it could be pretty flat for a while yet. The interesting thing is they've had some great announcements in the last year but it hasn't done any favours to the SP due to the concerns about the property market and construction delays.

[percy]

Anyone here buying at these prices?

I'm reducing my exposure to the SM, but nut selling SUM at these prices.

I adjusted our retirement sector holdings a few weeks ago,selling a few SUM and OCA.Already had "free ones" with RYM,which we held,back to near "free ones" with SUM, and have reduced our average cost of OCA."Well positioned."
I too think the sector will tread water for awhile, before the fundamentals drive it back on an upward trajectory.
I also think the worry of a property slow down,will turn out to be just that,a worry,which will prove to be unfounded.
And yes I will allocated more funds into the sector,but I do not know when that will be.Just not sure what affect rising interest rates will have on the sector,should they start to rise late next year.

[Mickey]

Not selling, but not buying either. I see SUM as a solid long term hold, but it could be pretty flat for a while yet. The interesting thing is they've had some great announcements in the last year but it hasn't done any favours to the SP due to the concerns about the property market and construction delays.

I'm curious about what makes you see SUM as a long term hold Jeremy? Even at the current SP, they only represent a 1.8% yield on current dividend and so for me - I'm currently losing income with the amount of capital that I've got tied up in them and would do better if it was sitting in my Heartland call account at 2.75%. Are you expecting them to show a similar growth to Ryman at some stage or are you expecting a much higher dividend later on down the track? I'd appreciate your opinion.

FYI - I'm more oriented towards dividend investing and try to achieve an average of >7% (after tax) p.a. across my share portfolio. Perhaps that is why I'm looking at these differently and maybe why they don't feel as if they fit as comfortably into my strategy as much as other shares do.

[JeremyALD]

I'm curious about what makes you see SUM as a long term hold Jeremy? Even at the current SP, they only represent a 1.8% yield on current dividend and so for me - I'm currently losing income with the amount of capital that I've got tied up in them and would do better if it was sitting in my Heartland call account at 2.75%. Are you expecting them to show a similar growth to Ryman at some stage or are you expecting a much higher dividend later on down the track? I'd appreciate your opinion.

FYI - I'm more oriented towards dividend investing and try to achieve an average of >7% (after tax) p.a. across my share portfolio. Perhaps that is why I'm looking at these differently and maybe why they don't feel as if they fit as comfortably into my strategy as much as other shares do.

Primarily I see it as a long term hold because of strong historical performance, demographic tailwinds and a very good leadership team. I'm not too worried about the Property market given they have performed in each downturn but I could see why this could bring some concerns.

Dividend play it is not, and I wouldn't expect it to be for sometime. However they have continually lifted dividends and if growth opportunities subsided I could see them lifting the dividend (but I think with the aging population and mentions of reviewing the Australian market) they'll be unlikely to significantly increase dividends in the near term in order to presue growth.

Ulimately there may be better times to enter into SUM and if there's a significant property downturn or Labour does something silly then SUM will be hit; however given their relatively low PE and the fact I see growth ahead for many years I'm not too worried. I have plenty of dividend stocks to balance out this one bouncing around for a little while.

If you're looking for strong dividends there's plenty of other stocks to look at on the NZX but I don't think most of them have the long term tailwinds or growth opportunities as SUM.

[fish]

I'm curious about what makes you see SUM as a long term hold Jeremy? Even at the current SP, they only represent a 1.8% yield on current dividend and so for me - I'm currently losing income with the amount of capital that I've got tied up in them and would do better if it was sitting in my Heartland call account at 2.75%. Are you expecting them to show a similar growth to Ryman at some stage or are you expecting a much higher dividend later on down the track? I'd appreciate your opinion.

FYI - I'm more oriented towards dividend investing and try to achieve an average of >7% (after tax) p.a. across my share portfolio. Perhaps that is why I'm looking at these differently and maybe why they don't feel as if they fit as comfortably into my strategy as much as other shares do.


I started buying more yesterday-its my only retirement/property stock and am balancing my portfolio

I just cannot see demand for their products falling and hence I dont believe their property values can go down or their financial models fail.Dont underestimate the aging population demand

Would like to buy more but will wait and see if sentiment drives the sp lower

[Lewylewylewy]

Percy, I'm interested to hear why you think property prices won't drop. They're already dropping in a short term measure, and more policy is coming to hammer it again.

[JeremyALD]

Percy, I'm interested to hear why you think property prices won't drop. They're already dropping in a short term measure, and more policy is coming to hammer it again.

Supply vs Demand. There's clearly not enough houses being built in NZ, and in particular Auckland to keep up with population growth and demand

[percy]

Percy, I'm interested to hear why you think property prices won't drop. They're already dropping in a short term measure, and more policy is coming to hammer it again.

I sometimes do not explain my thoughts clearly.Sorry.
Yes property prices are falling.
So will property prices falling,or a slow down in the property market affect the retirement sector?
I very much doubt it.
Both RYM and SUM are on record of saying the rise and fall of the property market has had no affect on them over the past 20 or more years.Think about that.I think they would know.
They are also on record as saying demand is driven by lifestyle decisions.These lifestyle decisions are made for a number of reasons,;
A partner having a health scare or dying.
Security,
Care.
Companionship.
So worry about the property market is just that, worry.
In the meantime us oldies are getting older.I guess everyone else is too.Property prices going up or down is not going to stop us ageing?

[James108]

I sometimes do not explain my thoughts clearly.Sorry.
Yes property prices are falling.
So will property prices falling,or a slow down in the property market affect the retirement sector?
I very much doubt it.
Both RYM and SUM are on record of saying the rise and fall of the property market has had no affect on them over the past 20 or more years.Think about that.I think they would know.
They are also on record as saying demand is driven by lifestyle decisions.These lifestyle decisions are made for a number of reasons,;
A partner having a health scare or dying.
Security,
Care.
Companionship.
So worry about the property market is just that, worry.
In the meantime us oldies are getting older.I guess everyone else is too.Property prices going up or down is not going to stop us ageing?

I guess the current development margin of 28% should be maintained then? and has nothing to do with a buoyant property market.

Before you say that the above development margin was achieved in a plataue phase of house prices - Bollox. It takes several years to develop a village and house prices have gone up a lot in the past 3 years.

My view is the development margin will trend downward but this may happen with a bit of a lag. Demand may remain but margin will not imo, I have modelled the long term development margin at 18%, 1% more than the SUM stated target of 17% (as I believe they have learnt a fair bit since they set that target). I still think this is an excellent company though and currently trading at a slight discount to fair value.

If it drops much further I will buy more shares, however this is almost at my portfolio limit.

[percy]

I guess the current development margin of 28% should be maintained then? and has nothing to do with a buoyant property market.

Before you say that the above development margin was achieved in a plataue phase of house prices - Bollox. It takes several years to develop a village and house prices have gone up a lot in the past 3 years.

My view is the development margin will trend downward but this may happen with a bit of a lag. Demand may remain but margin will not imo, I have modelled the long term development margin at 18%, 1% more than the SUM stated target of 17% (as I believe they have learnt a fair bit since they set that target). I still think this is an excellent company though and currently trading at a slight discount to fair value.

If it drops much further I will buy more shares, however this is almost at my portfolio limit.

I do not know what SUM or RYM will achieve in development margins,this year,next year or the year after.
I would expect there will be greater demand for some villages and lesser demand for others,and this will alter the development margins a great deal.A bit like some suburbs prices go up more than others.
I just think RYM and SUM's development margins will remain healthy for the foreseeable future..

[LAC]

Anyone here buying at these prices?

I'm reducing my exposure to the SM, but nut selling SUM at these prices.

I have reduced THL and bought SUM. Will also reduce RBD in favour of SUM. Not that I believe that THL and RBD are over priced but more along the lines that for the long term I have to constantly watch THL and RBD news, but I feel long term SUM is less of a bother for me constantly watching the SP and announcements etc.

[percy]

I have reduced THL and bought SUM. Will also reduce RBD in favour of SUM. Not that I believe that THL and RBD are over priced but more along the lines that for the long term I have to constantly watch THL and RBD news, but I feel long term SUM is less of a bother for me constantly watching the SP and announcements etc.

Three excellent companies.
You must find it hard trying to get your balance correct.

[LAC]

Three excellent companies.
You must find it hard trying to get your balance correct.

Sure is difficult, but I have decided for the next 8 months or so to spend less time on researching and following shares, (got an addition to the family so priorities have shifted). I will just continue to accumulate when funds available on my big 4 (RYM, EBO, SUM, TRA) until I start getting some time again. I think these 4 (imo) dont require a lot of my time. I will still spend my usual hrs on ST lol

[RupertBear]

I have reduced THL and bought SUM. Will also reduce RBD in favour of SUM. Not that I believe that THL and RBD are over priced but more along the lines that for the long term I have to constantly watch THL and RBD news, but I feel long term SUM is less of a bother for me constantly watching the SP and announcements etc.

I have just done the opposite, I sold my SUM and bought more THL ;) I maybe wrong but I think SUM may continue to drift lower for a while. If they do I will probably buy SUM more but I see better short term value in THL at the moment. Knowing me SUM will go up and THL will go down now! :D

[percy]

Sure is difficult, but I have decided for the next 8 months or so to spend less time on researching and following shares, (got an addition to the family so priorities have shifted). I will just continue to accumulate when funds available on my big 4 (RYM, EBO, SUM, TRA) until I start getting some time again. I think these 4 (imo) dont require a lot of my time. I will still spend my usual hrs on ST lol

Looks as though you are "well positioned" with family and shares.!
Well done with the family addition,[and the share selection]..

[Beagle]

I have just done the opposite, I sold my SUM and bought more THL ;) I maybe wrong but I think SUM may continue to drift lower for a while. If they do I will probably buy SUM more but I see better short term value in THL at the moment. Knowing me SUM will go up and THL will go down now! :D

Funny you say that mate. It was only a few days ago and they both closed at $4.92 and I was going to do another one of my silly polls comparing two completely different shares in two completely different sectors asking which one would perform the best over the next year....thing is I couldn't make up my mind. I like SUM long term but I suspect short term you have probably backed the right horse for the next year with a possible Chinese takeover but I will continue to have a bob or three each way :) I think the market is trying to tell us they might not make their target of 450 this year.

[winner69]

......

I think the market is trying to tell us they might not make their target of 450 this year.

Jeez if they don’t make 450 new units there will be a massive market reaction ...maybe like what happened with Metro Glass

It’s been a ‘promise’ made time and time again

[trader_jackson]

Jeez if they don’t make 450 new units there will be a massive market reaction ...maybe like what happened with Metro Glass

It’s been a ‘promise’ made time and time again

No worries. They are going to do it easy, cause they always do... the something like 48% growth rate Beagle loves to trumpet can only continue (although this years quarterly reports, and the company's own profit guidance would suggest otherwise)

Never mind whats coming up, like building pressures continuing (getting worse?), house prices slowing, or interest rates rising - take comfort from the almighty near 50% growth rate, which, to quote Beagle just under 2 weeks ago, is soon to be 6 years - so crack another bottle of champagne open instead! (I appreciate it is Sunday, so maybe save it till next week?)

And if they were to do the unthinkable, that is miss the 450 target, we would be significantly lower than the current $4.80... SUM only down a fraction (1%) since this time last year, when it was 'well known' (I thought) that they would do 450 units this year (and national was a shoe in for a 4th term), so if they were to miss it, or if the market (really) thought they were going to miss it, I think there would be sum chance the share price would drift down to $4 sooner rather than later.

On another note, SUM, as at today, is the worst performer of the 4 listed entities this past year (didn't count OCA "the new dog" as it hasn't been listed for the whole year) - wait, you telling me "the original dog" ARV is going to beat SUM for a 2nd or is it 3rd year in a row? No worries, next year is the year, right? ARV is Arvida Group Ltd and OCA is Oceania Healthcare Ltd - both in retirement, listed on the NZX and Oceania is even on the ASX - just a quick mention as I think some on this thread still don't know who these companies are, yet.

[Beagle]

Probably just the hound feeling a bit down about SUM shares, don't worry Julian has indeed reiterated that promise several times and a substantial underlying profit increase he made earlier this year has not been guidance that has been rescinded either. SUM shares are more frustrating to own at present than some others but in long term this is a license to print money.

Ignoring T.J.'s deep cynicism directly above :t_down: :t_down: who obviously had a worse weekend than me lol
P.S. The post above is so obviously incorrect, for one thing everyone knows Beagle's don't trumpet, they bark or howl :)

[trader_jackson]

Probably just the hound feeling a bit down about SUM shares, don't worry Julian has indeed reiterated that promise several times and a substantial underlying profit increase he made earlier this year has not been guidance that has been rescinded either. SUM shares are more frustrating to own at present than some others but in long term this is a license to print money.

Ignoring T.J.'s deep cynicism directly above :t_down: :t_down: who obviously had a worse weekend than me lol
P.S. The post above is so obviously incorrect, for one thing everyone knows Beagle's don't trumpet, they bark or howl :)

In the long term sum, actually all (in my view) listed retirement companies (including the original dog and new) are "well positioned" to print money.

My apologies, they do bark and howl - sometimes so much so that it is deafening and one can no longer think clearly;)

[Beagle]

I'm fully cognisant of the fact that not everyone is going to like the Beagle or his style of barking and I am not concerned one iota about that.
I do agree however that this license to print money is not something exclusively held by SUM.

[couta1]

I'm fully cognisant of the fact that not everyone is going to like the Beagle or his style of barking and I am not concerned one iota about that.
I do agree however that this license to print money is not something exclusively held by SUM. As we all know mate, SUM people like to put others down and use their old posts against them, I guess it makes them feel important and a cut above the rest of us.

[RupertBear]

The Call of the Beagle and Other Musical Sounds

My apologies, they do bark and howl - sometimes so much so that it is deafening and one can no longer think clearly;)[/QUOTE]

Personally I quite enjoy the sound of a Beagle sharing his thoughts :)

[Baa_Baa]

The breakdown of the 200dma, backtest fail and continued down in the SP doesn't inspire confidence. A year of sideways gyrations, it's not surprising the nerves get a bit frayed. Sentiment is everything, in the market, not here.

[percy]

The Call of the Beagle and Other Musical Sounds

My apologies, they do bark and howl - sometimes so much so that it is deafening and one can no longer think clearly;)

Personally I quite enjoy the sound of a Beagle sharing his thoughts :)[/QUOTE]

Luckily it falls on deaf ears with me.!!!.................lol.

[Beagle]

As we all know mate, SUM people like to put others down and use their old posts against them, I guess it makes them feel important and a cut above the rest of us.

Like water off a ducks (dog's) back mate https://www.youtube.com/watch?v=TdcCjpI4tS8
Thankfully SUM times as this makes my ears hurt its better to wear a protective weatherproof coat (AKA the ignore button) then as Percy suggests I too am deaf.
Anyway back to the company for goodness sake. Underlying profit forecast of $75 - $80m is still forecast, I reckon $85m which gives 38cps. At $4.80 the company is on a current year PE of just 12.6 and the year is nearly over so that will be a trailing PE soon !
Julian will see us right, Underlying profit of ~ $100m in FY18 I reckon.

[trader_jackson]

As we all know mate, SUM people like to put others down and use their old posts against them, I guess it makes them feel important and a cut above the rest of us.

Accountability is what is important to me, it is nothing personal - as I am sure I have said before for example, if you say something one week, you (or other posters) shouldn't get all up and arms about it the next when things maybe didn't go as planned.

I would also like to think the very securities we are commenting on (and their management) are accountable to what they say - such as the 450 target (reiterated relatively recently).

On the other hand, coming out and making blatant personal attacks and demanding apologies (for throwing one's exact words back at them lol) certainly does not help anybody on the forum. I would have thought

Anyhow onward and upward towards the Santa clause rally!

Disclosure: I do actually enjoy many of Beagle's posts

[JeremyALD]

I see no reason why they won't achieve 450 units this year. If they didn't i would be very surprised. They said in their Q3 update they were on track and they said it without any ifs or buts. You have a very good idea 3 months out when projects are completing and they have not said anything otherwise so I think they'll get there. I've actually heard houses are starting to be finished a bit more on schedule at the moment due to the slow down in house sales.

[Beagle]

I see no reason why they won't achieve 450 units this year. If they didn't i would be very surprised. They said in their Q3 update they were on track and they said it without any ifs or buts. You have a very good idea 3 months out when projects are completing and they have not said anything otherwise so I think they'll get there. I've actually heard houses are starting to be finished a bit more on schedule at the moment due to the slow down in house sales.

Thinking about it overnight I couldn't agree more. SUM has an excellent track record ever since they listed six years ago of always slightly exceeding build guidance and as you say as recently as last month Julian Cook confirmed they are on track to meet this year's guidance. Their reputation speaks for itself.
On another subject I see house prices according to REINZ are ostensibly flat in Auckland for the year to October and up 3.9% on average across the rest of the country. This exceeds the assumptions I have in my forecast model which was for 0% gain in Auckland and just 3.0% nationally. Development margin at 28% at the half year substantially exceeded my model of 22% average for the year. I am modelling $85m underlying profit for the year. Resales of units were slightly under my model for Q3 but were in line with my model for the first half. On balance I am more than happy with my forecast going forward. Disc: Holding a good sized position.

[bull....]

technicals look a worry , looks like it wants to test the 4.65 - 70 area?

[winner69]

technicals look a worry , looks like it wants to test the 4.65 - 70 area?

Long term channel wise 460 odd would be a disaster .....5 year uptrend over

Maybe the summary baa_baa suggested as to what’s going on in the market on the OCA thread is spot on

[peat]

yes they do bull....
trendlines mostly depict a break
9270

S/R exists around your stated area. except I would stretch it a bit wider say down to 4.50. its a bit fuzzy

while the shape over the last year looks precarious with that wonky W and two 78% retracements it could also be seen as a pennant bull flag, a period of consolidation before the next run.

[Brain]

yes they do bull....
trendlines mostly depict a break
9270

S/R exists around your stated area. except I would stretch it a bit wider say down to 4.50. its a bit fuzzy

while the shape over the last year looks precarious with that wonky W and two 78% retracements it could also be seen as a pennant bull flag, a period of consolidation before the next run.

From that I guess I can conclude that from a TA perspective this share could go either up or down in price. I am pleased that we can rule out the possibility that it will stay the same price.

[peat]

haha yeh exactly. I cant tell - it needs to declare itself more.

[bull....]

the move could be extremely large when it happens from that sort of pattern

[Food4Thought]

Don't worry guys. It can drop and then rise. Long term, keep your mind on the long term for this share and good companies in general.:) There's a lot of uncertainties with life, how ever the long term is rosie. Chin up, keep on researching.

[dabsman]

Would have liked to get some at 4.60. Got some at 4.65 and 4.66. I like what you are saying Bull - I cant understand this level but happy to buy more. Biggest part of my portfolio now and will keep buying at these levels

[Joshuatree]

Looking vulnerable again @ $4.68 close today. Land purchase no affect. Summerset Purchases Additional Land for Casebrook Village (https://www.nzx.com/announcements/310194)

[Lewylewylewy]

I couldn't help but buy some more today. Doubled my small holding.

[Ggcc]

Until they confirm their profit plus give a guidance for the year after things will stay stagnant for a while or head further south

[Lewylewylewy]

Agreed, but that's the bet

[dabsman]

Lower the better for me - I'll keep buying :)

Lower entry and lower DRP pricing is great IMO for my stage in investing

[winner69]

Thinking about it overnight I couldn't agree more. SUM has an excellent track record ever since they listed six years ago of always slightly exceeding build guidance and as you say as recently as last month Julian Cook confirmed they are on track to meet this year's guidance. Their reputation speaks for itself.
On another subject I see house prices according to REINZ are ostensibly flat in Auckland for the year to October and up 3.9% on average across the rest of the country. This exceeds the assumptions I have in my forecast model which was for 0% gain in Auckland and just 3.0% nationally. Development margin at 28% at the half year substantially exceeded my model of 22% average for the year. I am modelling $85m underlying profit for the year. Resales of units were slightly under my model for Q3 but were in line with my model for the first half. On balance I am more than happy with my forecast going forward. Disc: Holding a good sized position.

Terrible news in the headline - Auckland prices down the most since 2010
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11944135

But heck October median price was higher than September

[bull....]

3.5% fall , better start throwing some low ball offers at those retirement village units might get lucky

[trader_jackson]

3.5% fall , better start throwing some low ball offers at those retirement village units might get lucky

I was thinking about this... and although this is slightly unrelated, I saw Oceania advertising their exceptional Lady Allum (in Milford) apartments for $520k, about half the Milford average house price, so the price is going to have to drop an awful lot before the elderly decide they "can't afford" to move into these villages, especially those like may of Oceania's villages where they know they have easy access to care facilities when the time comes.

[Xerof]

We are seeing strong enquiry for our Casebrook village

This is all we need to know - it's a constant.

[percy]

This is all we need to know - it's a constant.

The margin on developing the additional land, will most probably be a lot higher, as they will already have the service blocks .

[Beagle]

All pervasive uncertainty reigned supreme in October for obvious reasons. I wouldn't read too much into one months real estate numbers but yeah I would acknowledge its essentially give or take a little bit flat. My model is based on flat Auckland real estate prices and 3% average growth throughout the rest of N.Z. where the vast majority of SUM's villages are.

[Beagle]

Must admit SUM days this month its been hard to be a SUM shareholder, especially when it hit $4.60 a while ago and the technical's seemed to scream SELL, although Winner would probably say that we're okay because it stayed within its 5 year uptrend squiggly line band thingy...whatever he call's it. Might be a little early to call the bottom but it seems to me its now somewhat more comfortable at the moment being a holder and maybe the recent test of the bottom of Winner's 5 year trend line has passed and we can look forward to better things in 2018...

[macduffy]

I'd be inclined to ignore these shareprice fluctuations, Beagle. We know that SUM is a longterm play and in the short term the shareprice can do what shareprices do.

:)

Disc: holding.

[percy]

I'd be inclined to ignore these shareprice fluctuations, Beagle. We know that SUM is a longterm play and in the short term the shareprice can do what shareprices do.

:)

Disc: holding.

Sage advice.

Fear , greed, and momentum drive charts,but fundamentals win out in the end.Get them right,and then wait for the market to wake up.If the market overshoots,sell a few,if the market has a buy one get one half price day,take advantage of it.It is called being "well positioned."

[Beagle]

I'd be inclined to ignore these shareprice fluctuations, Beagle. We know that SUM is a longterm play and in the short term the shareprice can do what shareprices do.

:)

Disc: holding.


Sage advice.

Fear , greed, and momentum drive charts,but fundamentals win out in the end.Get them right,and then wait for the market to wake up.If the market overshoots,sell a few,if the market has a buy one get one half price day,take advantage of it.It is called being "well positioned."

Yes good comments agree 100%. Fortunately I have been flat out at work as well as wasting the usual inordinate amount of time on here to worry too much :)
By and large a "happy hound holder" although the tail has been wagging a little slower than normal this month.

[Lewylewylewy]

It's annoying that with SUM you can't call them up to talk about profitability in a flat market (they don't pick up the phone).

Best I can assume is that fundamentals haven't changed so much in their history that they suddenly can't make money as a normal business without property increases.

Therefore business is still good. Worst case scenario they drop to the value of eps + nta, which puts them at $3.60. Of course if valuations drop further, that will litter the nta. Hopefully I won't be eating my words here, but I place all that as a slim chance. Most likely business is still good, as I mentioned. Therefore I see them going up on the next announcement stating that the core business is ok, then going up drastically in the event that property prices don't go down any more.

That's gotta be a good bet, right?

[dabsman]

People are still getting older and people still need solutions. Nothing has changed in its core business - unless tesla release an electric body to replace our aging ones?

[Beagle]

It's annoying that with SUM you can't call them up to talk about profitability in a flat market (they don't pick up the phone).

Best I can assume is that fundamentals haven't changed so much in their history that they suddenly can't make money as a normal business without property increases.

Therefore business is still good. Worst case scenario they drop to the value of eps + nta, which puts them at $3.60. Of course if valuations drop further, that will litter the nta. Hopefully I won't be eating my words here, but I place all that as a slim chance. Most likely business is still good, as I mentioned. Therefore I see them going up on the next announcement stating that the core business is ok, then going up drastically in the event that property prices don't go down any more.

That's gotta be a good bet, right?

Let's summarize what we know / guidance that's out there.
Julian Cook confirmed build guidance for the year of 450 units per month as recently as early October 2017 up from 400 last year.
They have nearly a six year history of doing what they say they will do and to the best of my knowledge have never missed build guidance before.
Development margins for the first half were at a record of 28%.
Their profit forecast issued much earlier this year for very strong growth in underlying profit has not been updated and would be required to be under the continuous disclosure requirements of the NZX so we can assume they are still on track.
REINZ data on average throughout N.Z. has been okay.
I think we're still on track for a very good year and the outlook is sound due to the very strong demographic tailwinds prevailing in this sector.
The underlying PE is very cheap. Potential risks and rewards appear well skewed towards the latter in my opinion.

[tipsy]

Looks like we're climbing our way back. Not a lot of sellers below 5 at present.

[couta1]

Looks like we're climbing our way back. Not a lot of sellers below 5 at present. You can thank the Ryman result for the climb.

[minimoke]

Only question now is can we leave today with a price with a 5 at the front

[bull....]

technicals look a worry , looks like it wants to test the 4.65 - 70 area?

gee wiz that area worked out well

[Ggcc]

And up up she/he goes

[Beagle]

And up up she/he goes

Finally...its been a tough year to be a holder but I am expecting a MUCH better year in 2018.

[Ggcc]

Finally...its been a tough year to be a holder but I am expecting a MUCH better year in 2018.

It has been a weird one. But it is above my purchase price and I am happy I did not need the money in a hurry. I am hoping for $5.60 by Christmas and a hopeful announcement that they are doing better than previously thought

[winner69]

Finally...its been a tough year to be a holder but I am expecting a MUCH better year in 2018.

COULDN'T RESIST THIS

SUM has a good day but still only remains fairly priced ...maybe a tad 'underriced' as just below the 50% of RYM sharerice mark

The market thinks SUM is only half as good as RYM. Whatever the reason the market obviously thinks it is a good one and won't be wavered from thinking so. The relationship is so entrenched one would have to think, just maybe, its a permanent relationship


thanks to couts for having this hypothesis ...which sort of has been proved

[Beagle]

COULDN'T RESIST THIS

SUM has a good day but still only remains fairly priced ...maybe a tad 'underriced' as just below the 50% of RYM sharerice mark

The market thinks SUM is only half as good as RYM. Whatever the reason the market obviously thinks it is a good one and won't be wavered from thinking so. The relationship is so entrenched one would have to think, just maybe, its a permanent relationship


thanks to couts for having this hypothesis ...which sort of has been proved

It is a fascinating hypothesis that has become more and more irrational over time as SUM have grown underlying earnings at a compound average rate of 48% and RYM at about 15% over the last five years. As you have acknowledged in a previous post SUM have traded at an average PE of about 27 since listing and are presently trading at just on half that level.
On the other hand we have RYM trading on an underlying PE of 25.5 based on the mid point of their 2018 forecast at yesterday's closing price which is about their average over the last five years.
Both companies face ostensibly similar market dynamics and it should be noted there are serious concerns about house prices across the Tasman too.
Looking forward logic suggests there are two compelling forces that should work to uncouple this 50% pricing relativity. SUM have much faster earnings growth and are coming off a much lower underlying PE.

Just because a pricing relationship has worked in the past is not nearly enough reason for a value investor (of which I am one) to follow this blindly going forward.
I for one will always follow earnings growth and value ahead of some arbitrary theory on pricing relativity regardless of how long or how illogical that pattern has existed for. The increasing absurdity of this relationship only adds to my resolve to increase my portfolio allocation to SUM. There you go mate, the fishing was good today, you got your bite :)
Disc: Added more SUM yesterday.

[Food4Thought]

Would have loved to add SUM more at $4.70. Tied up at the moment. Thrilled with the uptrend. Great week!

[bull....]

a quick 50c rebound not to shabby at all

[percy]

I'd be inclined to ignore these shareprice fluctuations, Beagle. We know that SUM is a longterm play and in the short term the shareprice can do what shareprices do.

:)

Disc: holding.

And that sage advice took under TWO weeks to be proved correct.

[Beagle]

And that sage advice took under TWO weeks to be proved correct.

Yes good advice but I was just venting a little frustration. Although technical's had been broken it was never an option for me selling at around $4.60-$4.70. Very deep value at that price. Should have topped up some more down there but pleased I got a few more at about $5 the other day after the 100 day MA had been broken through to the upside.

[Food4Thought]

Yes good advice but I was just venting a little frustration. Although technical's had been broken it was never an option for me selling at around $4.60-$4.70. Very deep value at that price. Should have topped up some more down there but pleased I got a few more at about $5 the other day after the 100 day MA had been broken through to the upside.

Hi Team

SUMmers here! Time to crack out SUM flip flops, slap on SUM Sumscreen (It's getting hot in here), chuck on the SUM hat and wrap on SUM shades... Life's pretty cool right now.

SUMone has to get excited about this bounce and the tide is bringing in SUM other boats too.

[BlackPeter]

Hi Team

SUMmers here! Time to crack out SUM flip flops, slap on SUM Sumscreen (It's getting hot in here), chuck on the SUM hat and wrap on SUM shades... Life's pretty cool right now.

SUMone has to get excited about this bounce and the tide is bringing in SUM other boats too.

Shall get really excited if & when the SP breaks out of its wedge ... (above 5.30) - let's see & wait whether we are in for another cycle or whether this is the time ...

[Beagle]

Just let compound earnings growth grow your investment over time.
All that's required is a sleepy approach and the occasional tail wag :) https://www.youtube.com/watch?v=BtBEmtj4FaM
Yes I am content but it hasn't done much overall this year so just holding and trying to exercise heaps of patience over the years ahead with this one.

[couta1]

Just let compound earnings growth grow your investment over time.
All that's required is a sleepy approach and the occasional tail wag :) https://www.youtube.com/watch?v=BtBEmtj4FaM
Yes I am content but it hasn't done much overall this year so just holding and trying to exercise heaps of patience over the years ahead with this one. Meanwhile Ryman hits $10.63 and is up 16% since a fortnight ago, that's very impressive for a boring, big cap, blue chip stock. PS-My ratio remains intact Mr Beagle.

[Food4Thought]

Just let compound earnings growth grow your investment over time.
All that's required is a sleepy approach and the occasional tail wag :) https://www.youtube.com/watch?v=BtBEmtj4FaM
Yes I am content but it hasn't done much overall this year so just holding and trying to exercise heaps of patience over the years ahead with this one.

Wish I kept my 20k-RYM back in 2010... Have learnt the hard way. Sold at a small loss (Yes, yes I am upset too). Would be singing a different song right now without that lesson.... Or maybe I wouldn't.... very happy holder of SUM.... SUMtime it has to return a similar return... yet that's a weeee way off. Very good modest return on this investment. RYM was one timely lesson of learning. I have had a very solid long term perspective and my basic graphing worked out better than forecast. This one is one I back 110%.... Yet not at 110% return... yet. I have almost always sold out too early. Experience is a wonderful thing. Chalked up some reasonable losses in the past. Trying to avoid those. Long term is where I will stick.

[minimoke]

Just let compound earnings growth grow your investment over time.
All that's required is a sleepy approach and the occasional tail wag
Sleepy works for me. RYM does its job for me while i doze and now I have SUM i'm ready for another 5 year nod off.

[winner69]

Meanwhile Ryman hits $10.63 and is up 16% since a fortnight ago, that's very impressive for a boring, big cap, blue chip stock. PS-My ratio remains intact Mr Beagle.

Completely rational that ratio eh Couts

[couta1]

Completely rational that ratio eh Couts Must be mate, the market can't be irrational for 4 years aye, perhaps it's been mesmorised by the power of the dark side (Reversion to the mean)

[winner69]

Must be mate, the market can't be irrational for 4 years aye, perhaps it's been mesmorised by the power of the dark side (Reversion to the mean)

Could be that the market ‘ranks’ certain stocks and no matter what the numbers say that ranking relativity will remain come what may. Like the market is saying Ryman is so much superior to Summerset (and others) it will be always valued much higher (in this case twice as much).

All things are not equal - even in the retirement sector. Not fair is it

A bit like Paritai Drive prices will always be higher than Ponsonby prices ...quite rational really.


Arvida is down Manukau way

[Lewylewylewy]

I'm pretty sure treating dogs is animal cruelty, you two ;-)

In any case, picking errors in valuations is how you make money on stocks. I'm sticking with SUM.

[Beagle]

SUM thing doesn't add up with this half price relationship to RYM but even if it sticks going ahead long term that's okay because I think RYM will do just fine long term too. (Heads you win). On the other hand if the market ever wakes up to the superior growth rate and valuation story of SUM you will win even more, (tails you win even more).
Any way you flip the coin, long term it looks hard to lose.

[Food4Thought]

When is the next announcement due? That's a pretty solid increase in this steady growth share for a day.
Had a look, looks like early January, first week or 2. I am imagining something good is brewing. That's a really good 60c gain for those recently buying in around the $4.70! (I didn't). Sure wish I had cash for that.

[Beagle]

2017 Q4 sales will be released to the market in the first 10 days of January 2018.

[BlackPeter]

Shall get really excited if & when the SP breaks out of its wedge ... (above 5.30) - let's see & wait whether we are in for another cycle or whether this is the time ...

Maybe one of the TA specialists could have a look ... but I think it did break out today of its wedge (and into the right direction ;) - which would be a great sign for things to come!

[bull....]

Maybe one of the TA specialists could have a look ... but I think it did break out today of its wedge (and into the right direction ;) - which would be a great sign for things to come!

im looking for a price around mar/april tops as resistance for me.

[Beagle]

All time high was about $5.60 in September 2016. I'm looking at that price as the long term resistance level. Any break above $5.70 on good volume would be a strong BUY signal for me.

[winner69]

Meanwhile Ryman hits $10.63 and is up 16% since a fortnight ago, that's very impressive for a boring, big cap, blue chip stock. PS-My ratio remains intact Mr Beagle.

Even as Ryman falls back to $10.48 your ratio essentially remains intact

Spooky eh possums .......must be a rational reason

[Beagle]

https://www.nbr.co.nz/article/no-signs-residential-property-market-retreat-sl-210772

[BlackPeter]

https://www.nbr.co.nz/article/no-signs-residential-property-market-retreat-sl-210772

Makes sense .... same number of people looking for houses as before the elections and not enough houses (talk alone does not build houses).

The market still works ...

[tipsy]

https://www.nbr.co.nz/article/no-signs-residential-property-market-retreat-sl-210772

Hmmm, from their own figures sales are down 20% from Nov 16, median price down 4%, while listings are up.

[Beagle]

Hmmm, from their own figures sales are down 20% from Nov 16.

Sale volumes are down, that's not news and has been that way for months but I think prices are holding up just fine.

[value_investor]

When is the next announcement due? That's a pretty solid increase in this steady growth share for a day.
Had a look, looks like early January, first week or 2. I am imagining something good is brewing. That's a really good 60c gain for those recently buying in around the $4.70! (I didn't). Sure wish I had cash for that.

At a PE of just 5 moving up to around a PE of 6 its actually not a big move in terms of valuation. Its more of a move to fair value from being undervalued. Still slightly undervalued I think at its price but depends on how you look at it.

Most mutual fund managers and kiwisaver managers need to report to their clients on short term basis mostly quarterly or yearly basis. A company that probably won't see any meaningful profit number or dividend for another few years is just no good.

[Beagle]

https://www.interest.co.nz/property/91266/qvs-latest-valuations-are-mixed-bag-average-values-flat-or-down-compared-year-ago

My forecast model at the start of this year assumed flat house prices in Auckland and 3% growth on average in the rest of N.Z.
Actual results are substantially better. Worth noting that the vast majority of SUM's villages are located outside of Auckland.

[bull....]

i was hoping it might go to previous highs early in the yr , couldnt stay above that 5.25 resistance oh well time to wait for the lows again in the range

[winner69]

i was hoping it might go to previous highs early in the yr , couldnt stay above that 5.25 resistance oh well time to wait for the lows again in the range

Quite intriguing share price action ......530 odd seems top dollar the market is prepared to pay

Seems so so long ago the share price reached 560

As of now less than 50% of the RYM share price .....must be some rational reason for that relationship

[couta1]

Quite intriguing share price action ......530 odd seems top dollar the market is prepared to pay

Seems so so long ago the share price reached 560

As of now less than 50% of the RYM share price .....must be some rational reason for that relationship It's called the" Couta Reversion Theorum Effect".

[Snow Leopard]

It's called the" Couta Reversion Theorum Effect".

I always assumed it was the
Couta Over/Under Typical Averaging (version 1).

Best Wishes
Paper Tiger

[BlackPeter]

Quite intriguing share price action ......530 odd seems top dollar the market is prepared to pay

Seems so so long ago the share price reached 560

As of now less than 50% of the RYM share price .....must be some rational reason for that relationship

Well, yes - but what would be the problem with that?

SUM has a forward PE of 11 and a forward CAGR of 17.5.

RYM has a forward PE of 17.7 and a forward CAGR of 14.3

Just says that SUM shareholders are already now (in terms of underlying value) much better off and will gain every year another roughly 10% (depending how you value growth) on top of what RYM shareholders gain.

Market is always right (in the sense of the law of the jungle), but it does not always make sense.

Unless you want to sell soon I can't see a problem with SUM shares being traded at a discount ...

And if you want to explain market logic -

why was $3 a year ago a fair price for a SML share and why is it now $7?
Why was a year ago $1000 a fair price for a Bitcoin, and now it is $18000 (or whatever)?

Market pricing does not need to make sense and good investing is exploiting these differences.

[Beagle]

Finding nonsensical situations is where you unlock value going forward. SUM CAGR in underlying earnings is actually 48% over the last five years, RYM ~ 15%.
I have RYM on a forward underlying PE of 26 at $200m and SUM at just a forward PE of 14.8 at $80m, very shortly to be a trailing PE. The old cliché that the market can stay irrational longer than one can stay solvent does not apply to me as I don't carry any debt. I am more than happy to exploit this situation going forward to generate alpha returns.
The Rolls Royce of anything isn't necessarily always a good thing as we've seen this week with their Trent 1000 engine. When something works like a well oiled Swiss watch and is priced like one there is no chance of market outperformance, all you'll get is market performance (assuming the watch doesn't break down or in any way whatsoever stop keeping time perfectly).
On the other hand there's plenty of opportunity for SUM other companies to improve and refine their systems by copying others.

Market pricing does not need to make sense and good investing is exploiting these differences.
I could not possibly agree more. One day we will see extreme market outperformance with the SP of SUM and I will be there to enjoy that, just don't ask me when that is lol.

Just unpacking this a bit more to remove confirmation bias here's how the analysts see it.
RYM closing price, forgive me its Saturday and I can't be bothered looking it up but from memory around $10.50 but average analyst value is well south of there at $9.24 so RYM trading at a 13.6% premium to average analyst fair value.
http://www.4-traders.com/RYMAN-HEALTHCARE-LTD-6492072/consensus/
On the other hand SUM closed at $5.18 but average analyst valuation is north of there by 7.3% at $5.56
http://www.4-traders.com/SUMMERSET-GROUP-HOLDINGS-10089438/consensus/
On average analyst views RYM therefore is overvalued on a relative basis to SUM by 20.9%.

[Beagle]

https://www.interest.co.nz/property/91266/qvs-latest-valuations-are-mixed-bag-average-values-flat-or-down-compared-year-ago

My forecast model at the start of this year assumed flat house prices in Auckland and 3% growth on average in the rest of N.Z.
Actual results are substantially better. Worth noting that the vast majority of SUM's villages are located outside of Auckland.

House sale volumes now recovering nicely too http://www.sharechat.co.nz/article/3b4d31e2/nz-house-sales-rise-17-8-in-november-with-strongest-growth-outside-auckland.html?utm_medium=email&utm_campaign=NZ%20house%20sales%20rise%20178%20in% 20November%20with%20strongest%20growth%20outside%2 0Auckland&utm_content=NZ%20house%20sales%20rise%20178%20in%2 0November%20with%20strongest%20growth%20outside%20 Auckland+CID_f2ba860965ba3aeab514049642f75b50&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle3b4d31e2nz-house-sales-rise-17-8-in-november-with-strongest-growth-outside-aucklandhtml

[winner69]

House sale volumes now recovering nicely too http://www.sharechat.co.nz/article/3b4d31e2/nz-house-sales-rise-17-8-in-november-with-strongest-growth-outside-auckland.html?utm_medium=email&utm_campaign=NZ%20house%20sales%20rise%20178%20in% 20November%20with%20strongest%20growth%20outside%2 0Auckland&utm_content=NZ%20house%20sales%20rise%20178%20in%2 0November%20with%20strongest%20growth%20outside%20 Auckland+CID_f2ba860965ba3aeab514049642f75b50&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle3b4d31e2nz-house-sales-rise-17-8-in-november-with-strongest-growth-outside-aucklandhtml


Westpac say ‘another quiet month for the NZ housing market with prices flat and sales still slow’. At best one could say it’s not getting worse.

Jeez the REINZ made it sound so fantastic in their releases ....almost as good as some of the bulln**** you see in NZX announcements.

[Beagle]

Westpac say ‘another quiet month for the NZ housing market with prices flat and sales still slow’. At best one could say it’s not getting worse.

Jeez the REINZ made it sound so fantastic in their releases ....almost as good as some of the bulln**** you see in NZX announcements.

Much tougher to get finance from the banks now mate. Completely different than this time last year and in that context and taking into account the recent elections I think the sales result for November was quite solid and gives some grounds for optimism.

[winner69]

Much tougher to get finance from the banks now mate. Completely different than this time last year and in that context and taking into account the recent elections I think the sales result for November was quite solid and gives some grounds for optimism.

Won’t get easier to borrow to buy a house so activity (number of sales) will continue to decline over the next few months and possibly bottom out at about 70,000 annual sales (average is over 80,000).

Good thing from a Summerset perspective is prices still increasing. I think it was 7 regions reached a new record.

So Summerset will continue to make exorbitant profits for a while ....might even do better than your forecast.

That declining activity not a good sign for outfits like Metro though ....tighter lending affects new builds as well.

[Beagle]

Weren't the Reserve Bank slightly loosening their chocker hold a little on deposit requirements the other day mate ? Immigration still tracking strongly, supply unable to meet demand...market overall in N.Z. looks well supported to me. Independent living homes and apartments are some of the best you'll find and satisfaction level's are very high.

[Food4Thought]

Out of interest I had a quick look at the share price 5 year chart. The drop in Mid year 2014, mostly due to Nora Barlows cheeky sell up that left investors with a sour taste in their mouth and a negative image for SUM. Uncertainty caused a great deal in lost ground.


Reference: NZX link to sale disclosure details: https://www.nzx.com/files/attachments/192444.pdf

For those who are not aware, Nora is now across the Ditch with Estia Health, The nations biggest Health Care Provider. Here is a recent article featuring Nora.
http://www.afr.com/business/health/estia-boss-leads-call-for-aged-care-staff-register-20171102-gzdjbe

I ponder about the future for SUM and a foreign business buying out the whole SUM.

The sweet thing about the graph, is that steady up trend, and strengthening position

[Beagle]

Some people reckon Beagle's are renowned for sniffing out trouble and love barking up a storm when they find it.
With help from the shareholders association it was great to make a difference for other shareholders, sometimes a Beagle is more effective with help
https://www.bing.com/videos/search?q=Beagle+barking&&view=detail&mid=287666AD5E1DAA500CA8287666AD5E1DAA500CA8&&FORM=VDRVRV

If Ryman want to make a takeover issuing their shares at 1:1 which is a fair ratio I'm all ears :D

[Joshuatree]

Yichh looks like those mutts have been poured into their skin and someone for got to say "when".:eek2:

[Snow Leopard]

My postbox says it has received a 'large document' from Summerset Scene.

Is this something from Summerset or postal spam ?

Tak

[winner69]

My postbox says it has received a 'large document' from Summerset Scene.

Is this something from Summerset or postal spam ?

Tak

A glossy magazine from Summerset sort of highlighting life at a village

I think ...didnt bother read it .....but the cover did say some crosswords inside ...to stop you going made.

Didn’t see much sense in getting it ...maybe missed the point

[QOH]

My postbox says it has received a 'large document' from Summerset Scene.

Is this something from Summerset or postal spam ?

Tak
No I've just got it out of my letterbox, looks legitimate, but waste of money, could have read it online if I was interested. Haven't opened it yet

[Snow Leopard]

thanks & thanks - I will tell them to recycle it :mellow:

[macduffy]

They're just following Rymans in this. "The Ryman Times" has been sent to shareholders since ..........forever?

:sleep:

[Beagle]

A glossy magazine from Summerset sort of highlighting life at a village

I think ...didnt bother read it .....but the cover did say some crosswords inside ...to stop you going made.

Didn’t see much sense in getting it ...maybe missed the point

There is a dog on the front cover so it must be worth a read :) Haven't had time yet but a real quick flick showed lots of glossy pictures and a crossword, what's not to like ?
Julian putting on a kinder face and looking to engage with shareholders and residents more, deserves a pat on the back for at least making some effort I would have thought. Don't Ryman have some similar publication ? Ryman times or something like that ?

[Food4Thought]

No I've just got it out of my letterbox, looks legitimate, but waste of money, could have read it online if I was interested. Haven't opened it yet

Would it be a good use of funds if you were to give it to someone who liked it? and as a result they became aware of Summerset and the great publication they have on offer? A form of marketing that shouldn't be discounted too early. There are all sorts of small steps for the long term that need to be considered. Maybe they found out that RYM had such a great response and people have requested something similar.

Over time it is probably a good way to communicate with a large number of SUM prospects, members and future members.

Bonus crossword. Excellent - I wonder which words they used. I have a few suggestions for the next one.

[Kay]

One for the coffee table when the elderly relatives visit over Christmas...a must for all holders

[percy]

I have always enjoyed Rymans.
Sum's is more up market and I am sure I will enjoy it too.
Just have to wean myself off the Glassons' one....lol.

[couta1]

I have always enjoyed Rymans.
Sum's is more up market and I am sure I will enjoy it too.
Just have to wean myself off the Glassons' one....lol. No worries Percy, you'll be still looking at the Glassons one after the others take residence in the household rubbish.

[Elles]

The magazine seemed well done to me, good to have some stories on the people's history and hobbies. It creates a feeling of community. Mostly interesting for the residents but good to keep shareholders informed of what they've produced. There was a cover letter from Julian commenting it's part of their new brand. If you don't want to receive the magazine in future you can email your CSN/holder nr to summerset@linkmarketservices.com

[minimoke]

If you don't want to receive the magazine in future you can email your CSN/holder nr to summerset@linkmarketservices.com
I'm still waiting for mine to arrive

[macduffy]

I'm still waiting for mine to arrive

Probably due to NZ Post's three day per week delivery regime!

[winner69]

I'm still waiting for mine to arrive

You don’t have much luck mate

Cryptos not delivered into your wallet and now Summerset goodies not delivered into your letter box

Wonder what else you missing out on?

[minimoke]

You don’t have much luck mate

Cryptos not delivered into your wallet and now Summerset goodies not delivered into your letter box

Wonder what else you missing out on?
And no perks from CGL before they binned me - its not been a good year!

[Food4Thought]

The December Effect. Summerset, (and probably across the board of the majority of stock prices) has that familiar December down trend. is it because people people have to pay for their festive season and cash in some stocks? Is there a technical term for it? Seasonality? XMas splurge funds? Increased uncertainty that the investment firms won't come back in January? Risk minimisation? Clear on the long term graphs and easy to identify.

Come on 2018, you are just around the corner.

All get's a bit wild at this time of year with those frantic festive season organisers

Happy Friday Everyone. Stay safe on the roads

[macduffy]

Is there a downtrend? I'd have said that SUM is trading quite healthily with the shareprice moving a few cents up and down - but perhaps chartists can detect something else? As for sharemarkets generally, December trading is often said to experience a "Santa rally". Didn't the NZ market reach a new high recently (yesterday?). Overseas markets are generally buoyant at present.

[BlackPeter]

The December Effect. Summerset, (and probably across the board of the majority of stock prices) has that familiar December down trend. is it because people people have to pay for their festive season and cash in some stocks? Is there a technical term for it? Seasonality? XMas splurge funds? Increased uncertainty that the investment firms won't come back in January? Risk minimisation? Clear on the long term graphs and easy to identify.

Come on 2018, you are just around the corner.

All get's a bit wild at this time of year with those frantic festive season organisers

Happy Friday Everyone. Stay safe on the roads

Hmm - if there is such a thing as a December downtrend, then my portfolio is certainly behaving quite adversary :t_up: and I like it!

However - never heard of such a thing - quite the contrary, most people talk about a XMas rally. But sure - not all stocks go upwards all the time, but if retirement stocks are currently a bit sagging: blame the new government and not Santa Claus! They deserve it - nothing wrong with December.

[Food4Thought]

Hmm - if there is such a thing as a December downtrend, then my portfolio is certainly behaving quite adversary :t_up: and I like it!

However - never heard of such a thing - quite the contrary, most people talk about a XMas rally. But sure - not all stocks go upwards all the time, but if retirement stocks are currently a bit sagging: blame the new government and not Santa Claus! They deserve it - nothing wrong with December.

Happy to be wrong. Didn't expect to go above $5.20 today. SUM vs RYM half price boundary.... is that now broken? Are people exiting RYM and coming onto in for SUM gains.

[Beagle]

Happy to be wrong. Didn't expect to go above $5.20 today. SUM vs RYM half price boundary.... is that now broken? Are people exiting RYM and coming onto in for SUM gains.

Yes I feel a disturbance in the force lol. Couta1's mean reversion theory has been slightly breeched. Surely a temporary thing and the truly compelling logic of RYM being exactly twice the price of SUM will resume next week ;)

[couta1]

Yes I feel a disturbance in the force lol. Couta1's mean reversion theory has been slightly breeched. Surely a temporary thing and the truly compelling logic of RYM being exactly twice the price of SUM will resume next week ;) Dead right Beagle, the Couta Theorum has stood and passed the test of time.

[Ggcc]

Earnings upgrade. Beagle you were spot on!!

[LAC]

Earnings upgrade. Beagle you were spot on!!
Great news:)

[Beagle]

Happy with that. I had been hearing rumors they might struggle to get to their 450 sales this year but the tight range of this updated forecast significantly de-risks the stock in what has been a flattish year for real estate. I had been hoping for a bit more... $80-85m but I think in the circumstances seeing as for various reasons they got a bit late with their 3rd quarter settlements this is a good solid update and underscores the resilience of their business model. Even if they don't make their 450 sales now the underlying profit growth rate of 35-40% is still a highly credible result. I have them as one of my five picks in the share competition for 2018 and they are one of my biggest holdings on the NZX. $78m (midpoint of forecast) on 224m shares gives 34.8 cps. At the time of posting this at $5.33 means they are currently trading on a 2017 PE of 15.3. I think that's pretty cheap considering their 6 year track record of very strong growth and proof of very strong profit growth this year in a more subdued real estate environment.

[Antipodean]

Time to break the 50% of RYM paradigm behind perhaps?

[couta1]

Time to break the 50% of RYM paradigm behind perhaps? Wait a year at least before that can be acertained with any certainty. PS-Im sure when Ryman hits $12, Sum will be $6.

[Beagle]

Im sure when Ryman hits $12, Sum will be at the very least $6 possibly quite a bit more :)

[winner69]

So underlying $77m-$79m

A bit less than Beagles (outrageous forecast) but pretty close to my R$80m I said early in the year

Real profit going to be close to $200m or about 90 cents a share

So currently on a PE of about 6

At least the share price is up 15% from a year according to the NZX but still has reached a new high ....in soite of this huge wealth creation

Even super cheap if valued like a pure property company

[Beagle]

So underlying $77m-$79m

A bit less than Beagles (outrageous forecast) but pretty close to my R$80m I said early in the year

Real profit going to be close to $200m or about 90 cents a share

So currently on a PE of about 6

At least the share price is up 15% from a year according to the NZX but still has reached a new high ....in soite of this huge wealth creation

Even super cheap if valued like a pure property company

To be fair I did pull my forecast back to circa $80-85m a couple of months ago but yes your point about being valued as a pure property company and super low PE on that basis is worthy of some consideration. Whichever way you look at it what's now clear is this business makes very good money even in normal real estate conditions so the low PE relative to the market isn't justified especially when one considers their proven business model, their proven track record of strong profit growth, the embedded value in each unit and the very strong demographic tailwinds for the next 20-25 years. Not many cheap stocks left on the NZX now but this is one of them the SP this year having significantly underperformed earnings growth.

[Raz]

so up approx. 80 cents in the past year...more to be made if you had time to trade it...thats my opportunity cost this year of doing other things.... and leaving them as a long term hold..I will have to live with it.

[Beagle]

Interesting to look at it from a 2 year view too Raz. 2 years ago the shares were $4. If we assume in late December 2015 the profit for the year to 31 Dec 2015 was already baked into the price and look at profit growth since then including expected profit growth this year at 38% (the mid point of forecast) if the PE had stayed the same the SP would reflect compound growth of 50% for the YE 31/12/16 and 38% for this year so that would give a theoretical SP of $4 x 1.5 x 1.38 = $8.28.

Clearly the market thinks the slowdown in the real estate market is going to affect its profitability going forward but it would appear we are looking at very robust growth this year despite a far more normal real estate market.

If someone is really bored over the holidays and wanted to check just how far this PE contraction has gone they could start with the SP on 31 March 2014 at $3.42 and check the compound profit growth for the 3.75 years since then.

[winner69]

Read somewhere that value hasn’t done that well in 2017 and that value will outperform in 2018

Heck, with SUM you could get both

Just imagine growth as well a rerating upwards .... 9 bucks here we come.

[Raz]

Read somewhere that value hasn’t done that well in 2017 and that value will outperform in 2018

Heck, with SUM you could get both

Just imagine growth as well a rerating upwards .... 9 bucks here we come.

Love to see a winner budget..it would be a masterpiece of positivity!

[BlackPeter]

For what it is worth - we just passed the Golden Cross - and SUM clearly broke out of the wedge it oscillated in throughout the last year. Blue skies from here ...?

[Beagle]

For what it is worth - we just passed the Golden Cross - and SUM clearly broke out of the wedge it oscillated in throughout the last year. Blue skies from here ...?

I would like to think so BP. SP was right around these level's way back in March 2017 and underlying profit is forecast by the company to grow ~ 40% for 2017 so the value is clearly there. My preliminary estimate, (subject to revision once I see more commentary from the company in its Q4 sales in January and annual profit announcement in February) is $100m underlying profit for FY18 which puts SUM on a forward PE of just 12. That would make it the lowest PE its ever been on since it listed six years ago.

[winner69]

I would like to think so BP. SP was right around these level's way back in March 2017 and underlying profit is forecast by the company to grow ~ 40% for 2017 so the value is clearly there. My preliminary estimate, (subject to revision once I see more commentary from the company in its Q4 sales in January and annual profit announcement in February) is $100m underlying profit for FY18 which puts SUM on a forward PE of just 12. That would make it the lowest PE its ever been on since it listed six years ago.

About the same multiple as OCA (on a forward looking F18 expectations)

[peat]

Looks like its continuing.



I tend to think this big triangle is a continuation pattern.

9151

[Beagle]

Looks like its continuing.


Sorry peat I don't follow the logic of you posting an old wedge pattern from a few months ago when the price was $4.97 ? Time to update your chart I reckon and to me its seems perfectly clear we have a breakout from that wedge pattern now at a closing price of $5.50. SUM stocks on the NZX are very cheap on a forward earnings basis and this is one of them so I am expecting big things for 2018 for the SUM share price as the market finally wakes up that this company has a very resilient business model that's well capable of generating strong earnings growth in a flat real estate market.

[JeremyALD]

Will we finally see this breakout into the $6 range? Surely it's time. I can't handle yet another fall back down into the $4s haha

[Yoda]

Nearly back to where we were 15 months ago......
Its been a long time coming.

[winner69]

Will we finally see this breakout into the $6 range? Surely it's time. I can't handle yet another fall back down into the $4s haha

That 6 bucks a certainty and not too far away either.

Looking ahead F18 earnings +20% so growth alone could take share price to $6.60

SUM been punished for some reason by the market over the last year or so and ‘rerated’ down and PE down to about 15

Just a little rerating upwards will add another $2 to the share price and that’s just taking to the PE to 17. Nothing dramatic

So next year we could easily see $7.60 as the SUM share price,

Jeremy - I reckon you are going to have a boomer of a year in 2018 with your value / cheap stocks. They reckon ‘value’ has been out of favour for too long and ‘growth’ stocks have gone as far as they realistically can - so ‘value’ will be the big thing. That’s your forte eh - boomer year coming up for you mate.

Don’t forget with SUM you get ‘value’ as well as ‘growth’ in 2018. Good eh.

[winner69]

That pre Xmas announcement of much better earnings than previously forecasted was really good news.

As intimated above the timing also suggested that new unit sales didn’t reach the 450 they have been touting for a long time. The early January announcement will probably go along the lines of ‘New unit sales of 420 for the year were slightly down on guidance because of delays in processing things which held up final settlement. Nonetheless we have been making heaps out of the sales we have made and will make more money than we told you a few months ago’

So in reality selling less units than expected but making heaps more than expected on the sales made. The media created property collapse really hurting eh ....which proves the media and reality are poles apart.

The best part is they have a pretty good kick start to the new year with say 30 extra sales being finalised in January - on top of the ones they expected to sell in the March quarter

Might need to revise your F18 expectations upwards Mr Beagle

[Beagle]

Good posts winner I agree 100%. While its likely that they won't make the 450 new build this year, (the timing and quantum of the profit upgrade announcement together with its tight range was clearly issued to give investors some comfort ahead of what is most probably going to be slightly disappointing Q4 sales numbers), by implication after 10 months of really wet weather and now we're in a golden spell of fine weather I would imagine this will allow their builders to catch up over summer and should allow a great completion rate over Q1 in FY18.

Too early to talk FY18 number with any confidence but as you know my preliminary thinking based on higher numbers of resale's at higher level's of embedded value and running with 450 sales for FY18, I think ~ $100m underlying profit is potentially achievable for underlying EPS of 45 cps. If the market starts to understand the resilience of their business model in normal market conditions it might apply a normal market PE again which could see serious market outperformance next year.
I think this has genuine potential for a total shareholder return of ~ 50% next year.

[winner69]

Almost a new all time high

Whether it’s 560 or 562 or 565 doesn’t really matter - it’ll be 600+ soon

This just the breakout or whatever they call it

[Beagle]

Yeap...the Couta relativity theory is going to get busted big time in 2018. RYM trading at a Rolls Royce forward PE while SUM companies growing twice as fast trade on half its PE but nothing ever goes wrong with Rolls Royce engines does it :)

[couta1]

Yeap...the Couta relativity theory is going to get busted big time in 2018. RYM trading at a Rolls Royce forward PE while SUM companies growing twice as fast trade on half its PE but nothing ever goes wrong with Rolls Royce engines does it :) Low volume holiday noise at the moment, small fish hoping to get a feed of the Q4 metrics, need to wait a bit longer to get a clear signal. Time will tell if the Reversion to the mean stranglehold will be broken.

[dabsman]

Very happy with price but will be happier it stays at this level or moves forward when everyone comes back from holiday in mid January

[Jim]

Yeap...the Couta relativity theory is going to get busted big time in 2018. RYM trading at a Rolls Royce forward PE while SUM companies growing twice as fast trade on half its PE but nothing ever goes wrong with Rolls Royce engines does it :)
https://www.sharetrader.co.nz/images/icons/icon6.png
I would rather have a Toyota than a Rolls-Royce...

[Ggcc]

Low volume holiday noise at the moment, small fish hoping to get a feed of the Q4 metrics, need to wait a bit longer to get a clear signal. Time will tell if the Reversion to the mean stranglehold will be broken.
Too much small noise turns to big noise and it’s fun to watch this small noise keep rising (maybe to big noise).

[Beagle]

Low volume holiday noise at the moment, small fish hoping to get a feed of the Q4 metrics, need to wait a bit longer to get a clear signal. Time will tell if the Reversion to the mean stranglehold will be broken.

Half a million dollars value of transactions wasn't too shabby considering the time of year. It'll be a fascinating to see if your theory continues to hold water in 2018 mate :)

[winner69]

All going to plan re SUM share price

Above the trend line now ....that's good

If it gets to the top of the channel that's 7 bucks sometomes next year ..... that's even more gooder

SUM has returned 27% pa over the last 6 years ..... that's better than pretty good. Only 20% odd in 2017

As an old mate of mine reminded me the other day just pick a good company that will grow over many years and hold for the long term ..... to me the trading part is set by that price channel

[Beagle]

Happy new year mate and what a beautiful image to start the new year, many thanks.

[Xerof]

Yeah nice winner, a good long term perspective, simply illustrated. Didn't make my $6 target by christmas, but well on the way. Even traders shouldn't sell this until $6.30, and then only if its a spike

Happy new year all

[couta1]

Half a million dollars value of transactions wasn't too shabby considering the time of year. It'll be a fascinating to see if your theory continues to hold water in 2018 mate :) Ryman pushing to go over $11 mate, that reversion to the mean a powerful force aye.

[Raz]

Ryman pushing to go over $11 mate, that reversion to the mean a powerful force aye.

some bugger called me small fish..haha can only accumulate what is on offer....

[couta1]

some bugger called me small fish..haha can only accumulate what is on offer.... You must be a big fish in a small pond then.

[Beagle]

Ryman pushing to go over $11 mate, that reversion to the mean a powerful force aye.

Early days mate but I have this ominous feeling you're going to be a flea in my ear about this all year lol

[couta1]

382 new sales for year, that looks like a falling short of target to me, resales strong, propping things up. Long term no worries though.

[winner69]

Record new sales for a quarter

But 382 new unit sales is a long way off the 450 ‘promised’ and is even less than the 414 in 2016

Resale’s were up ..that’s good

Just as well we have had a booming property market else the huge increase in profits would not have happened.

The property market you read about in the media is a different beast than the property market in reality.

One would have to say that the sales numbers for the year are rather underwhelming

[JeremyALD]

382 new sales for year, that looks like a falling short of target to me, resales strong, propping things up. Long term no worries though.

Very odd announcement. They didn't even acknowledge they fell well short of their target, or give any sort of explanation? I had to open the attachment to even see the total number for the year.

First time I've been disappointed in SUM for a while. Hmm.

[winner69]

Very odd announcement. They didn't even acknowledge they fell well short of their target, or give any sort of explanation? I had to open the attachment to even see the total number for the year.

First time I've been disappointed in SUM for a while. Hmm.

Did skite about a record quarter (t_j will pick up on that)

Yep ...not there usual openness

Being less than last year ...hmm ...see Metro Glass has a point about industry capacity

[LAC]

Q3 release was.....
"Summerset CEO Julian Cook said “We are continuing to see good sales and steady settlements across our villages throughout New Zealand, including Auckland. The group is on track to deliver 450 retirement units for the year. A large number of retirement unit deliveries have been late in the third quarter which will reflect in settlement volumes in the fourth quarter”."

And now 382.....I will be emailing for a better response than that. Overall result was good but we still need an explanation on the low number delivered.

[couta1]

Very odd announcement. They didn't even acknowledge they fell well short of their target, or give any sort of explanation? I had to open the attachment to even see the total number for the year.

First time I've been disappointed in SUM for a while. Hmm. Sugar coated announcement, will the market be fooled by the highest quarter sales spin?

[winner69]

Glass half full view is that we have 68 new sales in the bag for 2018

That’s a boomer of a start to the year

[JeremyALD]

They also had a profit upgrade on 19 December which made it sound like all guns were blazing. They were almost 20% off their year target. Considering they updated us in Q3 they were on track, Q4 sales must of fallen like 45% short of their expectation. That certainly warrants some commentary.

[winner69]

So guidance / expectations was 174 new sales in Q4

Delivered 106

That’s good forecasting .....about as good as Comvita’s efforts

Will ever taking future guidance with a grain of salt ...... hope the market doesn’t see it this way as well

Ne

[JeremyALD]

So guidance / expectations was 174 new sales in Q4

Delivered 106

That’s good forecasting .....about as good as Comvita’s efforts

Will ever taking future guidance with a grain of salt ...... hope the market doesn’t see it this way as well

Ne

Back down to $5 we go? Thought it was finally going to break out of that trend, but seems not lol.

[percy]

I guess the hound will be selling.!!!...lol.

[hardt]

Mmmm, either SUM are having trouble selling new units due to the property markets slight wobble this quarter.

Or perhaps someone else is snagging the buyers with a more enticing deal...

~ speculatively topping up on MET this morning ~

No mention of missing volume forecast impacting earnings guidance, seems fine.

[BlackPeter]

Well (lacking some other word) - they clearly under delivered on new unit sales - big way. I agree it is disappointing that this didn't come with an explanation. I wonder whether Julian might still be on holidays and the announcement has been put together by some young and inexperienced intern?

What would be really important to know is what happened with these missing 68 units. Are they completed and on market but nobody wants to buy them? - Unlikely since they say that their waiting lists look healthy.

Are they delayed due to the miserable weather last year and likely to be completed and sold in the current quarter? This would be good, but given that they said end of Q3 that they are on track for 450 end of Q4 - how likely is it that the completion of these units was end of Q3 still weather dependent? It takes a while from closing the roof to completing all the (not whether dependent) inside jobs.

Maybe their construction team did run away or they decided to give their sales team over December off or something like that - but they clearly need to explain the market what happened. Leaving this open for speculation is clearly not good enough.

Julian - are you listening?

(Edit:) ) I did write an e-mail to their "investor relations", expressing my concerns about the lack of information re the reasons for missing their annual target. Shall keep you guys up to date, if & when I hear something back.

[minimoke]

Glass half full view is that we have 68 new sales in the bag for 2018

That’s a boomer of a start to the year
Back in August Metrics were "on target to build approx 450 units". October update was to deliver 450 units. 382 sold in year end. 68 new sales comes 450 units sold

[JeremyALD]

I think the other thing is that in Q4 you really should have a pretty good idea of settlements and sales before the end of the year, especially if lots of sales from Q3 had pushed into the latter quarter. There's no point having a target number if you're not going to hold yourself accountable.

Looking back in the Q2, Half Year and Q3 announcements they mentioned the 450 target and that they were on track and now it's come to Q4 and it seems they have completely forgotten about their target.

Not good enough really, even if they've upgraded their underlying profit forecast.

[winner69]

And selling less new units in 2017 than they did in 2016 doesn’t look good either (for a growth company)

Just as well property prices were on a roll ......healthy fair value adjustments and margins drive earnings.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/312796/272772.pdf

Quite a few different ways you can look at this.
For those that can read the tea leaves it was clear in their 19 December 2017 announcement they weren't going to make the 450 sales, (the only reason to do such a modest profit upgrade announcement was to reassure the market that growth in underlying profit of ~ 35-40% is on track).
That said falling under 400 undershot my expectations a little and I agree with the consensus view that it should have come with an explanation.
Resale's met my expectations almost exactly for the year.

It is impressive that they are forecasting a 35-40% underlying profit increase on a modest increase in overall sales, (inclusive of resale's) this year.
Less impressive is the lack of explanation regarding missing the target.
One would hope some units scheduled for completion and sale in Q4 will fall into Q1 FY18 which will set the company up for good FY18 profit growth.

35-40% underlying profit growth is still impressive relative to RYM estimated to be running at ~ 12%. Disc: Holding.
One must remind oneself from time to time that investment in this sector is a long term game.

[winner69]

SUMMERSET LIFTS FOURTH-QUARTER SALES 31% AS STRONG RESALES BOLSTER ANNUAL FIGURE

Sharechat.co.nz Monday 8th January 2018




All is well on the Western Front

Missing sales targets well signalled in advance

No damage to share price

No worries

[Jantar]

What is not made clear is whether the new sales not achieved was because they just simply didn't sell in time, or because the units weren't completed and therefore not actually ready for sale. So really that is a question of was it sales that were not achieved because of lack of demand, or was it a delay in completing the units and getting them ready for sale, but the demand is still there.

[percy]

[
One must remind oneself from time to time that investment in this sector is a long term game.

Classic.
Reminds me of the old share trader's definition of Long Term Hold.;"A short term trade that did not work out."...lol.

[tobo]

Do their "sales" figures occur at occupation/settlement or (potentially earlier) when signed agreements occur?

[JeremyALD]

I struggle to see how a profit upgrade is signalling they will not make the target, but at any rate market doesn't seem fussed.

[BlackPeter]

Just an update:

I did get in the meantime a friendly response from SUM's share holder relations (i.e. they are fast). I don't want to copy the email without the approval of the author, but the essence is: It sounds like they did build all the units they planned to in the last year (i.e. I assume the 450) - and the average time to sell and settle them is between 3 and 4 months. The Q3 announcement (450 on target) was purely related to units delivered (not sold and settled). They do acknowledge that they could do better in future to distinguish between units delivered and units sold and settled.

Based on this info I assume we can relax - and hope that they distinguish in future announcements between "build" and "sold and settled" in their announcements. Expect a good Q1/2018 (though obviously the 3 to 4 months from deliver to sell is a moving window as well)

Ah yes - and they don't fail to point out that the updated profit guidance stands ;) ;

[peat]

lol Percy
Well I was expecting some negative news about now (although the market doesnt seem to have reacted negatively as yet - if it will)

We've clearly gotten over the fake downside breakout of the triangle that lasted a whole year (refer post 5793) and moved into an upside breakout and whats more this is composed of a 5 wave (impulsive) structure that would now appear to be completed.
Hence it is perfectly normal for a corrective phase to take place as indicated by the dotted lines
How far down the a-b-c pattern will extend is not known but the dotted lines indicate something typical.

The impulsive pattern (bullish) would be negated by a drop below wave 1 eg $4.80

Also supporting the bullish view is that there was convergence (not divergence ) in the recent 5th wave high on the RSI indicator.
9389

[freddagg]

Just an update:

I did get in the meantime a friendly response from SUM's share holder relations (i.e. they are fast). I don't want to copy the email without the approval of the author, but the essence is: It sounds like they did build all the units they planned to in the last year (i.e. I assume the 450) - and the average time to sell and settle them is between 3 and 4 months. The Q3 announcement (450 on target) was purely related to units delivered (not sold and settled). They do acknowledge that they could do better in future to distinguish between units delivered and units sold and settled.

Based on this info I assume we can relax - and hope that they distinguish in future announcements between "build" and "sold and settled" in their announcements. Expect a good Q1/2005 (though obviously the 3 to 4 months from deliver to sell is a moving window as well)

Ah yes - and they don't fail to point out that the updated profit guidance stands ;) ;

Thanks for finding that out BP

[Beagle]

Confirming what BP just said. I just rang Scott Scoullar CFO and discussed the situation. His mobile faded in and out a bit but here's what I gathered.
1. Company was well aware of the number of new sales it anticipated would be settled by 31 December 2017 when issuing profit guidance on 19 December.
2. They don't book a sale until settlement has been effected.
3. There were a large number of units in Ellerslie and Hobsonville that were completed in the period that had not settled, timing difference.
4. Time between contract deposit and settlement is typically about 100 days, has moved out about 5 days in Auckland only.'
5. Getting acceptable quality contractors in Auckland remains a challenge irrespective of price, price pressure remains.

I would anticipate based on what was discussed that Q1 FY18 should see a higher than usual number of sales.
Scott confirmed they would look to improve their clarity (around deliveries and sales) in the future.

[Baa_Baa]

Just an update: ... and hope that they distinguish in future announcements between "build" and "sold and settled" in their announcements.

Thanks for the update BP. I think that breakdown of numbers would help their reporting, and forecasting. I would like to see:

- Building (in construction)
- Built (completed compliance signed off)
- Sales pipeline (prospective sales)
- Sold (deal signed)
- Settled (payment made).

Forecast and reported over time.

Wishful thinking?

[winner69]

I struggle to see how a profit upgrade is signalling they will not make the target, but at any rate market doesn't seem fussed.

One needs to understand corporate speak ..... timing of announcements ....read between the lines ...and think about what’s not being said.

Pre-Xmas profit upgrade wasn’t really necessary under disclosure rules so why make an announcement (when they already knew the sales numbers) etc etc etc

[percy]

Just an update:

I did get in the meantime a friendly response from SUM's share holder relations (i.e. they are fast). I don't want to copy the email without the approval of the author, but the essence is: It sounds like they did build all the units they planned to in the last year (i.e. I assume the 450) - and the average time to sell and settle them is between 3 and 4 months. The Q3 announcement (450 on target) was purely related to units delivered (not sold and settled). They do acknowledge that they could do better in future to distinguish between units delivered and units sold and settled.

Based on this info I assume we can relax - and hope that they distinguish in future announcements between "build" and "sold and settled" in their announcements. Expect a good Q1/2005 (though obviously the 3 to 4 months from deliver to sell is a moving window as well)

Ah yes - and they don't fail to point out that the updated profit guidance stands ;) ;

BP.Thank you for contacting the company and sharing.

[winner69]

Good stuff BP and Beagle

They could keep the same number and forecast 450 sales in 2018 ...that be a 18% increase on 2017

Good eh

Share price over $6 soon and when punters see numbers like $200m real profit it might head to $7


and Ryman will be $14 by then to keep things in order

[Beagle]

Classic.
Reminds me of the old share trader's definition of Long Term Hold.;"A short term trade that did not work out."...lol.

LOL that's a good one but I am happy to hold long term with SUM. They have a track record of very strong underlying EPS growth and its EPS growth that counts.

[percy]

LOL that's a good one but I am happy to hold long term with SUM. They have a track record of very strong underlying EPS growth and its EPS growth that counts.

You are not alone.!!
I too am very relaxed being a long term SUM shareholder.
Well run business,great businesss model,and in a sector with huge tail winds.
We are "well positioned,"..lol.

ps.Thank you for contactingthe company and sharing with us.

[Beagle]

I struggle to see how a profit upgrade is signalling they will not make the target, but at any rate market doesn't seem fussed.

The clues were there mate.
1. Not reiterating the 450 target despite reiterating it with every previous announcement.
2. The size of the profit upgrade. Normally you simply wouldn't bother with an upgrade of that magnitude, you'd simply beat the existing target which wasn't much lower.
3. The timing of the updated guidance, just before Christmas within ten working days or so of the pending Q4 sales announcement.
Announcement was clearly intended to give the market comfort and did.

Expecting steady progress this year. SUM is cheap based on fundamental's in my opinion in a market where its hard to find value.
Underlying EPS growth of late 30's (percent) is very robust considering the timing issue with settlement of units completed but not settled and a flat real estate market in Auckland. Underscores the strength of their business model in my opinion to get profit growth like this on modest overall sales growth.

Yes Percy we are indeed well positioned. Strong tailwinds in terms of demand going forward.
Scott reiterated at some length the market dynamic that people are trading down in size and value when buying the average unit in SUM and freeing up capital.
Most free up two - several hundred thousand in the process.
According to Barfoot and Thompson Auckland real estate doing okay. http://www.sharechat.co.nz/article/43d0e7b2/auckland-house-prices-rise-in-2017-more-sold-for-over-1m-despite-fewer-sales.html?utm_medium=email&utm_campaign=Auckland%20house%20prices%20rise%20in %202017%20more%20sold%20for%20over%201m%20despite% 20fewer%20sales&utm_content=Auckland%20house%20prices%20rise%20in% 202017%20more%20sold%20for%20over%201m%20despite%2 0fewer%20sales+CID_75cd0d911521a719d622332e4dde1e2 b&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle43d0e7b2auckla nd-house-prices-rise-in-2017-more-sold-for-over-1m-despite-fewer-saleshtml
https://www.nbr.co.nz/article/summerset-lifts-fourth-quarter-sales-31-strong-resales-bolster-annual-figure-b-211604

[percy]

[QUOTE=Scott reiterated at some length the market dynamic that people are trading down in size and value when buying the average unit in SUM and freeing up capital.
Most free up two - several hundred thousand in the process.

I think most people miss this very important fact.

[Beagle]

I think most people miss this very important fact.
Not the people moving into Summerset units lol. Apparently many have never had so much spare money in their lives before :)

[minimoke]

Not the people moving into Summerset units lol. Apparently many have never had so much spare money in their lives before :)Which is why I consider factoring the value of your residential home as part of retirement capital is quite a valid approach to retirement planning (also see HBL reverse Equity loans)

[Beagle]

Which is why I consider factoring the value of your residential home as part of retirement capital is quite a valid approach to retirement planning (also see HBL reverse Equity loans)

I think that's fair enough provided you have plans to trade down, shift into a retirement village or shift to a cheaper part of the country, or all of the preceding :)

[percy]

Minimoke and Beagle.I think you are better planners than me and my friends.We all worried about retirement.What was going to be enough,$1mil,$2mil,$5mil,[always impossible,so forget it] then years of getting kids through school,married,housed,,grand kids,divorced.Then having the housed paid off and some money invested in the sharemarket.Never wealthy.Then thinking all of your house sale will be eaten up buying a retirement village unit.To me and my friends ,all of a sudden finding you have 200 to 700 thousand to spare is like winning Lotto.

[minimoke]

Minimoke and Beagle.I think you are better planners than me and my friends.We all worried about retirement.What was going to be enough,$1mil,$2mil,$5mil,[always impossible,so forget it] .My plans are based on the retirement Rule of 25 and the Rule of 4%. Both give me about the same number so I figure its a close enough guide.

[couta1]

Classic.
Reminds me of the old share trader's definition of Long Term Hold.;"A short term trade that did not work out."...lol. HaHa, classic Percy, I've been in that position many times. PS-Ive got my Percy portfolio all sorted this year with HLG/ATM/OCA/SML.

[percy]

HaHa, classic Percy, I've been in that position many times. PS-Ive got my Percy portfolio all sorted this year with HLG/ATM/OCA/SML.

Reads like an infants formula portfolio, with both ATM and SML.
"The Milky Bar Kid" is back in town.!...lol.

[couta1]

Reads like an infants formula portfolio, with both ATM and SML.
"The Milky Bar Kid" is back in town.!...lol. Yep, I learnt the hard way over a 3 month period last year that by selling your Milky bars too soon, you miss out on exchanging them for Gold bars.

[Beagle]

Minimoke and Beagle.I think you are better planners than me and my friends.We all worried about retirement.What was going to be enough,$1mil,$2mil,$5mil,[always impossible,so forget it] then years of getting kids through school,married,housed,,grand kids,divorced.Then having the housed paid off and some money invested in the sharemarket.Never wealthy.Then thinking all of your house sale will be eaten up buying a retirement village unit.To me and my friends ,all of a sudden finding you have 200 to 700 thousand to spare is like winning Lotto.

How much is enough ? For someone approaching seventy with your average expected lifespan and modest tastes with spending and you and your wife both getting super I think you can afford to relax a bit Percy. Retirement isn't simply about the amount of one's retirement fund its also about the intellectual capital one brings to the table in terms of their ability to work their retirement savings to their best advantage. With your investment portfolio and share skills I think you can afford to feel quite relaxed about having your retirement needs met. You could even say you're well positioned.

[percy]

How much is enough ? For someone approaching seventy with your average expected lifespan and modest tastes with spending and you and your wife both getting super I think you can afford to relax a bit Percy. Retirement isn't simply about the amount of one's retirement fund its also about the intellectual capital one brings to the table in terms of their ability to work their retirement savings to their best advantage. With your investment portfolio and share skills I think you can afford to feel quite relaxed about having your retirement needs met. You could even say you're well positioned.

Yes we are very "well positioned".
There seems to be three or more types of retirees.
!] Those like yourself and Minimoke who plan very well.
2] Those like myself who surprise themselves of being "well positioned" when it seemed in achieveable,ten or more years from retirement.We are the ones who free up a great deal of capital entering a retirement village.
3] Those who never planned or changed their lifestyles, and find they either have to keep working,or just keep getting themselves further behind.These include big earners who are big spenders.Entering a retirement village is a "get out of jail card."
4]Those on very low wages,most probably renters,who have not been able to save,and will never be able to afford a retirement village unit..

[Beagle]

The interesting thing that's never really been fully discussed before on this thread is the degree to which SUM and others do provide a safety net for those who have not saved for their retirement. Yesterday Scott mentioned that SUM's least expensive apartments (one bedroom) in Auckland start at just $400K and the average person selling the average Auckland house can free up as much as $600K through the shift into a smaller SUM apartment and still get all the benefits of a supportive lifestyle and resort type facilities and the camaraderie of others. He went on that some of them have no idea what to do with so much money and some of them had no idea their home was worth about a million dollars. Average age of a person moving into an apartment is 81 so that much money at that age for someone who's never had much before can be quite a shock. One would hope they have access to good quality financial advice.

[Brain]

The interesting thing that's never really been fully discussed before on this thread is the degree to which SUM and others do provide a safety net for those who have not saved for their retirement. Yesterday Scott mentioned that SUM's least expensive apartments (one bedroom) in Auckland start at just $400K and the average person selling the average Auckland house can free up as much as $600K through the shift into a smaller SUM apartment and still get all the benefits of a supportive lifestyle and resort type facilities and the camaraderie of others. He went on that some of them have no idea what to do with so much money and some of them had no idea their home was worth about a million dollars. Average age of a person moving into an apartment is 81 so that much money at that age for someone who's never had much before can be quite a shock. One would hope they have access to good quality financial advice.

MY financial advice would be spend all the extra on hookers and recreational drugs. Excess money to be spent on excesses. Advice for the 80 plus group of course

[Beagle]

MY financial advice would be spend all the extra on hookers and recreational drugs. Excess money to be spent on excesses. Advice for the 80 plus group of course

:lol: :lol: Many are too old to travel or drive so fine european cars and business class travel are off the menu too and if you haven't got much appetite and your liver is a bit second hand that doesn't leave many options left does it :)...and some people wonder why grandkids get spoilt rotten.

[minimoke]

The interesting thing that's never really been fully discussed before on this thread is the degree to which SUM and others do provide a safety net for those who have not saved for their retirement..
I presume you man those who have paid for their own home but have no retirement savings rather than than those who are renting and have no savings.

I see owning your own home mortgage free as a valid long term investment option. Because it allows you to down sell, sell and move into a retirement village or use reverse equity options. Which is why I see opportunities in SUM (given RYM is fully priced) and HBL

(those who have rented and have no savings are pretty well fvcked - they should have put difference between rent an cost of home ownership aside)

[Beagle]

I presume you man those who have paid for their own home but have no retirement savings rather than than those who are renting and have no savings.

I see owning your own home mortgage free as a valid long term investment option. Because it allows you to down sell, sell and move into a retirement village or use reverse equity options. Which is why I see opportunities in SUM (given RYM is fully priced) and HBL

(those who have rented and have no savings are pretty well fvcked - they should have put difference between rent an cost of home ownership aside)

Yes that's what I was getting at. Plenty of people fall into that category in my opinion. One of the biggest trends at the moment is people leaving Auckland to retire in a cheaper part of the country to cash in on their equity. Yes a nice comfortable home is a rewarding long term investment in more ways than one, that's for sure. I don't really think of our one as an investment though, more a lifestyle choice, but its quite nice to know one could trade down if required and free up significant capital :)

[couta1]

My wife and I were having one of our many sector discussions last night. I asked her whose village she would choose to live in upon retirement? She answered that if there was a RYM and SUM village in the same area, she would always choose the RYM village. Her reasons were simply that RYM as a company look after their residents better and offer more to their residents. SUM are a great development company, but i thought I'd put another perspective up other than just SP increase potential. RYM are priced at a premium, but there are solid reasons for this. PS-I highly value my wife's opinion on this with her immense coal face sector experience. PPS-Just to eliminate any bias, my wife nor I hold no SUM or RYM shares currently.

[Beagle]

Horses for courses. The CFO and CEO have made the point to me that SUM's independent living units are (based on their average size) amongst the very largest in the industry and also a lot of their villages are single level like a proper little village not a multi level prison style accommodation in a big rectangular block like some RYM villages.
When I visited SUM's Hobsonville village last year their waterfront units are about 130 sq metres, regular single level units about 100 sq metres, all very very nice. Nice flush floors on the entrance way too, no chance to trip up like units I have seen at some RYM villages Some RYM villages are also well laid out but lately their trend to build intensively in prison style multi level apartment blocks or worse in a big prison style rectangular multi level block with a courtyard in the middle leaves me feeling cold and disinterested. There's more to this than just how smoothly the care center operates. Its more about the overall quality of lifestyle I think. Some of RYM's apartments are very very small and leave a lot to be desired.

I wonder how SUM's satisfaction survey's are in the mid - late 90% mark if their villages are supposed to be of a somewhat lesser standard than RYM ?

[couta1]

Mate, I'm not talking about the size of appartments and lay out of the village here, I'm talking about what's on offer to residents in both the care centers and the independent units.

[winner69]

All looking good on the property front.

Another big year ahead for Summerset .....especially for development margins and for when the valuers do the fair value adjustments

http://www.sharechat.co.nz/article/310a0ba8/nz-house-sales-slump-in-december-but-prices-still-firm.html?utm_medium=email&utm_campaign=NZ%20house%20sales%20slump%20in%20Dec ember%20but%20prices%20still%20firm&utm_content=NZ%20house%20sales%20slump%20in%20Dece mber%20but%20prices%20still%20firm+CID_604b2f9b700 c0d0359d03ecb9c55432d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle310a0ba8nz-house-sales-slump-in-december-but-prices-still-firmhtml

[Beagle]

All looking good on the property front.

Another big year ahead for Summerset .....especially for development margins and for when the valuers do the fair value adjustments

http://www.sharechat.co.nz/article/310a0ba8/nz-house-sales-slump-in-december-but-prices-still-firm.html?utm_medium=email&utm_campaign=NZ%20house%20sales%20slump%20in%20Dec ember%20but%20prices%20still%20firm&utm_content=NZ%20house%20sales%20slump%20in%20Dece mber%20but%20prices%20still%20firm+CID_604b2f9b700 c0d0359d03ecb9c55432d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle310a0ba8nz-house-sales-slump-in-december-but-prices-still-firmhtml

Quite right mate. Very impressive nationwide house price growth considering the fairly significant changes the Reserve Bank made in terms of lending restrictions. Expecting further good progress this year for SUM companies on the NZX that still represent a very sound value and growth propositon.

[Beagle]

https://www.summerset.co.nz/why-choose-us/retirement-village-checklist/
They had me at the picture. Two dogs.

[Lewylewylewy]

Continued low interest rates are great for property investing.

[minimoke]

https://www.summerset.co.nz/why-choose-us/retirement-village-checklist/
They had me at the picture. Two dogs.
Great. Move somewhere that allows yappy little mutts. I thought most villages at best allowed you a cat.

[Beagle]

Great. Move somewhere that allows yappy little mutts. I thought most villages at best allowed you a cat.

Not many keep them. Speaking with the manager of their Hobsonville village last year she said they add real life to the village and are often adored by many of the other residents. They really lift some lonely residents spirits from what I hear.

[minimoke]

Not many keep them. Speaking with the manager of their Hobsonville village last year she said they add real life to the village and are often adored by many of the other residents. They really lift some lonely residents spirits from what I hear.
Thats nice. I am looking in the books to see the expected life span of my pet pony "Ginny". (doing my bit for planning for the future)

[percy]

Not many keep them. Speaking with the manager of their Hobsonville village last year she said they add real life to the village and are often adored by many of the other residents. They really lift some lonely residents spirits from what I hear.

Jolly sure I would not like a lonely neighbour with yappy little mutts, when I move into a village.

ps/Having to listen to them on Sharetrader is enough.?!!..lol.

[minimoke]

Jolly sure I would not like a lonely neighbour with yappy little mutts, when I move into a village.

ps/Having to listen to them on Sharetrader is enough.?!!..lol.You'll be safe next to me. No yappy ankle biting mutts in my house. Nor any garden digging pooy bird eating cats either. Just a harmless cute pony.

[percy]

Jolly sure I would not like a lonely neighbour with yappy little mutts, when I move into a village.

ps/Having to listen to them on Sharetrader is enough.?!!..lol.

Would your pony be strong enough to harness my gig to?
Would reguire it only for my weekly shop at Pak'n Save.

[Beagle]

Jolly sure I would not like a lonely neighbour with yappy little mutts, when I move into a village.

ps/Having to listen to them on Sharetrader is enough.?!!..lol.

Often better than listening to one's partner yapping away endlessly...opps did I really say that out loud :lol:

[percy]

Often better than listening to one's partner yapping away endlessly...opps did I really say that out loud :lol:

Good to know you have competition at home.
Now I understand the reason for your long "exercise" walks.

ps I travelled long distances selling books...lol.

[couta1]

Often better than listening to one's partner yapping away endlessly...opps did I really say that out loud :lol: I don't have that problem to deal with but my wife does.

[percy]

I don't have that problem to deal with but my wife does.

Another classic couta1 quote for us to enjoy.
I love them.!

[Joshuatree]

Ive been a little impressed how you guys share your share trader nom de plume with your other halves. Not always easy to tell which one is posting though except for w69, thats pretty obvious.:t_up:

[percy]

Ive been a little impressed how you guys share your share trader nom de plume with your other halves. Not always easy to tell which one is posting though except for w69, thats pretty obvious.:t_up:

If you don't mind,they are not other halves.!
The correct description is "Better halves."
\
ps.Please do not read HLG thread.Your daughter would disown you if you even considered buying Flamingo beach shorts.!

[Joshuatree]

perdanticky:0 Only buy teehee-shirts and we are showing our age!.What goes around etc. Im young at heart but know my limits, mutton dressed as lamb etc, an old tool in board shorts!!.Bring back the stubbies i say, must be just about fool circle time:). BTW i think you'd look great on the launch in flamingo plimsoles roger on the launch parked in the middle of the nudie holiday park :).
whoah lightning so close..... turning comp off, laters.......

[BobbyMorocco]

Some shares traded at $5.65 late in the day today. I believe this is the highest price ever paid for SUM. Is this a sign that the share price will stop trading in the $4.50 - $5.60 range that it has done over the past 18 months and move to something with a 6 in front of it?

[JoeGrogan]

Some shares traded at $5.65 late in the day today. I believe this is the highest price ever paid for SUM. Is this a sign that the share price will stop trading in the $4.50 - $5.60 range that it has done over the past 18 months and move to something with a 6 in front of it?

Need more volume before it can be called a "breakout", encouraging sign nonetheless.

[value_investor]

Need more volume before it can be called a "breakout", encouraging sign nonetheless.

Late volume trading coming in at the end to prop it up just a bit. Interesting that it came back to just within the price band its been around. Indicates a bit of profit taking from the computer algorithms.

Feb will be a big month because of the FY announcement, we could see some high volume activity then.

[winner69]

Some shares traded at $5.65 late in the day today. I believe this is the highest price ever paid for SUM. Is this a sign that the share price will stop trading in the $4.50 - $5.60 range that it has done over the past 18 months and move to something with a 6 in front of it?

Just a few though but was a record high beating the 562 in September 2016 - jeez share price hasn't gone anwhere for a long time in spite of them making heaps more money.

Should it break out some TA people would reckon it could possibly form a new higher channel ...with upper bound being 670 (depth being the depth of the current one)

Fantastic eh

Better bet than OCA I reckon ....but RYM will go to 1340 for certain

[Baa_Baa]

Just a few though but was a record high beating the 562 in September 2016 - jeez share price hasn't gone anwhere for a long time in spite of them making heaps more money.

Should it break out some TA people would reckon it could possibly form a new higher channel ...with upper bound being 670 (depth being the depth of the current one)

Fantastic eh

Better bet than OCA I reckon ....but RYM will go to 1340 for certain

Some TA people wouldn't call or even talk a new "channel", just like some haven't talked about the channel breakdown, at least until it convincingly broke out past the Sept 2016 highs and continued, which it hasn't (that's a long -sideways- despite all the bullish FA and chatter here).

Nevertheless, on modest volume it looked above today and fell back to close $5.55. Maybe some punter was desperate to get a few and just bought the ASK on the close, only to be sold into by a more savvy punter, insto or broker who trades the close.

Who knows, at least it's having another crack at the overhead resistance and is in the zone to soak up some of the 'where do I invest when the market is over priced' money. SUM isn't over priced, relatively speaking. The TA is looking positive and we should see continued attempts at a breakout.

But a (rising) channel? No, not really.

[Xerof]

Looked like an over-exuberant Bot to me, but never-the-less it did trade up

[winner69]

I used wrong words baabaa - I mesnt to say it could go from range trading between 450 to 560 (bobby's numbers) on a breakout to range trading between 560 to 670 (the breadth being the same quantum in both cases)

Or something like that often happens a TA guru once explained to me

[Baa_Baa]

Looked like an over-exuberant Bot to me, but never-the-less it did trade up

And a savvy Bot sold it immediately? Who knows, too little too early, but close. The buy was a stretch (test) and got called for what it was. Jmho.

[Baa_Baa]

I used wrong words baabaa - I mesnt to say it could go from range trading between 450 to 560 (bobby's numbers) on a breakout to range trading between 560 to 670 (the breadth being the same quantum in both cases)

Or something like that often happens a TA guru once explained to me

No worries. How's your Channel chart looking? I guess you can adjust the channel end date and it just widens and everything's hunky dory, or keep the channel parameters from last time and show it's broken?

Any which way, the TA is niggling for a breakout of the price range, that you point out. And about time too imo. Can't have SUM languishing in a stale range when everything else that is exciting is plumbing new highs!

[Xerof]

And a savvy Bot sold it immediately? Who knows, too little too early, but close. The buy was a stretch (test) and got called for what it was. Jmho.

Yes, there have been a number of those 'tests' over the past week or so. I meant it traded up with a higher close than Frididdlyiday.

All in good time

[Beagle]

Melting upwards slowly on a lack of sellers. They're either out of scrip or all at the beach, or both :)
About time I reckon. This was $5.60 way back in Sept 2016 and there's been a lot of water and earnings growth under the bridge since then.