SUM - Summerset Group

[Ggcc]

Could these prices going up be due to end of the month?

[BlackPeter]

Could these prices going up be due to end of the month?

Bit early for windows dressing - tomorrow is another January day :):

[Nasi Goreng]

could today be the day SUM de-couples from Ryman * 0.5 formula?

[macduffy]

Or could be a case of more buyers than sellers. It usually is!

;)

[couta1]

could today be the day SUM de-couples from Ryman * 0.5 formula? Not long term, there will always be temporal blips.

[Ggcc]

Bit early for windows dressing - tomorrow is another January day :):
I’ve seen it before two days prior that large transactions took place. We will see after 5 what transactions will take place..... who knows, but I love that the price keeps going up

[BlackPeter]

Well, I don't complain above the price move either (holding lots ... :t_up:);

And yes, it looks like at least one bot is programmed to push the price up - or why else would it buy just 6 (in words six) shares at $5.70 ... when there are so many more available at this bargain price ;);

[minimoke]

Well, I don't complain above the price move either (holding lots ... :t_up:);

And yes, it looks like at least one bot is programmed to push the price up - or why else would it buy just 6 (in words six) shares at $5.70 ... when there are so many more available at this bargain price ;);It was sorta explained to me before but I still don't get the 4 (four) shares that just went through at $5.78. Its part of a whole pile that went through at 14:57, including 140,000

[percy]

It was sorta explained to me before but I still don't get the 4 (four) shares that just went through at $5.78. Its part of a whole pile that went through at 14:57, including 140,000

It's easy.We played it a primary school years ago.
"I will show you mine ,if you will show me yours.
In fact if you show me yours,you can have mine."!,
Somethings never change...lol.

[minimoke]

It's easy.We played it a primary school years ago.
"I will show you mine ,if you will show me yours.
In fact if you show me yours,you can have mine."!,
Somethings never change...lol.
A lot of it happening over on SML as well. 1 share going through at $6.99 at 14:54

[peat]

1 share going through at $6.99 at 14:54

They must get good deals on the bro.

[Ggcc]

End of the month balancing I think. Many others are also going up

[minimoke]

End of the month balancing I think. Many others are also going up
Things just go nuts at this time of day / month.

[Filthy]

update on the property market: https://www.stuff.co.nz/business/101055304/summer-offers-property-market-buzz-to-regional-centres

although things looking flat, don't think it'll have much impact on SUM/RYM unless the ar$e falls out of it completely.

plenty of demand out there. still 10-20 parties going through most of the open homes I am visiting and limited stock around.

tailwinds still alive and well.




filthy

[Vaygor1]

update on the property market: https://www.stuff.co.nz/business/101055304/summer-offers-property-market-buzz-to-regional-centres

although things looking flat, don't think it'll have much impact on SUM/RYM unless the ar$e falls out of it completely.

plenty of demand out there. still 10-20 parties going through most of the open homes I am visiting and limited stock around.

tailwinds still alive and well.

filthy

Hi filthy. Welcome to ST.

From an affordability perspective, residents currently free up significant amounts of capital when they move into a village so there remains plenty of price-headroom for incoming residence. For example, the current median Auckland house price would need to drop from $1.2million to $900k before a transition into a SUM/RYM retirement unit becomes breakeven. I can't see house prices falling 25%.

But on top of that, and most importantly, elderly people move into a retirement village based on health needs and security, rather than what the housing market is doing.

And further still, demand for SUM/RYM and the likes will be greater than supply for the foreseeable future given NZ's age-demographics. As such, people will take a capital hit, if they have to, on transitioning into a retirement village in NZ.

Based on the above, I believe the property market has no impact at all on SUM/RYM's businesses.

This has been shown to be true when looking at the historical results of these companies compared to what the property market has been doing.

[Ggcc]

Start of the month and down she goes........ I must follow these patterns and sell at the end of the month and buy in the new month

[trader_jackson]

Start of the month and down she goes........ I must follow these patterns and sell at the end of the month and buy in the new month

Sounds bad right? Down down down
Then you realize it is basically, give or take a cent, the same price it was at the start of this week and that maybe yesterdays unusual spike was just that - unusual.

[Vaygor1]

Sounds bad right? Down down down
Then you realize it is basically, give or take a cent, the same price it was at the start of this week and that maybe yesterdays unusual spike was just that - unusual.

It had to go down or RYM had to go up.. whatever it takes to ensure the SP phenomena of SUM x 2 = RYM, aye Couta :)

[winner69]

It had to go down or RYM had to go up.. whatever it takes to ensure the SP phenomena of SUM x 2 = RYM, aye Couta :)

....and OCA x 10 = RYM is becoming a pretty good rule of thumb

Algebra then gives OCA x 5 = SUM

Spooky eh possums as Mr P used to say

[couta1]

It had to go down or RYM had to go up.. whatever it takes to ensure the SP phenomena of SUM x 2 = RYM, aye Couta :) That's the one, reversion to the mean is the force.:cool:

[winner69]

SUM share price held up pretty well last week

That 550/555 mgark acting as support at the moment

Still trending up on my cool linear regresion channel chart and the price is currently slightly above the regression line.

for geeks it has recently been recalculated and only reduced the slope ever so lightly .....still about 24% pa share price growth over 5 years or so

[value_investor]

SUM share price held up pretty well last week

That 550/555 mgark acting as support at the moment

Still trending up on my cool linear regresion channel chart and the price is currently slightly above the regression line.

for geeks it has recently been recalculated and only reduced the slope ever so lightly .....still about 24% pa share price growth over 5 years or so

Still see it as amazing value right now, given the overvalued market and this one just sneaking under the radar a little bit until now obviously.

[Baa_Baa]

SUM share price held up pretty well last week

That 550/555 mgark acting as support at the moment

Still trending up on my cool linear regresion channel chart and the price is currently slightly above the regression line.

for geeks it has recently been recalculated and only reduced the slope ever so lightly .....still about 24% pa share price growth over 5 years or so

The Nov to date rise has been on net declining volume, usually a good warning sign albeit went on for over three months so not reliable by itself.

That said the attempted and now failed double top breakout couldn't have happened at a worse time with the NZX faltering on US sharemarket jitters, but that said it has held up very well - this week at least, just a brief 'warning' on the trusty weekly chart then reverted and closed above. So no worries eh. Unless the whole shebang gets another walloping, SUM should be fine. He says optimistically.

Cue the cheerleaders, SUM might need it. It has nothing to do with fundamentals if the overall sentiment is to take money off the table as all boats go down on a falling tide. Eyes on, the classic decision of 'should I hold a good long-term fundamental that pays dividends' vs 'should I reduce my capital exposure' seems to be imminent.

[winner69]

The Nov to date rise has been on net declining volume, usually a good warning sign albeit went on for over two months so not reliable by itself.

That said the attempted and now failed double top breakout couldn't have happened at a worse time with the NZX faltering on US sharemarket jitters, but that said it has held up very well - this week at least, just a brief 'warning' on the trusty weekly chart then reverted and closed above. So no worries eh. Unless the whole shebang gets another walloping, SUM should be fine. He says optimistically.

Cue the cheerleaders, SUM might need it. It has nothing to do with fundamentals if the overall sentiment is to take money off the table as all boats go down on a falling tide. Eyes on, the classic decision of 'should I hold a good long-term fundamental that pays dividends' vs 'should I reduce my capital exposure' seems to be imminent.

Couldn’t agree more baa_baa

For me 510 becomes crunch time should it get down there again (even though 465 is the bottom channel line but circumstances have changed so need to be a bit more careful eh)

[Baa_Baa]

Couldn’t agree more baa_baa

For me 510 becomes crunch time should it get down there again (even though 465 is the bottom channel line but circumstances have changed so need to be a bit more careful eh)

Couldn’t agree more winner. :) Actually I have less leeway, my exit is a weekly close below 5.36. I'd buy back if I was wrong, but that's the current target.

SUM has been range trading (going sideways) for a over a year and half, with a few 'ok ish' trades in between, despite the numerous positive FA posts here, and notwithstanding dividends I reckon the wider 'market' doesn't yet understand the capital upside opportunity or the reliable earnings, or even respect the long term tailwinds and inherent fundamentals.

The market imho has also mostly forgotten about what a serious rout is and how it affects every share price. It might not happen, but it could and buy and hold is pure folly with a half decade or whole decade to recover capital, stuff that!

In a decent downdraft all of those 'fundamental' reasons could take a back seat and therefore a lot longer to embed into the psych. I just don't give away capital easily and am happy to forego the occasional dividend, sell a few or all on various levels of weakness, and buy back some or all later if the market gives me the opportunity.

Cheers
BAA

[Ggcc]

Nice little climb today. Must be doom and gloom tomorrow......... or not

[Ggcc]

What are people’s value of Summerset as in today’s value with the information the company has provided? 4 traders put a value average of $5.60 roughly. I would agree with this, but I would like to hear what others (sharetrader members) value it at.

[Beagle]

SUM reports its annual results on Friday. I think most would want to see that result before making a further valuation call at this stage but for those who want to take a position before then my assessment of this company is that's its very good value on a fundamental basis and has a well proven track record of strong growth. I hold and am looking at adding more subject to the annual result and any outlook commentary.

[percy]

The result would have to be a shocker for me to alter my opinion.
Great business,well directed and managed, in a sector with huge tailwinds.

[couta1]

What's it worth? well that's easy peasy, roughly half the value of Ryman.:cool: PS-The Couta ratio can be trusted, never failed me yet. PPS-At $1, I reckon OCA the best buy in the sector currently.

[oldtech]

I too think it is all good news for SUM - although I wasn't so sure around May-June last year when the SP started heading down. Heading back in the right direction now.

percy, I do recall you in November last year saying that you thought the retirement sector was going to be treading water for a while. Do you still think the sector will move sideways over the next few months?

[percy]

I too think it is all good news for SUM - although I wasn't so sure around May-June last year when the SP started heading down. Heading back in the right direction now.

percy, I do recall you in November last year saying that you thought the retirement sector was going to be treading water for a while. Do you still think the sector will move sideways over the next few months?
I did lighten up our OCA and SUM holding,before the election.Maybe we were a bit overweighted with RYM,OCA,and SUM.
I don't currently have a short term opinion of the sector,however I remain "well positioned" for the long term growth the sector will enjoy.
I value other posters views on the sector more than mine,esp the usual suspects,Couta1[all],Beagle [SUM],and Vaygor1 [RYM].

[tipsy]

I had a quick drive around the Ellerslie village on Sunday, very impressive, although slightly strange at present with those incomplete structures towering over the completed villas.

[oldtech]

Thanks percy.

I value the insights from all posters on this forum, but you are high on my list of MVPs!!!

[tipsy]

Not many sellers at all at the mo. Only 21000 shares currently up for sale.

[JoeGrogan]

Not many sellers at all at the mo. Only 21000 shares currently up for sale.

You love to see that folks :t_up:, especially with an announcement at the end of the week.

[Beagle]

I had a quick drive around the Ellerslie village on Sunday, very impressive, although slightly strange at present with those incomplete structures towering over the completed villas.

That's going to be their flagship village. I've held through all the noise of the election and other negativity last year and added more recently in the mid 5's.
Looking forward to running the ruler over the result on Friday. Might get SUM more after that.

[winner69]

That's going to be their flagship village. I've held through all the noise of the election and other negativity last year and added more recently in the mid 5's.
Looking forward to running the ruler over the result on Friday. Might get SUM more after that.

Just under $200m npat I reckon ..property market been good last year

Even Warren would think that’s a pretty good result

[Raz]

It will be a good result...

[tipsy]

You love to see that folks :t_up:, especially with an announcement at the end of the week.

Yep, not much standing in the way of $6 now


That's going to be their flagship village. I've held through all the noise of the election and other negativity last year and added more recently in the mid 5's.
Looking forward to running the ruler over the result on Friday. Might get SUM more after that.

Yeah I've held for a good while and topped up before the election at 5.20 then after at 4.9. Was a little worried for a bit there, but happy to be patient with this one.

[minimoke]

Well, they seem to be pretty positive results. Especially if you are an employee.

[winner69]

I did say npat to be $200m plus but jeez $223m is truly AMAZING, REALLY AMAZING

Not much more need to be said

Who said the property market was munted?

[Raz]

Yeah, half decent..lets see what it does to the SP.

[allfromacell]

Today is the day the famous RYM/SUM price ratio is broken for good :D

[Raz]

Today is the day the famous RYM/SUM price ratio is broken for good :D

I know someone who will not agree...

[silu]

Wow I didn't expect anything over $200m NPAT. Hopefully the market shares my positive surprise and nudges it up a few percent.

[percy]

Wow I didn't expect anything over $200m NPAT. Hopefully the market shares my positive surprise and nudges it up a few percent.

Not worried about the market,I loved it.!!.The increase in divie too.!!
"Well positioned"........................lol.

[silu]

Not worried about the market,I loved it.!!.The increase in divie too.!!
"Well positioned"........................lol.

Yeah one of the few shares I still expect to have when it's retirement time for me. Market, Shmarket.

[winner69]

Today is the day the famous RYM/SUM price ratio is broken for good :D

....you never know all this might have been priced in ....and the share price will revert to 50% of RYM next week

Stranger things have happened

Not likely though ...I hope

[iceman]

Development margin has shot up to 27.3% from 22.6 in FY16. This will drive profit growth even faster. Good result at first glance

[James108]

Happy with result overall. Disappointed that they are not increasing build rate - to do with less new sales compared to fy16?

Good that's margin has held up, expecting some pull back next year.

[LAC]

Yeah, half decent..lets see what it does to the SP.
Hard man to please:)

Great result in my opinion. All looks good going forward, will top up when the dust settles.

[minimoke]

Here are the highlights
FY17 net profit after tax (NZ IFRS) of $223.4m, up 54% on FY16

 FY17 underlying profit of $81.7m, up 44% on FY16 – record full year profit

 Tracked ahead of our $77.0m to $79.0m guidance with better than expected resale settlements, stronger than expected margins on both new and resale settlements, and positive year-end valuation impacts relating to retail bonds

 382 new sales with delivery of 171 retirement units in 1H17 and 279 retirement units in 2H17 for a total of 450 new retirement units in FY17

 Record development margin of 27.3%, up from 22.2% in FY16

 300 resales, a full year record, up from 244 in FY16

 Resale gain of 21.7%, up from 18.6% in FY16

 Final dividend of 7.1 cents per share declared, amounting to $15.9m

 Total dividends for the 2017 year (interim and final) of 11.0 cents per share, amounting to $24.6m

 Operating cash flow of $207.7m, and gearing ratio down to 30.7%

 Total assets now over $2.2b, up 30% on FY16

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/314609/275030.pdf
Very good result and nice beat on recent guidance. Highly credible that they raised the development margin so significantly in what is arguably an extremely tough construction market (look no further than FBU and their sub contractor problems for an example of how tough it is out there).

Interesting snippets from the investor presentation.
Embedded value per unit now $152K up from $114k last year, augers well for future profit growth.
Underlying profit has grown on average 47% per year for the six years since they listed, (struggling to think of any company that has anything like that record ?)
For those that like the headline IFRS metric Net profit after tax has grown on average at a whopping 93% per annum since they listed.

My thoughts are that this is an outstanding company for people to build wealth over time. Very happy long term holder.

[couta1]

Today is the day the famous RYM/SUM price ratio is broken for good :D Only temporarily, possibly,don't forget the RYM result late May which will soon keep the ratio intact.:)

[winner69]

Good lot of extras for the staff

Only fair we expect them to work bloody hard for it ....after all if we work them too hard and they die the family won’t need to front up for the funeral.

;):t_up::mad ;::confused:
Joshua says if I put those silly things in you’ll forgive me for being cynical / unsympathetic or whatever. So take post seriously.

[Beagle]

Good lot of extras for the staff

Only fair we expect them to work bloody hard for it ....after all if we work them too hard and they die the family won’t need to front up for the funeral.

;):t_up::mad ;::confused:
Joshua says if I put those silly things in you’ll forgive me for being cynical / unsympathetic or whatever. So take post seriously.

LOL mate, sometimes less is more :)

Nice to see the SP at an all time high and finally starting to recognize the six year track record of very strong growth this company has proven they're capable of. I think this is one company on the NZX that could see its multiple expand after a pretty tough 18 months, (was $5.60 all the way back in Sep 2016 and there's been huge EPS growth since then)

[minimoke]

Good lot of extras for the staff

Only fair we expect them to work bloody hard for it ....after all if we work them too hard and they die the family won’t need to front up for the funeral.

;):t_up::mad ;::confused:
Joshua says if I put those silly things in you’ll forgive me for being cynical / unsympathetic or whatever. So take post seriously.
$10000!. I burried 2 people for less than that

[Filthy]

$10000!. I burried 2 people for less than that

hopefully you used IVC(ASX) ;)

[Ggcc]

My investment in this great company keeps me happy. But I heard through talk back there were some retirement villages that only let their patients shower twice a week and get a sponge down for the remainder even if they soil themselves? Any idea why people can’t have a shower more than twice a week?

[winner69]

with a bit more enthusiam after lunch we could see a close at 620

That will be good end to the week

[winner69]

[QUOTE=couta1;705339]Only temporarily, possibly,don't forget the RYM result late May which will soon keep the ratio intact.:)[/QUOTE

One thing for sure is that the 1 SUM = 5 OCA will break down ....OCA just wont be able to catch / keep up with SUM

[Beagle]

Hmmm...wonder how the Couta 50-55% relativity theory is going today. Yeah...Nah, must be just a temporary aberration...forget it.

[couta1]

My investment in this great company keeps me happy. But I heard through talk back there were some retirement villages that only let their patients shower twice a week and get a sponge down for the remainder even if they soil themselves? Any idea why people can’t have a shower more than twice a week? Quite simply, caregiver workload ratios, there just isn't enough time in their work schedules to shower people more often. Of course this only applies to those who can't shower themselves, many in the rest home sections shower more often. PS-Normal carer to resident ratios are 1:10 in resthome and 1:5 in hospital section.

[winner69]

Hmmm...wonder how the Couta 50-55% relativity theory is going today. Yeah...Nah, must be just a temporary aberration...forget it.

Relationship hasn’t broken down completely ...yet ....give it a few more weeks / months. (the chart is monthly closes)

Last time it got over 60% (for a period) wasn't a good time to hold SUM

A bit like your current PE reversion theory ...when things have high multiples the share price could fall or go nowhere for a while ..... maybe SUM getting into that overvalued zone on this measure

And RYM is a few months behind SUM in reporting


Fascinating ... today just might be noise in a long relationship

[fish]

Relationship has broken down completely ...yet ....give it a few more weeks / months. (the chart is monthly closes)

Last time it got over 60% (for a period) wasn't a good time to hold SUM

A bit like your current PE reversion theory ...when things have high multiples the share price could fall or go nowhere for a while ..... maybe SUM getting into that overvalued zone on this measure

And RYM is a few months behind SUM in reporting


Fascinating ... today just might be noise in a long relationship

Often a good time to buy is before a good result and then sell if the result causes irrational exuberance
I felt that this morning so sold all my SUM between $6 and $6.10
I really wanted more mercury as their result is going to be good-
Latest recommendation report
Valuation: $3.60Appropriately priced, neither buy nor sell Last updated:24/01/18
Performance Goes from Good to Better; We Increase Mercury's FVE to NZD 3.60
Investment rating
Mercury NZ (formerly Mighty River Power) is a renewable electricity generator accounting for more than 15% of New Zealand's total electricity output. It enjoys a strong competitive position, and we rate the firm as having a narrow economic moat because of cost advantages from its difficult-to-replace hydro and geothermal generation assets and scale in the oligopolistic retail electricity market. The regulatory environment has been favourable and the market is dominated by four major electricity companies, providing an attractive landscape supportive of solid cash flow and returns. The outlook is improving, as the tightening wholesale electricity market should drive stronger generation earnings and allow for retail price rises. Mercury's earnings from fiscal 2019 will also benefit from unfavourable interest-rate hedges rolling off.

Event

Impact

Recommendation impact (last updated: 24/01/2018)
--

Event analysis
Performance Goes from Good to Better; We Increase Mercury's FVE to NZD 3.60

Weather conditions remain highly favourable for narrow-moat Mercury NZ, which is benefiting from plenty of rain while major competitors face dry conditions. We estimate higher hydroelectric generation and high wholesale prices should see double-digit first-half EBITDA growth. Second-half growth is unlikely to be as good given the firm had a very strong finish to fiscal 2017, and rainfall may not be as favourable. Nonetheless, the firm upgraded fiscal 2018 EBITDA guidance 3% to NZD 530 million based on an updated hydro generation forecast of 4,550 gigawatt hours. We think this is a little conservative and increase our fiscal 2018 EBITDA forecast to NZD 537 million.

While Mercury's hydro generation will normalise, we believe stronger wholesale prices will prove sticky and lead to higher electricity prices for customers. We upgrade medium-term earnings forecasts marginally on stronger retail prices and lift our fair value estimate 6% to NZD 3.60 per share. Medium-term earnings will also benefit from falling interest costs as expensive hedges locked in during the global financial crisis roll off. Mercury is a high-quality company with a solid dividend yield and relatively good outlook. At the current price of NZD 3.40, the stock trades modestly below our valuation.

Mercury's generation division is performing very well. The December quarter saw hydroelectric output increase 5% as the firm ran down hydro storage to complement average hydro inflows. Lake Taupo storage started the quarter at 130% of average for that time of year, and ended the quarter at 85%. Mercury's run of good luck continued, with strong rainfall in early January boosting hydro storage back to average levels.



Previous close Market cap
$3.220 $4,436 Million
52 week high/low
$3.600 - $3.020
Sector
Utilities
Intrinsic valuation
Moat rating Narrow
Business risk Medium
Pricing risk --
Company beta 0.66
Sector beta 0.68
Year 06/16A 06/17A 06/18E 06/19E
NPAT ($m) 152.0 176.2 193.2 191.9
EPS (c) 10.9 12.6 13.8 13.7
% change 4.8 15.9 9.7 -0.7
DPS (c) 14.3 14.6 16.0 17.7
Franking (%) 100.0 100.0 100.0 100.0
Yield (%) 5.1 4.7 4.9 5.4
PER (x) 25.7 24.5 23.6 23.7
Source: Aspect Huntley analyst estimates.
6 month price chart

[couta1]

Hey fish, im with you on MCY, the current price doesn't make sense and is a real bargin. PS-Not holding SUM. PPS-Beagle may have to lend me a few shares so I can go to the AGM.

[Beagle]

Often a good time to buy is before a good result and then sell if the result causes irrational exuberance


Ironic you suggest that. Just 10 minutes ago I got my calculator out and realized that $81.7m underlying profit is a 4.7% beat of the mid point of their guidance range issued in December 2017 ($78m) and what do you know, the shares are up 4.7% today. Often I wonder how efficient and rational the market really is. Just when I think it isn't, you get an example like this which almost completely restores my faith in the efficient market hypothesis theory.

[MauroNZ]

I did lighten up our OCA and SUM holding,before the election.Maybe we were a bit overweighted with RYM,OCA,and SUM.
I don't currently have a short term opinion of the sector,however I remain "well positioned" for the long term growth the sector will enjoy.
I value other posters views on the sector more than mine,esp the usual suspects,Couta1[all],Beagle [SUM],and Vaygor1 [RYM].

Few years ago when I've decided to get into the sector I was going to buy RYM but my broker (Craigs) suggested SUM and I bought it (well before knowing about this forum). This one has become my happiest holding, indeed I follow what Couta1 and Beagle comment about it as I look forward to learn more.

[fish]

Ironic you suggest that. Just 10 minutes ago I got my calculator out and realized that $81.7m underlying profit is a 4.7% beat of the mid point of their guidance range issued in December 2017 ($78m) and what do you know, the shares are up 4.7% today. Often I wonder how efficient and rational the market really is. Just when I think it isn't, you get an example like this which almost completely restores my faith in the efficient market hypothesis theory.

Very efficient calculation and thanks for all your postings telling us it was going to be a good result
But I dont believe the market is efficient everyday
The sp has fluctuated a lot since december.
A lot of posts suggested the results was going to be better than forecast so todays result should not have been a surprise to the informed.
I am very happy with the result and hope to buy back in sometime.
In the meantime I am looking for other waves to surf
Dogs like to stay and eat their prey.Sometimes they fall asleep after the food is gone
Fish have to be on the move once they sense the food has gone-but they do come back when the food returns.
They both have been highly successful

[artemis]

Few years ago when I've decided to get into the sector I was going to buy RYM but my broker (Craigs) suggested SUM and I bought it (well before knowing about this forum). This one has become my happiest holding, indeed I follow what Couta1 and Beagle comment about it as I look forward to learn more.

Notice you are in Wellington where SUM annual shareholder meetings are held. Last year I had the pleasure of meeting Beagle, Couta1 and Iceman there. I hope to be there again this year, possibly others from Sharetrader. If you post or PM me nearer the time we can arrange to touch base.

Last year the board and senior managers scooted off to visit a new village before we could grill them. Disappointing, hopefully different this time.

[dobby41]

$10000!. I burried 2 people for less than that

Digging a hole in the forest doesn't count. :eek2:

[macduffy]

Ironic you suggest that. Just 10 minutes ago I got my calculator out and realized that $81.7m underlying profit is a 4.7% beat of the mid point of their guidance range issued in December 2017 ($78m) and what do you know, the shares are up 4.7% today. Often I wonder how efficient and rational the market really is. Just when I think it isn't, you get an example like this which almost completely restores my faith in the efficient market hypothesis theory.

No point in thinking we can ever Buy the rumour, Sell the fact, then?

;)

[trader_jackson]

I have to say, these were great results.
What wasn't so great was the outlook
or lack of

Looked to me like OCA and SUM are about to swap positions - SUM build rate topped out and seem to be focusing on that next-to-no-profit-dog-like care stuff while OCA (and possibly that other dog) is just beginning to ramp up development, as their care offerings are already 'right up there'

[Beagle]

Julian Cook gave an interesting interview with NBR which unfortunately for some people is behind the paywall. SUM interesting insights in there.
I will work on my profit forecast for 2018 and 2019 next week if I get time. Disc: Not selling very happy holder. Long term track record of stellar growth speaks for itself.

[BobbyMorocco]

I have to say, these were great results.
What wasn't so great was the outlook
or lack of

Looked to me like OCA and SUM are about to swap positions - SUM build rate topped out and seem to be focusing on that next-to-no-profit-dog-like care stuff while OCA (and possibly that other dog) is just beginning to ramp up development, as their care offerings are already 'right up there'

It sounds to me like SUM have a bit leftover to sell so they're going to focus on selling those as well as put more effort into their care rather than continuing to increase their build rate right now. I'm not concerned because the results were fantastic but there is little point in increasing the build rate if there's still plenty leftover to sell.

It will be interesting to see if the leftover stock is unsold because it was late getting delivered or if it's because they are starting to top out and struggling to sell them. My gut tells me it's the former and that SUM will increase their build rate again. Definitely too early to say there's any problems at SUM. Going off the massive increase in earnings there's no problem at all!

[Beagle]

Most of the unsold stock is serviced apartments. It was explained to me that these are sold to needs based customers so the vast majority are built before they are sold as people need to see what they are moving into and usually move in quite quickly based on need. Churn rate on these is less than 2 years IIRC so hopefully you get my point about need. Expansion into Australia looks promising, Julian sounded very upbeat about that in his NBR interview.

[value_investor]

I like the result a lot, I wouldn't be too worried about a lack of information on future builds/projects. There's a lot of units in the pipeline that is still in the land bank. The fact that the dividend is only rougly 30% of underlying profits which is at their low range points to more cash in the business being used instead of giving it out.

FY18 will be an interesting one. For the first time in a few years I think we will see zero growth in house prices or even a small drop. With the government intention now on building and controlling speculators it will affect the market as whole too. I'm not sure how sustainable that development margin will be going forward. They've done amazingly well to manage 29%.

[Beagle]

Very early to make a call on 2018 profit but my preliminary modelling suggest they should go close to $100m underlying profit.
Much of the profit growth will be based on resales of existing units with embedded value this year of $152K per unit v last year of $114K per unit.
I'm expecting an announcement on Australian expansion sometime in 2018.

[James108]

I think Summerset have a great second mover advantage in terms of going into Aus. Hopefully a few good scalps from Ryman before they commit to this.

[Beagle]

Summerset shines
https://www.nbr.co.nz/article/impressive-company-results-lead-earnings-upgrades-jr-p-213083

[couta1]

Summerset shines
https://www.nbr.co.nz/article/impressive-company-results-lead-earnings-upgrades-jr-p-213083 Still, a bit overvalued currently, or more probably RYM undervalued aye.

[Beagle]

Still, a bit overvalued currently, or more probably RYM undervalued aye.

LOL mate. Lets see how your 50-55% of RYM price relativity theory holds water this year :)

[couta1]

LOL mate. Lets see how your 50-55% of RYM price relativity theory holds water this year :)Ryman be worth roughly double SUM others by end of May once again, enjoy the current run.:cool:

[winner69]

Those who pay the NBR an outrageous amount to read their insights shouldn’t shame us mere mortals by teasing us with links to locked articles

Unless it is a ploy by the NBR to seduce us to open up our wallets.

[MauroNZ]

Notice you are in Wellington where SUM annual shareholder meetings are held. Last year I had the pleasure of meeting Beagle, Couta1 and Iceman there. I hope to be there again this year, possibly others from Sharetrader. If you post or PM me nearer the time we can arrange to touch base.

Last year the board and senior managers scooted off to visit a new village before we could grill them. Disappointing, hopefully different this time.


I was so keen to attend last year however it happened when I was traveling to Japan (wonderful trip) so I thought I hope in 2018 I won't miss it, in fact I'm adding it now to my calendar, do you know when are they going to tell where is going to be?.

Would be great to meet people in person as I haven't had that chance yet.

[Beagle]

Those who pay the NBR an outrageous amount to read their insights shouldn’t shame us mere mortals by teasing us with links to locked articles

Unless it is a ploy by the NBR to seduce us to open up our wallets.

Sorry mate, forgot is was locked. Agree their subscription is expensive. Just said that Craig Lister thought that SUM's result was really really good and some other companies reporting had also really shone (ATM the real highlight, THL and EBO also good.
AGM usually very late in April. Must be time for them to consider moving it around the country like other companies do.

[Beagle]

Ryman be worth roughly double SUM others by end of May once again, enjoy the current run.:cool:

Thanks mate, this run is very enjoyable or more correctly it will be enjoyable when you can call it a run. Was $5.60 ~ 18 months ago in September 2016. Annual earnings growth was 50% in 2016 and has just been 44% so the SP has nowhere near kept up with earnings growth. A decent run would be this puppy heading to $9. Just give it time, it'll get there.

If they can hit $100m underlying profit for 2018 on 224m shares that's 44.64 cps. At $6.26 that puts SUM on a current year PE of just 14 and that for a company with a six year track record of average compound growth of 47% per annum in underlying earnings and some people reckon there's not much value left in the N.Z. market and PE's right across the board are too high....The PEG is still just 0.30...Hmmmm

I won't for a minute claim RYM isn't a great company because there's no debate about that. The issue is why should SUM which is growing at three times the earnings growth rate be priced at such a heavy PE discount ? For me, I can't see any logic to this trading at a discount to the market average PE of about 21, (which is still a material discount to RYM's forward PE) so my price target is 21 x 44.64 = $9.37.

If we get a nice stable year with real estate and some good news on an attractively priced land acquisition in Australia there's no reason this one can't have the possibility of giving shareholders a very rewarding year, which would be a pleasant change from last year. 50% SP gain a possibility ?, you betcha !

[BobbyMorocco]

I won't for a minute claim RYM isn't a great company because there's no debate about that. The issue is why should SUM which is growing at three times the earnings growth rate be priced at such a heavy PE discount ? For me, I can't see any logic to this trading at a discount to the market average PE of about 21, (which is still a material discount to RYM's forward PE) so my price target is 21 x 44.64 = $9.37.


I'm with you on this one Beagle. I did some thinking over the weekend to try and work out if I would be willing to sell if SUM had a good run and I came to very much the same conclusions as you - that there is no reason why SUM can't have a $9 in front of it one day soon. I also decided that in the current environment my shares won't be for sale for anything less than $10.

Looking at the market depth it looks like other holders agree and are holding onto their shares quite tightly.

All the best with your holding and keep up your commentary. It's always good to read.

Cheers.

[Beagle]

Some sums to think about. Since listing in late 2011 Summerset in February of each subsequent year have announced underlying earnings growth for the calendar years as follows :-
2011 35% about IPO forecast announced February 2012
2012 88%
2013 46%
2014 10%
2015 55%
2016 50%
2017 44% just announced.

Building a highly credible profit growth track record where a current year PE of just 14 is too cheap really ? Judge for yourself.

[couta1]

The difference between the relativities of the SUM and RYM share price is all about history,sentiment and perception. RYM are the top dog due to their leading the sector in every possible way, they have a large international following and are in the top 10 healthcare companies in the world, they also have great rapport in NZ and know how to negotiate through consent issues(Even the most difficult ones) seemingly effortlessly. The level of care and what's on offer to their residents is top notch. SUM are a great development company but still need to up their game on the care side of things, in light of the above facts plus a few others, they deserve the price premium IMO.

[Beagle]

Speaking of top dog's mate. This top dog :p reckons you have a fair point and RYM probably always trade at a big PE but 14 is too cheap for SUM. That's a PE that's appropriate for a low growth slightly "doggy" company for which sadly for the NZX, there are many.
Disc: Getting my snout into SUM more..my rating BBB (Beagle busy buying)

[couta1]

Speaking of top dog's mate. This top dog :p reckons you have a fair point and RYM probably always trade at a big PE but 14 is too cheap for SUM. That's a PE that's appropriate for a low growth slightly "doggy" company for which sadly for the NZX, there are many.
Disc: Getting my snout into SUM more..my rating BBB (Beagle busy buying) Nice one Beagle, but perhaps you should wait until the over exuberant buying settles down, myself I'm waiting for a drop in another milky share, at which point some other slightly"doggy"stocks will be getting kicked out of the kennel, even if they are bleeding.

[tipsy]

@ 6.35, with only 1 seller at 6.52 currently, some nice gains so far today :cool:

[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

I said this last month

Target was 670 ...almost there

Hope the range trading bit is wrong though .....it might just head up to 700 and then 800 ...

[Ggcc]

One 620,000 trade at $6.45. Someone sees value in Summerset

[Beagle]

One 620,000 trade at $6.45. Someone sees value in Summerset

Yeap, just on $4 million dollars bought at close to the top for the day says there's serious institutional interest in this growth story.

[iceman]

One 620,000 trade at $6.45. Someone sees value in Summerset

Didn´t you read post 6095. It makes clear who this buyer is. BBB :-)

[winner69]

Didn´t you read post 6095. It makes clear who this buyer is. BBB :-)

....seems to be the only fundie who is interested though

[couta1]

Didn´t you read post 6095. It makes clear who this buyer is. BBB :-) Short for Beagles Bone Broking Ltd.

[winner69]

Speaking of top dog's mate. This top dog :p reckons you have a fair point and RYM probably always trade at a big PE but 14 is too cheap for SUM. That's a PE that's appropriate for a low growth slightly "doggy" company for which sadly for the NZX, there are many.
Disc: Getting my snout into SUM more..my rating BBB (Beagle busy buying)

Hey beagle ....why do really think a PE of 14 is way too low for SUM and while you at it what you think is a ‘more reasonable’ multiple — probably the answer is what ‘discount’ to RYM’s PE is appropriate.

[winner69]

SUM reported NPAT for F17 was about $1 a share

Jeez that puts them on a PE of about 6.5 on trailing basis and if they make $275m in F18 a PE under 6

[Beagle]

Some sums to think about. Since listing in late 2011 Summerset in February of each subsequent year have announced underlying earnings growth for the calendar years as follows :-
2011 35% about IPO forecast announced February 2012
2012 88% RYM up 19%
2013 46% RYM up 18%
2014 10% RYM up 15%
2015 55% RYM up 16%
2016 50% RYM up 13%
2017 44% just announced. Mid point of 2018 forecast $205m RYM up 15% to be confirmed late May 2018

Building a highly credible profit growth track record where a current year PE of just 14 is too cheap really ? Judge for yourself.


Hey beagle ....why do really think a PE of 14 is way too low for SUM and while you at it what you think is a ‘more reasonable’ multiple — probably the answer is what ‘discount’ to RYM’s PE is appropriate.
You know me mate, I'm a numbers man. The underlying EPS growth figures speak for themselves, see blue comparative RYM underlying EPS growth figures above
Perhaps the real question should be given the FACTS about growth, does RYM deserve to be at a PE premium to SUM at all ? Could we see SUM's PE rerate close to RYM's PE over the next couple of years as SUM continues to demonstrate its ability to be consistently the fastest growth retirement company in N.Z. ? Certainly I would argue they're building a very strong and highly ccredible record for fast growth.

[Nasi Goreng]

Thanks Beagle.

What is SUMs pipeline like compared to RYM's? Is 40% growth sustainable? The results to date are phenomenal.

[Beagle]

They both have solid pipelines of future developments they're working on. SUM has a land bank that will give it six years of development at the current build rate of ~ 450 units a year.

The results to date have indeed been phenomenal, that's exactly the right adjective to use to describe them. A lot of that has been working around refining their development model over the years and lifting their build rate. Development margins have expanded from several years ago at 15% to 27+% in the most recent result.
Further, last year we saw the build rate increase from ~ 400 the year before to 450 this year, so a 12.5% increase in the number of units built.

The short answer is I am expecting some moderation of the underlying earnings growth rate in the 2018 year. Its very early in the year to stick my neck out and make a prediction but the other day I commented that my preliminary modeling sees them going close to $100m in underlying profit this year for circa 20-25% growth in 2018. My thinking is the vast majority of this will be because of higher numbers of resale's, (they have more stock than last year after building another 450 units, and higher realized profits on resale, embedded value 31/12/2016 was about $114K per unit and is now ~ $150K per unit, both figures from memory.

Looking further out, in a behind the paywall article on NBR the other day Julian Cook hinted at an expansion in the build rate in the future and mentioned they are keen on expansion into Australia. You don't get all that many chances in your lifetime to buy growth shares with a very strong track record like this one on a PE of just 14.
In 30 years of investing I struggle to recall a single other example of a growth share with this sort of stellar track record trading on that forward multiple.
Opportunity knocks ?...you be the judge. The final thing to consider when looking at that multiple is the strong prevailing demographic tailwinds for the sector for the next 20-25 years.

Winner reckoned a while back the average PE this company has traded on since listing is 27. Never mind the emotion / sentiment of RYM do this or that better and they should be top dog, the earnings growth FACTS suggest this company is undervalued and under appreciated by the market.

[winner69]

beagle

You may be getting your wish --- the SUM PE is slowly creeping up. Based on SUM achieving $100m underlying earnings for FY18 but only taking 1/2 of that at the moment (1/2 year like) I have them on a PE of 16.4 at the moment

What's intriguing is that is that the PE has been in a downtrend since 2014 when it was over 30. In the same period Ryman's PE has also declined. Maybe it is actually a sector thing -- interesting eh

The declinings PE hasn't been that obvious on the SUM price chart (compared to Ryman) because SUM earnings have been growing at much greater rate

But whatever there has to be a good 'reason' for such trends....wonder it is and wonder what it means? I have my theory.

Anyway an interesting chart (its based on underlying earnings, just for you)

[iceman]

Potentially bad or unworkable proposed law change that affects the retirement industry http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12002635

[minimoke]

Potentially bad or unworkable proposed law change that affects the retirement industry http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12002635Add to that restrictions on foreign labour (builders) as well as costs associated with pay equity / minimum wage / triangular employment relationships there's a perfect storm brewing for Labour as NZ business starts to feel the pinch

[dabsman]

Its ok Labour will arrange another working group - that fixes everything...

[Joshuatree]

Got to have the balance right, im sure a little Govt tweaking will keep everything hunky-dory.

[winner69]

Share price above the upper channel line ...just like Sept 2016

Is a weekly chart so may still be in the channel by Friday if price falls back to $6.32

SUM share price continues to increase at ~25%pa (over many years). Cool

[Beagle]

Share price above the upper channel line ...just like Sept 2016

Is a weekly chart so may still be in the channel by Friday if price falls back to $6.32

SUM share price continues to increase at ~25%pa (over many years). Cool

Very cool...SUM might even say this is the perfect stock to build wealth for their retirement, then move into one of their lovely spacious units and keep the shares too, a real win-win all round :)

[Beagle]

beagle

You may be getting your wish --- the SUM PE is slowly creeping up. Based on SUM achieving $100m underlying earnings for FY18 but only taking 1/2 of that at the moment (1/2 year like) I have them on a PE of 16.4 at the moment

What's intriguing is that is that the PE has been in a downtrend since 2014 when it was over 30. In the same period Ryman's PE has also declined. Maybe it is actually a sector thing -- interesting eh

The declinings PE hasn't been that obvious on the SUM price chart (compared to Ryman) because SUM earnings have been growing at much greater rate

But whatever there has to be a good 'reason' for such trends....wonder it is and wonder what it means? I have my theory.

Anyway an interesting chart (its based on underlying earnings, just for you)

Awesome chart mate, says it all. My theory is that in recent years people have been concerned that the real estate market is cooling and their model may come under pressure.
Last year was hardly a stellar year in the real estate market, (a more normal year if you like, if there is such a thing) and look at the profit growth.
Even if SUM's profit growth declines down toward RYM's medium term objective of 15% per annum over time, SUM shares are still substantially better value.
Further, it could be that SUM don't have the 25% foreign ownership threshold of shareholding yet so could potentially have a competitive advantage over other industry participants with future N.Z. land acquisitions.

[winner69]

Fisher Funds been selling down ....or taking profits

That's a good sign (often)

[Nasi Goreng]

This could rally to above $8 and still look pretty reasonable.

[winner69]

Doesn't seem that long the world had Summerset being affected by a collapsing property market and the share price was down at 470 odd

Now its up 35% and the future looks bright

Too many punters believe everything the media churns out ....like what they 'reporting; about the impending property market collapse was miles away from reality (i said so at the time)

Chris Lee has some interesting comments on this in his weekly comment. Seems like analysts/fund managers read the papers too much as well
https://www.chrislee.co.nz/taking-stock

For Chris Lee knockers the retirement village bit is worthwhile reading ...just pretend Beagle wrote it and you will feel better
https://www.chrislee.co.nz/taking-stock

[DarkHorse]

Well worth reading, thanks winner69!

[winner69]

Share price fallen back late in the weel and on a weekly close is just contained in the long uptrending channel (spooky eh)

Looking at this and noting what I said a few weeks ago about range trading everything points to SUM share price trading between $5.60 and $6.80 all of this year.

Even that PE chart I posted the other day suggests that this will occur .... the $6.80 being a PE of just over 15 on $100m underlying earnings, probably all the market thinks its worth.

Doesn't seem exciting but with the shareprice still returning about 25% pa over a long period I shall just have to keep holding

[value_investor]

I think the recent scare tactics have scared a few people off as well. It seems as though Ryman is somehow immune to it all. Their share price hasn't moved much in comparison to SUM. Perhaps they are a darling share with the fund managers out there because it should have dropped more proportionately because its so over-valued.

I do think the changes proposed by the govt may have some affect in this industry on stocks in the short term but the long game is very strong.

[BlackPeter]

Share price fallen back late in the weel and on a weekly close is just contained in the long uptrending channel (spooky eh)

Looking at this and noting what I said a few weeks ago about range trading everything points to SUM share price trading between $5.60 and $6.80 all of this year.

Even that PE chart I posted the other day suggests that this will occur .... the $6.80 being a PE of just over 15 on $100m underlying earnings, probably all the market thinks its worth.

Doesn't seem exciting but with the shareprice still returning about 25% pa over a long period I shall just have to keep holding

I might be old fashioned,but I very much prefer a boring 25% gain :t_up: to an exciting 100% loss (CBL) :t_down:

[Beagle]

Share price fallen back late in the weel and on a weekly close is just contained in the long uptrending channel (spooky eh)

Looking at this and noting what I said a few weeks ago about range trading everything points to SUM share price trading between $5.60 and $6.80 all of this year.

Even that PE chart I posted the other day suggests that this will occur .... the $6.80 being a PE of just over 15 on $100m underlying earnings, probably all the market thinks its worth.

Doesn't seem exciting but with the shareprice still returning about 25% pa over a long period I shall just have to keep holding

25% per year is so boring you can just sleep your way to doubling you're money every three years. (25% compounded for 3 years = 95.3% gain). Happy to bore myself stupid all the way to my retirement at that rate mate :)

Fisher funds trimmed their holding a bit recently. In a behind the paywall article on NBR they said their portfolio had become unbalanced with the recent strong run in SUM so they had to trim some to keep their self imposed allocations intact. The investment manager went on to say that they thought SUM was good value for the growth on offer. I gathered the impression they wouldn't be selling any more.

[allfromacell]

Did SUM go ex-divi yesterday? I didn't notice a drop?

[blackcap]

Did SUM go ex-divi yesterday? I didn't notice a drop?

It's a tiny dividend, probably lost in the noise. Not sure what happened yesterday but it may have gone up... just not as much as if it was still CD :)

Good to see it up again today, going well and great things ahead.

[Zaphod]

SUM is one of the few companies that I don't keep a track of the ex-DIV dates, because it's so small it never really effects the SP much, and I have a very long term view on the investment itself.

[Beagle]

It's a tiny dividend, probably lost in the noise. Not sure what happened yesterday but it may have gone up... just not as much as if it was still CD :)

Good to see it up again today, going well and great things ahead.

Yes they went ex the ~ 7 cent divvy yesterday, recovered the dividend on the same day just like AIR did. Hard to keep good companies down isn't it :D
Disc: Topped-up SUM more today. Long term you can't go wrong...

[value_investor]

The brakes got pumped a bit on price with all the implications that may be put in place by the govt of the day I think.

What type of growth are we expecting on underlying profit in this FY then?

Another 40% would be a heck of an effort but perhaps not attainable. Even a 'modest' growth of between 10-20% would still value this company on a forward basis as amazing value for money ($6.44 on this day).

[Beagle]

Hey Couta1. How's that special reversion theory of yours holding up mate ? :)

[couta1]

Hey Couta1. How's that special reversion theory of yours holding up mate ? :) Sum now overvalued, but not for long once RYM get closer to their result and things revert back to the mean where they should be. PS-You have to expect a bit of irrational exuberance from time to time, but long term, well you know the story.

[Ggcc]

I don’t see Summerset overvalued. I see that Summerset was undervalued for way too long.

[Beagle]

I don’t see Summerset overvalued. I see that Summerset was undervalued for way too long.

I could not agree more. Share prices follow earnings per share or more correctly earnings per share in the foreseeable years ahead. SUM shares have been in the wilderness for too long. My best guess on the underlying forecast for FY18 this early in the year is $100m underlying profit and on 224m shares that's 44.64 cps.
At $6.79 they're on a forward PE of just 15.2. Why should SUM with its stellar record of profit growth be on a forward PE well below the market average of about 21 ?
A current year PE of 21 would give them a SP of 21 x 44.64 = $9.37 later this year / early 2019...impossible ?...or maybe not ?

[couta1]

I don’t see Summerset overvalued. I see that Summerset was undervalued for way too long. Bit of tongue in cheek fun with the Beagle, but off course I stand by my theory that long term SUM will revert to under 60% of RYM share price, wait till RYM get a whole lot of their XOS villages all coming on tap at once.

[LAC]

$6.80 at the moment...what did I miss? up 5.5% today, is that a new high?

[Ggcc]

$6.80 at the moment...what did I miss? up 5.5% today, is that a new high?
For the last two years Summerset stood still while growing underlining profit at roughly 44% per year average is what you may have missed. Glad I own a few of these with no intention of selling anymore, which I think others holding are doing this very moment.

[Beagle]

Underlying profit grew 50% and 44% respectively for 2016 and 2017. Yes a new high and not before time, (18 months ago was $5.60 and earnings are a heck of a LOT more now).

Hey Winner. You know that restricted persons trading policy that was finally agreed a couple of years ago that a certain person hounded them into in association with the NZSA, I think if my memory serves me correctly the restricted persons window for buying in this first quarter ends on about 15th March. Kind of makes me wonder who's buying just before that window closes and what they know about sales so far this quarter ? Perhaps I'm reading too much into it...wouldn't be the first time lol

I'm going to go out of a limb here especially for my very good friend Couta1's benefit. You theory is gone for a burton for all time mate. Better BUY back in before they catch up to RYM :D

[winner69]

For the last two years Summerset stood still while growing underlining profit at roughly 44% per year average is what you may have missed. Glad I own a few of these with no intention of selling anymore, which I think others holding are doing this very moment.

Not quite correct

Two years ago SUM shareprice was $4.40 ...so at todays price of $6.80 thats increasing at 24%

A rate thats been in existence for a few years now ..... and just happens to be about what Beagle says underlying profit will grow by in 2018

[couta1]

I'm just too immersed in a certain kinda milk to worry about SUM other company right now, actually wishing I was completely submerged if truth be known.

[Beagle]

Kind of but the SP has been cyclical a bit mate. For instance in March 2014, four years ago my old balance sheet shows my holding valued at $3.40, so about 19% compound growth in SP since then but earnings have been growing MUCH faster.

[minimoke]

I'm just too immersed in a certain kinda milk to worry about SUM other company right now, actually wishing I was completely submerged if truth be known.With ATM, SUM , THL and PPH I'm finding I'm drowning in dollars at the moment. Thankfully HBL is my sanity straw to the surface.

[Ggcc]

At what point do we get a please explain why price is increasing so much?

[Beagle]

At what point do we get a please explain why price is increasing so much?

I was just thinking that myself. Almost due for the mandatory speeding infringement notice from the NZX with the usual response expected of "nothing untoward" and we are mindful of our continuous disclosure obligations under the NZX rules and regulations. Just been too cheap for too long. SUM of us might have mentioned that "once or twice" before. Hopefully SUM on here appreciate others taking a "dogged" approach to highlighting opportunities. No doubt my detractors will think I'm too dogmatic lol

[pierre]

No doubt my detractors will think I'm too dogmatic lol

Anyone thinking you're too dogmatic about SUM should paws for thought because you're definitely not barking up the wrong tree!

[Ggcc]

I was just thinking that myself. Almost due for the mandatory speeding infringement notice from the NZX with the usual response expected of "nothing untoward" and we are mindful of our continuous disclosure obligations under the NZX rules and regulations. Just been too cheap for too long. SUM of us might have mentioned that "once or twice" before. Hopefully SUM on here appreciate others taking a "dogged" approach to highlighting opportunities. No doubt my detractors will think I'm too dogmatic lol
I for one thank you, as I have agreed with your posts and followed it by investing Big with this one at just under $4 average. It has done me well!! I am waiting for this to happen to Oceania now as well haha. I guess it will take a bit longer for that share, but it would not surprise me if Oceania gets over $1.50 in two years

[winner69]

Beagle ...still think you a bit light on your forecasted $100m Underlying Profit for 2018

Will be more than that ...I’ve told you before you’re always too ‘conservative’ (ha ha) when it comes to SUM forecasts .....and that I’m generally closer to the mark than you

[Beagle]

http://www.sharechat.co.nz/article/8cbb6cda/summerset-climbs-to-record-as-first-nz-upgrades-stock.html?utm_medium=email&utm_campaign=Summerset%20climbs%20to%20record%20as %20First%20NZ%20upgrades%20stock&utm_content=Summerset%20climbs%20to%20record%20as% 20First%20NZ%20upgrades%20stock+CID_00138b251a9ad1 25cf13c4881a9ee470&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8cbb6cdasummer set-climbs-to-record-as-first-nz-upgrades-stockhtml

[winner69]

http://www.sharechat.co.nz/article/8cbb6cda/summerset-climbs-to-record-as-first-nz-upgrades-stock.html?utm_medium=email&utm_campaign=Summerset%20climbs%20to%20record%20as %20First%20NZ%20upgrades%20stock&utm_content=Summerset%20climbs%20to%20record%20as% 20First%20NZ%20upgrades%20stock+CID_00138b251a9ad1 25cf13c4881a9ee470&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8cbb6cdasummer set-climbs-to-record-as-first-nz-upgrades-stockhtml

FNZC LOVE SUM

They’re gurus ...and pushing many punters the SUMway

Good eh


FNZC better at ramping then you Beagle ...but what a combo

[Onion]

FNZC better at ramping then you Beagle ...but what a combo

Don't exclude yourself as an adept practitioner Winner.

[Beagle]

FNZC LOVE SUM

They’re gurus ...and pushing many punters the SUMway

Good eh


FNZC better at ramping then you Beagle ...but what a combo

I suspect the institutions are "slightly" more interested in FNZC analyst's review than some yappy dog on here LOL...but you couldn't completely rule out the possibility that the analyst might have heard or read about SUM of the barking :)

[couta1]

I suspect the institutions are "slightly" more interested in FNZC analyst's review than some yappy dog on here LOL...but you couldn't completely rule out the possibility that the analyst might have heard or read about SUM of the barking :) Well I'm not sure, after all the yappy dog is in 7th place currently and First NZ are in 143rd place in the share pick comp, and they haven't even got SUM amongest their picks.

[Beagle]

Well I'm not sure, after all the yappy dog is in 7th place currently and First NZ are in 143rd place in the share pick comp, and they haven't even got SUM amongest their picks.

Just a temporary fluke mate. All the proof you ever need that every dog has its day. I'm sure I'll get a reality check soon enough but I did read in yesterday's market close summary on the NBR that SUM was the second best performer of the NZX50 stocks so far this year with ATM a clear leader by miles ahead. If HLG were included in the NZX50 those three (which are my biggest three invested positions by quite SUM margin) I'd have the trifecta !

Of course a really cunning dog would just have a super big XXXXXXXXXXL position in ATM and another XXXXXL position in HLG...wonder who that extremely clever investor is :)

[winner69]

Hey Beagle me old mate, that article says FNZC '..... upgrade was due to an uplift in the amount of value attributed to future development "given increasing confidence in Summerset's approach to risk".'

Isnt that what you have been saying for ages

[Beagle]

Not sure I recall putting in in those terms but I think that's just FNZC way of somewhat creatively saying we've been less bullish on this one than we should have been, not that these analysts ever admit they were wrong LOL. The jump in the development margin this year was extremely pleasing but that isn't news per se, in fact as you quite rightly say I noted at the half year point last year that they were really smashing the ball out of the park with their development margins.

Their debt management and land banking have also been impressive. Overall I think the management team are doing a very good job. Not the slick well oiled machine RYM are yet but you have to hand it to them and give kudos where its due, their track record of EPS growth since they listed over six years ago has vastly exceeded the rate of RYM's growth. The numbers don't lie mate and you know me, I'm a numbers man ! Maybe we might see the multiples these two trade at close up a bit in the years ahead ? Now that would really give me a good warm contented feeling...finally SUM companies getting recognised for their real earnings growth performance.

Better get yourself a defibrillator at some stage in the next couple of years mate so you can pop around and resuscitate Couta1 from his heart attack when SUM's SP overtakes RYM's :D

[winner69]

Beagle ....wasn't there a huge increase in the embedded value per unit last year .... indicator of future profits when they get sold eh

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/314609/275030.pdf
Very good result and nice beat on recent guidance. Highly credible that they raised the development margin so significantly in what is arguably an extremely tough construction market (look no further than FBU and their sub contractor problems for an example of how tough it is out there).

Interesting snippets from the investor presentation.
Embedded value per unit now $152K up from $114k last year, augers well for future profit growth.
Underlying profit has grown on average 47% per year for the six years since they listed, (struggling to think of any company that has anything like that record ?)
For those that like the headline IFRS metric Net profit after tax has grown on average at a whopping 93% per annum since they listed.

My thoughts are that this is an outstanding company for people to build wealth over time. Very happy long term holder.


Thanks mate, this run is very enjoyable or more correctly it will be enjoyable when you can call it a run. Was $5.60 ~ 18 months ago in September 2016. Annual earnings growth was 50% in 2016 and has just been 44% so the SP has nowhere near kept up with earnings growth. A decent run would be this puppy heading to $9. Just give it time, it'll get there.

If they can hit $100m underlying profit for 2018 on 224m shares that's 44.64 cps. At $6.26 that puts SUM on a current year PE of just 14 and that for a company with a six year track record of average compound growth of 47% per annum in underlying earnings and some people reckon there's not much value left in the N.Z. market and PE's right across the board are too high....The PEG is still just 0.30...Hmmmm

I won't for a minute claim RYM isn't a great company because there's no debate about that. The issue is why should SUM which is growing at three times the earnings growth rate be priced at such a heavy PE discount ? For me, I can't see any logic to this trading at a discount to the market average PE of about 21, (which is still a material discount to RYM's forward PE) so my price target is 21 x 44.64 = $9.37.

If we get a nice stable year with real estate and some good news on an attractively priced land acquisition in Australia there's no reason this one can't have the possibility of giving shareholders a very rewarding year, which would be a pleasant change from last year. 50% SP gain a possibility ?, you betcha !


Beagle ....wasn't there a huge increase in the embedded value per unit last year .... indicator of future profits when they get sold eh

Yeap, see above comments from late February, comments made "just a little" before FNZC analyst finally got around to crunching the numbers.
Maybe you're right and they can do more than $100m underlying profit this year. That would be good wouldn't it !

[winner69]

FNZC guy said "we are watching the housing market and inventory levels closely," (from that sharechat article)

Hope he’s watching closely enough ...might have to raise his target again eh

Looks pretty good the property market per se to me.


https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Residential/February/REINZ%20Residential%20Press%20Release%20-%20February%202018.pdf

[percy]

I think the FNZC analyst disagrees with RYM and SUM on the affect the property market has on their prospects.
So far the past 20 years RYM and SUM have been correct.

[minimoke]

Since I'm new to SUM how does theri Div Reinvestment work. I see they are XD now - do I get a letter or just an update on holding at some stage?

[777]

Since I'm new to SUM how does theri Div Reinvestment work. I see they are XD now - do I get a letter or just an update on holding at some stage?

Log in to the share registry and tick the box for shares in lieu if cash. Timing for this dividend may be a problem as I think it has to be before ex date.

[Beagle]

FNZC guy said "we are watching the housing market and inventory levels closely," (from that sharechat article)

Hope he’s watching closely enough ...might have to raise his target again eh

Looks pretty good the property market per se to me.


https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Residential/February/REINZ%20Residential%20Press%20Release%20-%20February%202018.pdf

Those are really solid statistics, all the more so when you consider RBNZ deposit requirement changes and various banks making it harder to borrow money.
Worth remembering that only 6 of SUM's villages are in the wider Auckland region.
Also worth remembering in regard to future profit growth that in addition to the much higher embedded value per unit I mentioned yesterday, that the number of units available to be churned went up by 450 last year :)


Since I'm new to SUM how does theri Div Reinvestment work. I see they are XD now - do I get a letter or just an update on holding at some stage?

Dividend reinvestment plan (DRP) 2.5% discount to volume weighted average ex divvy price. You'll get a dividend statement in the next week or so telling you how many extra shares you've been granted in lieu of the dividend. I'm fully subscribed to the DRP.

[iceman]

Since I'm new to SUM how does theri Div Reinvestment work. I see they are XD now - do I get a letter or just an update on holding at some stage?

Login to your account at Link Market Services, select "Payments & Tax" and then "Reinvestment Plans" where you can select what you want. But like 777 said above, you may be too late for the current divie.
Welcome aboard this train mate :-)

[minimoke]

Login to your account at Link Market Services, select "Payments & Tax" and then "Reinvestment Plans" where you can select what you want. But like 777 said above, you may be too late for the current divie.
Welcome aboard this train mate :-)I bought on 14 Nov at $4.80 so am expecting to be included.

[BlackPeter]

I bought on 14 Nov at $4.80 so am expecting to be included.

I think the issue is not when you bought the shares, but when you selected the Reinvestment plan. I am sure you will get your divvie, but it might be in cash ;);

[minimoke]

I think the issue is not when you bought the shares, but when you selected the Reinvestment plan. I am sure you will get your divvie, but it might be in cash ;);Ah - filled the forms in pretty much as soon as they arrived which was at least 6 weeks ago. I'll just check the registry later and see what it says.

[iceman]

Ah - filled the forms in pretty much as soon as they arrived which was at least 6 weeks ago. I'll just check the registry later and see what it says.

Then you should be fine but easy to check on Link Market's website

[Antipodean]

Since I'm new to SUM how does theri Div Reinvestment work. I see they are XD now - do I get a letter or just an update on holding at some stage?

The registry will automatically update - and you should receive electronic or postal communication to that effect. Any other portfolio trackers (like through ASB/ANZ online for example) you will need to manually update to include the new shares. Usually by loading a $0 consideration purchase.

[dabsman]

The registry will automatically update - and you should receive electronic or postal communication to that effect. Any other portfolio trackers (like through ASB/ANZ online for example) you will need to manually update to include the new shares. Usually by loading a $0 consideration purchase.

I add at the cost I "purchased" the DRP at. Am I doing this all wrong? My logic is the fact that if I got the cash I would just invest it anyway in a stock so I really am purchasing the share even thou it feels free

[minimoke]

I add at the cost I "purchased" the DRP at. Am I doing this all wrong? My logic is the fact that if I got the cash I would just invest it anyway in a stock so I really am purchasing the share even thou it feels free
I'll be adding costs as $0.00.

On my portfolio spreadsheet I keep a separate line for cash dividends. It will stay on spreadsheet until I either apply the cash to a stock purchase (in which case portfolio value essentially stays the same) or I take the cash out and spend it all on Ardbeg, or other goodies (in which case Portfolio value drops).

The value of the stock holding goes up (assuming no fall back on price) since I now have more shares.

[Toasty]

I add at the cost I "purchased" the DRP at. Am I doing this all wrong? My logic is the fact that if I got the cash I would just invest it anyway in a stock so I really am purchasing the share even thou it feels free

Thats what I do. Keen to see what other people are doing as I hate getting these things wrong.

[BlackPeter]

Thats what I do. Keen to see what other people are doing as I hate getting these things wrong.

I don't think there is a right or wrong. Depends on what you want to get out of this exercise. If you want to know what the average share price is you paid for your holding, than you clearly need to add whatever cash dividend you gave up for getting them (DRP shares are NOT free!).

Obviously - depending on your accounting ... if you shift money from you cash account to your investment account to pay for these "DRP" shares, than you need as well to enter the cash dividend (which you used to buy your DRP shares, but never received in cash) to your cash account. That's what I do.

Clear like mud?

[Beagle]

I add at the cost I "purchased" the DRP at. Am I doing this all wrong? My logic is the fact that if I got the cash I would just invest it anyway in a stock so I really am purchasing the share even thou it feels free

Correct in my opinion. If you're effectively acquiring extra shares in lieu of a cash dividend you've effectively elected to purchase same for the cash consideration of the dividend foregone. Others may have a different or more creative approach and that's their prerogative.
A 2.5% discount is at the higher end of the scale and for a growth company like SUM it makes good common sense to reinvest unless you really need the cash.

[Filthy]

I add DRP shares @ zero cost (i.e. free shares), thus lowering my overall holding average, increasing the divi % return and ensuring the proper gain is captured in the ROI increase in my ASB portfolio tracker

This allows me to accurately compare the return of say a ‘growth-no-divi’ share (i.e. ATM) vs a ‘stock-paying-divi’ share…. like SUM

I then run my own DRP plans for most of my 'cash-divi-only option' shares i.e. AIR (inclusive of brokerage cost) especially on shares where I perceive there is good value for money at current SP level (or where the SP has dropped below my entry point - thus cost averaging).

If the divi’s are too small to warrant immediate reinvestment, I may save up a couple of divi allocations (in cash), wait for a reasonable entry point, then ‘blow’ say 18-months (i.e. 3 divis worth of that particular share) in one purchase, which reduces the effects of the brokerage fees. This requires me to look back at the amount I have received from that share – easy, as you can revert to the online portals for computershare/link if needed.

Again these ‘free shares’ (using my own DRP scheme) are added @ zero cost.

There will however be occasions when the SP has run really well (i.e. a decent gain onwards past my entry), and it wont warrant reinvestment, so I will take that divi money out of circulation ‘as profit' (which I then reflect in my own offline portfolio spread-sheet).

Profits are either used to invest in other shares entirely (when coupled with regular savings) as a 'new' purchase, OR used to buy a couple of Tui’s

I am NOT saying the above is the correct way of doing it. It is just how I do it (it helps that I have time on my side - so reinvestment and multiple holdings is a logical approach for me).

Everyone will have their own views on how to treat DRP (and Divi’s) – and there is no right or wrong way, but at the end of the day, as long as you understand how you are capturing the data and its accurate – then, box of fluffies!!

[Ggcc]

I have always found that when I have invested in companies with a dividend reinvestment scheme, It has always proven better for me to take the cash and invest in your other lower valued shares. Nothing wrong with the company/share, only if you fear that you will spend the money........Give me the cash please

[Antipodean]

Re the $0 DRP or not, I'm in the 'depends what you want out of it' camp.

I want my 'automated' portfolio via ASB to track what funds I have put into equity investment versus current value, nothing more. I think 'charging' for the DRP shares makes dividend stocks look worse than growth stocks.

Though it could be argued I'm putting money into the stock when the DRP transacts compared with taking the cash, I want the psychological incentive of 'free' shares to continue to commit to the DRP. Especially when I was first investing as ignoring the brokerage was a pivotal factor for me.

[Vaygor1]

Re the $0 DRP or not, I'm in the 'depends what you want out of it' camp.

I want my 'automated' portfolio via ASB to track what funds I have put into equity investment versus current value, nothing more. I think 'charging' for the DRP shares makes dividend stocks look worse than growth stocks.

Though it could be argued I'm putting money into the stock when the DRP transacts compared with taking the cash, I want the psychological incentive of 'free' shares to continue to commit to the DRP. Especially when I was first investing as ignoring the brokerage was a pivotal factor for me.

I used to share your perspective (the psychological incentive of 'free' shares) Antipodean, but with CDL Investments (CDI) whose DRP is still trucking along.
The DRP also ensured my shareholding wasn't getting 'diluted' by not being in it while some of the big players were.

However I decided a few years back to get out of the DRP scheme and just buy the same number of shares the DRP scheme was likely to offer (plus a bit for contingency purposes) at a price that I want to buy at (as opposed to being dictated to by a strike price) a few months before the DRP record date. The forthcoming dividend income would then pay back the amount paid.

So far, that decision has paid off handsomely.

If your disciplined enough to take this approach, have a think about it.. especially for a growth stock like SUM. I am just offering food for thought on the subject.

[Brain]

I have often thought about DRPs . My casual observation is more often than not shares can be purchased on market for less then the DRP strike price. A company raising more capital by way of a DRP is a positive provided the money is put to good use.

[silu]

DRPs are great for small time investors like me where brokerage would eat up any gains from a lower SP vs DRP strike price.

[Antipodean]

I used to share your perspective (the psychological incentive of 'free' shares) Antipodean, but with CDL Investments (CDI) whose DRP is still trucking along.
The DRP also ensured my shareholding wasn't getting 'diluted' by not being in it while some of the big players were.

However I decided a few years back to get out of the DRP scheme and just buy the same number of shares the DRP scheme was likely to offer (plus a bit for contingency purposes) at a price that I want to buy at (as opposed to being dictated to by a strike price) a few months before the DRP record date. The forthcoming dividend income would then pay back the amount paid.

So far, that decision has paid off handsomely.

If your disciplined enough to take this approach, have a think about it.. especially for a growth stock like SUM. I am just offering food for thought on the subject.

It's an interesting thought thanks - this thread is making me reconsider. I'm getting closer to the point where brokerage isn't eating a significant portion and can seriously look into this.

[Beagle]

I used to share your perspective (the psychological incentive of 'free' shares) Antipodean, but with CDL Investments (CDI) whose DRP is still trucking along.
The DRP also ensured my shareholding wasn't getting 'diluted' by not being in it while some of the big players were.

However I decided a few years back to get out of the DRP scheme and just buy the same number of shares the DRP scheme was likely to offer (plus a bit for contingency purposes) at a price that I want to buy at (as opposed to being dictated to by a strike price) a few months before the DRP record date. The forthcoming dividend income would then pay back the amount paid.

So far, that decision has paid off handsomely.

If your disciplined enough to take this approach, have a think about it.. especially for a growth stock like SUM. I am just offering food for thought on the subject.

SUM extremely cunning investors do what you've suggested mate and participate in the DRP :)

[Antipodean]

SUM extremely cunning investors do what you've suggested mate and participate in the DRP :)
Doubling down on SUM stocks is well worth it :)

[Vaygor1]

SUM extremely cunning investors do what you've suggested mate and participate in the DRP :)


Well. do both then ! ... and the 2% discount that SUM offers is an added reason to stick with he DRP I suppose. :)

..... but keep in mind with the DRP, you don't choose the price, and you don't choose the time. GLTAH.

[value_investor]

I'll take what I can get on the DRP, might not be able to get that price again in the future!

[minimoke]

Strike price NZ$6.615 Today trading opening at $6.78. You wont see me complaining at this brokerage free addition to my portfolio. Nad better yet - I dint have to try to time the market.

[dabsman]

On my ANZ/WBC shares I have a DRP account and all leftover funds (less than the value of 1 share) sit in it and gets added to next payment. I didn't see this with the SUM DRP - is this happening in the background or did I just miss it?

[winner69]

On my ANZ/WBC shares I have a DRP account and all leftover funds (less than the value of 1 share) sit in it and gets added to next payment. I didn't see this with the SUM DRP - is this happening in the background or did I just miss it?

Good question

I’ve had a look back on the last couple of statements and it appears as if we lose the bits left over ...or if they keep them to help out next time it’s not that obvious like those ANZ statements you mentioned but then part of $30 is more than part of $6

If so ...miserable bastards ....was $2.95 last divie

[dabsman]

OK at least I'm not going crazy. I checked my statements too and it isn't obvious. So is that a call to Link or Summerset?

[minimoke]

Good question

I’ve had a look back on the last couple of statements and it appears as if we lose the bits left over ...or if they keep them to help out next time it’s not that obvious like those ANZ statements you mentioned but then part of $30 is more than part of $6

If so ...miserable bastards ....was $2.95 last divie
By my reckless math calculations I figure I am 0.54 of a share out. Should I expect a cheque in the mail for full shares not bought?

[winner69]

OK at least I'm not going crazy. I checked my statements too and it isn't obvious. So is that a call to Link or Summerset?

Link probably ...I’ll be lazy and leave it up to chase up for us

Well done

[dabsman]

Just talked to Link. She checked the offer document and there is no residual roll over. So they will round down to the nearest whole share amount and the residual disappears... oh well up to $6 a time could be lost - soon to be $7 then $8 by 2019...

[winner69]

Just talked to Link. She checked the offer document and there is no residual roll over. So they will round down to the nearest whole share amount and the residual disappears... oh well up to $6 a time could be lost - soon to be $7 then $8 by 2019...

Well done mate

At least they have the decency to show you how much you miss out on the dividend statement ....but you would think that if it’s done for other companies they could do it for Summerset

Probably common / best practice for an unsophisticated NZX exchange.

Won’t be losing any sleep over it but if it’s in the fine print sobeit

[Beagle]

SUMwhat less than ideal though isn't it. I think most companies have a carry forward process on residuals don't they ?

[percy]

There you are,your next crusade,SUM again..No Norah though.!..lol.

[Beagle]

Fractions of a share, there's something to getting get fired up about lol ..might just save my strength and top up with a few thousand more instead :)

[percy]

What.?
And leave all the small holders with out a saviour.?...............lol.

[winner69]

SUM be 7 bucks tomorrow I reckon

No worries

[Beagle]

Yeap hit an all time high today. Technically and fundamentally this is looking very very good. Expecting a great Q1 FY18 sales result to give it the next leg up into the mid - late $7 range to make for happy times at the SUM annual meeting in late April.

[couta1]

Fractions of a share, there's something to getting get fired up about lol ..might just save my strength and top up with a few thousand more instead :) I've got another alternative crusade for you Mr Beagle, get SUM to drop charging some residents extra if they want a dessert on top of their main, talk about tight, RYM include the pudding with the main. PS-Good for shareholders that extra bit of profit aye.

[Beagle]

I've got another alternative crusade for you Mr Beagle, get SUM to drop charging some residents extra if they want a dessert on top of their main, talk about tight, RYM include the pudding with the main. PS-Good for shareholders that extra bit of profit aye.

Nah mate hounds don't do goose chases. Whether that was fair or not would depend upon the pricing and the caliber of the meals both main and desert but I will say that based on my own observations the very minimal quantity of sloppy rubbish RYM served up to my dad when he was a dementia patient at their Orewa facility is not something I would feed one of my dogs even if one of them was in the dog box for misbehavior. As for their "care" standards....oh dear...
I'm sorry mate but I turn a deaf ear to anyone who tells me RYM's standards are first class.

[LAC]

What’s the difference in price of a Rym unit vs Sum unit in the same area? Pudding or no pudding, someone is paying for it;)

[percy]

I've got another alternative crusade for you Mr Beagle, get SUM to drop charging some residents extra if they want a dessert on top of their main, talk about tight, RYM include the pudding with the main. PS-Good for shareholders that extra bit of profit aye.

After years of reading thousands of posts on sharetrader,retirement village annual reports, of both NZ and Australian retirement companies,brokers research,attending annual meetings and presentations, I realise I have been wasting my time.
It all comes down to The Pudding,and whether it is included in the meal price or not.....?....lol.

[Beagle]

After years of reading thousands of posts on sharetrader,retirement village annual reports, of both NZ and Australian retirement companies,brokers research,attending annual meetings and presentations, I realise I have been wasting my time.
It all comes down to The Pudding,and whether it is included in the meal price or not.....?....lol.

Come on Couta mate, you have to admit that is funny. Thanks for the laugh Percy.
Anyway on a serious note I added SUM more today. Yes its had a wee run lately, (not all that strong, was $5.60 18 months ago so only up 23% in that time and earnings are up a LOT more than that) but long term you can't go wrong and from a technical point of view with it breeching a new all time high all the signs point north :t_up:
$20 in 5 years time, remember which hound barked it out first :)...that's just 24% compounding earnings growth average per annum for 5 years, compared to the 45% they've enjoyed in the previous 5 years...what could possibly go wrong... lol

[couta1]

After years of reading thousands of posts on sharetrader,retirement village annual reports, of both NZ and Australian retirement companies,brokers research,attending annual meetings and presentations, I realise I have been wasting my time.
It all comes down to The Pudding,and whether it is included in the meal price or not.....?....lol. Always good to keep things simple Percy, the Proof of the Pudding really is in the eating, or not eating in the case of SUM.

[percy]

Always good to keep things simple Percy, the Proof of the Pudding really is in the eating, or not eating in the case of SUM.

SUM will have to get their puddings right if they ever want to be a success in Australia.
They love our Pavlova...lol.

[Beagle]

Forecasting underlying EPS of $100m this year for 44.5 cps. At $7 that puts SUM on a FY18 PE of 15.7., still well and truly below the market average of about 21.
Those who think they've missed this opportunity with the modest recent run might like to consider whether with their very well proven track record of strong growth SUM deserve to trade at a discount to the market PE at all ? My target price one year hence is $9.30. Couta1's reversion theory has been consigned to the annuals of history, you read it from me first :)

[couta1]

Forecasting underlying EPS of $100m this year for 44.5 cps. At $7 that puts SUM on a FY18 PE of 15.7., still well and truly below the market average of about 21.
Those who think they've missed this opportunity with the modest recent run might like to consider whether with their very well proven track record of strong growth SUM deserve to trade at a discount to the market PE at all ? My target price one year hence is $9.30. Couta1's reversion theory has been consigned to the annuals of history, you read it from me first :) Couta's reversion theory has stood the test of time and is well proven, recent barking has not.

[cymonger]

After a long hard look, swapped out my Pushpay stock for Sum today. Had a quarter of my Portfolio invested in THL, ATM, HLG, and PPH. My reasoning was, three pretty sure things, and one lottery ticket type (PPH) stock. After reviewing the numbers and giving it some thought, I realized SUM was BOTH a sure thing and a lottery ticket stock. If it just keeps growing like it's growing, that's great. But the tsunami of the need for elder care and housing is most assuredly coming. I think people sort of know it's a reality, but until it gets here it still feels kind of hypothetical. The P/E on this stock makes little sense to me, and this last run was a sort of "catch-up" in this regard. This stock fully meets my WWWD (What would Warren do?) standards.

[dabsman]

Just read about the massive shortfall of beds in Tauranga - where can I find land bank information for Summerset?

[Nasi Goreng]

SUM still in catch up mode I think. Even at $8, it looks very attractive.

[winner69]

Just read about the massive shortfall of beds in Tauranga - where can I find land bank information for Summerset?

Page 17 might help you
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/314609/275030.pdf

Your homework ....what’s the answer to your question?

Good or bad?

[MauroNZ]

In 3 days, from 20 Feb to 23 Feb, Craigs had increased their target price from 6.4 to 7.7.

[dabsman]

Page 17 might help you
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SUM/314609/275030.pdf

Your homework ....what’s the answer to your question?

Good or bad?

It seems to be an area they have little focus in for whatever reason. Only Katikati and it looks small. Maybe its a planned strategy or maybe they feel they moved too late. I would have wanted more exposure to this market but I'm happy with the pipeline as a whole. So the answer is - I dont know

[winner69]

Kaching Kaching Kaching - another $400,000 of underlying profit into the till today as 3 more sales are completed

Easy peasy .... on average have 3 sales a day (not counting weekend thats 750 for the year) and book about $133,000 underlying profiton each. The average underlying profit will probably be higher but I don't want to get to excited

Kaching every day = $100m underlying profit for the year ...good eh

What a business

[winner69]

On our way to 8 bucks ..... cool

[peat]

Those who think they've missed this opportunity with the modest recent run might like to consider

Yes I've seen two triple tops break out upwards recently and added this morning.

[Ggcc]

Could not quite stay above $7 for now.......

[percy]

SUM is now Craigs' #1 sector pick with a target price of $7.70.
They still rate MET with a target price of $7.50.

[MauroNZ]

SUM is now Craigs' #1 sector pick with a target price of $7.70.
They still rate MET with a target price of $7.50.

I wonder if sometimes they are a bit behind or wait a long time for recommendations.

[percy]

I wonder if sometimes they are a bit behind or wait a long time for recommendations.

I think most analysts are good in some sectors and poor in others.
Even the worlds best analyst/investor, Warren Buffett admits he sometimes gets it wrong.
Not very often though.!

[Beagle]

To be fair to Craigs they updated fairly quickly after the result whereas FNZC took considerably longer.
I guess to be fair to analysts they have a lot of companies reporting in a short period of time so its impossible to update all their company analysis at once.
I take a bit of comfort from FNZC and Craigs rating SUM highly but its pretty clear from my posts on here dating back over the last few years I've consistently held that view whereas the analysts have come to the party pretty late. Better late than never though...

[percy]

Craigs' updates are a result of MET and SUM presentations at Craigs "industry day".
Bit of a waste of time, when all they have to do is read Beagle on Sharetrader to learn everything they need to know about the sector.......lol.

[couta1]

Oh dear, no Welly get together this year as SUM are holding their AGM in Auckland for the first time.

[winner69]

Oh dear, no Welly get together this year as SUM are holding their AGM in Auckland.

And beagle was looking forward to fly Jetstar

Will be voting against that Ogden guy being re-elected. Been there long enough and hasn’t been the ‘luckiest ‘ of Directors of late and wouldn’t want him to curse Sum

[Beagle]

And beagle was looking forward to fly Jetstar

Will be voting against that Ogden guy being re-elected. Been there long enough and hasn’t been the ‘luckiest ‘ of Directors of late and wouldn’t want him to curse Sum
Nice for a change. Will have to have an Auckland get together instead. Come on folks....just a cheap return flight on AIR and you've got that wonderful Antarctica safety video to enjoy twice in one day.

Behind the paywall article on NBR today suggesting huge demand for retirement village living for the next 25 years and insufficient supply !
25 year tailwinds in this sector and a company with an average growth rate of 45% and a current year PE of less than 16...making long term capital gains doesn't get an easier than this !

[dabsman]

They better increase land bank in the Florida of NZ then - BOP very under represented

[iceman]

They better increase land bank in the Florida of NZ then - BOP very under represented

And lets hope the proposed foreign buyers ban, if it gets through Parliament, will not tie things up for the retirement village operators. The report referred to in the NBR article expects increase in the over 75 population to be 164% nationwide and 205% in Auckland from now until 2043, requiring 1654 new units every single year. Since 2012 the growth rate in villages being built has been 12%.
The future demand is incredible.

[Bjauck]

They better increase land bank in the Florida of NZ then - BOP very under represented With Roto-vegas and Tau--lando, the BoP village guards should be packing heat.

[minimoke]

And lets hope the proposed foreign buyers ban, if it gets through Parliament, will not tie things up for the retirement village operators. The report referred to in the NBR article expects increase in the over 75 population to increase 164% nationwide and 205% in Auckland from now until 2043, requiring 1654 new units every single year. Since 2012 the growth rate in villages being built has been 12%.
The future demand is incredible.Which is why I am a happy holder of RYM and SUM.

Personally I think this and prior governments have got it wrong. National focused on a non-existent housing problem and Labour are focussing on Affordable Housing.

The solution in my mind is to focus solely on the retirement accommodation sector, incentivising "older" people into these housing opportunities and thus freeing up existing properties. I am very comfortable in the view no government will currently do this so your basic demand / supply economics remain in play - making RYM and SUM dead certs (or as close to a dead cert as you are likely to find)

[MauroNZ]

Nice for a change. Will have to have an Auckland get together instead. Come on folks....just a cheap return flight on AIR and you've got that wonderful Antarctica safety video to enjoy twice in one day.

Behind the paywall article on NBR today suggesting huge demand for retirement village living for the next 25 years and insufficient supply !
25 year tailwinds in this sector and a company with an average growth rate of 45% and a current year PE of less than 16...making long term capital gains doesn't get an easier than this !

I was hoping to happen in WLG, will have to arrange flights now, hopefully there is any good price there.

[James108]

And lets hope the proposed foreign buyers ban, if it gets through Parliament, will not tie things up for the retirement village operators. The report referred to in the NBR article expects increase in the over 75 population to be 164% nationwide and 205% in Auckland from now until 2043, requiring 1654 new units every single year. Since 2012 the growth rate in villages being built has been 12%.
The future demand is incredible.

Based on those growth rates the 2040 demand will be exceeded by supply around 2020? Time to sell?!

Disc: sum is my largest holding and has been for a few years.

[hardt]

Based on those growth rates the 2040 demand will be exceeded by supply around 2020? Time to sell?!

Disc: sum is my largest holding and has been for a few years.

Surely not everyone moving into retirement living is over 75... also, life expectancy is expected to rise steadily meaning they will be there for longer.

I only saw Auckland in that tidbit.

[Beagle]

The future demand is incredible.

That's the key...the tailwinds in this sector are very strong and very durable.


Which is why I am a happy holder of RYM and SUM.

RYM and SUM dead certs (or as close to a dead cert as you are likely to find)

As certain as you will EVER find in my opinion.


Disc: sum is my largest holding and has been for a few years.

Congrats, my second biggest holding second only to ATM.

[minimoke]

Congrats, my second biggest holding second only to ATM.
ATM put me in a position where I had to double down. SML I had to Double Double down. SUM didnt, so its in third spot in holdings ranks behind those other two.

[Beagle]

ATM put me in a position where I had to double down. SML I had to Double Double down. SUM didnt, so its in third spot in holdings ranks behind those other two.

Its hard to go wrong backing that trifecta :)

[Beagle]

https://www.summerset.co.nz/assets/Investor-centre/3f535469bd/2017-Annual-Report.pdf

[James108]

They are relocating their GM development to GM development Australia - was this info available earlier? Seems like they are seriously looking at Aus villages now, did not realise this. Happy for them to follow Rym into Aus.

[Ggcc]

They are relocating their GM development to GM development Australia - was this info available earlier? Seems like they are seriously looking at Aus villages now, did not realise this. Happy for them to follow Rym into Aus.
I feel land is somewhat overpriced here in NZ and Summerset have a 6 year land bank, so it is great to work with that land for now until property prices cool down a bit. Properties seem a lot cheaper in Australia than here, of course depending where you are buying (same as in New Zealand) so a great move.

[macduffy]

I feel land is somewhat overpriced here in NZ and Summerset have a 6 year land bank, so it is great to work with that land for now until property prices cool down a bit. Properties seem a lot cheaper in Australia than here, of course depending where you are buying (same as in New Zealand) so a great move.

I'd like to think that there's a lot more to SUM's move into Aus than just the attraction of cheaper land. Rather, that it is a well researched and considered move, not just a "follow Ryman" reflex decision! But not to worry. I'm sure they know what they're doing.

[Beagle]

I'd like to think that there's a lot more to SUM's move into Aus than just the attraction of cheaper land. Rather, that it is a well researched and considered move, not just a "follow Ryman" reflex decision! But not to worry. I'm sure they know what they're doing.

Their average rate of earnings growth since listing 6 years ago at ~ 45% (three times the rate of RYM's) suggests they do.

[Scrunch]

And lets hope the proposed foreign buyers ban, if it gets through Parliament, will not tie things up for the retirement village operators. The report referred to in the NBR article expects increase in the over 75 population to be 164% nationwide and 205% in Auckland from now until 2043, requiring 1654 new units every single year. Since 2012 the growth rate in villages being built has been 12%.
The future demand is incredible.

I'm puzzled. A 4.6% compounded growth rate for 25 years is 205% from now. If the current village growth rate is 12%/yr then its been more than double what's required to meet the this long-term older population growth rate. Do build rates need to slow down to meet future requirements or am I missing something?

[iceman]

I'm puzzled. A 4.6% compounded growth rate for 25 years is 205% from now. If the current village growth rate is 12%/yr then its been more than double what's required to meet the this long-term older population growth rate. Do build rates need to slow down to meet future requirements or am I missing something?

The numbers posted were only for 75+. The 65-74 age range is about the same numbers. The total population growth in NZ is estimated to be 20% over that time period while 65+ is expected to increase by 92%.
In the last 5 years the number of units in retirement villages has grown by 130% ( 6,400 units) but more interestingly, the penetration rate has grown from 9.1% to 12.4%. The report estimates are based on the 2016 penetration rate, i.e. no increase in penetration rate for the next 25 years !!!
I believe with better facilities, providing better healthcare and better activities for its occupants, much more than 12% of the 65+ population will choose the lifestyle and financial freedom that comes with living in retirement villages.
I also believe retirement village living is and will be an even bigger part of the solution to the "housing crisis", or rather, our need to house our fast increasing population.

In Europe, apartments built and occupied solely by 55+ are becoming increasingly popular and in most cases these people sell large good homes to younger families. A new target market perhaps for SUM ??

So I am firmly of the view that this is a big growth industry for the foreseeable future and SUM and RYM are pretty much as safe a bet as one can have on the NZX.

[artemis]

.....
In Europe, apartments built and occupied solely by 55+ are becoming increasingly popular and in most cases these people sell large good homes to younger families. A new target market perhaps for SUM ??

Couple of years ago I asked this question at the SUM ASM and was told they were looking at it. Must be plenty who would be interested in a purpose built apartment with eveything on site or at the doorstep. No sign yet AFAIK but maybe they are swans paddling like crazy under the water. Or more likely sticking with their current well tried development model for now.

I did hear that there are potential issues with emergency egress for older people in a multi storey building.

At the same meeting they also said they were considering communities catering for some ethnic groups.

[macduffy]

The retirement village companies will be reluctant to provide accommodation for the 65-70 age group, let alone the 55+ cohort. Their business model is built around the "turnover" of the 70+ occupants. You'll need to find some other developer for the 55+ folk's needs.

[couta1]

The retirement village companies will be reluctant to provide accommodation for the 65-70 age group, let alone the 55+ cohort. Their business model is built around the "turnover" of the 70+ occupants. You'll need to find some other developer for the 55+ folk's needs. Correct, in fact if a couple are not both 70, they can't buy an independent unit now, used to be more leeway a few years ago, if one was under 70.

[Beagle]

https://www.summerset.co.nz/assets/Investor-centre/3f535469bd/2017-Annual-Report.pdf

Hudsonville waterfront unit shown in this report looks really good. Seen it in person too. Idyllic spot. $1.6m though. See page Page 6. Can imagine I'd be quite content there to put my feet up with a couple of dogs and a few beverages enjoying the north facing sunny views.

[bull....]

Hudsonville waterfront unit shown in this report looks really good. Seen it in person too. Idyllic spot. $1.6m though. See page Page 6. Can imagine I'd be quite content there to put my feet up with a couple of dogs and a few beverages enjoying the north facing sunny views.

does the beauty of the place equate to wonderful service as well, im been reading all these horror news stories this weekend about rest homes etc so wondering not just about summerset but all the others when it comes to service , does it exist or is it a fancy brouchure


http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12016995

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12018808

[Beagle]

Must be a slow news week, Herald once a year seem to have this campaign they start against rest homes. Satisfaction rates in care suites and independent living apartments according to SUM in their annual report are up fro 94% in 2016 to 97% in 2017.
Sensationalism sells newspapers. NZME turning the Herald into a shabby little tabloid...shame as I own some NZME shares :ohmy:

[winner69]

Must be a slow news week, Herald once a year seem to have this campaign they start against rest homes. Satisfaction rates in care suites and independent living apartments according to SUM in their annual report are up fro 94% in 2016 to 97% in 2017.
Sensationalism sells newspapers. NZME turning the Herald into a shabby little tabloid...shame as I own some NZME shares :ohmy:

Not a shame for NZM shareholders .....good stories, more clicks and all that sort of stuff

And they have Kate and Mike to keep things pumping

[Beagle]

I know Julian and the team are very proud of their innovative dementia care facility for which they won an award and will be rolling this out across all their villages.
https://www.summerset.co.nz/living-at-summerset/care-and-support/memory-care/
Seeing my father gradually decline, (years ago, time heals the pain), in an old style dementia facility where service standards were marginal at best (RYM Orewa) I think SUM's approach is a wonderful innovation for patients.
Just want to acknowledge Couta1's efforts here in consistently talking to senior management at annual meetings and other times about the need for high quality dementia care.
Also the board has some excellent expertise in this area with Dr Marie Bismark who I am sure played a vital role in getting this fresh approach in dementia care right.
For anyone that doesn't know I can assure you that watching one of your parents slowly succumb to this cruel debilitating disease and then pass away is a very tough thing to endure over the years. Anything that a retirement village can do to make it more tolerable for patients and their loved ones is a great thing and very welcome.

[jimmybuffett]

I know Julian and the team are very proud of their innovative dementia care facility for which they won an award and will be rolling this out across all their villages.
https://www.summerset.co.nz/living-at-summerset/care-and-support/memory-care/
Seeing my father gradually decline, (years ago, time heals the pain), in an old style dementia facility where service standards were marginal at best (RYM Orewa) I think SUM's approach is a wonderful innovation for patients.
Just want to acknowledge Couta1's efforts here in consistently talking to senior management at annual meetings and other times about the need for high quality dementia care.
Also the board has some excellent expertise in this area with Dr Marie Bismark who I am sure played a vital role in getting this fresh approach in dementia care right.
For anyone that doesn't know I can assure you that watching one of your parents slowly succumb to this cruel debilitating disease and then pass away is a very tough thing to endure over the years. Anything that a retirement village can do to make it more tolerable for patients and their loved ones is a great thing and very welcome.
Good to see them take this approach for all new villages. Sorry to hear of your experience Beagle, we are just beginning this journey with my wife's mother, unfortunately in Australia so distance makes it both a little easier and harder, if you know what I mean.
Have to hope RYM and ARV will go this track as well.

[Beagle]

Good to see them take this approach for all new villages. Sorry to hear of your experience Beagle, we are just beginning this journey with my wife's mother, unfortunately in Australia so distance makes it both a little easier and harder, if you know what I mean.
Have to hope RYM and ARV will go this track as well.

Thanks jimmy and welcome to the forum. Its a tough journey, was about 5 years ago now but remembered quite vividly.
As you say, it would be great if the other retirement companies look to innovate in this way.
Give your wife lots of support. Yes easier and harder at the same time. Best wishes.

[couta1]

The independent dementia units are only suitable for a small number of dementia sufferers, a lot of sufferers found in any of the dementia units, no matter the company, would be unable to reside successfully in one of these units for a variety of reasons, some obvious and some not so.

[winner69]

Did I see $7.03 at close? First time ever ... a record close .....and on a big down day on the NZX

Well we can look forward to 8 bucks by Christmas now