SUM - Summerset Group

[couta1]

No worries wolf once I get over the shock of losing $100k things will get back to normal instead of not going to work(self employed) not sleeping etc. Hind sights a great thing but one thing I know for sure if I'd heard the internet coalition first media release before selling retirement stock to grab CNU dividend I wouldn't have gone anywhere near the stock. Same as if John Key had said the Govt MAY override com com not they will I wouldn't have touched the stock with a barge pole,CNU is currently one very hot potato and is only for traders and speculators maybe for quite a while to come unlike Sum which looks pretty darn good to me.

[Dej]

No worries wolf once I get over the shock of losing $100k things will get back to normal instead of not going to work(self employed) not sleeping etc. Hind sights a great thing but one thing I know for sure if I'd heard the internet coalition first media release before selling retirement stock to grab CNU dividend I wouldn't have gone anywhere near the stock. Same as if John Key had said the Govt MAY override com com not they will I wouldn't have touched the stock with a barge pole,CNU is currently one very hot potato and is only for traders and speculators maybe for quite a while to come unlike Sum which looks pretty darn good to me.

I hope to one day be investing even that amount in 1 stock!! :p

[Goldstein]

No worries wolf once I get over the shock of losing $100k things will get back to normal instead of not going to work(self employed) not sleeping etc. Hind sights a great thing but one thing I know for sure if I'd heard the internet coalition first media release before selling retirement stock to grab CNU dividend I wouldn't have gone anywhere near the stock. Same as if John Key had said the Govt MAY override com com not they will I wouldn't have touched the stock with a barge pole,CNU is currently one very hot potato and is only for traders and speculators maybe for quite a while to come unlike Sum which looks pretty darn good to me.

You've set your course couta1. Now relax, get some sleep and enjoy life. It may do you some good to start checking the market no more frequently than once a day for a while. SUM may wobble around a bit on its upward trend.

I have committed more than I usually do to SUM, so you are in fantastic company :)

[ratkin]

I shouldnt worry , Ryman was the same many years ago , unloved and boring , the rat made a killing on that stock , hopefully this one will eventually follow suit

Have not been on this thread for long time. Posted the above back in feb 2012 when there was less than one post a day on this stock (maybe less than one a week). Has moved from 140 to 3.40 in that time. Now however every man and his dog is posting on this stock , many with a ramping quality (only way is up) Happy to be holding but not sure i would be buying at these prices.
In fact i have not bought a single stock since last febuary. (except the leccy floats) as the market has not been cheap , not sold any either (except cash converters)
This is a good stock but some seem to be getting carried away, when everyman and his dog talking a stock up , theres usually not much upside (in the near term)

[couta1]

Ratkin these prices are cheap In comparison to Met and Ryman, Met heading toward $5 When nothing changed in terms of it proving itself other than a couple of good investing companies stepping in to take a stake but it was trading at only $3.06 just a few weeks ago and only building 200 new units a year compared to Sums 300 in fact you could say its currently more overvalued than Rym and needs a good correction to align it with its current true value no Sum is definitely the buy of the 3 of them currently and the market will realise by march next year once their full year results are released

[silu]

I expect SUM to return a min of 15% p.a. for me. Talks for doubling and even trippling share prices are nothing but pure speculation.

[couta1]

Speculation based on factual historical data

[iceman]

I expect SUM to return a min of 15% p.a. for me. Talks for doubling and even trippling share prices are nothing but pure speculation.

If your "expectation"proves right for 5 years, you will indeed double your money in that time, pretty much like Roger & couta1 have been "speculating"

[silu]

If your "expectation"proves right for 5 years, you will indeed double your money in that time, pretty much like Roger & couta1 have been "speculating"

Ha. I was under the impression some posters thought that this would happen within a year or so. I definetely have the long game in sight with this one.

[Harvey Specter]

If your "expectation"proves right for 5 years, you will indeed double your money in that time, pretty much like Roger & couta1 have been "speculating"15% compounded return for 5 years is doubling your money exactly (to 1 decimal place)

[couta1]

Silk Roger and I only mentioned 5 year point of reference remember this is a long term investment as Norah Barlow so apptly put several months ago

[couta1]

Sorry Silk not silk

[couta1]

Sorry my tablet has developed a key malfunction keeps changing your name to silk

[iceman]

Sorry my tablet has developed a key malfunction keeps changing your name to silk

Maybe you need to connect your tablet to the Chorus fibre network again :eek2:

[couta1]

Nah Iceman I'll stick with copper its fast enough for me and of course will be much cheaper after Dec2014

[Beagle]

Is 25% per annum growth really such an unrealistic expectation ?

2012 Underlying profit up 88% year on year
http://www.summerset.co.nz/investor_centre/2012%20Results%20Media%20Release%20FINAL.pdf


2013 half year Underlying profit up 45.4% on previous compareable period
http://www.summerset.co.nz/investor_centre/2013%20Half%20Year%20Report.pdf

Clearly defined growth stratagy and land bank for 5 years + development already on
hand.

Speculation or well founded growth investment, you decide for yourselves.

[Snow Leopard]

To be honest I have come to the conclusion that I do not really know how to value MET, RYM or SUM. The models I am comfortable with give much lower values than the numbers most brokers and the optimists of ShareTrader throw around.

BUT.
For my model that gives RYM a current value of $7.525 on a 15% growth rate:

For SUM with a 15% growth rate of their current profit (of $20M9) : $3.240;
For MET with a 15% growth rate of their current profit (of $56M6) : $3.836;

Now whilst I expect RYM to follow the model, I fully expect both SUM and MET to pick their game up, SUM quicker that others (MET) ;).
So both should really be valued higher, but I have not yet done the work to come up with what I would consider realistic scenarios.

So as a conclusion I would suggest that according to the majority world view then currently:
RYM is fully priced;
MET is probably fully priced;
SUM is cheap.

I hold all three of these and taken together they constitute 36% of my total NZX holdings and whilst they are going up I will keep them.

[Another] BUT
I worry that current valuations of these companies have actually lost sight of the fundamentals of what these companies consist of how they should be actually be valued.

Best Wishes
Paper Tiger

[Beagle]

^^Well...without wishing to overstate the completly obvious, I think its pretty clear that SUM is growing much faster than Ryman's average of 15% and has more room to do so with its improving margins by bringing development in-house. That and management are clearly focused on the task in N.Z and don't have thr risk of overseas expansion.

[Goldstein]

To be honest I have come to the conclusion that I do not really know how to value MET, RYM or SUM. The models I am comfortable with give much lower values than the numbers most brokers and the optimists of ShareTrader throw around.

BUT.
For my model that gives RYM a current value of $7.525 on a 15% growth rate:

For SUM with a 15% growth rate of their current profit (of $20M9) : $3.240;
For MET with a 15% growth rate of their current profit (of $56M6) : $3.836;

Now whilst I expect RYM to follow the model, I fully expect both SUM and MET to pick their game up, SUM quicker that others (MET) ;).
So both should really be valued higher, but I have not yet done the work to come up with what I would consider realistic scenarios.

So as a conclusion I would suggest that according to the majority world view then currently:
RYM is fully priced;
MET is probably fully priced;
SUM is cheap.

I hold all three of these and taken together they constitute 36% of my total NZX holdings and whilst they are going up I will keep them.

[Another] BUT
I worry that current valuations of these companies have actually lost sight of the fundamentals of what these companies consist of how they should be actually be valued.

Best Wishes
Paper Tiger

Thanks PT.

I think there are a few intangibles here. SUM seem to be developing a good brand as mentioned previously. I hope this carries on as some of the management are retiring.

I'd love to know where RYM came in the list of Australasian retirement companies of which SUM leads the pack as far as happy residents go.

SUM also seems to purchase jolly nice sites.

[percy]

The retirement village sector is strengthening with the strong companies,MET,RYM,SUM ,BUPA[16 villages], and wealthy investors being attracted to the sector.
There is room for all these companies, and I am sure they will raise the sector's standards,and services.

[silu]

This is completely anecdotal but I was talking with a colleague today who has parents looking at purchasing a unit in a retirement complex. She told me that her parents and others have all earmarked properties owned by SUM. Purely coincidental but made me happy to hear.

discl. hold SUM

[silu]

Forgot to mention. Location was the main factor in their decision process.

[Beagle]

This is completely anecdotal but I was talking with a colleague today who has parents looking at purchasing a unit in a retirement complex. She told me that her parents and others have all earmarked properties owned by SUM. Purely coincidental but made me happy to hear.

discl. hold SUM

Another attraction is that SUM are generally not adverse to retiree's having a pet, or maybe pets, (says he hopefully with his 3 dogs), although I see that this is subject to written permission from the village manager.
I have a natural dislike for leaving things to chance so if I ever move into a SUM retirement village it'll be part of a clause on my licence agreement that permission may not be unreasonably withheld. Hopefully I can wean my love of dogs down to two fine examples by then :)
Seriously this is a big issue. My dad died last year and I know mum would love to get a little lap dog to keep her company but she's in a non Sum village and isn't allowed.

[couta1]

People I'm pretty sure Ryman have never entered this competition will find out for you if someone's interested ?

[jghomer]

Hi Couta
I would be interested to know. I had a quick search and all I could find was that Summerset got first, I couldn't find who was placed second or third let alone a list of entrants

[troyvdh]

Thanks PT.As I have said before the same (i.e. fundamentals being lost sight of...) surely the same could be said of residential house prices in CHCH and Auckland.

Its my believe that (as with Xero) folk are hugely factoring the "future".This is not a right or wrong issue.

Again its my humble belief that both are very closely related.The additional attraction of course is that the 3 companies provide a healthy income stream.And of course the customer base is ever increasing.This is an absolute certaintey.

The above may be very obvious to most and apologise for that but I believe that attempts at valuation are indeed helpful but not so relevant in the big picture.

Cheers troy

[couta1]

Troy I think what's more important at the moment for members is which of the big three is currently the best buy and to me Sum stands out, as I said earlier Met has run ahead of itself based only on a buy in from a couple of descent stakeholders (noticed it had a small correction today) but needs a couple more before it becomes a buy IMHO,Rym is fully priced but with half yearly report due out Nov21st worth buying some just as a trade as you can be sure it will spike after the 21st, which leaves Sum as the pick of the bunch as a current buy regardless of future valuations

[Dej]

Troy I think what's more important at the moment for members is which of the big three is currently the best buy and to me Sum stands out, as I said earlier Met has run ahead of itself based only on a buy in from a couple of descent stakeholders (noticed it had a small correction today) but needs a couple more before it becomes a buy IMHO,Rym is fully priced but with half yearly report due out Nov21st worth buying some just as a trade as you can be sure it will spike after the 21st, which leaves Sum as the pick of the bunch as a current buy regardless of future valuations

Pretty sure its one of those unsaid rules to never buy to trade an announcement! :mellow:

Been burned a few times doing that…

[troyvdh]

Dear couta...I note you mention that MET had a small correction today.....with all due respect todays trading is almost totally irrelevant....are you are aware that RYM had a 1 for 5 split (at what $11 something) a few years back....to the best of my knowledge MET and SUM have not ...so far....My guess is ...given the BIG picture that RYM will again have a 1 for 5 split....when it will probably undoudtably reach a certain price.
And the same may well occur should MET and/or SUM shareprice pass the $10 level.
Its my belief (am probably wrong) but most folk see high priced shares as expensive....and probably feel more comfortable buying in lower dollar priced companies (thus being totally oblivious to the real value...blah blah ).

Please correct me if am wrong.

cheers and good luck troy

[couta1]

Hi Troy, Yes I am aware of the share split with Rymans yes maybe correction is the wrong word choice but regardless Met has run ahead of itself on no proven extra results to date, Sum has ticked all the boxes and I'm just trying to help members to put their money in the best space if they are tossing up between the 3 companies but I've said enough so will shut up now, thanks

[Dej]

Hi Troy, Yes I am aware of the share split with Rymans yes maybe correction is the wrong word choice but regardless Met has run ahead of itself on no proven extra results to date, Sum has ticked all the boxes and I'm just trying to help members to put their money in the best space if they are tossing up between the 3 companies but I've said enough so will shut up now, thanks

Don't get ST wrong we value your opinion and tbh you have really livened up the SUM thread, so please keep posting. :t_up:

[apac]

Troy I think what's more important at the moment for members is which of the big three is currently the best buy and to me Sum stands out, as I said earlier Met has run ahead of itself based only on a buy in from a couple of descent stakeholders (noticed it had a small correction today) but needs a couple more before it becomes a buy IMHO,Rym is fully priced but with half yearly report due out Nov21st worth buying some just as a trade as you can be sure it will spike after the 21st, which leaves Sum as the pick of the bunch as a current buy regardless of future valuations

Is there anyone else like me that holds about the same amount for all 3? is that a good or bad idea?

[couta1]

Hi Apac, I'm mearnt to be shutting up but I did hold equal amounts of Sum and Ryman before my CNU disaster but now have way more Sum and happy to have it that way never held Met and wouldn't buy them at current prices I guess it depends on if you go by diversification or one basket school of thought they should all continue to do well at the end of the day

[apac]

Hi Apac, I'm mearnt to be shutting up but I did hold equal amounts of Sum and Ryman before my CNU disaster but now have way more Sum and happy to have it that way never held Met and wouldn't buy them at current prices I guess it depends on if you go by diversification or one basket school of thought they should all continue to do well at the end of the day

sweet thanks Couta

[Harvey Specter]

Is there anyone else like me that holds about the same amount for all 3? is that a good or bad idea?I do now. Previously only owned RYM. Sold down that a bit and bought into MET. Took place in the SPP and thn slid down a bit last week and entered SUM.

I previously thought MET was the best to be overweight in but with the recent rise, I now think SUM is - it is smaller so will be able to maintain higher growth rates for longer.

[Bjauck]

Is there anyone else like me that holds about the same amount for all 3? is that a good or bad idea?I have put equal amounts into RYM MET and SUM. However I started investing into RYM some years ago, with the consequence that my stake is now worth about 3 times more than the others. I still top up with SUM, although I now have no more available fresh funds so would need to reduce RYM, which I am reluctant to do, given their proven comparatively long track record.I consider RYM, SUM and MET to be represent differing risk levels and are at differing points in company maturity and, while in the same sector, they are complementary investments.

[Beagle]

I'm boots and all in SUM having sold out completly of Ryman. I wouldn't own Met until they can prove they can manage their assets better.

[Goldstein]

I used to own both SUM and MET. Now just SUM. Been averaging up since $2.53. As Mr Creosote says, 'Better get a bucket.'

[Zaphod]

Is there anyone else like me that holds about the same amount for all 3? is that a good or bad idea?

I hold equal amounts (in terms of shares) of both RYM and SUM, but no MET. Have considered selling down RYM to add to SUM, but for various reasons decided against it.

IMO holding all three fine, although personally I prefer to stick with just the two main players who have proven records.

[fiasco]

I only hold SUM, I was too late getting on the RYM bandwagon, have being topping up during the opportunities that arise, and have enough to help diversifty my portfolio. Need to start topping up HNZ now.

[iceman]

I've sold 50% of my RYM holding this year and put all of the proceeds into SUM. Have since been accumulating more SUM and the ratio now is 25% RYM and 75% SUM with the retirement sector being around 28% of my NZ portfolio.
Back in 1994 I thought the retirement sector would be a good investment and bought MET but was forced to sell in 1999 and haven't held MET since :ohmy:

[macduffy]

I hold all three - RYM from way back and the others more recently. I originally intended to switch entirely to RYM but have revised that "strategy" in the light of SUM's recent performance. May still eventually switch out of MET which I consider to be not quite of the quality of the other two.

[Latama]

Woops, had to edit to correct my mistake.

Norah Barlow (SUM CEO) won the Business Person of the Year at "The Wellys" awards tonight, however apparently wasn't there due to being in London receiving another award for SUM.

[MAC]

SUM won the "Professional Services & Infrastructure Providers" award at the Wellington Gold Awards tonight. Obviously not the biggest award out there, but not bad nonetheless!

Crumbs, there cannot be many awards left to win.

I'm astonished the media aren’t all over a fantastic success story like this, especially given recent concerns about the industry, does anyone know any editors ?

[Latama]

Crumbs, there cannot be many awards left to win.

I'm astonished the media aren’t all over a fantastic success story like this, especially given recent concerns about the industry, does anyone know any editors ?

Had the awards mixed up, sorry. Corrected my original post :) Gold Awards was a while back now.

[Harvey Specter]

I'm astonished the media aren’t all over a fantastic success story like this, especially given recent concerns about the industry, does anyone know any editors ?NZHerald is planning a beat up (per Whale Oil) so no surprises

[Harvey Specter]

I'm astonished the media aren’t all over a fantastic success story like this, especially given recent concerns about the industry, does anyone know any editors ?NZHerald is planning a beat up (per Whale Oil) so no surprises there.

[Beagle]

Typical of their biased reporting. Bad news sells copy...and seeing as everyone's online now, they really need to sell copy.
They wouldn't be the slightest bit interested in undertaking in-depth good news reporting on the best of breed even in normal times.
I'll just keep accumulating as and when spare funds allow.

[Beagle]

Down 7 cents last week when international markets are strong, the other retirement sector stocks remained strong and SUM won best Retirement Village Operator of the Year in Australasia for the fourth year running... and this after recently getting their premier Hobsonville site plans approved by Council. Go figure ?

[fiasco]

So essentially we need some bad news for the SP to start heading north again? haha.

[couta1]

Patience required 2014 will be Sums year.

[Beagle]

Patience required 2014 will be Sums year.

To quote Percy's favourite cliche in the HNZ thread, "we are well positioned":)

[fiasco]

Announcement just made about the two awards collected, great work. Did anyone know she was set to retire next year? Sounds like things will continue to get better with her sitting on the board after her stint in the CEO chair.

[macduffy]

Announcement just made about the two awards collected, great work. Did anyone know she was set to retire next year? Sounds like things will continue to get better with her sitting on the board after her stint in the CEO chair.

Norah Barlow announced her retirement back in August. While she has been an excellent CEO, the market seems satisfied that the company will continue to thrive once she's gone.

I hold.

[Beagle]

Here's a copy of the announcement


REL: 1132 HRS Summerset Group Holdings Limited

GENERAL: SUM: Summerset CEO Norah Barlow Collects Two Awards

NZX, ASX AND MEDIA RELEASE

18 NOVEMBER 2013

SUMMERSET CEO NORAH BARLOW COLLECTS TWO AWARDS

Summerset CEO Norah has won two significant awards in the last week. The
first was for Most Outstanding Contributor to Over 50s Housing 2013 presented
at an awards ceremony in London on Thursday night. The other was
Wellingtonian of the Year in the business category.

The two awards top a busy period not just for Mrs Barlow, but for Summerset,
which was named Best Retirement Village Operator in Australasia for the
fourth year running, received the green light to build a NZ$120 million
waterfront retirement village in Hobsonville, Auckland, and started work on a
NZ$70 million retirement village in Karaka, Auckland in the last few weeks.
Mrs Barlow also received two awards at the Women in Governance Awards in
July.

Mrs Barlow received her international award in London at the Over 50s Housing
Awards.

Awards convenor Ann Richards said, "Mrs Barlow has been exceptional in her
field, not just in growing the business, but in growing it sustainably and
keeping the residents' needs at heart. She's always thinking about how to be
innovative and creative, not just in 2013, but throughout her time leading
Summerset."

Of her two awards Mrs Barlow said, "I'm humbled and honoured to receive these
awards. They really belong to the people who make Summerset what it is - the
staff and residents. I'm fortunate to be CEO of Summerset."

Summerset Board Chairman Rob Campbell said these awards were recognition for
the remarkable contribution Mrs Barlow has made to the sector and to the
lives of Summerset's residents.

"Norah has been, and continues to be, an outstanding CEO and these awards
acknowledge that. She has built Summerset from a small family business into
an NZX50 company, growing the business sustainably. She's given the business
a solid foundation from which to grow further. What she has accomplished is
phenomenal."

Mrs Barlow is to retire in April next year, but will stay on Summerset's
Board. Current Summerset Chief Financial Officer Julian Cook has been
appointed to replace her.

ENDS

For investor relations enquiries:
Julian Cook
Chief Financial Officer
julian.cook@summerset.co.nz
04 894 7310 or 029 894 7310

For media enquiries:
Kimberley Rothwell
Communications Advisor
kimberley.rothwell@summerset.co.nz
04 894 6993 or 027 601 2001
End CA:00243931 For:SUM Type:GENERAL Time:2013-11-18 11:32:35

[Harvey Specter]

They have also sought consent for their Ellerslie property. Hopefully this goes through quickly unlike the Hobsonville one.

http://www.propbd.co.nz/summerset-seeks-consent-ellerslie-village/?

[Mista_Trix]

Still a very interesting lack of reporting on these wins.
Two theories, the one where there's a smash session coming against the entire retirement community, or, as an insider has suggested - the reporting agencies have lost pretty much all their depth of talent and are struggling with younger business reporters who don't quite have all of market reporting under control...

It'll be interesting to see if this beat-up does come out.

[macduffy]

FWIW, Macquaries rate SUM an "Outperform" with a valuation of $4.15 and a 12 month target of $4.50.

[Toasty]

FWIW, Macquaries rate SUM an "Outperform" with a valuation of $4.15 and a 12 month target of $4.50.

On that news then we should see the price hit $3:00 today? Hopefully there's no more good news.

Surely with, what is it now, three villages in the planning stages? SUM has to be ready for a solid 24 months at least?

[glasszon]

On that news then we should see the price hit $3:00 today? Hopefully there's no more good news.

Surely with, what is it now, three villages in the planning stages? SUM has to be ready for a solid 24 months at least?

3.28 now with few buyers until 3.20, maybe your prediction will come true? :p

[Beagle]

Lack of buying depth / support is bizarre. Perhaps this is something to do with the Govt using the sharemarket as an ATM machine, yet again...

Yes i think they're on for a fantastic spurt in growth over the next few years but when will Mr Market realise this, its anyone's guess...

[couta1]

Who cares what the dumb market currently thinks I just grabbed another 10k shares at 3.27 taking sum up to 55% of my portfolio

[Mista_Trix]

Who cares what the dumb market currently thinks I just grabbed another 10k shares at 3.27 taking sum up to 55% of my portfolio

So you're assuming that if the market overheats and falls over Summerset wont feel the effects? Or it will remain over $3.27? or you're holding un-diversified for the quick exit? or you'll hold through the downturn? or, you haven't really thought about any of the above?

[couta1]

Mista Trix, I will hold through downturn average buy is 3.17 Sum won't be affected as much as Rym or met IMHO, is the undervalued one of the 3, I've worked in retirement homes for 20 yes now so a lot of thought given, have bought and sold Sum before but holding tight this time

[Harvey Specter]

Who cares what the dumb market currently thinks I just grabbed another 10k shares at 3.27 taking sum up to 55% of my portfolioAfter getting burned on CNU, I'm surprised you are not diversifying a bit more.

[couta1]

Harvey Spencer, If I hadn't had sold my original Sum holding to grab the CNU dividend I wouldn't have got burnt, I got some Rym also plus others but can someone tell me why is Sum is more risky than dumping the same amount of money into a single residential rental with less return?

[macduffy]

Given the state of the property market at present, the real question might be - "Why take either risk?"

I'm happy with my SUM holding - less so about the market in general. But old market maxims still apply - markets tend to anticipate good results; expectations are often greater than realities; very few stocks, even the great ones, rise in an uninterrupted straight line!

[couta1]

To show how irrational the market is look at Met hasnt proven anything since it was at 3.06 except to gain a couple of new stakeholders and is up today?

[Lorne Ranger]

Summerset remains the most frustrating stock I have owned, even more so than DIL and that's saying something. I dont understand why it remains so undervalued. I know the Quadrant sell out bled the stock for what seemed like ages, but that seems to be out of the way, good revenue, good future plans, but still wont kick off. Closer it gets to Dec 12 closer I am to giving up and going back to DIL. Or maybe Dec 13 might be wiser.....

[couta1]

LR, The only thing I can think of is some people don't like Norah standing down from CEO role even though Julian is an excellent replacement?

[Mista_Trix]

Summerset remains the most frustrating stock I have owned, even more so than DIL and that's saying something. I dont understand why it remains so undervalued. I know the Quadrant sell out bled the stock for what seemed like ages, but that seems to be out of the way, good revenue, good future plans, but still wont kick off. Closer it gets to Dec 12 closer I am to giving up and going back to DIL. Or maybe Dec 13 might be wiser.....

Are you trading this stock or investing in this stock?
If it's the first, there's better trading stocks out there. If its the second, why so impatient?

[Harvey Specter]

Harvey Spencer, If I hadn't had sold my original Sum holding to grab the CNU dividend I wouldn't have got burnt, I got some Rym also plus others but can someone tell me why is Sum is more risky than dumping the same amount of money into a single residential rental with less return?I thought power companies were nice and safe too until Labour/Greens came along. Heavy reliance on one sector increases the risk of loss which doesn't correlate to the market.

Admit ably, I wish I was overexposes to retirement villages and not power companies but then that was a risk that wasn't foreseen. To be completely exposes to just one sector is crazy.

[Beagle]

Can someone tell me why is Sum is more risky than dumping the same amount of money into a single residential rental with less return?

It isn't. I have numerous clients with rental properties and almost always there is far more work and many more problems in owning a rental property than people anticipate and that's before we go down the track of an analysis of all the risks involved in rental properties, tenant damage, P Labs, gaps in tenancy, investment in a single building in a single location as opposed to a wide geographical spread e.t.c.e.t.c.e.t.c. Then there's the maintenance / refurbishment, ever increasing insurance and rates bills, tenants that can't / won't pay their rent. Why would you bother ?

The Government is sucking the life out of the market at present, its really that simple.

[troyvdh]

Dear Roger.With all due respect your comments about rental properties smacks of someone with an agenda (alternative to res prop).In many ways your comments are fairly stereotypical from someone who is a financial advisor or a broker.
I will no ill will here ..honestly.
I have been a res inv for over 3 decades and sure there have been "interesting times"...but overall...I cannot help smiling most of the time.

Cheers troy

[Beagle]

Gidday Troy. I don't have an agenda. My advice is based on 32 years of being an accountant and dealing with hundreds of clients from all walks of life who've experienced all sorts of drama's with their rental properties. Many have enjoyed huge capital gains and depreciation write-offs in the PAST, the latter is of course gone now and the days of big capital gains must surely be coming to an end ? There's plenty more I could say but I'll just point out that you're coming from your own personal experience whereas my experience is based on a vastly wider sample size.

Anyway back on topic, personally I am FAR more comfortable putting a few hundred thousand into Summerset where the elderly tenants have a vested interest in looking after their units than buying a rental property where who knows what a tenant might do ? must weigh on the average investors mind, surely ? (Yes I've owned rental properties before, in case anyone is wondering).

[troyvdh]

Roger thanks for that.A few points.
-Depreciation claimed ...you still have to pay it back right ???..when you sell.
-"huge capital gains must surely be coming to an end "...a very bold statement.Were there not 2 747 planes loaded leaving NZ every week some 2 years ago and now are is there not a reversal occurring.
-has not the building of new houses in recent times slowed down for a variety of reasons....
-Leaky homes...are there not remaining in NZ 100000's of these "poly castles" that will need to be bulldozed/rebuilt...here in CHCH we have 1000's of them ...rows of them in street after street....they aint going away....honestly you can see them when it rains...the timber framing is visible
-having said that I have always believed that the continuing good fortune of the likes of RYM MET SUM is dependent on a healthy residential property market

As an aside me hopes that the above 3 do/did not/have not succommed to any cheap building philosophy blah blah...like some schools have..

cheers troy

[Beagle]

To the best of kmy knowledge N.Z. has the third highest house prcies relative to income in the world, sorry don;t have a link off the top of my head to verify that. The timing advantage of previously being able to claim depreciation each year, (negative gearing and tax losses) has been a major driver behind residental property investment in my opinion. Of coruse you have to pay it back but by then you've hopefully got a capital gain to fund that. If our housing is already almost the most expensive in the world relative to income that should be something the average investor might want to take into account.

The reason I went off on this tangent was to answer another posters (perhaps rhetorical), question and to illustrate the difficulties that people face in rental property investment relative to the simplicity of investing in the listed retirement sector. A share in a geographically diversified retirement homes, with a one way bet on the future price movements of same, fully managed, units tenanted by elderly folks with a vested interest in looking after the property and who have to pay a full refurbishment fee when they leave, a sector with extremly favourable tailwinds e.t.c.

With respect, I think we've gone far enough off on this tangent without talking about migration statistics, leaky building problems e.t.c.

My contention is that an investment in shares of say $400,000 in the retirement sector even if that's all in SUM is lower risk than the investment in one rental property. More than happy to back that opinion up with action :)

[couta1]

If this stock isn't $4 or close to it by the end of march 2014 after Sums annual result, failing a major market correction period then I'm out of the market,i can't be bothered putting up with numskulls who don't know true value forever.

[troyvdh]

Fair call cheers

Bye the way...re investing...Im now 57...one of many things Ive learnt is that the return from putting a bit of effort (like talking to folk and maybe mowing the odd lawn) has by far returned me more dosh/satisfaction than a phone call/mouse click (shares) over 30-35 years.

Cheers again troy

[troyvdh]

Fair call cheers

Bye the way...re investing...Im now 57...one of many things Ive learnt is that the return from putting a bit of effort (like talking to folk and maybe mowing the odd lawn) has by far returned me more dosh/satisfaction than a phone call/mouse click (shares) over 30-35 years.

Cheers again troy

oops sorry

[macduffy]

If this stock isn't $4 or close to it by the end of march 2014 after Sums annual result, failing a major market correction period then I'm out of the market,i can't be bothered putting up with numskulls who don't know true value forever.

Now that must qualify as the post of the month!

Personally, I'm more than happy for a stock that I'm quietly accumulating to remain unloved and out of the spotlight for an extended period! "In the short term the market is a voting machine, in the long term, a weighing machine." Or words to that effect.

:cool:

[Zaphod]

I completely agree Macduffy, although perhaps we haven't held on as long as Couta1 and other opportunities are beckoning?

RYM are still the market darling and the focus appears to be firmly fixed to them, but this will most certainly change.

[Goldstein]

A bit of perspective couta1:

SUM has risen 40% this calendar year, even with the QPE sell down.

Investment = capital + time. If you believe in your investment couta1 (and you sound like you are exposed to the industry) then I would not do anything rash. You say you don't care what the market is doing, but then you say if the SP isn't about $4 by March you will pull the plug. If SUM continues performing and the SP goes backwards they will end up being a takeover target. The management are doing a good job at increasing the value of the company - it's just not reflected in the SP of the last week. The SP is voltile at the moment.

I'm over committed so can't make use of the current prices, but you can't always pick the dips.

The number one rule I have is to set your strategy (with appropriate stop losses) and then stick with it. Take your emotion out of it.

[couta1]

Good stuff Goldstein, I can't for the life of me using the coldest unemotional reasoning fathom why you would pay $4.45 for Met and only $3.28 for Sum at the moment when Met still has an unproven track record to date???

[Beagle]

A bit of perspective couta1:

SUM has risen 40% this calendar year, even with the QPE sell down.

Investment = capital + time. If you believe in your investment couta1 (and you sound like you are exposed to the industry) then I would not do anything rash. You say you don't care what the market is doing, but then you say if the SP isn't about $4 by March you will pull the plug. If SUM continues performing and the SP goes backwards they will end up being a takeover target. The management are doing a good job at increasing the value of the company - it's just not reflected in the SP of the last week. The SP is voltile at the moment.

I'm over committed so can't make use of the current prices, but you can't always pick the dips.

The number one rule I have is to set your strategy (with appropriate stop losses) and then stick with it. Take your emotion out of it.

Sage advice there. I too am a little bit frustrated by the relative movements of other stocks in the sector but value always shines through in the end and there's such incredibly strong tailwinds in this sector you might as well think of it as a long journey on a Yacht...just hoist your best spinnaker, sit back, relax and enjoy the cruise. It might get a bit choppy at times but we know in the long run it will be a very pleasant journey and we're sailing towards a very comfortable retirement :) At 52 now, by my calculations with growth over the next 18 years $100,000 invested now in this stock easily buys you a retirement home in one of Summerset's best locations. Now that's what I call retirement planning :)

[cyclist]

Is there an announcement due soon (quarterly update perhaps?). There was something mentioned a little earlier in the thread, but I can't find it again. I am presently doing my research on this one, and am mindful that an announcement might set things moving again. (Assuming I decide I am happy with what I find, I would like to be in before then!).

[JayRiggs]

The last quarterly sales update was on 10th Oct.

Quarterly metrics on occupation right sales are provided by the 10th of the month following the end of each quarter.
RYM half year result is out in 2 days, so I'm watching out for that.

[couta1]

Sum holding up well today Rym down prior to half yearly tomorrow

[psychic]

Some meaty transactions going through today - $1.8m vol .....

[couta1]

The stocks done itself proud today, Rym down to 7.60 earlier but closing higher, maybe the market is starting to weigh Sum correctly now?

[Mista_Trix]

The stocks done itself proud today, Rym down to 7.60 earlier but closing higher, maybe the market is starting to weigh Sum correctly now?

Ramping much?

[Harvey Specter]

The stocks done itself proud today, Rym down to 7.60 earlier but closing higher, maybe the market is starting to weigh Sum correctly now?And MET down 3%. A lot of blood on the floor today, at least in my portfolio.

[Beagle]

Seems to have built a base at $3.25. Augers well for the future but people need patience. Value and growth always shine over time :)

[couta1]

Mista Trix, No ramping your only get honest from the heart comments from me but wish I'd sold my Rymans last Friday at $8 and bought them back today ready for another run tomorrow, how ironic the only day I didn't have computer access because I was working at a Ryman home.

[clip]

That sounds pretty similar to how you lost on cnu, I am in no position to comment being a new investor this year but it seems like you should make a decision on whether you're a trader or investor and stop trying to sell long term growth stocks to buy back for a quick buck. My 2c feel free to correct me (anyone)

[couta1]

Clip,The money in Rymans is not a long term hold, it is my leftover money from CNU and will be moved around to gain some of my loss back in a controlled fashion, my long term hold which won't be sold except under extreme circumstances in Summerset

[clip]

All the best in that case :)

[troyvdh]

Dear clip.You are utterly correct.

cheers

[JohnnyTheHorse]

Clip,The money in Rymans is not a long term hold, it is my leftover money from CNU and will be moved around to gain some of my loss back in a controlled fashion, my long term hold which won't be sold except under extreme circumstances in Summerset

So you are trading RYM, yet use no technical indicators? Sounds like you are really setting yourself up for trouble with what you are doing. I can't begin to fathome why you tried to picked up the CNU dividend and then didn't sell when it dropped - you need to set yourself rules around when you sell and stick to them. A common rule of thumb is to NEVER buy before any announcement, as often the market has already priced it in. I have seen shares plummet countless times on good announcements. I believe that the odds are high that RYM will either stay unchanged or drop in price tomorrow. There is too much already built into the price. That, coupled with the bearish hanging man that formed today.

I don't mean this to sound harsh, but I believe there is a lot more about the market that you need to learn before you trade the dollar amounts that you are (this comment is just based from what I have read).

[couta1]

Troyvdh, Incorrect as its not a long term hold for me.

[couta1]

JTH, Thanks for comments, I will still make a profit unless it falls guess well see and I guess not a bad stock to be stuck with for a bit longer otherwise.

[couta1]

Black Knat,I will go with the flow, the only stock I'm holding very long term is Sum,a lot of others are in deep red like Diligent and TTk but I'm not doing anymore quick selling of red arrowed stocks at the moment, at least TTK pays a good dividend and long term will come up

[Wolf]

Couta1 mate, are you trading now? Trading and buying mid/long term are a hell of alot different. Make sure you know what you're doing.

[couta1]

Wolf, I little bit of swing and positional trading no day trading stuff,cheers

[cyclist]

I'm trying to get my head around how SUM would cope with a significant downturn. I'm not concerned about share price or dividends for such a situation - just that they come out the end in acceptable shape.

A significant income stream in a strong market is re-selling occupation rights for more than the previous owner paid (and selling new units with margin inbuilt). What happens in a down market? Some round numbers, assuming that new builds are winding down in a downturn, so it is mainly resales happening:

$200K price per occupational right
200 re-sales per annum.
Assume resales can only achive a price of $185K. i.e. a 7.5% drop in the market for these units.
That equates to 15K x 200 = $3m reduction in available cashflow.

Looking at other income and expenses, it appears they may need to borrow small amounts to keep things running. Probably could weather it. An interest rate rise at the same time would cause additional pressure.

To me, the company seems strong enough to weather it. Have others done any analysis?

(I am not discounting the possibility that GFC mk II may occur at some stage. The unbalances have only got worse since 2008. I'd prefer to own shares that can weather a downturn, if needed).

[Harvey Specter]

Cyclist - may I suggest you research how Ryman did during the last property fall in 2008. I don't know the answer but as a listed co, it would be easy to find out. I understand it did alright.

[couta1]

Black knat,Thank you for your honesty, a lot of food for thought, just regarding any trading it would be a long time before I would need to account to IRD on any profit due to my large loss, I would agree with you about the TA though I have made more profit on random tries than using TA and after all if the Govt had overridden the com com I wouldn't be sitting on the loss and I don't believe any TA could predict that, it could have gone either way so my investment in Sum is based on FA only, once again thanks for your genuine reply.

[silu]

Thought you guys might be interested in this if you haven't already seen it.

http://www.listener.co.nz/current-affairs/money/linda-sanders-old-business-is-good-business/

[couta1]

Black knat, Forgot to add you are correct when you say others are not using the same amount of money as myself, there are a lot of big talkers on here and I thought they must be trading large sums like myself and then I hear them say they loss a grand or so and started to think I'd better listen to less of the hype or I'm going to be the worst off on this forum at the end of the day.

[percy]

Go carefully couta1.
I did post on CNU thread on 10/11/2013 post No.1356;"I don't think you should be investing in the sharemarket."
Not a nice thing to say to a newbie,but was intended to be a wake up call.I hate losing capital, and I hate seeing other sharetrader members losing their capital.

[baller18]

Couta, I really think you need to understand yourself as a trader or an investor?
I would never be a trader, because I haven't studied technical analysis to the bones. So for me or yourself trying to predict the market, we will get burnt... N i have been burnt.
If you are investing in value companies and you have done your FA, then don't worry about the 1-2% swings, or even 10% swings..
May I ask how long have you been investing for? It sounds like you've been investing for at least 3 years plus? If so, you should be accommodated to the daily SP swings...

[baller18]

Couta, I really think you need to understand yourself as a trader or an investor?
I would never be a trader, because I haven't studied technical analysis to the bones. So for me or yourself trying to predict the market, we will get burnt... N i have been burnt.
If you are investing in value companies and you have done your FA, then don't worry about the 1-2% swings, or even 10% swings..
May I ask how long have you been investing for? It sounds like you've been investing for at least 3 years plus? If so, you should be accommodated to the daily SP swings...

[Jasemc]

Cyclist - may I suggest you research how Ryman did during the last property fall in 2008. I don't know the answer but as a listed co, it would be easy to find out. I understand it did alright.

looks like highest point was for 2008 was 15th sept $1.90 and dropped to $1.14 26th Feb 2009.

[couta1]

Black Knot, I was under a broker for 3 years and had a good range of fixed interest and reset investments with a very good average interest rate i purchased a few shares through them and did well but wasn't happy paying the steeper fees so switched to DB and converted most of my fixed interest etc into shares as I saw more potential and have been learning some good lessons the hard way, Percy I have considered your comment and its not something I'm going to rule out if I cashed up now I'd still walk away with 830k but my wife is very happy to have a large chunk of our money in retirement village stock but the question is can I leave it at that with my personality type? Baller thanks for your email

[Mista_Trix]

Black Knot, I was under a broker for 3 years and had a good range of fixed interest and reset investments with a very good average interest rate i purchased a few shares through them and did well but wasn't happy paying the steeper fees so switched to DB and converted most of my fixed interest etc into shares as I saw more potential and have been learning some good lessons the hard way, Percy I have considered your comment and its not something I'm going to rule out if I cashed up now I'd still walk away with 830k but my wife is very happy to have a large chunk of our money in retirement village stock but the question is can I leave it at that with my personality type? Baller thanks for your email

It worries me a little that while I think your nodding your head to some of the comments on here I really don't think you understand the realities of what your doing - your gambling.

If you make money, its purely accidental, but will you realise that?
or will it continue to support bad behaviours and uneducated guesses about stock movements.

Why not lock down like 90% of your portfolio back into a well diversified bundle, and then play with 10% while you learn. Read up on TA if that's what you want to use and definitely look into using stop-losses.

Singlehandedly you've made me reassess where I think the market might be up to, I think maybe your an early adopter of a bunch more people piling into shares misinformed and out for the 'quick wins' shares can bring.

I don't mean to be harsh but your posts are painful to read knowing the mess your in.


ADDITION: But I really do appreciate your honesty, maybe a wake up call for a few new people on here to the realities of 'trading'.

[couta1]

Mistake Trix, Thanks no more rash moves for me now just have to sit on my Dil Ttk and Peb red arrows for now don't want any more loss Dil is my worst at 40% down like I said I could sell up and walk away with 830k but want to wait and see what happens with Dil etc not keen on realising any more loss at the moment so stuck in jail on some of these stocks right now,any advice I get will tell me to sell or hold and I guess who knows which is the right decision, happy to hold Sum though of course.

[couta1]

Sorry Mista Trix not mistake

[Mista_Trix]

Sorry Mista Trix not mistake

Oh trust me there's been a few Mistaken Trix along the way :-S

[Harvey Specter]

looks like highest point was for 2008 was 15th sept $1.90 and dropped to $1.14 26th Feb 2009.But did it effect the underlying company or just that people sold down since it was a land company? ie. was their operating profit still growing, what did their build rate do? No doubt they took the opportunity to buy some cheap land?

[winner69]

But did it effect the underlying company or just that people sold down since it was a land company? ie. was their operating profit still growing, what did their build rate do? No doubt they took the opportunity to buy some cheap land?

Rym profit fell from 77m in 2008 to 61m in 2009

[percy]

I hear Macquaries have fallen in love with SUM and have a target price of $4.50.
Could anyone confirm what I have heard?

[couta1]

Correct Percy and by the way many thanks for your email

[percy]

Correct Percy and by the way many thanks for your email

Thanks for confirmation,and trust my email was helpful.

[Toasty]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11162246

The Herald have finally started their threatened expose of the retirement sector. I wonder if this will have any material effect on the sector as a whole. It feels to me like an opinion piece designed to inflame the outrage of their readers and spark some sales of papers. You could probably do this sort of journalism on any industry and cherry pick some horror stories to make great copy.

[Dej]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11162246

The Herald have finally started their threatened expose of the retirement sector. I wonder if this will have any material effect on the sector as a whole. It feels to me like an opinion piece designed to inflame the outrage of their readers and spark some sales of papers. You could probably do this sort of journalism on any industry and cherry pick some horror stories to make great copy.

Based on previous trading, this negative news for the sector could be enough to start seeing the SP rising for SUM.

:t_up:

[MAC]

Based on previous trading, this negative news for the sector could be enough to start seeing the SP rising for SUM.

:t_up:

Let’s hope so Dej, there are no doubt some dodgy retirement homes out there and this focus may steer the more discerning toward the larger more professional operations. With all the awards accumulated it must make Summerset’s marketing managers job a dream at present.

[Harvey Specter]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11162246

The Herald have finally started their threatened expose of the retirement sector. I wonder if this will have any material effect on the sector as a whole. It feels to me like an opinion piece designed to inflame the outrage of their readers and spark some sales of papers. You could probably do this sort of journalism on any industry and cherry pick some horror stories to make great copy.Pretty lame so far. I can understand why the Husband was upset but 'mauled' is taking it a bit far, she was 'consenting', she just mistook who it was. And if you read to the very last line, the Husband sent her back after the event.

The fact is some homes only provide the minimum standard of care. For some people, they probably want more but that costs money. Also when you are trying to just be on the line, of course you will drop below it occasionally. Is that good enough - no but unless they find something symptomatic, or deliberate, it is a non issue in my view. There are systems in place for complaints etc to ensure the minimum standards are maintained.

[fiasco]

Was just grabbing a coffee and stumbled across this in todays Dominion Post :)

http://i4.photobucket.com/albums/y130/Ali21/25ADCF77-3A7A-4925-A5C9-A46EA25A0EEA_zpshtfr9ngx.jpg (http://s4.photobucket.com/user/Ali21/media/25ADCF77-3A7A-4925-A5C9-A46EA25A0EEA_zpshtfr9ngx.jpg.html)

[CJ]

Bit out of date isn't it - havent they won Best RV 4 years in a row now. No wonder I dont read hard copy newspapers anymore!!!!

[fiasco]

Yeah was thinking the same when I saw it ha. But good to see her getting the recognition she deserves regardless of the DP's timing.

[Beagle]

Having personally witnesssed the way my father was "cared" for in Ryman Orewa dementia unit over many many months I am very sad to confirm that standards are very low indeed, at least at Ryman's Orewa facility in late 2012 they were.
A brief over-view of the house of horrors I witnessed at Ryman's facility
Lack of patient notes, each new shift of predominantly Phillipino woprkers seemed to have little to no idea of his advanced medical needs and condition
Frequent loss of hearing aids, glasses, nobody seemed to care or help him find them, scabies that went untreated for too long and too infrequently, staff that didn't want to get their hands dirty applying the medication, reluctance to call the doctor on many occassions when the family thought it was in his best interests, (we almost had to threaten them with legal action), lack of timely assistance with toilet requirements, in my opinion under-nourishment with meals, lack of assistance with obtaining adequate hydration, he couldn't walk at all towards the end, over medication by miles in our opinion...really it was a truly horrific way to see my father gradually pass away. He deserved much better after more than 50 years service as a Presbyterian minister. If it wern't for the fact that my Mum is in good nick and lived nearby in another retirement facility and could visit him daily, his treatment would have been much worse.

I was ashamed to be a shareholder of Ryman and have sinced exitied my association with Ryman and the level of "care", if you can call it that was a significant part of that decision.
There are many reasons i now prefer to invest in SUM instead of Ryman.
1. SUM is growing much faster.
2. SUM is muti award winning
3. SUM is better value based on its much faster growth rate
4. SUM is better diversified geographically and has a better spead of retirement facilities in the popular North Island area's
5. SUM is more heavily exposed to the Auckland market with 5 villages, (RYM has five times the market capitalisation so would need 25 villages in Auckland to have the same relative exposure, not the 5 ? it has.

I am proud to support a multi award winning company (SUM) and was ashamed to be a shareholder of Ryman when I saw the treatment of my father.

I see RYM in their latest press release prattling on about how important their standards are to them and how they've made moves to improve their systems and keep families better informed blah, blah, blah. I'm not impressed, too little too late as far as I'm concerned.

Sorry about the long rant but I have a VERY strong ethical preference to invest in this company (SUM) that win's best standards awards year after year after year. Diversification be dammed, I'll invest in the company that really looks after our elderly folks.
I'd bet money, (and have effectivly), that SUM has nothing to hide, unlike some operators in this field.

This sector absolutly needs transperancy and any move to publish / put independent audit reports of the standards applying to each individual facility be it rest home, hospital or dementia care, should be encouraged so that families can make informed decisions on where to get proper care for their loved ones.

[macduffy]

Bit out of date isn't it - havent they won Best RV 4 years in a row now. No wonder I dont read hard copy newspapers anymore!!!!

No, it's not "news", is it!

Just Colliers International giving themselves a pat on the back for being sponsor of the award.

:sleep:

[luigi]

I'd bet money, (and have effectivly), that SUM has nothing to hide, unlike some operators in this field.


Is this based on personal experience of SUM villages or on the awards they have won?

[Under Surveillance]

He deserved much better after more than 50 years service as a Presbyterian minister.
Everyone deserves much better than you describe. I can't fathom what his having been a Presbyterian minister has to do with his deserved level of care.

[Harvey Specter]

Having personally witnesssed the way my father was "cared" for in Ryman Orewa dementia unit over many many months I am very sad to confirm that standards are very low indeed, at least at Ryman's Orewa facility in late 2012 they were.I agree that standards should be better.

What extra cost do you think there would be to get the level of care we expect. A lot of the issues you state are due to low levels of staff or not wanting to incur extra costs (ie doctor call outs). The sad truth is that those with dementia are very expensive to care for.

I do wonder if there is room in the market for a Ryman Gold (ie. a higher standard of care, well above the minimum but also at a cost well above the minimum.

[Toasty]

Everyone deserves much better than you describe. I can't fathom what his having been a Presbyterian minister has to do with his deserved level of care.

When the Presbyterians rewrote the bible for their benefit they added it in the back somewhere that ministers were to get special treatment. Its just after revelations.

They went to the same publisher that allowed Catholic priests to drink and mess with young boys.

Disc. I am Catholic, though not a priest (and not much of a catholic to be honest)

[Beagle]

Is this based on personal experience of SUM villages or on the awards they have won?
Awards, I assume the award process is fairly robust.


Everyone deserves much better than you describe. I can't fathom what his having been a Presbyterian minister has to do with his deserved level of care.
He gave up a lucrative career to serve the community for a very modest salary. The irony of someone who worked so hard all his life serving the community literally six days a week all the time being so poorly served in his last period of life isn't lost on me but I agree that everyone deserves to live the last bit of their life with as much dignity and proper care as possible. My point, is this is not a media beat up on a sector, the poor treatment of our senior citizens is something that needs exposure and debate.

I agree that standards should be better.

What extra cost do you think there would be to get the level of care we expect. A lot of the issues you state are due to low levels of staff or not wanting to incur extra costs (ie doctor call outs). The sad truth is that those with dementia are very expensive to care for.

I do wonder if there is room in the market for a Ryman Gold (ie. a higher standard of care, well above the minimum but also at a cost well above the minimum.

Wages in the sector are poor and its very difficult to attract good staff, that's the key issue affecting the standards of care. Really the minimum living wage idea thing of circa $18 per hour that's doing the rounds now as a concept is something I support as every worker deserves to live in dignity too.

[Goldstein]

Having personally witnesssed the way my father was "cared" for in Ryman Orewa dementia unit over many many months I am very sad to confirm that standards are very low indeed, at least at Ryman's Orewa facility in late 2012 they were.
A brief over-view of the house of horrors I witnessed at Ryman's facility
Lack of patient notes, each new shift of predominantly Phillipino woprkers seemed to have little to no idea of his advanced medical needs and condition
Frequent loss of hearing aids, glasses, nobody seemed to care or help him find them, scabies that went untreated for too long and too infrequently, staff that didn't want to get their hands dirty applying the medication, reluctance to call the doctor on many occassions when the family thought it was in his best interests, (we almost had to threaten them with legal action), lack of timely assistance with toilet requirements, in my opinion under-nourishment with meals, lack of assistance with obtaining adequate hydration, he couldn't walk at all towards the end, over medication by miles in our opinion...really it was a truly horrific way to see my father gradually pass away. He deserved much better after more than 50 years service as a Presbyterian minister. If it wern't for the fact that my Mum is in good nick and lived nearby in another retirement facility and could visit him daily, his treatment would have been much worse.

I was ashamed to be a shareholder of Ryman and have sinced exitied my association with Ryman and the level of "care", if you can call it that was a significant part of that decision.
There are many reasons i now prefer to invest in SUM instead of Ryman.
1. SUM is growing much faster.
2. SUM is muti award winning
3. SUM is better value based on its much faster growth rate
4. SUM is better diversified geographically and has a better spead of retirement facilities in the popular North Island area's
5. SUM is more heavily exposed to the Auckland market with 5 villages, (RYM has five times the market capitalisation so would need 25 villages in Auckland to have the same relative exposure, not the 5 ? it has.

I am proud to support a multi award winning company (SUM) and was ashamed to be a shareholder of Ryman when I saw the treatment of my father.

I see RYM in their latest press release prattling on about how important their standards are to them and how they've made moves to improve their systems and keep families better informed blah, blah, blah. I'm not impressed, too little too late as far as I'm concerned.

Sorry about the long rant but I have a VERY strong ethical preference to invest in this company (SUM) that win's best standards awards year after year after year. Diversification be dammed, I'll invest in the company that really looks after our elderly folks.
I'd bet money, (and have effectivly), that SUM has nothing to hide, unlike some operators in this field.

This sector absolutly needs transperancy and any move to publish / put independent audit reports of the standards applying to each individual facility be it rest home, hospital or dementia care, should be encouraged so that families can make informed decisions on where to get proper care for their loved ones.

I couldn't agree more Roger. My mother lives in Orewa and the word amongst her friends is not to go near RYM. As I've said in previoous posts, I really hope SUM protect their brand, it may be worth a fair bit in the years to come. I'm really glad Norah Barlow is going to be on the board.

disc: Hold SUM (and this post is not meant to be a ramp)

[Beagle]

I couldn't agree more Roger. My mother lives in Orewa and the word amongst her friends is not to go near RYM. As I've said in previoous posts, I really hope SUM protect their brand, it may be worth a fair bit in the years to come. I'm really glad Norah Barlow is going to be on the board.

disc: Hold SUM (and this post is not meant to be a ramp)

I wish I could say I was surprised. We used to know the manager of the Dementia unit there, (Dad knew her from his previous work) and while she was employed there standards were acceptable and Dad received good care but sadly another problem for this sector is that anyone who's really good at managing health facilities is in high demand and she was head-hunted by another operator, thereafter standards for the most needy patients declined rapidly.

P.S. I'm not trying to ramp either, just venting a bit of frustration that's still left over, adding some first hand perspective that there's some real substance behind the Herald article and saying why its so important to me that I support a company that has been independently assessed through the awards process as having the best standards year after year.

And yes i'm happy Norah is staying on as a board member and hope her retirement from full time CEO duty gives her some more time too manage her health / weight better, no offence intended.

[Under Surveillance]

Disc. I am Catholic, though not a priest (and not much of a catholic to be honest)With Ryman Orewa full of Filipino staff you stand a good chance of superior care there, so long as you have beads and icons in residence with you.
Disc: I was christened a Presbyterian (but dropped out during sunday school, thankfully unmolested).

[pierre]

..... thereafter standards for the most needy patients literally fell off the edge of a cliff.

Not belittling the need for excellent care for the elderly - my dad received superb dementia care in a privately run retirement village in Hawke's Bay - but we'll need to be sure that future aged care facilities are "literally" not built on the edge of a cliff!

[gv1]

When the Presbyterians rewrote the bible for their benefit they added it in the back somewhere that ministers were to get special treatment. Its just after revelations.

They went to the same publisher that allowed Catholic priests to drink and mess with young boys.

Disc. I am Catholic, though not a priest (and not much of a catholic to be honest)

Roger doesn't mean that Toasty, its just his father served the community, for the good of everyone and he was treated like that. As ministers they do so much for the good of country as well. There are some bad apples but that doesn't mean we bash everyone with the same hammer.

[Beagle]

Toasty. That was completly insensitive / offensive and uncalled for.

Here's a revelation just for you mate, you know what, you are actually allowed to keep offensive opinions to yourself, please feel free to do so and that goes for your other mate as well.

[Goldstein]

Interesting that the Govt has been given a report suggesting investment in the very young gives a better return than investment (expenditure I suppose) on the elderly.

I don't think the two should be mentioned on the same page. It will be very interesting to see what the Govt's response is.

That plot down the bottom is alarming given the grey tsunami approaching.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11159174

[NZSilver]

Can we please have constructive posts and discussions regarding investing.

Cheers.

[Toasty]

I find it somewhat interesting that so far all the articles in the Herald have been negative. I know the adage is that bad news sells better but I wonder if there will be any positive stories as part of the series.

Cameron Slater on the Whale Oil blog displayed an internal Herald email some time back suggesting that it was pretty much an orchestrated beat up. It seems that no matter how successful a company or industry in New Zealand people just want to tear it down. Even the fact that the rest home sector is a good investment has been portrayed from the viewpoint that the industry is just out to extract every last dollar from their residents.

Surely if people are being treated so badly they would leave or their family would shoulder the responsibility of caring for them or finding somewhere better? These journalist must have gone through the homes and rejected every feel good story and seized on the disasters.

[Harvey Specter]

Toasty - they will all be negative. Not hard to find 10 examples (2 articles a day for a 5 day series) of bad care. They will also tarnish the whole industry rather than a Consumer style ranking - why not do a table with various metrics - could turn into an annual think like the school rankings.

The fact is these places are need so why not show whose best (using industry wide data, not one off specific events) so hopefully the bad drop out and everyone else tries to raise their game to win further business.

[Beagle]

Bad news sells copy and the Herald are desperate to do exactly that.

Anyone know the new website for the new Ministry's audit reports of each health care facility apparently being made available to the public today ?

Interesting article around the debate regarding full audit disclosure of healthcare standards.
http://www.insitemagazine.co.nz/news-feed/september-2013/something-s-got-to-give/

[gypsy]

My inlaws are at RYM Orewa and have no problems at all, in fact the complete opposite.

[Beagle]

My inlaws are at RYM Orewa and have no problems at all, in fact the complete opposite.

Are they both in the Dementia unit ?

[G on]

http://www.health.govt.nz/your-health/certified-providers/aged-care Try this.

[gypsy]

No, self care unit. They are happy with RHY as a hole, best thing they did was move there. They know quite a few of others there and all happy.

[Lost in space]

No, self care unit. They are happy with RHY as a hole, best thing they did was move there. They know quite a few of others there and all happy.

Freudian slip there gypsy with the word 'hole'? :-)

[Beagle]

http://www.health.govt.nz/your-health/certified-providers/aged-care Try this.

Thanks.


No, self care unit. They are happy with RHY as a hole, best thing they did was move there. They know quite a few of others there and all happy.

That's the difference. Nothing wrong with Ryman's general facilities, in fact the village at Remuera is one of the very best I've seen. The issues I've seen are with their level of care in the secure dementia unit. I hope Ryman are working hard to improve their service delivery.

P.S. I've now reviewed the Ministry's summary Audit report of Ryman's Evelyn Page facility in Orewa available on the website detailed above and it doesn't look too bad but doesn't line up with what I saw there, I'll leave it at that.

On a more positive investment note its intersting to see Ryman's SP come in for a correction, (down about 60 cents in the last week or so), but SUM's staying well supported, value shines through :)

[troyvdh]

under surveillance....troy here...read your post once...winced...blinked...wiped eyes..repeated process.....yep it remained the same....Are you taking the mickey here...or are you serious...in fact Im stunned that no other poster has commented....gee mate me hopes your taking the piss...

[Beagle]

^^ I agree.

Anyway...back to investment. I see very well regarded Milford Asset Management have just issued a substaintial shareholder notice advising their holding has increased from 5.66% to 6.66%.

[Dej]

^^ I agree.

Anyway...back to investment. I see very well regarded Milford Asset Management have just issued a substaintial shareholder notice advising their holding has increased from 5.66% to 6.66%.

Always like the movements of milford asset management. Good indicator for me. I also note that they increased their holding in the Active Growth Fund which is also another good indicator to me.

[Beagle]

Always like the movements of milford asset management. Good indicator for me. I also note that they increased their holding in the Active Growth Fund which is also another good indicator to me.

Arguably N.Z.'s best investment managers :)

[Goldstein]

The depth seems to mean very little at the moment. Almost like there's two different markets, which I suppose there is.

[Beagle]

Its almost like Milford and others are happy to hoover up stock at $3.25 whenever they can and other insto's are happy to take profits at $3.30, presumably from their recent allocations from Quadrant's sell down at $3.10.

I can't help wonder how long this situation will prevail, another month perhaps ?

[Goldstein]

Its almost like Milford and others are happy to hoover up stock at $3.25 whenever they can and other insto's are happy to take profits at $3.30, presumably from their recent allocations from Quadrant's sell down at $3.10.

I can't help wonder how long this situation will prevail, another month perhaps ?

Yep, I was thinking the same. It's basically a good time to take a position in the stock which is what Milford is doing. The SP will most likely be flat and then run up in February next year.

However, a lot of investors/traders will be looking for a quicker buck elsewhere. It will be interesting if/when the SP heads north. It's possible there could be quite a surge of investors returning.

[Snow Leopard]

Finally finished fiddling with my retirement village portfolio: basically selling some RYM and buying SUM with the proceeds so they have more equal waiting in the portfolio.

I hope that will give me a better return over the medium term.

Best Wishes
Paper Tiger

[Mista_Trix]

$2.4m went through pre-market @ $3.20

[fiasco]

Noob question.

If 2.4m went through @ 3.20, how does the allocation of shares work?

I see the below currently traded

Volume

789,533
/$2,528,578

[macduffy]

I assume the 2.4m shares was a " crossing" where a broker handles a sale from one client to another ( or a number of others). Often done a bit below last market price in recognition that otherwise a large number of shares put on the market would tend to depress the price.

[fiasco]

Great thanks for confirming that macduffy, I assumed that could be the case.

[Beagle]

I wonder with the annual stock brokers selections for 2014 about to be published later this month, how many brokers will have SUM in their selection ?

[fiasco]

I'm hoping a large majority when you consider how many overvalued stocks there are at the moment. Well I hope so anyway haha.

[couta1]

Top up time anyone?

[silu]

Top up time anyone?

When support levels are confirmed then definetely.

[silu]

Top up time anyone?

When support levels are confirmed then definetely.

[Food4Thought]

Top up time anyone?

Hi Couta1 - Tempting to top up, reasonable drop today. Seems to be small volumes, probably cashing up on a win, with more negative market sentiment.

Long term SUM is certainly a winner. Short term, it could easily drop to below $3.10. There are likely to be some Australians reducing holdings/cashing up their shares with the NZ dollar so strong. Also, prior to xmas, the xmas churn happens... those people cashing up, to fund their festive/holiday season.

Check out PHB Crouta1 - unsure if you have had a look into them. They have a solid business, with not much similar competition. Growth may be a bit modest for some people, yet I recon this company is worth looking into.

Also, thanks for sharing the CNU story. I also sold out, at a loss, but much less significant to you. What a lesson that uncertainty has had for this stock. I still believe CNU will drop further, to how low, that is anyone's guess.

With interest rates due to rise next year, cash in the bank won't hurt.

Happy informed decision making

[couta1]

Thanks Food4Thought, I'm looking forward to Sums progress next year have half of my money tied up in the stock and happy about it, I believe Sum will be around $4.20 this time next year, yes with interest rates rising I will be putting available money back into good paying bonds as there will be some new issues coming up I'm sure.

[In4a$]

Top up time anyone?
Hi couta1. I will be, but waiting, might get below $3 as prices do the usual xmas decline.

[fiasco]

Will look to top up around $3.00, will watch it though if it does dip under the $3 mark.

[Beagle]

The 100 day moving average is $3.13. The fact that this is very close to the price Institutions widely supported the stock a while back when Quadrant sold out, and given good news since then, (approval of Hobsonville site and winning the Australasian Retirement Operator of the year award again), notwithstanding the fact that some retail holders cash up a bit for Christmas I expect it to find solid support in the $3.10-$3.13 range. I am happy to top up in that range and slip some into my family trust. My kids will think I'm a bloody legend when I die, which at 52, hopefully won't be anytime soon :).

[gv1]

The 100 day moving average is $3.13. The fact that this is very close to the price Institutions widely supported the stock a while back when Quadrant sold out, and given good news since then, (approval of Hobsonville site and winning the Australasian Retirement Operator of the year award again), notwithstanding the fact that some retail holders cash up a bit for Christmas I expect it to find solid support in the $3.10-$3.13 range. I am happy to top up in that range and slip some into my family trust. My kids will think I'm a bloody legend when I die, which at 52, hopefully won't be anytime soon :).
Good choice, will be doing the same.

[Dej]

Will look to top up around $3.00, will watch it though if it does dip under the $3 mark.

Ill top up anything below $3, in fact may double up!

[couta1]

I think you guys are thinking a bit wishfully to think Sum is going to drop below $3, that would mean a major correction given what the companies done in the last 6 months.

[silu]

I think you guys are thinking a bit wishfully to think Sum is going to drop below $3, that would mean a major correction given what the companies done in the last 6 months.

Who knows what's going to happen. Wall Street is a perfect example at the moment of not knowing how to interpret results & figures. It has been pretty irrational lately.

[couta1]

Yes I've discovered half the markets got an IQ approaching Einstein and the other half approaching a blond on a bad day.

[Goldstein]

I suspect anything below $3.10 would be a buying opportunity for some of the new SSH's out there. It hard to tell, but that's my feeling.

I'm overcommitted in SUM at the moment and can't make use of the current SP. I actually broke one of my rules which says I don't average up or down unless there has been 10% movement in price. This is to prevent me from reading too much into short term changes. It was looking very good there for a whle with the QPE overhang gone and the SP into uncharted territory.

[couta1]

Goldstein, What's a movement of 10 c or so when we're all hopeing to double our money in a few years I'm loaded to the max so not buying anymore but as Roger said just enjoying the start of a long enjoyable yacht ride.

[Goldstein]

Goldstein, What's a movement of 10 c or so when we're all hopeing to double our money in a few years I'm loaded to the max so not buying anymore but as Roger said just enjoying the start of a long enjoyable yacht ride.

Couta1, it's part of my strategy. My rule would have suggested that I wait for $3.60 or $3.00 for my next purcahse. I put rules in place as I am probably only going to be right 65% of the time regarding any decisions I make - maybe it's less than that, and these rules are to stop me burning my capital.

If you carry out a reasonable number of trades, then sooner or later you will do a very bad one. It really does pay to admit to yourself that you (i) don't have all the information about any given stock and (ii) you are not the invetsment guru you think you are.

[couta1]

Goldstein, Yes those bad ones can be very bad as I we'll know I'm feeling very humbled now but still enthusiastic I mean without that we all might as well just toss the towel in right now,cheers

[Beagle]

Just a bit more Christmas chop to get thru and then we can hoist the big spinnaker once January is here, (January effect) http://en.wikipedia.org/wiki/January_effect and enjoy a lovely breezy tailwind in calm seas as we cruise towards another strong growth announcement in late February.

[couta1]

More good news,Sum purchasing 2 Christchurch sites taking on Rym in their territory

[silu]

Nice. I like the announcement. Christchurch is perfect for new aged care homes. Me thinks SUM will become my biggest holding today.

[fiasco]

For anyone who can't see it :D


ASSET: SUM: Summerset Investing Nearly $200m at Two Christchurch SitesSUM
18/12/2013 09:26
ASSET

REL: 0926 HRS Summerset Group Holdings Limited

ASSET: SUM: Summerset Investing Nearly $200m at Two Christchurch Sites

NZX, ASX & MEDIA RELEASE

18 DECEMBER 2013

SUMMERSET INVESTING NEARLY NZ$200 MILLION AT TWO CHRISTCHURCH SITES

Retirement village and aged care operator Summerset announced today it has
purchased two Christchurch sites on which to develop villages, investing
around NZ$200 million into retirement living for older Cantabrians.

The sites are located in Casebrook and Wigram. They will be the company's
first Christchurch villages.

The company intends to build more than 200 townhouses and villas for
independent living, and care apartments for those with more advanced needs at
the Casebrook village. The village will be located on a 9.7ha site in
Casebrook, which is an up-and-coming area in the north of Christchurch, where
significant development is proposed.

The Wigram village will be set on 5.4ha and will have more than 200
retirement units. It is near to the Wigram Skies development. Both villages
will have a village centre, combining recreational facilities and a care
centre providing rest home and hospital-level care.

The purchase of the Wigram site is subject to subdivision of title.

Summerset CEO Norah Barlow said the company is looking forward to being part
of the city as it rebuilds.

"Christchurch is undergoing dramatic change and it's exciting to be part of
that. We're pleased to have found these sites after searching for many years
in the region.

"We look forward to providing the people of Christchurch and the wider region
with first class retirement villages set in great locations. We have
residents who have moved from Christchurch to Summerset's other locations
throughout the country since the earthquakes. We're very pleased to be able
to offer Cantabrians Summerset's range of retirement living options without
having to leave the region or their families and friends."

CFO and CEO-designate Julian Cook said, "There is significant pressure for
quality, affordable housing in Christchurch. Those moving to a Summerset
village not only get the benefits of living in a safe and secure community in
purpose-built homes, they also free up homes in the city for younger
families."

Latest census figures show the number of people aged 65 years and over is
increasing. Over 73,000 people are aged 85 years or over - an increase of
nearly 30% in this age group since 2006. The ageing population, coupled with
a shortage of housing and retirement village offering in Christchurch means
there are few options for older Cantabrians. Summerset's two villages will go
some way to addressing this problem.

These two Christchurch sites bring the total number of greenfield sites in
Summerset's portfolio to six.

Mr Cook said, "The company has strong growth objectives with Christchurch
being an important part of this. The city was a visible gap in our portfolio,
and we've had lots of interest from Christchurch residents into our
villages."

ENDS

For investor relations enquiries:

Julian Cook
Chief Financial Officer
julian.cook@summerset.co.nz
04 894 7310 or 029 894 7310

For media enquiries:

Kimberley Rothwell
Communications Advisor
kimberley.rothwell@summerset.co.nz
04 894 6993 or 027 601 2001

End CA:00245336 For:SUM Type:ASSET Time:2013-12-18 09:26:50

[silu]

Wondering if this sell order will get filled :)

10,000 shares @ 1150000 cents

[couta1]

Nice. I like the announcement. Christchurch is perfect for new aged care homes. Me thinks SUM will become my biggest holding today.
6 sites now I wonder what number this stock will have in front of it in around 4yrs time? My biggest holding by far 50% of portfolio and proud of it, go Summerset

[couta1]

For those looking to get in I advise you do so before Sums full year result next march, I think once the market realizes the true value of the company you won't ever buy the stock at these prices again, I kicked myself for not buying Rym at $3 and look where it is now, will be the same for Sum so don't be timid

[Mista_Trix]

Kewl, no seller depth, perhaps we'll find our next point to hover at for a couple of months.

SUM is a funny beast, a bit of action (either way) every couple of months, just slowly climbing, which I'm happy with, its not a traders stock as there's not enough movement, so I'm happy to watch it jump a few percent every couple of months and then sits ... then same again a few months later.

SUM, the ultimate teacher of patience,

[couta1]

[QUOTE=Mista_Trix;450261]Kewl, no seller depth, perhaps we'll find our next point to hover at for a couple of months.

SUM is a funny beast, a bit of action (either way) every couple of months, just slowly climbing, which I'm happy with, its not a traders stock as there's not enough movement, so I'm happy to watch it jump a few percent every couple of months and then sits ... then same again a few months later.

SUM, the ultimate teacher of patience,[/QUO Your right but ive got the feeling we may see a substantial jump next year

[couta1]

Your right mistatrix but I've got the feeling we may see a substantial jump next year

[silu]

Bought some more at $3.25 (avg price $3.30). Unless there are major changes in structure I'm taking a 5-10 year view on this one.

[Onion]

Wondering if this sell order will get filled :)

10,000 shares @ 1150000 cents

I was amused at that one too. Seems to have dropped off as of today.

[Goldstein]

Great to see them diversifying away from Auckland. It makes the company more resilient. Happy with the low divvy if they are doing that sort of investment.

[MAC]

It is good news, reasonable sites both on the outskirts, but with quite longish walks to the Hornby and Papanui shops/malls respectively. I do hope SUM time the construction well so as not to catch the peak constraints and pricing during the rebuild.

Having said that, I know from first hand exp that it is really not very easy at all to find any form of quality accommodation, it's an extremely competitive market in shaky town at the middle to top end, and I wouldn't be surprised if SUM were to demand a nice price premium for elderly folk moving into very nice Christchurch retirement units.

Onward and upward.

[ratkin]

Wasnt a cheap purchase , any chance we see a capital raising at some point?

[Banksie]

Plenty of development planned in Wigram.

http://www.stuff.co.nz/the-press/business/9346109/New-shopping-centre-for-Wigram-Skies
http://www.stuff.co.nz/the-press/business/your-property/9529130/Business-park-planned-for-former-airfield

[MAC]

You will note that SUM haven't said when they start construction in Christchurch. SUM have a formula where they happily land bank, wait for infrastructure that is forecast to be built in the area, and then start construction when some of that community inftrastructure is coming on stream. For example, local shops that would support a dairy/superette, hairdresser, GP clinic etc. It's what they've done in Karaka.

Yes indeed, there could be a nice sweet spot in 2016 or 2017 when all the rebuild construction is dying away and all that experienced resource is starting to mill about looking for work.

[Beagle]

I'm pleased with the acquisition and am honing my skills around the disipline of patience :)

Very happy that SUM continue their focus entirely in N.Z as in my opinion the Aust economy looks like turning really sour for a considerable period of time. Implications for RYM and SKC's expansion plans over there ? (Disc, sold RYM and SKC)

[noodles]

I'm pleased with the acquisition and am honing my skills around the disipline of patience :)

Very happy that SUM continue their focus entirely in N.Z as in my opinion the Aust economy looks like turning really sour for a considerable period of time. Implications for RYM and SKC's expansion plans over there ? (Disc, sold RYM and SKC)

Isn't gambling and aging recession proof? :)

Perhaps you are more concerned about the fall in Aussie profits due to strong $NZ? I reckon we will reach parity.

I fear IF Aussie does have a recession, they will pull us down anyway.

[Lorne Ranger]

This stock remains my most vexing hold. Good revenues, good management, confirmed forward planning in a economic and social environment that is supportive of company growth and potential..... yet the SP remains impotent at around 3.10 - 3.25. Hard to fathom this stock, I thought once Quadrant had finished its sell off we would start to see the true value reflected in pricing, but it seem immune to good news. Yet MET continues to soar... I don't get it.

[PartyPooper]

This stock remains my most vexing hold. Good revenues, good management, confirmed forward planning in a economic and social environment that is supportive of company growth and potential..... yet the SP remains impotent at around 3.10 - 3.25. Hard to fathom this stock, I thought once Quadrant had finished its sell off we would start to see the true value reflected in pricing, but it seem immune to good news. Yet MET continues to soar... I don't get it.

I honestly don't mind. buying SUM for anything below 3.50 I believe will be great for the future. Of course for people who already hold lots of shares it must be a pain. From the sound of today's announcement these planned villages will bolster the share price when dirt is turned. The next financial report will be interesting to see earnings and how they are funding the current development of the 4 or is it 5 homes going ahead at the moment.

As for MET I wouldn't be surprised to see it fall below 3.50 in early 2014.

[couta1]

This stock remains my most vexing hold. Good revenues, good management, confirmed forward planning in a economic and social environment that is supportive of company growth and potential..... yet the SP remains impotent at around 3.10 - 3.25. Hard to fathom this stock, I thought once Quadrant had finished its sell off we would start to see the true value reflected in pricing, but it seem immune to good news. Yet MET continues to soar... I don't get it.
I have written many times regarding the above concerns that others have also mentioned but to spell it out again Sum is currently undervalued and the market hasnt recognised that yet and PartyPooper is correct Met is overvalued based on no proven results to date so i think the market has that wrong, goes to show the market isnt always right,if Sum hasnt got a 6 in front of it in 3-4 yrs time id be very surprised,cheers

[couta1]

Isn't gambling and aging recession proof? :)

Perhaps you are more concerned about the fall in Aussie profits due to strong $NZ? I reckon we will reach parity.

I fear IF Aussie does have a recession, they will pull us down anyway. Ryman are very savvy operators and i dont think anyone could write them off due to their Aussie expansion plans they have a proven track record but as Roger has mentioned on a few occaisions already Sums growth potential in NZ will be greater over the coming years, you only have to look at how Rym went from $3 to$6 in a relatively short space of time there is a lag phase from start of construction to the Acme phase when profits really start to show through, its like building a dam takes a while for the water to build up but once the dams full theres a lot of force ready to let rip and so we will see this process occuring with Sum in the coming years,stand firm

[Snow Leopard]

I have written many times regarding the above concerns that others have also mentioned but to spell it out again Sum is currently undervalued and the market hasnt recognised that yet and PartyPooper is correct Met is overvalued based on no proven results to date so i think the market has that wrong, goes to show the market isnt always right,if Sum hasnt got a 6 in front of it in 3-4 yrs time id be very surprised,cheers

String assertions there. Any chance that you can back them up using figures from the company reports?

- Summerset's recent profit essentially equates entirely to the re-valuation of investment property by 2.5-3% pa;
- absolutely pathetic;
- the current price is based on the expectation that they up the build rate and improve their development margin.

- Metlifecare's current price is based on precisely the same expectation.

Best Wishes
Paper Tiger

[couta1]

String assertions there. Any chance that you can back them up using figures from the company reports?

- Summerset's recent profit essentially equates entirely to the re-valuation of investment property by 2.5-3% pa;
- absolutely pathetic;
- the current price is based on the expectation that they up the build rate and improve their development margin.

- Metlifecare's current price is based on precisely the same expectation.

Best Wishes
Paper Tiger
I did do up figures for Sum will dig them up again when i get some time,regarding Met i havent really any detailed analysis but when the share price went from $3.06 to $4.55 in a short space of time based only on the fact that 2 new owners had come along I think it being overvalued speaks for itself, the other factors that come into valuing these companies for future growth are not based on numbers but on public perception of the overall standard of care offered to the residents by that company and if the company is seen as having a focus on excellent care not just profit it will do well and Sum is in that place,cheers

[Beagle]

I have written many times regarding the above concerns that others have also mentioned but to spell it out again Sum is currently undervalued and the market hasnt recognised that yet and PartyPooper is correct Met is overvalued based on no proven results to date so i think the market has that wrong, goes to show the market isnt always right,if Sum hasnt got a 6 in front of it in 3-4 yrs time id be very surprised,cheers I'd be very surprised too.
The impact of Ford and Holden ceasing manufacturing in Australia will shake the southern states economies to the very core, and of course its Melbourne that Ryman are targeting...honestly they probably couldn't have chosen a worse state.
Although there's several thousand employees in each operation directly affected by some estimates there's as many as 160,000 employed in the supply chain component manufacturing industry supporting the production of Ford and Holden cars and most experts seem in agreement that Toyota will cease manufacturing in Australia as well, perhaps for the main reasons of expensive labour and the supply chain manfacturers going broke due to them losing crictical mass from the other two manufacturers closing down.
When circa 160,000 people in Southern Australia stop spending because they're on the dole how do you think this will affect all the other small retailers in places like Geelong ?

I really do think the two economies are now on quite divergant paths and we'll see parity in the currency or even the Kiwi stronger within 2-3 years if not sooner.

I'm happy to invest in a company that's growing striongly and is focused in N.Z. but agree that it is somewhat perplexing that we havn't seen more of an upward trend since quadrant's overhang was removed.
Great long term hold.

[Jay]

Slightly off track, but I read 1 supplier said won't affect them too much as they have secured export orders and have overtime built this up. Must be more than 1 like that. Therefore while still will affect alot of people, some will be absored in to other jobs, some will leave the country, some will retire early (and hopefully purchase a Ryman place!)

[Jay]

Slightly off track, but I read 1 supplier said won't affect them too much as they have secured export orders and have overtime built this up. Must be more than 1 like that. Therefore while still will affect alot of people, some will be absored in to other jobs, some will leave the country, some will retire early (and hopefully purchase a Ryman place!)

[Mista_Trix]

I did do up figures for Sum will dig them up again when i get some time,regarding Met i havent really any detailed analysis but when the share price went from $3.06 to $4.55 in a short space of time based only on the fact that 2 new owners had come along I think it being overvalued speaks for itself, the other factors that come into valuing these companies for future growth are not based on numbers but on public perception of the overall standard of care offered to the residents by that company and if the company is seen as having a focus on excellent care not just profit it will do well and Sum is in that place,cheers

I would be keen to see your numbers as well, especially given how much advice you're dishing out about this ('these' RYM, MET, SUM) shares.

[Beagle]

String assertions there. Any chance that you can back them up using figures from the company reports?

- Summerset's recent profit essentially equates entirely to the re-valuation of investment property by 2.5-3% pa;
- absolutely pathetic;
- the current price is based on the expectation that they up the build rate and improve their development margin.

- Metlifecare's current price is based on precisely the same expectation.

Best Wishes
Paper Tiger

I used to be a sceptic too and based on annual results for the YE 31/12/2012 I felt with strong validity but I'd encourage you to have a thorough read of the interim report
http://www.summerset.co.nz/investor_centre/2013%20Half%20Year%20Report.pdf to 30 June 2013 wherein you'll clearly see the nature of the profit is transforming and the company is growing real EPS at circa 45% p.a. before the revaluations which are also very strong.

I think this company is transforming its business model and refining its development methodologies and that together with only really reaching critical mass recently will see some very strong growth over the next five years, growth rates that are not currently reflected in the share price.

On the Aussie thing, There's always the odd story of supply chain manufacturers adapting and changing but for every one of those...
Has anyone noticed the size of the projected deficit next year in Australia and they're talking about the possibility of huge deficits for as long as a decade...meanwhile Asia wants more dairy products and meat every year...

[Wolf]

As for MET I wouldn't be surprised to see it fall below 3.50 in early 2014.


I have written many times regarding the above concerns that others have also mentioned but to spell it out again Sum is currently undervalued and the market hasnt recognised that yet and PartyPooper is correct Met is overvalued based on no proven results to date so i think the market has that wrong, goes to show the market isnt always right,if Sum hasnt got a 6 in front of it in 3-4 yrs time id be very surprised,cheers

MET is currently trading on a PE ratio of 6.08
SUM is currently trading on a PE ratio of 32.17
RYM is currently trading on a PE ratio 26.61

MET is overvalued on no proven result?

Benjamin Graham uses a PE of 8.5 for a no growth company. I personally don't see MET having a decrease in EPS in 2014 and like to think Infratil wouldn't have bought a stake if they did either. When i look at a company i look at the people running it as well. Not long ago i didn't look twice at MET, but with the new appointments from infratil, who i hold in good regard, i believe they can sort the company out.
Factoring in EPS growth of 5% per annum average over an extended period of time i get a fair PE of 10. So subsequently i believe MET is in fact undervalued.

Don't get me wrong i believe Summerset is currently undervalued too and is my favorite of the two and my main holding.


I did do up figures for Sum will dig them up again when i get some time,regarding Met i havent really any detailed analysis but when the share price went from $3.06 to $4.55 in a short space of time based only on the fact that 2 new owners had come along I think it being overvalued speaks for itself, the other factors that come into valuing these companies for future growth are not based on numbers but on public perception of the overall standard of care offered to the residents by that company and if the company is seen as having a focus on excellent care not just profit it will do well and Sum is in that place,cheers

While the public perception of the overall standard of care is important i don't think you should use it as a base of further growth. Further growth can be forecast by looking at similar companys/ research reports / track record / financial documents.

I think Summerset should have an average EPS growth PA of at least 20% over the next seven years. Does anyone else have another opinion?



Summerset's recent profit essentially equates entirely to the re-valuation of investment property by 2.5-3% pa; Good point, i guess they can't pay out Land re-valuations in dividends :t_up:. You just added a new angle to everything i've looked at, i don't even know what to say lol.

[Harvey Specter]

MET is overvalued on no proven result?MET is undervalued due to no proven result.

That's my view and with IFT and Superfund coming in, hopefully that will change. One of the things SUM has going for it is that it is small so it is therefore 'easier' to get higher percentage growth (eg. I think SUM and MET build rate is similar but as a %, SUM is much higher).

Disc: for this reason, I reduced my RYM during the year and bought into both MET and SUM - MET as improved management should made it a value buy and SUM as it has the best potential for growth. I will reassess over Xmas to determine at what points I should accumulate or reduce for each.

[Wolf]

I may buy MET after their next report but the price is currently to high for me still. It's all dependent on the effects of the management change e.g dividend payout ratio, EPS growth. Obviously we're not going to see any drastic effects for a while but it would be good to see where they are heading. I might buy a small parcel for a value play but probably not.

Ryman is overpriced in my books i have a fair value of $5.19, my concern is the decrease in EPS growth.



RYM
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014


EPS
3.1
3.7
4.7
7
11.1
14.6
13.3
15.8
20.1
24.3
27.5



GROWTH
N/A
19.40%
27.00%
48.90%
58.60%
31.50%
-8.90%
18.80%
27.20%
20.90%
13.20%



AVG
10YR=25.7%
1 5YR=37.1%
2 5YR= 14%


-30.00%

-58.30%




Summerset i'm just trying to work out an EPS forecast for the future is anyone willing to share their figures?

[MAC]

Hi Wolf, here's mine,





11/12

12/13

12/13

13/14

13/14





FY

HY

FY

HY

FY



Net Margin

38.9%

50.9%

62.5%

67.4%

75.0%



NPAT

14.8

10.8

27.6

16.5

38.5



Growth

244.7%

176.2%

86.5%

53.4%

39.2%




Margins are important and have been steadily increasing as SUM grows, noting that RYM net margins have been stable in the high 70's for six years now. As forward construction by SUM will be managed in house I'm anticipating that this will assist the trend in margin growth.

[Beagle]

I'm investing on the basis that I believe EPS growth of approx 25% on average per annum is a safe assumption for the forseeable future, 5-7 years.

I'm basing this on the number of sizeable projects they have in the pipeline, their increasing development margin and their current growth rate of circa 45%. That and their on-going reputation as confirmed by winning the Australasian retirement operator of the year, year after year.

[Wolf]

Thanks for sharing MAC.
How high do you think Net margin will reach? Do you think they will balance out in high 70's like RYM? or head into 80's?
If the net margin balances out surely that would mean a decrease in the % increase of NPAT?

[MAC]

I find it difficult to be too speculative actually. The three companies are all a little different and have slightly different models and strategies.

Around a year ago I moved from Victoria to New Zealand and I can’t help but think that RYM will continue to expand in Vic but not with the same margins that we see within the sector here, higher relative construction costs, very aggressive unionism, and lower labour productivity.

I see no reason though why SUM margins should not also head into the high 70’s low 80’s, it comes down to management doesn’t it and their approach in monitoring and controlling opex.

[Whipmoney]

I find it difficult to be too speculative actually. The three companies are all a little different and have slightly different models and strategies.

Around a year ago I moved from Victoria to New Zealand and I can’t help but think that RYM will continue to expand in Vic but not with the same margins that we see within the sector here, higher relative construction costs, very aggressive unionism, and lower labour productivity.

I see no reason though why SUM margins should not also head into the high 70’s low 80’s, it comes down to management doesn’t it and their approach in monitoring and controlling opex.

From what I understand (regulation wise) Victoria is one of the hardest states in Australia to get things built.

[Goldstein]

Looks like the sellers have packed up for Christmas. Some folk may have left their re-entry a little late.

Of course this could be wishful thinking on my part.

[Mista_Trix]

Looks like the sellers have packed up for Christmas. Some folk may have left their re-entry a little late.

Of course this could be wishful thinking on my part.

Maybe helped along (at least by people on this thread), by how many times its appearing in peoples 2014 picks - probably the least risked 'at some point it will pop' 2014 gamble.

[Beagle]

Christmas selling pressure had to end sooner or later, personally I thought it would have ended a few days ago.

[Toasty]

Bit of a pop today. Who would have thought that a new company secretary would be so well received?

[Goldstein]

Bit of a pop today. Who would have thought that a new company secretary would be so well received?

She'll be saying 'who's the man'. Sorry couldn't resist.

[couta1]

Merry Kwanza to all SUM holders out there :)
Moosie im looking forward to this time next year when Sum should have obliterated my CNU loss and ill be able to smile to myself every time i see a Chorus van

[Bjauck]

It looks like SUM today may possibly have been helped by the fact that SFWU are not pursing it in the application filed with ERA over low pay.

[clip]

nice big sell off at the end of the day - back to 3.23. I will be looking to get in next week at these levels :)

[MAC]

Absolutley agree with all that, Norah Barlow must be seen as a CEO to emulate for many now, and look where she has left SUM positioned .............

These comparative tables say it all, SUM has the highest growth rate, lowest expenses per bed and the highest forward land bank, what a magic equation.

I’m looking for SUM to catch RYM also on EBITDA per bed over the next couple of years as SUM margins continue to steadily grow and they perhaps start to capitalize on the award winning reputation and associated sales advantage they have over the competition.

5220

5221

http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2013-12/METNZ161213ESSe.pdf?cid=&spMailingID=7595880&spUserID=NzgwMDI1MDk1NjIS1&spJobID=106299599&spReportId=MTA2Mjk5NTk5S0

[iceman]

Sparky, I think many of us SUM shareholders will second your words on Norah Barlow. I most certainly do.

[Wolf]

Doubled my holding yesterday at $3.25.

[Beagle]

I added today, Christmas selling must be over by now :)

Good capital gains to be had here for the forseeable future. Merry Christmas everyone :)

[blocker3]

Sparky, I think many of us SUM shareholders will second your words on Norah Barlow. I most certainly do.

Norah and here team have done excellent work.

A well deserved Merry Christmas.
Cheers

[Goldstein]

I believe strongly that Norah is NZ's best businesswoman.

Not sure we should differentiate on gender. She's a great business person and streets ahead of most of her male counterparts in NZ.

I agree with the sentiment though Sparky.

[MAC]

MacQuarie as at 16/12/13 have 12 month price targets as below, seems according to them we are in the right village;

Ryman $7.50 (-5.6%)
Summerset $4.50 (+37.2%)
Metlife $4.65 (+18.9%)

Percentages are upside from present day SP (26/12/13).

Their price target for Ryman seems a little high to me actually, but how do you say, 'going flat for a bit' after getting ahead, in a nice way.

http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2013-12/METNZ161213ESSe.pdf?cid=&spMailingID=7595880&spUserID=NzgwMDI1MDk1NjIS1&spJobID=106299599&spReportId=MTA2Mjk5NTk5S0

[troyvdh]

Thanks Mac ..for the Mac post...would it not be interesting to see the "books" on BUPA....
Having said that ...my father is in a Bupa facility (Pap RD CHCH) and (I am a nurse) the care there is beyond a level that I would have expected.The staff (mostly from the Phillipines are always courteous engaging kind and empathetic (like me !)...I should add that my mother does visit virtually everyday.

This BUPA...they are English are they not.By the way the staff tell me that they are all paid more than the min wage.

[couta1]

Thanks Mac ..for the Mac post...would it not be interesting to see the "books" on BUPA....
Having said that ...my father is in a Bupa facility (Pap RD CHCH) and (I am a nurse) the care there is beyond a level that I would have expected.The staff (mostly from the Phillipines are always courteous engaging kind and empathetic (like me !)...I should add that my mother does visit virtually everyday.

This BUPA...they are English are they not.By the way the staff tell me that they are all paid more than the min wage.
Yes they are English but have a global type presense now i do work at a Bupa facility and its of of the best facilities i have ever worked in its dementia unit is fantastic and a fun place to work i like their care focus but like all retirement type complexes if the manager and clinical manager are bad then this affects the whole facility

[troyvdh]

Thanks couta1...re managers and clinical governance...do not me started on that topic...I could go on...but in summary (after being a nurse in CDHB) for about 36 years ...you have a point...simply put (and I am sad to this )...in my experience "ego" is afar more dominate feature than capability of the individual.

Perhaps we should chat privately....cheers

[Harvey Specter]

Thanks Mac ..for the Mac post...would it not be interesting to see the "books" on BUPA...

http://www.business.govt.nz/companies/app/service/services/documents/E565B78E55725B6693F8877979DB5068

[troyvdh]

Harvey S....well done and thank you....mmmm...perhaps the ST boffins will decipher what you have posted ..and determine whats what in regard to investment potential .
Me thinks that any investments in the retirement sector will almost perhaps be a given....BUT ...murphy again reappears ...if it sounds to good to true then it probably is..i.e. the continuing SP shareprice appreacation of companies in this sector...

What can go wrong ..we all know that HP....particularly in AK and CH are not quite insane yet but beyond the norm...(which we all know will be the ultimate determination) of the listed retirement sector companies. Am I wrong ?

[Goldstein]

Thanks for the post MAC. I notice in the risks section there is no mention of a change in Govt polciy which a few have hinted at here.

I suspect the Govt sees this as a sector in which private enterprise is doing well.

Looks like the sector is extremely healthy going forward with the the shortfall in beds.

[couta1]

Thanks for the post MAC. I notice in the risks section there is no mention of a change in Govt polciy which a few have hinted at he suspect the Govt sees this as a sector in which private enterprise is doing well.

Looks like the sector is extremely healthy going forward with the the shortfall in beds. Yep either way its looking good for the big 3 if the Govt doesnt increase the funding then more small timers and not for profits go out of business leaving a bigger pool for the others to pick up on and if the Govt does increase the funding the big players come out with more bottom line profit so we are well positioned

[blocker3]

SparkyTheClown what an excellent posting and I concur . Readings like yours are so inspirational & educational to myself and others.

Well done

Happy New Year

[Goldstein]

Some thoughts on government risk in the aged care/retirement village sector:

5. While house prices will have some correlation with new prices of units (referring more to the underlying land prices), the market forces for demand in village units will be just as strong in pushing unit prices up.
.

Your fifth point is interesting Sparky. It's possible the demand for rest care vastly outstrips the demand for housing over the next decade or two and the housing and rest care markets start to diverge. It got me wondering whether we could see a situation in which weathly retirees look to tie up units in RYM/SUM/MET/BUPA without living in them for the first few years. I suppose the contracts would preclude this (does anybody know?)

It's funny how interesting and active this sector has become.

[couta1]

Your fifth point is interesting Sparky. It's possible the demand for rest care vastly outstrips the demand for housing over the next decade or two and the housing and rest care markets start to diverge. It got me wondering whether we could see a situation in which weathly retirees look to tie up units in RYM/SUM/MET/BUPA without living in them for the first few years. I suppose the contracts would preclude this (does anybody k
It's funny how interesting and active this sector has become.
Units can be purchased in the manner you speak of above as long as all monthly fees are paid and there is no option to rent them out like a traditional unit

[Goldstein]

Units can be purchased in the manner you speak of above as long as all monthly fees are paid and there is no option to rent them out like a traditional unit

Thanks Couta1. We could see some interesting bubbles develop in this sector - although the govt would probably have to address that if there became an acute shortage due to the weathly buying up and not living in units.

It would be similar to the Coromandel or Stweart Island where investors have bought houses and left them unoccupied, decimating the local school rolls, etc.

[couta1]

Well fellow Summerset lovers we have the Q4 results to look forward to on Jan 10th something to bring an early cheer to the market,anyone got any thoughts on the effect of the recent $200 mill land purchase in Christchurch on 2014 figures maybe on the upcoming march dividend? Depends where this money come from I guess as to what effect if any will be had.