SUM - Summerset Group

[JohnnyTheHorse]

Watch the Bolinger bands and wait for a hammer reversal to show. Getting mighty tempting in my books...

Getting very tempted too. Must stay disciplined though... I'm sure you will :)

[PartyPooper]

I topped up again today. The two times I've brought during some week long aggressive rises it has fallen hard and ended up costing me. I seem to do my best buys while catching the knife.

My only concern especially for how the NZX seems to go sometimes is that insiders might know the result isn't as good as it is expected to be. I highly doubt this but i'm always cautious.

[MAC]

It is all fathomable though, short term traders sometimes create great opportunities solely for intangible technical reasons.

Look at it as a gift, 9.8% off recent high's, undervalued, accelerating growth, 12 days to reporting.

I just want to say - thank you all.

[Wolf]

Couta1, Met has dropped with Sum. Both are off their recent share price increases.

Err i'm already overweight in Sum.. Looks like i'm moving into heavy weight category

[couta1]

Couta1, Met has dropped with Sum. Both are off their recent share price increases.

Err i'm already overweight in Sum.. Looks like i'm moving into heavy weight category
I was thinking of just over the last couple of days but your correct as they have both dropped around 50c from their highs,it will be good to have company in the heavy weight category or maybe I'm already in the Obese category with Sum:cool:

[couta1]

I think Roger would remind us all that we are sailing on a very capable and seaworthy yacht at full mast and we have just run into some rough waters which will slow our journey down a bit but will have no bearing on us arriving safely at our final destination

[clip]

probably anything under a 3.30 is now a buy. Edit to clarify - i'm not sure if this one was already known/priced in by punters? Has this NP one already been announced in some form/plans for it etc?

Summerset Gets Green Light for $55M Village in New Plymouth

9:15am, 14 Feb 2014 | ASSET

NZX, ASX & MEDIA RELEASE

Friday 14th February 2014
SUMMERSET GETS GREEN LIGHT FOR NZ$55 MILLION VILLAGE IN NEW PLYMOUTH
Summerset has been granted resource consent to build a NZ$55 million retirement village at its site on Carrington Road, New Plymouth.
The 4ha village will be Summerset’s first village in the Taranaki region. The village has a rural outlook towards Mt Taranaki. This picturesque flat site is located for excellent sun.
Summerset CEO Norah Barlow said, “Summerset Mountain View will have a unique feel to it. There’s few other locations in the country with a view that’s as instantly recognisable. It’s only a 10 minute drive from town and five minutes from beautiful Pukekura Park.”
The company intends to build around 150 homes on the 4ha site. The village will have townhouses and villas for independent living, and care apartments and care rooms for those with more advanced needs. Care integrated into a village in this way provides residents with certainty that should they require more care as their needs change, it is provided on site.
The heart of any Summerset village is the village centre, which will house a range of recreational facilities as well as the care centre offering rest home and hospital-level care.
New Plymouth’s village centre will include a cafe, an indoor spa and swimming pool, exercise room, hair salon and residents’ bar. Outdoor facilities could include an all-weather bowling green, blokes’ shed, communal vegetable garden and BBQ area.
Summerset announced its purchase of the land in August 2013.
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

[couta1]

And then as soon as I say that this happens!

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3548829

Could be a catalyst for uptrend to resume. Watch closely...
Affirmative Moosie,will be up on opening,Rym looks like it may have another down day

[Beagle]

I think Roger would remind us all that we are sailing on a very capable and seaworthy yacht at full mast and we have just run into some rough waters which will slow our journey down a bit but will have no bearing on us arriving safely at our final destination

Gidday ship mates :) Its certainly been more choppy than I expected, most of you like me would have thought we were looking at a great summer's cruise when it went north of $3.70 and would have expected a better price in the lead up to the annual result due in ten days.
The current SP is sitting right on the bottom of the long term uptrend band, right on the 100 day moving average and a great buying opportunity if you have the courage. Sticking with the boating analogy seeing as I had one, I'm feeling slightly sea sick but I know we're on a good solid boat so I'll ride out the choppy waters knowing with one hundred percent confidence there will be smoother sailing ahead. Nothing has changed, the dynamics of the age care industry are extremly favourable, (tail winds, spinnaker set), SUM is focused in N.Z. which is a very, very good thing. Ryman will face an extremly difficult challange in southern states in Australia, the prognosis with the exit of all Australian car manufacturing and all supporting component suppliers by 2017 together wityh the downstream effect of that on the Australian economy in general and all other small business owners in the surrounding areas will be a profound sea change event in Australia. None of this is concern for SUM shareholders, other than the back wash effect of what could happen to RYM's price.
Happier times lie ahead for SUM shareholders. Consistent strong growth inevitably ends up in a ever increasing share price over time.

[stef]

I wouldnt jump the gun too fast though. let it trade for a bit and watch VWAP to see where it goes. Sellers are good at keeping the sp capped on SUM...

yes, only small orders going thru presently

[couta1]

yes, only small orders going thru presently
Latest news very timely,up is up stef,go over and have a look at Rymans if you have depth screen available

[MAC]

And then as soon as I say that this happens!

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3548829

Could be a catalyst for uptrend to resume. Watch closely...

Hopefully it marks a diversion within the sector also, there’s a lot of growth potential within SUM to go.

I just find it bizarre when media journalists report on the retirement sector like it is in some peculiar way a single animal, equally bizarre when we see sector correlations as we did yesterday.

Is it not a sector of stocks each with their own economic fundamentals and outlooks ?

[Harvey Specter]

Is it not a sector of stocks each with their own economic fundamentals and outlooks ?I think the sector has shared economic fundamentals and outlooks but each individual entity has their own financial fundamentals and opportunities. We could argue details on this but overall, they are in the same sector so share some attributes, but individual companies so also have their own attributes.

A classic example of this is AIR - the Airline sector is nortoriously bad but AIR is currently enjoying a good run. In my view the sector will ultimately win so thats why I am more positive about those in the retirement sector, though have different opinions on each.

[couta1]

Hopefully it marks a diversion within the sector also, there’s a lot of growth potential within SUM to go.

I just find it bizarre when media journalists report on the retirement sector like it is in some peculiar way a single animal, equally bizarre when we see sector correlations as we did yesterday.

Is it not a sector of stocks each with their own economic fundamentals and outlooks ?
Exactly Mac you have just hit the nail on the head and as I have alluded to in the past they are not all equal in terms of the quality of care offered either,don't be fooled by past success of a company when it comes to this area,with too much focus on profit at the expense of care things can change,I've put my money in Sum so you can read between the lines here

[couta1]

Hopefully it marks a diversion within the sector also, there’s a lot of growth potential within SUM to go.

I just find it bizarre when media journalists report on the retirement sector like it is in some peculiar way a single animal, equally bizarre when we see sector correlations as we did yesterday.

Is it not a sector of stocks each with their own economic fundamentals and outlooks ?
Exactly Mac you have just hit the nail on the head and as I have alluded to in the past they are not all equal in terms of the quality of care offered either,don't be fooled by past success of a company when it comes to this area,with too much focus on profit at the expense of care things can change,I've put my money in Sum so you can read between the lines here

[notooshabby]

Lots of small sellers selling down into the weak uptrend... Guess we shall wait and see how the real SP movement plays out with announcements in 10 days time...

[MAC]

Aside from SUM being undervalued at present, those valuations are the net present value of forward cashflows from residents seeking access to aged care and elderly communal living benefits.

A dip in the property market may for some make a suburban unit look attractive, but then those individuals don't necessarily need aged care right away.

Most prospective residents of SUM are looking to buy the aged care facilities and the communal lifestyle more than the property itself, or they are buying with a view to needing the aged care if so required in the next couple of years of life if suddenly required. Life can be uncertain in the later years and a little more conservative certainty is where the value is, not in the property it sits on.

Agree that a property dip would lower book values, and it would create an opportunity for land banking, but the valuation of aged care cashflows is insulated considerably more than the outside real estate market.

[notooshabby]

Must confess that I got in at 3.34. My decision, but at this stage would you hold out for the annual results, or exit and get back in closer to the announcement.... looks like downtrend still in play....

[couta1]

Must confess that I got in at 3.34. My decision, but at this stage would you hold out for the annual results, or exit and get back in closer to the announcement.... looks like downtrend still in play....
Stick with it why worry about 10c or so if your in it for the long haul,the above thinking has left me high and dry on a few occasions when it comes to this kind of stock,exit and you might regret it

[couta1]

Just as I expected, nice little bull trap formed this norning as the small guys flocked in and the big guys unloaded. Hope no one pulled the trigger this morning higher than $3.30. Looking for a $3.2x here soon...
True but still holding its own,Rym down and staying down,perfect timing that news or we may have been at $3.20 now

[notooshabby]

Stick with it why worry about 10c or so if your in it for the long haul,the above thinking has left me high and dry on a few occasions when it comes to this kind of stock,exit and you might regret it

Thanks. Yeah not too worried by small movements. Just not as clued up on the fundamentals of this stock and sector as I'd like - so tends to make one a little more jumpy!!

[winner69]

Technical's create volatility allowing investors opportunities to enter, to exit and inconsequentially to gravitate the share price back to fundamental value, isn’t that how markets work.

So where is Summerset at;

- Award winning sales and marketing advantage over the competition, some including myself would say that this alone makes them the ‘best in breed’ within the sector.

- The market demographic is aging, and in addition, the wealthiest generation in history, the baby boomers, the oldest of which are now 69, are about to move all that cash into this sector. The wealthier individuals will be looking for the ‘best in breed’ aged care, why should they not have it in Summerset.

- Summerset have the highest rate of growth within sector, and that growth rate is accelerating. Forward new build growth is 25% for the next two years, and in addition, we should anticipate increasing resale growth as all those villages built two years prior at that growth rate now start to turnover occupancy.

- They have the largest land bank within the sector mostly in the key larger cities. I would not be surprised to see a growth rate above 300 units p.a announced at some point for FY16.

- Gross and net margins are improving very quickly despite the high rate of growth. I’m looking for a continuation of this improvement again at reporting in ten day’s time.

- I have a HY14 DCF valuation for SUM of $4.20 (+28%).

DISC: Buy

What's the sensitivities around the discount rates in your DCF valuation?

How much does a 1% higher number reduce your valuation

[MAC]

What's the sensitivities around the discount rates in your DCF valuation?

How much does a 1% higher number reduce your valuation

Yes, like all analysts I apply forward discount rates with interest rate forecasts in mind Winner.

[winner69]

Yes, like all analysts I apply forward discount rates with interest rate forecasts in mind Winner.
I knew you would be doing this

My question was what does your $4.20 become if the discount rate is say 1% higher or lower (albeit from high interest rates, change in risk premiums or whatever)

Just interested around the sensitivities

[Beagle]

This is becoming a very frustrating stock to own. Another day, more good news and another reduction is share price....go figure ???

[alistair85]

Can anyone give any reasonable explanation as to why the price has dropped so much the last couple days only 10 days or so out from the financial report, which from what I have heard should be positive.. Maybe it's not going to be quite as positive as what everyone thinks?? Inside trading? Somethings up and I cannot put my finger on it. I never thought we'd see below 3.30 again!!

[couta1]

You guys need to look at the charts and realise that traders have been ruling this stock for awhile, going through 2-3 month cycles which are clear as day. I've pointed it out before, have a look back.
Yep Moosie I think you can see this in this whole sector especially over the last couple of weeks,there's been some big volume days plus big individual sales over at Rym this last week for the observant,I think there's a lot of small sellers of Sum who don't understand the value and long term nature of the stock,as for a comment I saw somewhere on here quite a while ago that these stocks are no good for traders,that's nonsense,in fact if I was trading seriously these stocks and the likes of Tel would be near the top of my list as you know if you get it wrong you only have to bide your time to get out of jail IMHO

[fiasco]

Definitely need to read the charts, if you don't understand spend more time doing analysis and research before investing. The last 10 pages should be a wealth of information, plus SUM's website (awards, reports etc). Glad they got the go ahead with NP. I purchased a little bit more today, think that will do it.

Completely agree with your couta1 and moosie_900. The evidence is all there, it's all about patiences!! Stocks actually do go down and up!

[JohnnyTheHorse]

Yep Moosie I think you can see this in this whole sector especially over the last couple of weeks,there's been some big volume days plus big individual sales over at Rym this last week for the observant,I think there's a lot of small sellers of Sum who don't understand the value and long term nature of the stock,as for a comment I saw somewhere on here quite a while ago that these stocks are no good for traders,that's nonsense,in fact if I was trading seriously these stocks and the likes of Tel would be near the top of my list as you know if you get it wrong you only have to bide your time to get out of jail IMHO

No good (and profitable) trader bides their time to get out of jail. Losses are cut short, no excuses.

[Beagle]

I agree the stock has moved in a clear wave pattern and its clear that ACC have been the biggest trader of the lot but if you subscribe to this theory I would have thought sitting right on the bottom of the trading channell and right on the 100 day moving average line that ACC and other large traders would have been buying this stock in volume at present prices of circa $3.30 especially after a more than 10% pullback from $3.75 less than a month ago and five minutes so too speak before the annual result, but they've been completly AWOL ? Its either a great buy at current prices or there's something that we don't know lurking in the forthcoming annual result. I think its the former.

[JayRiggs]

I hope it is great buying at these prices too. I have been buying small chunks from 3.43 down to now and prepared to buy more sub 3.20. Like couta, I am overweight on SUM. Feeling obese like a big mac :ohmy:
At least we haven't seen any SSH notices selling.
Steady on lads, only 11 more days to full year result. Just gotta brace for a few more waves and maybe a thunderstorm. We will see sunnier days ahead :cool:

Really like your guys ship analogy!

[couta1]

No good (and profitable) trader bides their time to get out of jail. Losses are cut short, no excuses.
If your a day trader true but what about swing and positional traders where a trade may occur over several days and up to a few months if need be for positional traders? After all its your income at the end of the year that matters not over a week

[JohnnyTheHorse]

If your a day trader true but what about swing and positional traders where a trade may occur over several days and up to a few months if need be for positional traders? After all its your income at the end of the year that matters not over a week

I stand by my statement, no matter what your time frame is if you're trading. Making a trade into a long term hold because it goes below your purchase price is plain stupid and will lose you money. You have learnt that in the past. No point tying up capital that you are losing money on. You need to to know why you are trading something and need to know at what point the trade is "broken". Once it gets to that point stop losses should exit your position for you. No emotion and no poor decisions.

[Hoop]

All buy and sells are trades so everyone is a trader...

Trying to make technicial analysis sense out of SUM is difficult...SUM plays to its own tune....Like many stocks in a constant uptrend, indicators are useless they "cry wolf" every time there's an opportunity to buy (due to dip buying fundies??)...but at some time in the future this up trend will end, as all trends do..and us TAer's will ignore the "cry wolf" sell signals and crash and burn.

.SUM is so chart unfriendly you can't even draw a long term primary uptrend line as it always breaks...So how do you know which break will be geniune in the future when all its listed life so far on the NZX is full of false signal breaks and unreliable indicators??

On closer inspection SUM seems to have a primary bull trend curve and the curve seems to be maturing.
I have used Winners idea of trend channels (I used SD(1) channels just to be different:p),,but the channels ultimately break down because of that maturing curve.....see chart

So a chartist life using SUM is a bitch but S&R lines sort of work as each bull market correction just breaks them ...so I accumulated more at 3.29, in the dip....and hope the dip isn't the reversal..any price below the 3.20 bull/bear line will have me worried..

http://i458.photobucket.com/albums/qq306/Hoop_1/SUM14022014.png (http://s458.photobucket.com/user/Hoop_1/media/SUM14022014.png.html)

[winner69]

Hoop- do you think that your "maturing curve" that SUM (and RYM is doing the same) Has is actually a sign of total market sentiment beginning to wane and maybe a signal that a market correction (or worse is imminent.

Recall that 2007/08 and to a lesser extent 2010 down periods didn't happen overnight and before the big drops there was general market weakness and many stocks had stopped going up and had started trending down before the big falls came

Maybe SUM and RYM are the bell weather stocks this time sending out that message

As moosie says history has a tendency to repeat

Interested in your thoughts Hoop

[Snow Leopard]

Hoop, firstly I would like to salute you for drawing a chart with a log price axis - everybody should be doing this.

Secondly I am appalled that you should write "Trying to make technicial analysis sense out of SUM is difficult..."
It goes up and it goes down where is the difficulty? You are just using the wrong model.

Thirdly I am even more appalled that you also wrote "..So how do you know which break will be geniune in the future ... ?"
You know as well as I do that TA does not accurately predict the future (neither does FA for that matter), it is a percentages and profit protection game.

But you know your current sell conditions for SUM surely?

If it meets them you sell don't you?

Then you are on the look out for (re)entry conditions and you continue to ply your TA rules, updating them as you learn.


Just for you here is a chart (and not like yours so full of stuff that it is difficult to see anything :p).

5485

If the SP hits that second line up then start selling and if it hits the bottom line sell up completely. (And then watch it turn round and climb again maybe?)

Best Wishes
Paper Tiger

[ratkin]

Reason they are not going upis because they are fully valued, some might say expensive.

Good stock , but every man and his dog are already in , it will be a case of waiting for the company to catch up to the shareprice
People expecting 25% returns year after year are being a little unrealistic. May well go through an adjusting period of underperforming the matket . You may have noticed that good news no longer moves the shareprice , its already factored in
One broker said the same recently much to the disbelief of the forum.

[couta1]

Reason they are not going upis because they are fully valued, some might say expensive.

Good stock , but every man and his dog are already in , it will be a case of waiting for the company to catch up to the shareprice
People expecting 25% returns year after year are being a little unrealistic. May well go through an adjusting period of underperforming the matket . You may have noticed that good news no longer moves the shareprice , its already factored in
One broker said the same recently much to the disbelief of the forum.
Sorry ratkin don't agree with you,I think your describing Ryman above not Sum,I believe Sum is suffering because Ryman has run ahead of itself and because it is the market leader in the sector it has dragged Sum down with it in its downtrend hence why good news is not influencing the share price much,you could see the same effect happening over at the tech stocks with Xro dragging other stocks up or down with it several times I've noticed,is Sum fully valued at $3.28,I don't think so,as for brokers valuations,yeah right pass another Tui,cheers

[couta1]

See article in Herald this morning on Sums frustrations in dealing with Auckland's Council processes

[winner69]

Sorry ratkin don't agree with you,I think your describing Ryman above not Sum,I believe Sum is suffering because Ryman has run ahead of itself and because it is the market leader in the sector it has dragged Sum down with it in its downtrend hence why good news is not influencing the share price much,you could see the same effect happening over at the tech stocks with Xro dragging other stocks up or down with it several times I've noticed,is Sum fully valued at $3.28,I don't think so,as for brokers valuations,yeah right pass another Tui,cheers

Now see what you done ratkin ..... upsetting the loyal followers

couta explained why - rym ran ahead of itself and on the pull back sum gets punished as well (unfairly by an irrational market?)

Both in the same sector. There will always be a market leader in any sector (usually the best of the bigger ones) and that is RYM in this sector. The market leader becomes the 'benchmark' price wise and the others will follow the trends of the market leader.

As such in couta's eyes Ryman will always be 'overvalued' and SUM will always be 'undervalued' - its not an irrational market thing, its just markets will give a premium to the one they see the best (from an investment point of view)

I live with that and set my expectations accordingly

But like you ratkin what the heck do I know

[iceman]

Summerset in the Sun doing well
http://www.stuff.co.nz/nelson-mail/news/9716682/Stoke-village-expands-with-10m-centre

[couta1]

Hey Winner on a lighter note seems yourself,PT and Hoop have all graced us with your presence here at Sum perhaps we could also invite balance and Snoopy to come on over and then we would have kinda like the African big five right here on the Sum thread:scared:

[Snow Leopard]

Roger, I will stand corrected if wrong, but I think the score is:

Ryman - yes, but requires village mgr approval. They have pet open days where local residents can interact for the day with animals.
SUM - can have a small cat or dog, must be approved by village manager
MET - can bring a small cat or dog with you, but can't replace. Requires manager approval. Needs to be apartment friendly pets.

Best Wishes
Paper Tiger

[Hoop]

Hoop- do you think that your "maturing curve" that SUM (and RYM is doing the same) Has is actually a sign of total market sentiment beginning to wane and maybe a signal that a market correction (or worse is imminent.

Recall that 2007/08 and to a lesser extent 2010 down periods didn't happen overnight and before the big drops there was general market weakness and many stocks had stopped going up and had started trending down before the big falls came


Maybe SUM and RYM are the bell weather stocks this time sending out that message

As moosie says history has a tendency to repeat

Interested in your thoughts Hoop

I read somewhere on a TA site that Bull cycle reversal is nearly unnoticeable it starts when your favourite stocks not all at once but quietly one by one slowly start to technically break down while the "rock star" stocks, the media and market commentators are still exuberant and singing the praises of a vibrant economy and a prosperous future.

Yeah ..history repeating rule of thumb is well known...eh?....Chartists, me included, follow pattern behaviour with interest...I personally have some companies I keep an eye on in a hope to pick that inevitable reversal quick enough...I personally am more vigilant now that the NZX50 Bull market cycle has matured and is 5 years old.....
I look for and try to identify both leaders and laggards with the NZX.

Its well known that Utilities lag the market and analysts recommended to hold in a bear cycle ...yes they can lag but in the end they too get severely mauled by the bear so don't hold them..don't fight the bear just get out and let the market drop...See CEN.

Other laggards I've noticed are the high profile rock stars shares...in 2007 it was RAK.....this year.. PEB XRO ???
In 2007 MHI stood out ...clothes retailers led while gold silver jewelry lagged

Leaders in 2007 were the two with property associations AIA and RYM both topping out in July and end of May respectively. 4 and 3 months before...
You would expect the retailers to be laggards, the beneficiaries at the end of the trickle down economy cycle....surprisingly PPL and HLG topped out Feb 2007 and December 2006 a good 8 to 10 months before the NZX50 multi-topped for the last time...
Actually these leaders I've mentioned haven't yet developed established bear type downtrends as I write....but they have come off the boil ...Hmmm.

Winner...if you think the Wall St 1929 comparison doing the media rounds is scary...Have a look at HLG chart...if Moosie's "history repeats" is true then HLG suggests NZX50 has recently topped out and the unnoticeable bull to bear cycle reversal has now commenced...

Disc: 90% in .. 10% cash....

[MAC]

Nice chart Hoop, thank for posting that.

Of interest is that your upper channel correlates with the Quadrant sell down period, from the anticipation right through the wane of the post transaction overhang.

It is clear that for a such a substantial sell down Summerset really held up very well during this period, continuing to grow even into such a big overhang says a lot in itself.

The fundamentals are strong, steady even accelerating growth, net margin expansion, award winning performance, best in breed, forward sites land banked at least six years ahead, and wealthy baby boomers about to enter the market and probably compete amongst themselves to get the best.

It would not surprise me one bit to see the next channel take a compensatory move to the upside.

To those who are concerned about valuation, I say DYOR. The brokers also retain higher 12 month price targets, Macquarie’s have $4.50 (+37%).

If NZ First Capital are representative of the market, we should anticipate NPAT growth of 68% at reporting in nine day’s time.

Being undervalued at present, if SUM achieve close to this or exceed it, the SP is going to fly.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11202286

[macduffy]

Still in the news!

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11202494

[winner69]

I think we should all have a read over Sparkys last post on here again...

Hey moosie you seem to imply some of us think SUM is a dog.

Its not a dog, its a great company, as is RYM in the same sector.

Hoop says we are all traders (even investors) Traders trade price. My trade in SUM started 2 years ago in Jan 2012. It's been a great trade so far but as good traders I try to make as much as I can on any trade. As Mr P said 'the market giveth but the market taketh away'. I intend to keep my profits and not giveth back. At 330 the long up trend may be over, if so time to take profits. Might wait a week or so to see what happens. The signals are sell and end th trade but I am allowed some emotional attachment to this winner eh.

Price does not reflect intrinsic value. Price is driven by sentiment, how much punters are prepared to pay for those future cash flows.

My DCF valuation for SUM is slightly higher than MACs. But my experience is that my DCF valuations are usually 20% away from current price. Further more analyst targets often seem to be about 20% higher than price as well. Maybe saying that DCFs don't always reflect reality and are subject to the bias of the person doing them. On this basis SUM (and RYM) are as ratkin says 'fully priced'

History also seems to be playing out again. Good stocks showing price weakness when fundamentals are improving where a signal in 2007/2008 and other times of an impending period of overall market weakness. I have lived through this several times and it all looks familiar again. This is another reason to exercise more caution than normal, and don't let emotions rule.

If this does happen sentiment is negative and most stocks get downgraded, I lower PE ratios. Fundamentally nothing changes and unless on changes the discount rate the DCF valuation doesn't really change. In SUM case the population will continue to age, they will continue to build, and the old will still be buying their units - but the market won't pay as much as today for those cash flows.SUM shareprice possibly will have a 2 in front of it.

If this happen then we can start all over again and make heaps (maybe from as low 180 or something)

So SUM not a dog but price/value driven by sentiment an fundamentals mean next to nought see days.

Maybe SUM will recover from 330. If so th trade continues but at some future point in time that upward trend will end. The market giveth and the market taketh away.

[ratkin]

Im a holder (in at 1.40) They now firmly in the bottom draw , my time frames tend to be long , unless the fundamentals take a sudden turn for the worst i will continue to hold for many years (hopefully) .
i said earlier that the price needs a breather as its gotten ahead of itself a little . However im still optimistic for the longer term , the demographics etc are all in its favour

[MAC]

From the quarterly reports we have total new sales for the FY13 year of 228 representing an increase of +36% on FY12.

We won’t get the actual number of new units delivered until reporting is released in a few days time, however there were 102 units delivered at HY13 reporting, their goal being 200 units total for the financial year. The new unit sales figure for the year of 228 also may suggest that construction is on schedule.

It is even entirely possible that Summerset may upgrade their outlook for FY14.

I wouldn't be surprised if they raise their build target from 200 units per year to 250 units per year for FY14, let’s wait and see.

5488

[winner69]

Im a holder (in at 1.40) They now firmly in the bottom draw , my time frames tend to be long , unless the fundamentals take a sudden turn for the worst i will continue to hold for many years (hopefully) .
i said earlier that the price needs a breather as its gotten ahead of itself a little . However im still optimistic for the longer term , the demographics etc are all in its favour

Price gotten ahead of itself

Cant talk for SUM but no doubt similar to RYM where over the last 2 years about 80% of the increase in their price has come from multiples expansion (market sentiment). The balance being company performance (increased profits and/or increases I. Net assets)

Multiples of underlying profit / reported NPAT / book value have more than doubled over the last 2 years.

RYM and SUM will continue to perform well with earnings etc all up 20% or so a year. But it is those high multiples that are likely to contract - that's the bit that Mr P always said 'the market taketh away'

Doesn't happen overnight - just a slow grind down. I think that process is underway at the moment.

Keeping a close eye hoping that market sentiment gets a little more positive then it has been lately

That's my current view but then what the heck do I know

[winner69]

Just we coming at from different perspectives moosie

I been in for 2 years and in both RYM and SUM trailing stop losses are being tested. So what do I do ensure I keep most of the profits so far?

You not in but looking to get in so you have different triggers. No doubt it will work out for you

Interesting eh

[winner69]

I reckon Underlying Profit for FY13 will be $23.1 million up 51% on pcp

[Beagle]

I'm thinking 50-55% growth range in underlying profit for 2013.
68% growth as suggested earlier in this thread would be a positive surprise as far as I'm concerned.

[MAC]

I'm inclined to agree Roger, NZ First seem to be at the top end of the range and with SUM being undervalued as it is, just meeting expectations should see a nice step up. It's looking increasing like a nice entry point actually, lot's of solid growth ahead building off a base of good performance.

5489

[cyclist]

I reckon Underlying Profit for FY13 will be $23.1 million up 51% on pcp

That still gives a P/E based on underlying profit of over 30. (I am using the 216m shares listed on the NZX site). So still another year and a half or so of stellar growth needed before someone buying today would see a P/E well under 20 based on purchase price. Is that realistic or normal?

[MAC]

Cyclist, PE is a metric that is often used for roughly gauging the relative value of cyclical stocks FBU, TEL, MRP etc. Value investors use PE as a quick screening tool to see if cyclical’s are under or over valued relative to the market as a precursor to performing more in-depth analysis and modelling.

Growth stocks like SUM have higher PE’s because investor’s value forward discounted cashflows, and those cashflows are increasing over time. As a rule the higher the earnings growth, the higher the PE will be for a growth stock.

If SUM report 51% earnings growth in a week or so, a PE in the 30’s will be entirely acceptable.

Do have a go at some DCF you may be pleasantly surprised, trust this assists.

[Bjauck]

There is an interesting item on stuff this morning http://www.stuff.co.nz/business/money/9728796/Investing-trumping-dividends . Of particular interest was the assertion "Labour's capital gains tax policy was expected to impact on property and aged care stocks" .

I have what is a very basic question and this will display my ignorance! SUM and all other property and retirement village companies would face a capital gains tax liability if a village/building were sold. Currently they are already taxed when a licence to occupy a unit (less costs) is sold for a gian.

However other companies would also have to pay capital gains tax if a part of their business or a subsidiary were sold for a gain. As it seems unlikely that SUM would sell part of a village at the moment...a CGT would not have much of an effect. Would a CGT actually have a greater impact on SUM and the other listed retirement villages compared with other NZX listed companies? Would the retirement companies actually face the same % increase in tax as the listed property trusts?

[fiasco]

For those who haven't got access :)


GENERAL: SUM: Summerset Invests NZ$500M in Auckland Developments

SUM
17/02/2014 08:49
GENERAL

REL: 0849 HRS Summerset Group
Holdings Limited

GENERAL: SUM: Summerset Invests NZ$500M in Auckland Developments

NZX, ASX AND MEDIA RELEASE

17 February
2014

SUMMERSET INVESTS NZ$500 MILLION IN AUCKLAND
DEVELOPMENTS

Retirement village operator Summerset will have spent NZ$500
million on
developments in Auckland by the time it completes its three latest
villages
in the city. The figure was revealed on Saturday at the launch of
the
company's Hobsonville village, where the public got their first chance to
see
what the NZ$120 million waterfront development will look like.

MP
Paula Bennett attended the event and welcomed the new development.

"This
development is a fantastic addition for the community, and will provide
great support for our older people, who'll have access to accommodation built
specifically for their needs," Mrs Bennett said.

Summerset CEO
Norah Barlow said the affordability and availability of housing
in Auckland
is something both the Government and Council are working to
address. "We
support both Council and Government's policies such as the
Housing Accord,
which will encourage development to help address the shortage
of housing in
Auckland.

"In our five Auckland villages we will spend a total of NZ$500
million, and
create homes for some 1300 people. We've built a village at
Manukau, and are
close to completing our Warkworth village. Now we're
commencing work on our
Karaka village and look forward to construction
starting on our Hobsonville
village. We are working with Council and looking
to finalise resource consent
to commence our Ellerslie village as soon as
possible."

Summerset's Auckland villages will free up existing homes for
younger
families. This will assist Auckland Council's stated goals of
providing a
range of housing options and increasing
affordability.

Plans for the 7.6 hectare Hobsonville village include
approximately 225 homes
comprising villas, apartments, and care apartments,
and a 90-bed care centre
providing rest home and hospital-level care. The
site has 180-degree views of
Waitemata Harbour out to Herald Island. The
village will be named Summerset
at Monterey Park after the tourist theme park
that previously occupied the
site.

Summerset CEO-designate Julian Cook
said, "This village is going to be an
asset for the community and for wider
Auckland. We look forward to
contributing to the growth of Hobsonville which
is on its way to becoming a
vibrant part of the city, and to the city as a
whole as our developments
progress.

"In our experience, many of the
people moving into retirement villages are
down-sizing from three and four
bedroom family homes. This frees up homes in
the community for younger
families.

"Our villages also support the ageing population, who require
safe, secure
housing that is designed for their needs. Demand for our
villages across the
city shows there's a real need for this kind of
housing."

[MAC]

“In our five Auckland villages we will spend a total of NZ$500 million, and create homes for some 1300 people.

That provides for roughly 1,300 units in Auckland which is considerable considering the total units constructed to date by is 1,748.

Summerset have done well with that strategy, taking on the local councils in Auckland in pursuing big build, and doing it effectively in the lucrative Auckland area where demand and pricing pressure is higher. This is something that RYM and MET have not achieved as well or effectively.

The recent land banking of the two big sites in Christchurch I think will pay off well in a similar way, there’s a few years of property development, economic growth and demand there also.

Onward, upward and higher.

[Beagle]

“In our five Auckland villages we will spend a total of NZ$500 million, and create homes for some 1300 people.

That provides for roughly 1,300 units in Auckland which is considerable considering the total units constructed to date by is 1,748.

Summerset have done well with that strategy, taking on the local councils in Auckland in pursuing big build, and doing it effectively in the lucrative Auckland area where demand and pricing pressure is higher. This is something that RYM and MET have not achieved as well or effectively.

The recent land banking of the two big sites in Christchurch I think will pay off well in a similar way, there’s a few years of property development, economic growth and demand there also.

Onward, upward and higher.

I agree 100% Mac. Ryman for the relative size of the company with a market cap of circa 5 times that of SUM have executed in quantum very poorly in the lucrative high demand Auckland area. The facilities they do have are very good, but in number are woefully inadequate in my opinion. SUM's approach in the Auckland market is one of the key reasons i've been favouring them over Ryman for some time now, with the other main reason being the much higher growth rate of SUM and its generally better geographical spread of villages. (People seem to have forgotten that RYM have a high percentage of their villages in Christchurch and none of us can forget how earthquake prone that area is).

On another topic its nice too see Mr Cook taking a more public approach towards making comments aimed at Auckland City Council's lathargic consent approval process. This augers well for the future and I believe he brings fresh energy to the CEO role.

[mrjeems]

Sorry just realised this is a couple of days late...

Not sure if this has already been posted but Summerset have just gotten consent for a New Plymouth village:

on Sunday 16 February 2014 in Gainz (http://www.propbd.co.nz/category/sectors/gainz/), Sectors (http://www.propbd.co.nz/category/sectors/), Securities - NZ (http://www.propbd.co.nz/category/sectors/gainz/securities-nz/), Summerset (http://www.propbd.co.nz/category/sectors/gainz/securities-nz/summerset/) 0 (http://www.propbd.co.nz/summerset-gets-consent-new-plymouth-village/#comments)
Summerset Group Holdings Ltd has been granted resource consent for a $55 million retirement village on Carrington Rd, New Plymouth.
The 4ha village will be Summerset’s first in Taranaki. Chief executive Norah Barlow said it would have about 150 homes in a mix of townhouses, villas, care apartments & care rooms, with a rural outlook towards Mt Taranak

[MAC]

For those interested, this is the Macquarie report I referenced during the weekend;

Macquarie have a price target for SUM of $4.50 (+37%), a price target for RYM of $7.50 (-2%), and a price target for MET of $4.65 (+14%).

“we prefer Summerset Group” …… “it has a stronger growth rate and larger discount to our price target”.

Seems Macquarie see SUM and RYM moving in different directions.

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

[Beagle]

Thanks for that Mac. Interestingly since that report dated 16 December 2013 we have had the extraordinary sales result of 50% growth on the previous compareable period in the final quarter of 2013, an exceptional result that McQuarie couldn't have known about when preparing that report, so it could easily be argued their fair value target could be shifted a little further north...perhaps even more so later next week after the profit announcement :)

SUM seems impervious to good news at the present time...can't stay like that forever though...

I'm buying more if the profit growth is > 50%

[couta1]

For those interested, this is the Macquarie report I referenced during the weekend;

Macquarie have a price target for SUM of $4.50 (+37%), a price target for RYM of $7.50 (-2%), and a price target for MET of $4.65 (+14%).

“we prefer Summerset Group” …… “it has a stronger growth rate and larger discount to our price target”.

Seems Macquarie see SUM and RYM moving in different directions.

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
Rymans price was overdriven by its inclusion into the international index late last year IMHO but it seems the market has now got the scales out and giving it a good old weigh,shame it hasn't yet happened for Sum yet in the opposite direction

[Bjauck]

Until the last few months, my parents' broker was recommending RYM as their preferred exposure to the sector. Now SUM is their preferred choice. If other brokers are doing the same, as more long term holders make switches in their portfolios, maybe we will see a gradual strengthening of SUM relative to RYM.

I think my post at #1202 may have got lost in the other news concerning SUM. However I am still interested to know what others may think of the article on stuff and how Labour's capital gains tax policy may impact on property and aged care stocks. My understanding on the subject is not clear.

[Harvey Specter]

I think my post at #1202 may have got lost in the other news concerning SUM. However I am still interested to know what others may think of the article on stuff and how Labour's capital gains tax policy may impact on property and aged care stocks. My understanding on the subject is not clear.A CGT wouldn't impact them directly as they are unlikely to sell. To date we have not seen any indication that the business model of any of the major three is to build and then dispose at some point, they all appear to be long term hold. Even from a diversification perspective, if they are under represented in an area, they are more likely to construct their own than acquire of someone else.

A CGT may have an indirect impact as some suggest that a CGT would result in lower house prices. One only has to look at Sydney or Melbourne to know this is not the case but for arguments sake, lets say they are correct. If the Oldies get less money for their house, they will have less to purchase an occupation license. From memory, RYM targets the cost to be about 75% of the average house price in the area, so if the average house price goes down, so does the occupation license (and the 25-30% they earn from that). They could always counter this by increasing the deferred charge or increasing the weekly charge as we all know, aged care is expensive and if you can pay you will. So it really comes down to affordability. If CGT means oldies have less money, the they have less to spend on their retirement. Having said that, they may just choose to spend it all and not give away such a big inheritance or donation to the SPCA.

Bjauck - This is all off the top of the head thinking - is that what you were thinking?

[Snow Leopard]

Labours CGT policy.

Probably means that gains in the value of the property creates a deferred tax liability that never actually becomes payable because they do not or rarely sell properties.

In this case it would generally not affect cash flow.


Best Wishes
Paper Tiger

Disc: Could well be wrong.

If they are going to exempt the family home then that is an unfair tax on those who choose to rent and invest in other assets: discuss.

[Bjauck]

Thanks HS, PT and M900. I was thinking along the lines of all three of you...
I still do not know why the article seems to think that the retirement sector will be affected more than the average company. CGT would not just be levied on real estate gains. In fact real estate in general would be less affected because of the Labour Party exemption for the family home!

I guess a CGT with an exception for the family home has a very big exemption, with incentive for people to have a very big and expensive family residence! If the family home is included...it would be certain political suicide for Labour.

[artemis]

The whole thing is a non-starter anyways as a booming economy, bungling Labour leadership and Green Party that can't even get their economic policies right on simple matters means National will get a third term in November!

Maybe, but remember nobody ever went broke underestimating the intelligence of the average NZ voter. To me the election still looks too close to call, and we have yet to see the 2014 version of WfF or interest free student loans.

[artemis]

Thanks HS, PT and M900. I was thinking along the lines of all three of you... I still do not know why the article seems to think that the retirement sector will be affected more than the average company. CGT would not just be levied on real estate gains. In fact real estate in general would be less affected because of the Labour Party exemption for the family home! I guess a CGT with an exception for the family home has a very big exemption, with incentive for people to have a very big and expensive family residence! If the family home is included...it would be certain political suicide for Labour.

If implemented it will take a few years to show a half decent revenue stream. By then, small business owners (of which there are many), Kiwisaver account holders, farmers and investors in productive enterprises (incl shares) will perhaps have twigged that they are paying a CGT while their neighbour in the $2 million plus house is not.

[In4a$]

If implemented it will take a few years to show a half decent revenue stream. By then, small business owners (of which there are many), Kiwisaver account holders, farmers and investors in productive enterprises (incl shares) will perhaps have twigged that they are paying a CGT while their neighbour in the $2 million plus house is not.

It's not the $2m house thats a problem, it's the $2m of investment properties, mostly leveraged through the bank, which he intends to sell over the next few years at a reasonable capital gain, and not tell the tax man.
These are the properties the 1st home owner is struggling to raise a 20% deposit for,

[artemis]

It's not the $2m house thats a problem, it's the $2m of investment properties, mostly leveraged through the bank, which he intends to sell over the next few years at a reasonable capital gain, and not tell the tax man.
These are the properties the 1st home owner is struggling to raise a 20% deposit for,

No doubt there will be IRD checks and balances to catch these situations. Or many of them anyway. One way IRD identified property developers not paying tax on gains was by asking real estate agencies for lists of sales. Only takes a few hefty penalties before word gets round in an industry in our small country.

[couta1]

Watched Sum close off for the day seems like a few holders getting impatient waiting for a rise or maybe they thought the price would have started rising anticipating the result by now 3 individual lots of around 40k shares up for sale 1c apart,one lucky buyer scooped a lot at $3.28,irrational market staying that way longer than holders can remain rational perhaps?

[Beagle]

Watched Sum close off for the day seems like a few holders getting impatient waiting for a rise or maybe they thought the price would have started rising anticipating the result by now 3 individual lots of around 40k shares up for sale 1c apart,one lucky buyer scooped a lot at $3.28,irrational market staying that way longer than holders can remain rational perhaps?

I'd speculate that was one institution with a 3 way staggered sell order that's probably been progressivly letting stock go at circa $3.30 for some days now. Go figure why any insto would sell at this level just before a profit announcement.
Where's my sea sick pills LOL.

[cyclist]

Cyclist, PE is a metric that is often used for roughly gauging the relative value of cyclical stocks FBU, TEL, MRP etc. Value investors use PE as a quick screening tool to see if cyclical’s are under or over valued relative to the market as a precursor to performing more in-depth analysis and modelling.

Growth stocks like SUM have higher PE’s because investor’s value forward discounted cashflows, and those cashflows are increasing over time. As a rule the higher the earnings growth, the higher the PE will be for a growth stock.

If SUM report 51% earnings growth in a week or so, a PE in the 30’s will be entirely acceptable.

Do have a go at some DCF you may be pleasantly surprised, trust this assists.

Mac. Thanks for your reply. I guess I understand that DCF is the correct way to value a stock like this, but I am also mindful that the price is also significantly affected by market sentiment. As someone who has purchased more recently, I guess I am trying to figure in my head how long it will take for profit growth to give me a greater margin of safety.

Cheers

[troyvdh]

dear Moosie a thousand thankyous...Indeed why do kiwi investors continue to treat the SM as a Casino....I suspect that many folk have/do not realised the difference between being momentarily cash rich and wealth....it truly saddens me that many many folk do not yet get it....Many rejoice in a quick trade and have made money....wow big deal...what are their financial circumstances in 5 years time....Id like to think that wisdom/lessons learnt from the past WILL not be repeated....i.e...boom and busts.....

Like I have posted before...re RYM MET SUM do folk expect honestly .... the SP trajectory to rise for ever ????>? THIS does not happen in the real world...

I suspect that the behaviour/attitude of "investors" in NZ is indeed a harbinger of woeful times ahead..like do investors anticipate the fortunes/SP on a day by day basis only...what about appreciating the benefits that may accrue in 5-10 years time !!!

[Xerof]

Roger, the only logical conclusion can be that 'they' either have close knowledge of the result, or are confident in their (negative) assumptions. Remember Forbarr were down on them a short while ago. Their 'house view' probably hasn't changed, so we can only assume their clients are encouraged to continue to exit. Who-ever it is likes to weigh in near and at the close, to provide a weakened finish most days lately.

Perhaps they are trying to hit Winner69's (and others') stops, which are probably clustered just below 325/320 to provide a cascade for re-entry?

Despite my short term reservations, Mr and Mrs Xerof bought a chunk late today to hold until death us do part.....

[In4a$]

No doubt there will be IRD checks and balances to catch these situations. Or many of them anyway. One way IRD identified property developers not paying tax on gains was by asking real estate agencies for lists of sales. Only takes a few hefty penalties before word gets round in an industry in our small country.
They probably get most of the developers okay, but I hear they are having a look at ways to get more of the average Joe selling his investment property.

[Beagle]

Nice timing on buying Xerof. I am confident over time shareholders will be well rewarded.
Troyydh - There is no reason a company that grows strongly and consistently over time won't see its share price reflecting the growth in underlying earnings. SUM isn't a casino or ATM machine, its a great investment for those looking to build significant wealth in the long term with extremly favourable demographics applicable to the sector as a whole and more specifically to the company best situated to facilitate market demand.

What I think you are getting at is that PE expansion cannot go on forever and if that's the case, yes I agree with that aspect of your argument. We've seen RYM's SP triple in the last 3 years and obviously their underlying earnings have nowhere near tripled.

I think its quite possible with long term interest rates forecast to increase this year (AKA tapering) we may see some pressure regarding PE contraction world-wide.

Its well worth noting that SUM is on a PEG ratio (Price Earnings to Growth) of less than 1 and this suggests not only that the stock is compelling value but it will be more insulated from any PE contraction than others. You've got to invest your money somewhere that's going to grow for you and I beleive this is one of the most compelling opportunities, arguably the most compelling of any on the NZX.

[MPC]

Completely agree with you Roger, especially your first paragraph.
I have been accumulating these since about $2.40 and don't plan on selling for a long time unless something untoward occurs.
This year looking interesting for all investments...

Cheers,
MPC

[Joshuatree]

Last i looked MET, RYM and SUM are all roughly 10% off their highs .

[Onion]

If you compare the SP charts for SUM, RYM and MET, depending on the timeframe each of them can look to have performed the best at various times:

1 Year: Best is RYM (+63%), MET & SUM (+30%)
6 months: Best is MET (+26%), then RYM (+11%) and SUM trailing at +6.5%
3 months: Best is SUM (+1%), then RYM (-4%) and MET languishing with -9%
1 month: all a bit sad

[winner69]

If you compare the SP charts for SUM, RYM and MET, depending on the timeframe each of them can look to have performed the best at various times:

1 Year: Best is RYM (+63%), MET & SUM (+30%)
6 months: Best is MET (+26%), then RYM (+11%) and SUM trailing at +6.5%
3 months: Best is SUM (+1%), then RYM (-4%) and MET languishing with -9%
1 month: all a bit sad

Today

MET up 1.5%
RYM up 0.5%
SUM was DOWN


that SUM looking a bit of a dog at the moment ...but hanging in there ....just

[couta1]

Today

MET up 1.5%
RYM up 0.5%
SUM was DOWN


that SUM looking a bit of a dog at the moment ...but hanging in there ....just
Rym only up last 5 mins of day otherwise down more than Sum on swap average:cool:

[winner69]

Rym only up last 5 mins of day otherwise down more than Sum on swap average:cool:

But just like the batsman given out lbw even when he hit it the fish and chip wrapping tomorrow will say SUM down and the other 2 up

[Xerof]

SUM closed unchanged today. Which wrapper are you reading?

but you are right, it's been barking recently

[couta1]

But just like the batsman given out lbw even when he hit it the fish and chip wrapping tomorrow will say SUM down and the other 2 up
Oh well those international volume boys will be sleeping on open tomorrow so Rym will head straight back down again and Sum up hopefully:confused:

[winner69]

SUM closed unchanged today. Which wrapper are you reading?

but you are right, it's been barking recently

Was looking at Findata

They had a 330 close yesterday so down 2 cents

They must be wrong then

Sorry couta ...unchanged then ...but still the other 2 outdid them

[troyvdh]

Giday..I for one would like to know what the percentages of folk who actually invest in shares as opposed to those who trade in shares like MET SUM RYM...like I mean I suppose its fairly much a given that in time ..its a no brainer..re SP appreciation will occur of these companies....What intrigues me is the amount of comment about the daily fluctuations in share prices.

What am I saying ?. well have investors matured to the point where an investment in shares is viewed as an "investment"...or a "profitable short term trade".

As we know our private debt to the world is virtually totally reliant on overseas dosh suppliers being nice to us.

So ..what is preventing us from being self funding in the way of investing...I understand that "we" have Billions of dollars in bank deposits....Like why would that be...its my belief that most folk have almost nil confidence in our sharemarket as a place to invest money in....WHY WHY....cheers

[Xerof]

Troy, let me explain my own circumstances:

I have two accounts, one for long term (the till 'death us do part' account), and a trading account, which for good order is set up as a company, which pays corporate tax on nett trading profits less deductible expenses

over the past few days, I have bought for both accounts, in fact I bought SUM more for the trading account again today

so if it may seem I speak with forked tongue, unfortunately it's true!


I think you will find a disproportionately large number of contributors on SHARETRADER are traders, not long term investors. It's the nature of this beast

[ratkin]

Seems to me that many of the SUM investors say they are in for the long term but seem to fret over every single up or down day.
Makes you wonder how they would cope during a temporary market downturn.

[couta1]

Seems to me that many of the SUM investors say they are in for the long term but seem to fret over every single up or down day.
Makes you wonder how they would cope during a temporary market downturn.
Ratkin bit of tongue in cheek going on here I'd say,I think you'll find that with the price Sum is trading at presently compared to its intrinsic value we are currently experiencing a temporary market downturn so we are all coping well :cool:

[Beagle]

Seems to me that many of the SUM investors say they are in for the long term but seem to fret over every single up or down day.
Makes you wonder how they would cope during a temporary market downturn.

I think its easy to misconstru a bit of chatter as fretting.
I think fellow shareholders enjoy a good natter and there's nothing wrong with that.

[Beagle]

Seems to me that many of the SUM investors say they are in for the long term but seem to fret over every single up or down day.
Makes you wonder how they would cope during a temporary market downturn.

I think its easy to misconstru a bit of chatter as fretting.
I think fellow shareholders enjoy a good natter and there's nothing wrong with that.

[Mista_Trix]

It's also been a frustrating stock to hold. Having been in it for just shy of a year, I missed the stellar run, and have had mostly hover, up, return, small gain, hover, hover, hover, up, return, hover, small gain, massive gain, regress, hover, hover, hover.

There's probably a few of us who are a bit miffed given the continuing strong performance.

[Food4Thought]

...Long term, excellent stock to keep. Likely that there be some solid day trading happening with SUM. Long term, still a great business IMO. Beaut day!

[MAC]

It's also been a frustrating stock to hold. Having been in it for just shy of a year, I missed the stellar run, and have had mostly hover, up, return, small gain, hover, hover, hover, up, return, hover, small gain, massive gain, regress, hover, hover, hover.

There's probably a few of us who are a bit miffed given the continuing strong performance.

The last six months or so seems to have been about shaking out the remaining Quadrant overhang. Now that’s all dust it may be the market just needs to see a growth business as usual report to reaffirm those fundamentals and to continue the course.

Holding long term and anticipating good things for next week, looking forward to those results on Tuesday.

[Mista_Trix]

The last six months or so seems to have been about shaking out the remaining Quadrant overhang. Now that’s all dust it may be the market just needs to see a growth business as usual report to reaffirm those fundamentals and to continue the course.

Holding long term and anticipating good things for next week, looking forward to those results on Tuesday.

Agree, I just hope we're not still telling ourselves that line in a few weeks time :-S

[couta1]

Agree, I just hope we're not still telling ourselves that line in a few weeks time :-S
The whole retirement sector is a bit subdued currently so what increase in share price should we expect after next weeks results? Your guess is as good as mine but I'm confident if you hold the stock over a 5 year time frame you'll double your money or more

[MAC]

If you are a long term holder what does it matter if we see a big spike in SP.

Stocks don't stay undervalued for all that long. I would not be surprised one bit to see a steeper upward trajectory forming, possibly a sector divergence away from Ryman also since it’s not presenting close to the same value as Summerset at this juncture.

[skid]

There sure hasnt been much divergence yet,looking at the 2 charts.
They look joined at the hip so far:)

[Ginger_steps_]

[QUOTE=couta1;462911]The whole retirement sector is a bit subdued currently so what increase in share price should we expect after next weeks results? Your guess is as good as mine but I'm confident if you hold the stock over a 5 year time frame you'll double your money or more[/quite]

Im sorry to be so blunt Couta but I dont think you are in the position to be giving anyone investment advice. Ive sat by watching all the ST gurus mother you out of pity after your losses and silly buys only to be followed by you preaching your 2 cents of f-all. Like me there are many newbies who look to ST for advice & input of VALUE to make decisions- however you have not yet presented any value- just hype and ramping. I fail to see why members like snoopy who are genuinely trying to learn and add value are bludgeoned while people like you are mothered for being a loser (moneteraly). Newbies take heed- a coin will do you better....

[MAC]

There sure hasnt been much divergence yet,looking at the 2 charts.
They look joined at the hip so far:)

Crumbs, we must be working to totally different schedules Skid, I'm thinking months you're thinking minutes.

[couta1]

[QUOTE=couta1;462911]The whole retirement sector is a bit subdued currently so what increase in share price should we expect after next weeks results? Your guess is as good as mine but I'm confident if you hold the stock over a 5 year time frame you'll double your money or more[/quite]

Im sorry to be so blunt Couta but I dont think you are in the position to be giving anyone investment advice. Ive sat by watching all the ST gurus mother you out of pity after your losses and silly buys only to be followed by you preaching your 2 cents of f-all. Like me there are many newbies who look to ST for advice & input of VALUE to make decisions- however you have not yet presented any value- just hype and ramping. I fail to see why members like snoopy who are genuinely trying to learn and add value are bludgeoned while people like you are mothered for being a loser (moneteraly). Newbies take heed- a coin will do you better....
Ginger steps your out of order with your post above and just plain rude,those that have lost large sums know how tough it is to work through,do you? Help from others is much appreciated during these tough times,I'm not going to defend myself other than to say I've had 24 years working in the retirement sector including Summerset and Ryman homes and know their inner workings inside out and upside down so yes I have a valuable opinion to share,do you? And just to make you happy Summerset is a buy and hold okay ,now how's that for good advice

[Beagle]

I'm absolutly with couta1 in this matter and rarely if ever report a post but Mr Gingerbread man that was extremly harsh and uncalled for so has been reported by me. Try and act like a gentleman with a spirit of mutual respect and goodwill for your fellow members or go elsewhere to another forum, how's that for some straightforward advice !!

[Ginger_steps_]

[QUOTE=Ginger_steps_;463185]
Ginger steps your out of order with your post above and just plain rude,those that have lost large sums know how tough it is to work through,do you? Help from others is much appreciated during these tough times,I'm not going to defend myself other than to say I've had 24 years working in the retirement sector including Summerset and Ryman homes and know their inner workings inside out and upside down so yes I have a valuable opinion to share,do you? And just to make you happy Summerset is a buy and hold okay ,now how's that for good advice
Agreed it was harsh. however I maintain that your knowledge of the market is not sufficient to be offering advice. Just because youve been changing bed pans for 24 years or anything else in the companies doesnt make you a financial advisor. Again it comes back to the value where i believe you have offered none. Yes ive lost a substancial amount before (due to greed and lack of knowledge- much like yourself) and agree support is good, however its because of this fact I dont offer advice or suggestions.

[couta1]

[QUOTE=couta1;463206]
Agreed it was harsh. however I maintain that your knowledge of the market is not sufficient to be offering advice. Just because youve been changing bed pans for 24 years or anything else in the companies doesnt make you a financial advisor. Again it comes back to the value where i believe you have offered none. Yes ive lost a substancial amount before (due to greed and lack of knowledge- much like yourself) and agree support is good, however its because of this fact I dont offer advice or suggestions.
I never said I was a financial advisor,surely all on here are entitled to have an opinion,if you can only be rude and critical then please read Rogers post above and act accordingly

[iceman]

I'm absolutly with couta1 in this matter and rarely if ever report a post but Mr Gingerbread man that was extremly harsh and uncalled for so has been reported by me. Try and act like a gentleman with a spirit of mutual respect and goodwill for your fellow members or go elsewhere to another forum, how's that for some straightforward advice !!

I am with you on this Roger although I will not be reporting it. The most valuable aspect of ST is the divergence of opinions and peoples freedom to comment. We can like, dislike, agree, disagree, read or not read posts, but lets try to keep it respectful.

[In4a$]

The whole retirement sector is a bit subdued currently so what increase in share price should we expect after next weeks results? Your guess is as good as mine but I'm confident if you hold the stock over a 5 year time frame you'll double your money or more
I didnt realise you worked in this sector Couta1, good to read posts from someone involved in the industry.

[skid]

Crumbs, we must be working to totally different schedules Skid, I'm thinking months you're thinking minutes.

It was just a quick look at the two on the DB charts,especially the last few months where they both spiked and then both settled back to almost exactly to the 100day moving average.
It was just a quick observation
https://www.directbroking.co.nz/DirectTrade/dynamic/quote.aspx?qqeg=NZ&qqsc=sum&QuickQuote=Go+%3E%3E
https://www.directbroking.co.nz/DirectTrade/dynamic/quote.aspx?qqeg=NZ&qqsc=sum&QuickQuote=Go+%3E%3E

You may be right about the coming months--theres probably more of a chance they will diverge than correlate

[skid]

Sorry--those links were supposed to be the charts (have to use drop down box)

[skid]

So Couta, Id be interested to hear what you did in these firms and what motivated you to make your prediction.
They both obviously have lots of villages and working in one is not always an indication of the business overall,but having said that,often workers get a relatively good feel of how things are going--Do Share

[skid]

I have not done in depth research into SUM but there are some other factors i would certainly look into aside from good management
Interest Rates--Do they have alot of debt on their properties? (we have been given a pretty good indication that they will rise)
Which leads to the second-the property market in general--How would a downturn affect them?
And last -the overall markets--How badly would a sizable correction affect them?

These factors have been pretty sweet so far--will they continue for another 5 yrs?
If they do,then I suppose management becomes the major issue to consider--If they dont,then the equation becomes a bit more complicated.

People still get old and need accommodation so Im relatively confident they will still be around in yrs to come,but growth in profits can be affected by many things. IMO

[MAC]

All market wanes and waxes respond to economic cycles, including the property and share markets, and are mostly all correlated anyway. The secret of a long term hold is to stick with outperforming stocks.

The retirement sector has some degree of immunity also, the respectful elderly when they purchase are not buying property, they are buying aged care and security in knowing they will actually be taken care of in the twilight years, or, they are buying some degree of access to this security in advance anticipating requiring it in a few years.

You can’t take your wealth with you but you can end your days with dignity and respect, and your kids would probably just buy a sport’s car or go on an OE.

Just ten reasons why Summerset will continue to outperform;

1. Accelerating growth (an additional 200 units/yr in 2014 to 300 units/yr in 2015).
2. The aging demographic driving sector growth.
3. Baby boomers the wealthiest generation in human history.
4. Increasing net margins.
5. Award winning operational performance.
6. A sales and marketing premium for being the best in breed.
7. The highest ratio of villages within the lucrative Auckland region.
8. The highest land bank, also in key areas.
9. Revenue funded growth with only cashflow debt requirements.
10. Proven growth and goal focused management

Not to mention that SUM is undervalued at present.

[Bjauck]

3. Baby boomers the wealthiest generation in human history.
A lot of that baby boomer wealth (especially in NZ) is based on surging real estate prices. As the "demographic bulge" of boomers decide to cash in on their properties to buy a Licence in a SUM complex (or just to downsize or cash-up their investment properties etc) do you think the decades of boomer-fuelled house price growth may come to an end? I think that there could be a real risk to what many have come to assume to be chronic out-performance of residential real estate. Asset revaluations could turn negative. I agree with all your other positive points with the caveat primarily on this point 3.

[macduffy]

I think you've got a point there, Bj. While the average house price, particularly in Auckland, probably enjoys a healthy margin over the average cost of a retirement villa, apartment etc at present , the question may become whether that margin remains sufficient to buy that licence and to finance the ongoing costs of retirement village living. I've taken stakes in the three listed companies but they're only a part of a diversified portfolio.

[MAC]

It’s a healthy and interesting debate to have I think as it’s all a bit unprecedented in New Zealand history.

Certainly the boomers coming out of the property market will free up stock for generation x, but I agree at some point in time, could be ten years from now the property market will die as demand falls away. Remember all those school closures in the 1980’s and early 1990’s after the demographic shift occurred and the boomers had passed through.

Having said that, I see the aged care retirement village as being in the same bucket as hospitals, if the property market were to take a dive, the land value of a hospital would drop but this only represents 1 or 2% of the total site value, a hospital is valued in the healthcare sector not the real estate sector.

Similarly the value of the land an aged care retirement village sits on will drop, again it’s only 1 or 2%, but the aged care facilities on that land is in the healthcare market, and not in the commercial real estate market or in the residential real estate market.

Also, I’m inclined to anticipate that for a senior respectful elderly person living in a modern world where their children won’t change their nappies, their priorities are increasingly going to be on security of care first and inheritance second. The boomers cash will most probably prioritise toward their own care before any surplus from the sale of their house is allocated.

[winner69]

MAC said - Certainly the boomers coming out of the property market will free up stock for generation x, but I agree at some point in time, could be ten years from now the property market will die as demand falls away.


One of the big issues is that those Xers or 13ers are now at the peak f their earning cycles and have realised that are about to or have inherited a poor economy and a ravaged environment. They blame the generations before them.

It is likely that most of his generation will not match the economic fortunes of their baby boomer parents. It possibly is not a generation that feels it should pay the dues for people in the past - not good for baby boomers.

Some generational theorists (notably Howe and Strauss) point out that history shows when generational cycles such as this happen depressions if not deflating happens. Imagine the wealth of baby boomers (as you say the richest generation in history) sees asset prices falling away.

One outcome is a return to multigenerational living as seen in Europe in the past. - grandparents and parents and children all sharing the same house and caring for each other (particularly granddad or nana)

Only time will tell us how al his evolves over the next 5 or 10 or 20 years.

Retirement villages might be necessary for quality living or they might just be glorified nursing homes. Who knows.

[winner69]

If interested in generational trends and multigenerational living here's an interesting insight

http://www.enlightenmentmag.com/trends/multi-generational-living

Extract -

A record number of Americans live in multi-generational households today, according to Generations United™ (GU), a national organization focused on improving the lives of children, youth, and older people through intergenerational strategies, programs, and public policies.
Although the trend began before the economic downturn, the Recession has fueled a dramatic rise in U.S. multi-generational households from 46.5 million in 2007 to 51.4 million by the end of 2009 – a 10.5 percent increase in just three years.

[BlackPeter]

A lot of that baby boomer wealth (especially in NZ) is based on surging real estate prices. As the "demographic bulge" of boomers decide to cash in on their properties to buy a Licence in a SUM complex (or just to downsize or cash-up their investment properties etc) do you think the decades of boomer-fuelled house price growth may come to an end? I think that there could be a real risk to what many have come to assume to be chronic out-performance of residential real estate. Asset revaluations could turn negative. I agree with all your other positive points with the caveat primarily on this point 3.

Good point highlighting the risk of property values dropping when all the baby boomers try to sell them. On the other hand - assuming our politics stays rational, New Zealand has due to its space, climate and still sort of green reputation the natural advantage of being a desirable destination for well contributing and hard working immigrants. If we manage this immigration flow to our advantage, than it shouldn't be too hard to keep property prices in a desirable band. If they drop too much, open the immigration tap - and if they go too high, reduce the flow. Quite simple, isn't it?

[Harvey Specter]

Re boomers etc, remember that retirement villages aren't targeting everyone. Due to huge numbers of them, they are only targeting the wealthiest 20% (excluding the top 5% who will pay to continue living in their mansions). These will own their own freehold, and have investments on the side.

Those with only their own home or those living in multigenerational living are not the target.

[percy]

All market wanes and waxes respond to economic cycles, including the property and share markets, and are mostly all correlated anyway. The secret of a long term hold is to stick with outperforming stocks.

The retirement sector has some degree of immunity also, the respectful elderly when they purchase are not buying property, they are buying aged care and security in knowing they will actually be taken care of in the twilight years, or, they are buying some degree of access to this security in advance anticipating requiring it in a few years.

You can’t take your wealth with you but you can end your days with dignity and respect, and your kids would probably just buy a sport’s car or go on an OE.

Just ten reasons why Summerset will continue to outperform;

1. Accelerating growth (an additional 200 units/yr in 2014 to 300 units/yr in 2015).
2. The aging demographic driving sector growth.
3. Baby boomers the wealthiest generation in human history.
4. Increasing net margins.
5. Award winning operational performance.
6. A sales and marketing premium for being the best in breed.
7. The highest ratio of villages within the lucrative Auckland region.
8. The highest land bank, also in key areas.
9. Revenue funded growth with only cashflow debt requirements.
10. Proven growth and goal focused management

Not to mention that SUM is undervalued at present.

Great post.!!

[Beagle]

I concurr with Mac's ten points above.
$500m investing in Auckland creating 1300 units = circa $385,000 average price inclusive of other village amenities.
On the subject of affordability and future house price movements isn't the average Auckland house now somewhere over $600,000 ?
Pretty comfortable margin of safety there I would have thought.

[skid]

Does your ''revenue funded growth with only cash flow debt requirements" mean that their properties are basically free hold so they are not to tied to raising interest rates?
(Just trying to get an idea of their debt levels)

Disc. Still in the research stage --good points Mac

[winner69]

Does your ''revenue funded growth with only cash flow debt requirements" mean that their properties are basically free hold so they are not to tied to raising interest rates?
(Just trying to get an idea of their debt levels)

Disc. Still in the research stage --good points Mac

Last financials has $79m odd borrowings (not counting the complicated stuff they owe residents which has no impact on interest cost anyway)

[MAC]

Does your ''revenue funded growth with only cash flow debt requirements" mean that their properties are basically free hold so they are not to tied to raising interest rates?
(Just trying to get an idea of their debt levels)

Disc. Still in the research stage --good points Mac

I’m not an accountant Skid but I do know construction, this is my humble understanding to share;

Summerset are as much a construction company as a village operator, they have access to 180M in available debt facilities as working capital if so required. Although it does not appear that they typically have utilised this facility fully over the last few years with borrowings typically closer to $80M.

They secured an increase in debt facilities in 2012 from $150M to $180M which allowed them to more comfortably accelerate and manage a planned increase in their build rate target from 250 units/yr by 2016 to 300 units/yr by 2015.

In 2012 they constructed $72M in new village assets with borrowings of $78M. This seems to be an annual reconciliation with working capital quickly paid down from revenues.

IMO it is a sign of a pretty good business model when your construction working capital is paid off annually from revenues in only twelve months or thereabouts.

http://www.summerset.co.nz/assets/Investor-Centre/NZX-2012/2012-11-Summerset-purchases-19th-site.sml.pdf

Summerset presently have $706M in assets under management.

5530

[couta1]

So Couta, Id be interested to hear what you did in these firms and what motivated you to make your prediction.
They both obviously have lots of villages and working in one is not always an indication of the business overall,but having said that,often workers get a relatively good feel of how things are going--Do Share
Skid I can't say exactly what I do in these companies for various reasons including having contracts to work in competing companies and not biting off the hand that feeds you, I have worked in 18 different retirement complexes over the years including 2 Summerset and 2 Ryman facilities,others include Bupa,Oceania,Presbyterian support,Terra Nova and various small private operators,never worked in a Met home to date though, so I've done a thorough study of the different continuum of care models,management structures,management operating styles,staffing operations including staff-management interactions and delivery of care standards etc, I have observed various changes over the last 2-3 years in certain companies in a negative way and others in an increasing positive way,so with my position on Sum I think you can draw your own conclusions,my wife also has extensive experience in the sector.

[Beagle]

I take a bit of comfort from that Couta1, thanks for sharing. After seeing how my Dad was "cared for" in a dementia unit in Ryman's Orewa facility, I no longer own Ryman shares. In terms of SUM it certainly has the feel good factor investing in a company that's confirmed best of breed by independent awards at looking after its residents. Two days to go to the annual result, anyone else feeling a little excitable, or is it just me :)

[gv1]

I take a bit of comfort from that Couta1, thanks for sharing. After seeing how my Dad was "cared for" in a dementia unit in Ryman's Orewa facility, I no longer own Ryman shares. In terms of SUM it certainly has the feel good factor investing in a company that's confirmed best of breed by independent awards at looking after its residents. Two days to go to the annual result, anyone else feeling a little excitable, or is it just me :)

Count me in, already have bought lots was thinking whether to buy in more as sp quite low before the announcement.

[Vaygor1]

In terms of SUM it certainly has the feel good factor investing in a company that's confirmed best of breed by independent awards at looking after its residents.

According to Summerset's website, "Summerset has been named Best Retirement Village Operator in New Zealand and Australia at the Australasian Over 50s Housing Awards for four years running".

I have nothing against SUM at all and I am currently invested heavily in New Zealand's retirement sector. I am however sceptical about just how independent these awards are.

The awards come from an Australian based publication called Housing Care Aged Weekly. Refer http://www.seniors-housing.net/ They market themselves as a "Reuters level service" and this is their "Australian Edition", although I can't find any other edition in existence. A sample of one of their publications is here http://www.seniors-housing.net/core/achw/ACHW-Sample.pdf

Looking at the awards on the 1st link above, there was a 2010 and 2011 award, both won by Summerset. But only nominations were called for for 2012 (with a closing date of 10 Aug 2012 for the nominations) with no winner yet, and there is no mention at all of 2013 or 2014 at all. Despite the sample in the 2nd link above, I didn't get the feeling this is a very big publication.

Around July last year, Housing Care Aged Weekly wrote an article besmirching RYM's proposed Wheelers Hill Village in Melbourne. They called it a 'Foray' and went so far as to call it a 'financial suicide mission'. The article also went a long way to misinterpret MorningStars comment on RYM's Wheeler's Hill village. Refer http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=414737&viewfull=1#post414737

Due to this article, I dug a bit deeper and found what I believe to be an undisclosed tie-up between Housing Care Aged Weekly and New Zealand's Summerset Group. I can't remember exactly what I came across but the tie-up seemed pretty clear to me at the time and I was not surprised to find it. I would be astonished to see any Australian based publication in any sector recognising New Zealand in front of itself for even one year let alone four. There are hundreds of aged care companies around Melbourne alone let alone the rest of Australia yet little known Summerset keeps winning? Ask any Australian in any Australian City if they have heard of Summerset. I can tell you what the answer will be, especially with no Summerset presence there yet.

In any event, due to my findings the credibility of this award, in my mind anyway, went out the window.

[Joshuatree]

Excellent sleuthing Vaygor ; great to see some fact uncovering some fiction, thanks

[MAC]

Here is the actual website for the organisation that operate the industry awards for those who may be interested in the real facts about the facts.

http://www.seniors-housing.net/

The awards have been operating for 14 years with 80 retirement village companies entering covering 1,200 villages in Australia and New Zealand. The judges apparently have 28 year’s experience within the industry.

Vaygor, it was actually Morningstar that independently provided that opinion of Ryman, not the industry magazine that published and ran the story, although the magazine seems to somewhat agree as do I and probably many others.

“MELBOURNE: Morningstar has issued an equity research report on Ryman Healthcare Limited (RYM) which raises the spectre of its promulgated Australian foray being a drag on its future results. This journal has long held the view that Ryman's proposed Wheelers Hill Continous Care Retirement Community is a financial 'suicide mission.' Ryman management has been blindsided”

Having moved from Victoria to New Zealand shortly after Ryman announced their Wheelers Hill initiative I was equally perplexed as to why Ryman would ever want to enter Victoria of all states, I’m not sure I would go as far as to say it was financial suicide, maybe naive and under researched perhaps.

Still I think Ryman will make it profitable because they have too, it just is quite unlikely to be nearly as profitable as if they had invested that same cash in the New Zealand market.

[Xerof]

Personally I'd find your sleuthing more believable if you can document the alleged 'link'. You are accusing them of self nomination, and parochial judging, without any evidence, (so far). I think you owe us proof.

there are many sector awards handed out, where nominations are made by industry peers, with judging performed by an 'independent' judge.

Just one example is our local finance industry, the INFINZ annual awards. Nice recognition but would you change bank or broker on that basis?

In any event, I personally put no weight on industry awards anymore, just look at who have won the Exporter of the year, and CEO of the year awards in the past. Remember Fortex?

[Beagle]

Vaygor1 - Yes I see you've made that unsubstantiated claim about an alleged tie up
before and have been grinding that axe for a while now without proof. Yes it appears the website of Housing Care Aged weekly needs updating on that point alone I agree with you.
Frankly unless you can back you assertion of a tie-up with facts its nothing more than
a slanderous and baseless allegation.

[couta1]

Vaygor1 has a clear preference for Ryman when you read all his posts and he's entitled to it but this is a Summerset party here so get the drinks lined up ready for tomorrow,price has already started to creep up while Rym is heading down:cool:

[Vaygor1]

Hi all.

Your reaction in the last few posts is not unexpected given your interests in Summerset, but what I have given you is the truth.
I do not favour SUM, RYM, MET over each other and there is no slander in my post. I have stuck to the facts. I would like to see the last two years of these awards if they exist, but I can't find them. Surely if they existed they would be well publicised, or at least updated on their own website.

I shall see if I can find the connection I found back in July last year and report back.

There are a couple of other things you should know about this award:


Only those villages nominated by someone are 'evaluated'
I can't find an historical campaign aimed at attracting nominations except this one website which I find to be discrete
There is no stated evaluation criteria
There is no judges named.
There is no documented decision making process
The website itself, any of their publications, and awards themselves do not name a single person, manager, or organiser who you can contact.


I mean, click on http://www.seniors-housing.net (http://www.seniors-housing.net/) and select 'Awards 2012' on the left. Who is this judge? Any committee of such a prestigious award would want the judges name with all his experience up in lights wouldn't they? Something doesn't add up.

As for just how bona fide the independency if this award is doesn't bother me an iota except for one thing and that is it calls into question just how much the CEO or board of Summerset are prepared to bend the truth on whatever they report, and this in turn impacts my level of investment in them.

If there is a rat here, and I certainly smell one, then we should all be aware of it. I have tried to get to the bottom of it and I can't.

MAC, the reason RYM entered Victoria is a simple one… Melbourne demographics.

[winner69]

Leo Campbell won the 2013 Architecture Award at a ceremony last November - from the publication linked.

No mention f other winners in this publication but we know Summerset won the supreme award

Vayoger ....you should know better than to piss off the believers ...it does seem to rile them even if there is some truth in your outrageous claims. Must admit Summerset seem to get good coverage in this publication

[Banksie]

If there is a rat here, and I certainly smell one, then we should all be aware of it. I have tried to get to the bottom of it and I can't.


I did a little research on who owns the domain and who owns the domain of the parent company. I found similar sites in the UK, US and Canada (http://www.seniorshousingcanada.com (http://www.seniorshousingcanada.com/), http://www.seniorshousing.co.uk (http://www.seniorshousing.co.uk/), http://www.seniorshousing.us/).

Domain and or company names all seem to be related - Bevan Crowley, Ann Crowley or Liam Crowley...and the expert who does the judging, editing and public speaking is Edmonde Crawley (http://www.seniorshousing.co.uk/core/SpeakerProfile.html).

Edit: Oops mistype it is Esmonde Crawley

[MAC]

MAC, the reason RYM entered Victoria is a simple one… Melbourne demographics.

I think you are correct Vaygor, too simple;

Victoria compared to New Zealand:

Very aggressive unions
Higher construction costs
Longer construction times, working capital tied up for longer
Higher operational labour costs
Lower labour productivity

I’ve first hand experience with union negotiations in Vic and I can assure you they will fire and at a time of their choosing to achieve a maximum return for their members. Even Australian companies entering Victoria get burned badly let alone a company from New Zealand where we have little cognisant exposure.

The closest analogy I have, for those of us long enough in the tooth, is a comparison to the industrial relations we had here in NZ in the 1980’s. They don’t have compulsory unionism like we did here in NZ, but in Victoria they effectively may as well have.

Of key importance for Ryman is to ensure that the site employment bargaining agreement they have for construction does not roll over into the operation of the village. This could occur immediately or at any time after.

I would also be interested in some feedback from Ryman as to whether the build was on time and budget. Projects in Vic have a history of being over, often 50% over is not at all unusual. Construction labour productivity is often only 30% of that in other states.

The risks are enormous in such a labour dependent sector as aged care, and this is what the analysts and industry commentators are referring too.

I’m very pleased actually that Norah Barlow looked at the Australian market and strategically decided against it. Until proven otherwise my anticipation is that gross margins will be lower in Vic than NZ, either way, Julian Cook will have a good zero cost guinea pig to study at Wheelers Hill.

[BlackPeter]

Hi all.

Your reaction in the last few posts is not unexpected given your interests in Summerset, but what I have given you is the truth.
I do not favour SUM, RYM, MET over each other and there is no slander in my post. I have stuck to the facts. I would like to see the last two years of these awards if they exist, but I can't find them. Surely if they existed they would be well publicised, or at least updated on their own website.

I shall see if I can find the connection I found back in July last year and report back.

There are a couple of other things you should know about this award:


Only those villages nominated by someone are 'evaluated'
I can't find an historical campaign aimed at attracting nominations except this one website which I find to be discrete
There is no stated evaluation criteria
There is no judges named.
There is no documented decision making process
The website itself, any of their publications, and awards themselves do not name a single person, manager, or organiser who you can contact.


I mean, click on http://www.seniors-housing.net (http://www.seniors-housing.net/) and select 'Awards 2012' on the left. Who is this judge? Any committee of such a prestigious award would want the judges name with all his experience up in lights wouldn't they? Something doesn't add up.

As for just how bona fide the independency if this award is doesn't bother me an iota except for one thing and that is it calls into question just how much the CEO or board of Summerset are prepared to bend the truth on whatever they report, and this in turn impacts my level of investment in them.

If there is a rat here, and I certainly smell one, then we should all be aware of it. I have tried to get to the bottom of it and I can't.

MAC, the reason RYM entered Victoria is a simple one… Melbourne demographics.


Interesting allegations. Just fired off emails to seniors-housing as well as to Summerset and asked them for comment. Will share with you if & when I get a response.

discl: hold SUM

[Goldstein]

I’m very pleased actually that Norah Barlow looked at the Australian market and strategically decided against it. Until proven otherwise my anticipation is that gross margins will be lower in Vic than NZ, either way, Julian Cook will have a good zero cost guinea pig to study at Wheelers Hill.

Yes, I remember the Air New Zealand Ansett debacle. Ansett would have looked attractive to Air NZ management who believed they could operate the airline with similar cost structures. The rest is history.

[Beagle]

I’m very pleased actually that Norah Barlow looked at the Australian market and strategically decided against it. Until proven otherwise my anticipation is that gross margins will be lower in Vic than NZ, either way, Julian Cook will have a good zero cost guinea pig to study at Wheelers Hill.

Well said mate.

[winner69]

I reckon Underlying Profit for FY13 will be $23.1 million up 51% on pcp

The tension is building .... will it be $23.1m or more ..... I thinking more

That will send the price to 360 today

Just remember price always catches up with value

[fiasco]

Close winner69


Financial Results for the Year Ended 31 December 2013

8:30am, 25 Feb 2014 | FLLYR

NZX, ASX AND MEDIA RELEASE
25 FEBRUARY 2014
SUMMERSET GROWTH CONTINUES - UNDERLYING PROFIT UP 46%

- Underlying profit for FY13 of NZ$22.2 million, up 46% on FY12
- Net profit after tax of NZ$34.2m, up 131% on FY12
- Net operating cash flow of NZ$88.6m, up 34% on FY12
- Total sales of occupation rights up 21% on FY12
- 209 units delivered, 31% increase on FY12
- FY13 final dividend of 3.25 cps announced

Retirement village and aged care operator Summerset today announced underlying profit for FY13 of NZ$22.2 million. This result is a record for the company and represents a 46% increase in its underlying profit on the prior year.

Net profit after tax for FY13 was NZ$34.2 million – 131% above FY12. This figure includes $8.4 million of gains in the fair value of greenfield land held in Auckland as well as the benefit of income tax losses of $2.2 million being recognised for the first time, given continuity around shareholdings going forward.

Summerset has also announced its annual dividend for shareholders of 3.25 cents per share. This represents a total dividend of NZ$7.0 million, an increase of 31% on FY12.
The dividend reinvestment plan will apply to this dividend, with a discount of 2% applicable to those shareholders participating in the plan.
Managing director and CEO Norah Barlow said 2013 had been a year of high growth for Summerset and she was very happy with the performance of the company over the period.
“We purchased five new sites in 2013; Lower Hutt, New Plymouth, Casebrook and Wigram in Christchurch, as well as additional land adjacent to our Trentham site. We welcomed our first residents to Dunedin and Katikati, and have started construction on our Karaka and Hobsonville sites.”
The company is working through the planning process for its Lower Hutt, Ellerslie and New Plymouth villages, as well as the two Christchurch sites. New sites acquired in 2013 lift Summerset’s land bank to over 2,100 retirement units.
“Care continues to be a focus for us and new villages will have larger care facilities as we move forward,” Mrs Barlow said. “We are always looking at innovative ways to meet our residents’ care needs – care apartments are one example of this. These are apartments that have been certified by the DHB to provide rest home-level care to residents in their own home.”
The company saw its third year of record sales with a 21% increase in the sales of occupation rights for 2013. Gross sales exceeded 400 units for the first time with sale proceeds reaching over NZ$130 million. This compares with gross sales of $102 million in FY12, a 28% increase.
Mrs Barlow said demand was strong across all 18 villages. Summerset was working to meet that demand by supplying new units quickly. This was demonstrated by the completion of 209 units built across six sites, up 31% on the previous year.
“Our results this year were driven by our in-house design and development capability, strong sales and our continuing reputation as the best retirement operator in Australasia, an award we have won four times in a row,” Mrs Barlow said.

In November 2012, the company upgraded its longer term build rate to 300 retirement units per annum by the end of the 2015 financial year. Guidance given during the IPO was for 150 units per annum by 2016.
Mrs Barlow is to retire in April, and current CFO Julian Cook has been appointed to replace her. Mrs Barlow will remain on the Summerset board of directors.
CEO-designate Julian Cook said, “With a strong development pipeline, in-house development and design teams, we are well placed to reach our targets going into 2015.”
“We are always looking for new sites on which to build, where we can create vibrant and active communities to serve the local area. We have plenty of room for further growth.”
The value of the company’s total assets has grown 20% to NZ$845 million from NZ$702 million in 2012.
Summerset chairman Rob Campbell said Summerset was continuing to perform well.
“Summerset’s development capability, which has been enhanced by taking development and design in-house over the past few years, is a key part of this growth. Demand for our villages is strong across the country and our ability to deliver new units in a timely fashion to residents is key to meeting this demand.
“The board has welcomed two new directors recently, with Marie Bismark appointed last September and Anne Urlwin commencing in her new role on the 1st of March this year. Both of these directors bring significant experience to the board and will be valuable additions. The board is now well placed to carry the company forward following the exit of QPE Funds Management in 2013.”
This is the company’s third set of results since it listed on the New Zealand Stock Exchange in November 2011. Summerset became part of the NZX50 in December 2012. It is also the company’s first set of full year results since listing on the Australian Securities Exchange (ASX) in July 2013.
 
ENDS

[777]

The tension is building .... will it be $23.1m or more ..... I thinking more

That will send the price to 360 today

Just remember price always catches up with value

Very close.

Well done.

[stoploss]

Here is your catalyst to buy. RSI, Stochastic and MACD all pointing to a price recovery. Enjoy those who bought last week, I'm tied up elsewhere so can't buy (don't worry that investment is paying off just as handsomely!) :)

Hard to argue with 44% in a day ........

[Beagle]

Solid and credible result. Significant land acquisitions this year positions the company extremly well for long term growth. Land bank of 2100 retirement units is 7 years supply based on the projected 2015 build rate of 300 units per annum so the foundations for superb long term growth have been laid in 2013.
Happy to hold long term. (Rome wasn't built in a day).

[couta1]

A sunny day at camp Summerset,all ducks in a line,let the growth curve continue

[MAC]

A good result, an NPAT increase of 131% certainly exceeded NZ First Capitals anticipation of 68% and probably most of the market’s.

Build rate target of 200 adequately met, new unit and resale's up well also.

I particularly like the advice on the increase in build rate expectation from 200 units to 250 units for 2014.

An exceptional report really, onward and upward.

http://www.scoop.co.nz/stories/BU1402/S00385/summerset-gains-consent-for-55m-new-plymouth-village.htm

[silu]

Really like the result. SUM is sitting nicely in my looooongterm portfolio.

[Hoop]

........So a chartist life using SUM is a bitch but S&R lines sort of work as each bull market correction just breaks them ...so I accumulated more at 3.29, in the dip....and hope the dip isn't the reversal..any price below the 3.20 bull/bear line will have me worried..


Hoop, firstly I would like to salute you for drawing a chart with a log price axis - everybody should be doing this.

Secondly I am appalled that you should write "Trying to make technicial analysis sense out of SUM is difficult..."
It goes up and it goes down where is the difficulty? You are just using the wrong model.

Thirdly I am even more appalled that you also wrote "..So how do you know which break will be geniune in the future ... ?"
You know as well as I do that TA does not accurately predict the future (neither does FA for that matter), it is a percentages and profit protection game.

But you know your current sell conditions for SUM surely?

If it meets them you sell don't you?

Then you are on the look out for (re)entry conditions and you continue to ply your TA rules, updating them as you learn.


Just for you here is a chart (and not like yours so full of stuff that it is difficult to see anything :p).

5485

If the SP hits that second line up then start selling and if it hits the bottom line sell up completely. (And then watch it turn round and climb again maybe?)

Best Wishes
Paper Tiger

Hi PT I guess I must've bought part of your SUM share sell down at $3.29... Thanks:)

[Beagle]

^^ LOL Revenge is sweet :)

[skid]

Skid I can't say exactly what I do in these companies for various reasons including having contracts to work in competing companies and not biting off the hand that feeds you, I have worked in 18 different retirement complexes over the years including 2 Summerset and 2 Ryman facilities,others include Bupa,Oceania,Presbyterian support,Terra Nova and various small private operators,never worked in a Met home to date though, so I've done a thorough study of the different continuum of care models,management structures,management operating styles,staffing operations including staff-management interactions and delivery of care standards etc, I have observed various changes over the last 2-3 years in certain companies in a negative way and others in an increasing positive way,so with my position on Sum I think you can draw your own conclusions,my wife also has extensive experience in the sector.

Thanx Couts--Interesting reading

[Snow Leopard]

Hi PT I guess I must've bought part of your SUM share sell down at $3.29... Thanks:)

Now given that the second line up was at $3.17 and the bottom line was at $3.05 you're guess is wrong.
But well done for buying.

My last buy was at $3.28 but that was last November.

Result looks promising for Summerset being able to live up to the expectations we all seem to have for it.

Best Wishes
Paper Tiger

[Joshuatree]

So you've worked in the retirement industry, are moved along a lot could work in the sluice room who knows as you don't want to share and thats fine. Yes of course we can draw our own conclusions. Thanks.

Looks like the Retirement ind in fine fettle.

[couta1]

So you've worked in the retirement industry, are moved along a lot could work in the sluice room who knows as you don't want to share and thats fine. Yes of course we can draw our own conclusions. Thanks.

Looks like the Retirement ind in fine fettle.
Moosie has learnt the hard way for being too specific as have others,many eyes on here and not worth losing a contract and income by sharing sensitive info,my wife and I are still heavily involved in the industry(Not the sluice room though) cheers

[winner69]

Bit disappointing that result today ... below my expectations anyway

ratkin said fully priced and earnings need to catch up. I agree so in the meantime at best just a steady rise in shareprice, nothing spectacular from here

Update on linear regression channels - avoided going below the bottom channel line last week. Todays rise still has price below the actual trend line ($3.58). So still in with this 2 year trade. Long may it continue at the 0.85% per week rise ..... no acceleration I am afraid. That growth rate is about the rate of earnings growth so if fully valued expect a pullback of sorts. If world markets collapse SUM will have a 2 in front of it

[winner69]

Omg these guys have no idea do they.

Nobody has ever responded to me whether they see the possibility of perceived super profits being reined in by an unfriendly government as a risk to investing in sum or RYM.

And I am not da facts

From NBR
http://www.nbr.co.nz/article/summerset-annual-profit-more-doubles-record-pace-may-slow-after-fast-growth-bd-152385#comments

#1 by da facts 7 hours ago
Is it just me or is making super profits out of old people a bit off. A big non for profit business should be launched (e.g Southern Cross type) to keep this activity in check.


by Share Watcher 1 hour ago in reply to da facts
So what's stopping you then?


#2 by Anonymous 4 hours ago
I couldn't agree more with "Da Facts" we were interested in looking at one of their units, but having been in the construction industry all of my life, there was no chance in hell I was going to pay that sort of asking price for one of their units, they are extremely poor value for what they are, it is a shame that the frail elderly are being separated with their money in favour of massive profits to a corporation that has no conscience.

[Snow Leopard]

Take the profit before tax (NPBT) deduct the fair value movement of investment property (revaluation gains) and:

FY2013 SUM made a NPBT of $2M0

FY2012 SUM made a NPBT of -$0M7 (loss)

So currently SUM is a de facto non-profit provider of retirement living accommodation and services.
The perceived profit is just the normal increase in the value of property and land.

MET is much the same.

Now RYM is a different beast entirely they made $31M3 NPBT of real money for FY2013 and another $16M4 NPBT for the first half of this year. But that is not particularly a great return on 1.8 billion dollars of property or even 780 million dollars of equity.

So not a lot of profit to cut anywhere.

Best Wishes
Paper Tiger

Disclaimers:
1 - Own MET, SUM & RYM (specified in strictly alphabetical order)

2 - Nothing in this post should be construed as criticism of, or preference for the retirement sector in general or specifically; nor as criticism of, or preference for any particular retirement village operator, listed or unlisted, for-profit or not for profit.

[couta1]

Winner before any Government would have a right to be concerned with any super profits which PT has pointed out don't exist they would have to address the current and ongoing large underfunding issue created by themselves running at around 500 mil/year currently

[winner69]

Winner before any Government would have a right to be concerned with any super profits which PT has pointed out don't exist they would have to address the current and ongoing large underfunding issue created by themselves running at around 500 mil/year currently

What's underfunded?

[winner69]

As MAC says they are really just a property developer any way. As PT says doing things in the developments they have created is really just a de facto service.

As a property developer this guys view is a worry then. Anonymous (like MAC says I
He in construction
I couldn't agree more with "Da Facts" we were interested in looking at one of their units, but having been in the construction industry all of my life, there was no chance in hell I was going to pay that sort of asking price for one of their units, they are extremely poor value for what they are, it is a shame that the frail elderly are being separated with their money in favour of massive profits to a corporation that has no conscience.

[couta1]

What's underfunded?
The money given by the MOH to the DHBs which is distributed to the retirement village operators to fund their care centers is in a funding shortfall winner to the tune of 500mill/year currently ,and will have just increased with the raising of the minimum wage as part of this funding is mearnt to cover staff wages also.

[couta1]

As MAC says they are really just a property developer any way. As PT says doing things in the developments they have created is really just a de facto service.

As a property developer this guys view is a worry then. Anonymous (like MAC says I
He in construction
I couldn't agree more with "Da Facts" we were interested in looking at one of their units, but having been in the construction industry all of my life, there was no chance in hell I was going to pay that sort of asking price for one of their units, they are extremely poor value for what they are, it is a shame that the frail elderly are being separated with their money in favour of massive profits to a corporation that has no conscience.
This is one guys opinion,the dozens of people I talk to who own Ryman and Summerset units are more than happy with their purchases and the security that comes with living in one of these facilities

[Harvey Specter]

Disclaimers:
1 - Own MET, SUM & RYM (specified in strictly alphabetical order)Given your grammer Nazi reputation, I suggest you go back to school and learn the alphabet.

[couta1]

Good article in this mornings Dom Post from Summerset,40 years of growth ahead etc

[BlackPeter]

Interesting allegations. Just fired off emails to seniors-housing as well as to Summerset and asked them for comment. Will share with you if & when I get a response.

discl: hold SUM

just a follow up on the suggestions vaygor1 made recently in this forum (post #1279 and #1285):

I contacted SUM following these allegations and received a response directly from Julian Cook. He clearly states that they (SUM) have no relationship with the organiser of this competition and he points out that during the 15 years this contest is running as well RYM and MET have been under the winners for some years as well. He highlights that selection of candidates or judging criteria are a matter for the organisation concerned (i.e. seniors-housings) and that they (SUM) have been only informed after a decision has been made by the panel.

Still waiting for a meaningful response from seniors-housing and shall keep you posted if anything relevant eventuates.

[Harvey Specter]

As a property developer this guys view is a worry then. Anonymous (like MAC says I
He in construction
I couldn't agree more with "Da Facts" we were interested in looking at one of their units, but having been in the construction industry all of my life, there was no chance in hell I was going to pay that sort of asking price for one of their units, they are extremely poor value for what they are, it is a shame that the frail elderly are being separated with their money in favour of massive profits to a corporation that has no conscience.Is he considering the cost of the complex as a whole? He is definitely missing that the property development side of the business has to subsidise the care side of the business. Personally I think the frail elderly see this whereas the greedy property developer doesn't. They aren't buying a 'house', they are buying a licence to occupy in a facility that will give them greater care and security than if they continued to live in their existing home.

[couta1]

Is he considering the cost of the complex as a whole? He is definitely missing that the property development side of the business has to subsidise the care side of the business. Personally I think the frail elderly see this whereas the greedy property developer doesn't. They aren't buying a 'house', they are buying a licence to occupy in a facility that will give them greater care and security than if they continued to live in their existing home.
Exactly Right

[In4a$]

Is he considering the cost of the complex as a whole? He is definitely missing that the property development side of the business has to subsidise the care side of the business. Personally I think the frail elderly see this whereas the greedy property developer doesn't. They aren't buying a 'house', they are buying a licence to occupy in a facility that will give them greater care and security than if they continued to live in their existing home.
Well said Harvey

[Beagle]

This is one guys opinion,the dozens of people I talk to who own Ryman and Summerset units are more than happy with their purchases and the security that comes with living in one of these facilities
A personal experience - case study.
I encouraged my parents to move into a retirement home in Whangaparaoa about four years ago. The Peninsula club was the best fit for them with their friends in the community there and close to their Church. I negotiated the price down for them to $360,000, which I consider very reasonable for a stand alone north facing 112 sq metre condiminium with views and a lovely sunroom. They enjoy investment income from a reasonably sized fund that I manage for Mum as a result of the sale of their modest unit in an adjacent suburb and also bought a new car and some travelling out of the net sales proceeds from their modest home.


Dad passed away late in 2012, we knew he had Dementia at the time they moved in. I knew my Mum would be alone in due course at the time when I encouraged them to move in.

Mum has enjoyed tremendous support from the existing friends, new friends she's made there and from the staff and is as happy as you could possibly expect for an 85 year old who lost her huisband of 56 years marriage fairly recently. She finds the support and safety and organised activities and facilities there invaluable and often remarks to me what a vast difference its made to her life compared to how it might have turned out, alone and somewhat isolated in a unit in Red Beach.

She travels more now and I am picking her up from the sirport today from a trip of three weeks when she's been down to see her sister in dunedin. She knows she will come back to well cared for grounds, her condimium will be safe and not burgled during her absence and she can reaquaint herself with all her friends again in a safe caring commiunity of like minded people.

In my view, the move for my Mum has been a trememdous sucess and gives me a huge amount of peace of mind knowing she's well connected and cared for in the community.

[Toasty]

Sounds nice Roger. I almost want to age a bit quicker so I can get there myself.

[iceman]

Thanks for sharing your story Roger. I think too often we underestimate and undervalue the comfort and security the retirement villages provide for some of the most insecure and vulnerable people in our society. They all deserve nothing but the best.

[percy]

Thanks Roger.
Sums up perfectly what the retirement sector is driven by.

[fiasco]

Thank you for sharing that Roger, appreciate this type of input, which I think brings intangible facets which are equally important.

Side note: Volume up 413,649.

[Joshuatree]

Great for you and your parents Roger. With care I'm not so sure. Folks with parent/s with dementia need to look thoroughly at all options. Ryman def didn't work for us and we are really happy with a private operation. No comment on Summer set as not in our area.

[couta1]

Thank you for sharing that Roger, appreciate this type of input, which I think brings intangible facets which are equally important.

Side note Volume up 413,649.
Yes and I think the likes of Mr ginger steps need to have a hard think about what adds value when it comes to posting on a retirement sector stock,number crunching is only half the equation (See his posts a few pages back for those not sure what I mean)

[Joshuatree]

Keep posting Ginger; we need some balance here:)

[Goldstein]

Good post Roger. My Mum is on her own in Orewa after my Dad died, but she doesn't want to 'give up her independence'. I might show her your post.

I think there has to be a paradigm shift with some of the older generation. They need to free up their capital to invest in their retirement as the Govt and the working force will not be able support them.

[Joshuatree]

Enter heartland and their plans to reinvigorate ,rework ,refresh annuity ,reverse mortgages.

[couta1]

Great for you and your parents Roger. With care I'm not so sure. Folks with parent/s with dementia need to look thoroughly at all options. Ryman def didn't work for us and we are really happy with a private operation. No comment on Summer set as not in our area.
I always advise people looking to buy a unit at a certain village and who want the continuum of care for themselves to visit the care center first and talk to staff and residents there before signing on the bottom line

[Joshuatree]

If i was asked to advise it would be to visit a number of times at different times of the day , observe, and listen ; one can form an unbiased opinion of whats really happening. Be careful asking staff and some residents as it may not necessarily be accurate. Watching to see if residents needs (esp dementia) are being met. Are staff run off their feet and so order residents around e.g. you must shower now. Are staff friendly, happy , speak clear english, how many diversion therapists are there etc etc.

[Snow Leopard]

Disclaimers:
1 - Own MET, SUM & RYM (specified in strictly alphabetical order)



Given your grammer Nazi reputation, I suggest you go back to school and learn the alphabet.

MET SUM RYM

Best Wishes
Paper Tiger

[Ginger_steps_]

Yes and I think the likes of Mr ginger steps need to have a hard think about what adds value when it comes to posting on a retirement sector stock,number crunching is only half the equation (See his posts a few pages back for those not sure what I mean)
Right Couta - I bit my lip when you dodged the question about your involvement in the retirement sector but after this post of yours I will continue.



I have worked in 18 different retirement complexes....>> I've done a thorough study of the different continuum of care models,management structures,management operating styles,staffing operations including staff-management interactions and delivery of care standards etc Its blatantly obvious from this post you are a simple carer who has upskilled along the way - but never making it out of a hands on position - maybe at the most you have made it to head nurse. This gives you a tiny insight into middle management and nothing thereafter.


Furthermore I wasn't only commenting on your inability to crunch numbers - I was commenting on your INABILITY TO ADD ANY VALUE to this thread, coupled with your complete lack of share-market knowledge - whilst giving advice to others to BUY (which angered me considering your record so far). Yes, Roger having never worked in a retirement complex (I assume) did just add value - a great deal more in a single post than you have collectively(Thanks Roger). You'd think after all of those years and 18 complexes you would be able to at least provide some strengths and weaknesses or even simple differences of said companies but haven't - not even a tiny whiff of value in ANY one of your posts. Which I might add could be done with absolute anonymity.


Now I would like to lay this to rest so that we dont continue cloud the forum with rubbish imberteen valued posts by knowledgable members. So before I climb back into my viewing platform - do you care to share some value with us now?
I have observed various changes over the last 2-3 years in certain companies in a negative way and others in an increasing positive way... Heres your chance to ADD some value!! Failing that I can only assume that you indeed do not know anything past caring for patients and therefore should not be advising unknowing newbies or anyone on ST to BUY without any credibility or facts - other than comments you've regurgitated from VALUED members of ST. At present I think you are using ST like facebook - where you'd be better of posting your breakfast updates. Two eyes, Two ear, 1 mouth - use them in that order buddy.



Keep posting Ginger; we need some balance herehttp://www.sharetrader.co.nz/webkit-fake-url://952BA160-9B7E-4840-87E9-72B09C74AE3B/001_smile.gif


Thanks Joshuatree - dont worry, I only post when I feel strongly about something and a cheeky Fugazi sure wont stop me. On a side note may I ask why Ryman didn't suit your family?

[aGuyCalledBob]

Sometimes I wish people would just admit they made a mistake and/or let it go, rather than making this thread look like their facebook feed...
I know I dont contribute, but it would be great to be able to read all the valuable information on this thread without wading through all the pointless posts (like this one)
irony.

[ratkin]

Its blatantly obvious from this post you are a simple carer who has upskilled along the way - but never making it out of a hands on position - maybe at the most you have made it to head nurse. This gives you a tiny insight into middle management and nothing thereafter.



i suspect a head nurse would have a better idea of whats really happening than some suit in middle management.

[couta1]

Unbelievable ginger steps that's all I've got to say in reply,have a nice day and I will continue to post as others on here seem to appreciate someone who's has a long experience looking from the inside out and who has studied the inner workings of these facilities and understands the funding model and continuum of care model etc,cheers

[Lost in space]

Unbelievable ginger steps that's all I've got to say in reply,have a nice day and I will continue to post as others on here seem to appreciate someone who's has a long experience looking from the inside out and who has studied the inner workings of these facilities and understands the funding model and continuum of care model etc,cheers

I don't post often and anyone looking at the threads of my posts would think I'm pretty light on analysis. Yet I spent many years as a sharebroker and I find little reason to list my credentials however part of my history was establishing Renouf & Co in Auckland back in the 80's and I must say that I just love the diversity of contributors to this site and you couta1 are counted in that pool - keep it going!

[Bjauck]

Right Couta - I bit my lip when you dodged the question about your involvement in the retirement sector but after this post of yours I will continue.


Its blatantly obvious from this post you are a simple carer...
My experience from when my relative was in a home is that the carers are anything but simple. As this remark may illustrate...they are often undervalued. A carer's point of view of a company in this sector would be invaluable - even more so if they had experience in several companies.

[squirrel]

Sometimes I wish people would just admit they made a mistake and/or let it go, rather than making this thread look like their facebook feed...
I know I dont contribute, but it would be great to be able to read all the valuable information on this thread without wading through all the pointless posts (like this one)
irony.

I have to agree entirely with the writer there is too much of "claptrap" going on, it would be far more appreciated,when all the "experienced" contributors stick to what they know well, and pass this valuable info on to the more inexperienced one as my self:).

[winner69]

Back to what matters - SUM closed at 347 today.

Good boost after yesterday's solid I no spectacular half year.

A little bit to go reach the all time high of 347 but maybe next week.

As long as the uptrend continues within those linear regression channels I be happy

[Ginger_steps_]

Unbelievable ginger steps that's all I've got to say in reply,have a nice day and I will continue to post as others on here seem to appreciate someone who's has a long experience looking from the inside out and who has studied the inner workings of these facilities and understands the funding model and continuum of care model etc,cheers

Thanks for the confirmation.

[fiasco]

Back to what matters - SUM closed at 347 today.

Good boost after yesterday's solid I no spectacular half year.

A little bit to go reach the all time high of 347 but maybe next week.

As long as the uptrend continues within those linear regression channels I be happy

Winner, you mean 375! Was good to see some nice volume today.

[winner69]

Winner, you mean 375! Was good to see some nice volume today.

Yes you are correct ..... must have got too excited at the 347

So 375 next week

[gv1]

[QUOTE=Ginger_steps_;464080]


Furthermore I wasn't only commenting on your inability to crunch numbers - I was commenting on your INABILITY TO ADD ANY VALUE to this thread, coupled with your complete lack of share-market knowledge - whilst giving advice to others to BUY (which angered me considering your record so far). You'd think after all of those years and 18 complexes you would be able to at least provide some strengths and weaknesses or even simple differences of said companies but haven't - not even a tiny whiff of value in ANY one of your posts. Which I might add could be done with absolute anonymity.


Now I would like to lay this to rest so that we dont continue cloud the forum with rubbish imberteen valued posts by knowledgable members. So before I climb back into my viewing platform - do you care to share some value with us now? Heres your chance to ADD some value!! Failing that I can only assume that you indeed do not know anything past caring for patients and therefore should not be advising unknowing newbies or anyone on ST to BUY without any credibility or facts - other than comments you've regurgitated from VALUED members of ST. At present I think you are using ST like facebook - where you'd be better of posting your breakfast updates. Two eyes, Two ear, 1 mouth - use them in that order buddy.





Thanks couta for your insight. People should not take whats in the forum as gospel, they should do their own research. To put these utter garbage is nonsense.

[Ginger_steps_]

Thanks couta for your insight. People should not take whats in the forum as gospel, they should do their own research. To put these utter garbage is nonsense.

What insight was that exactly?? Name one post of value. Just one - thats all I ask....Take a look through his post list - I double dare you.

[couta1]

What insight was that exactly?? Name one post of value. Just one - thats all I ask....Take a look through his post list - I double dare you.
Please take Rogers advise on post #1254 if you can only be rude,disrespectful and put people down,you arrived here out of the blue from your viewing platform as you put it and yet all you have done is personally attack me for which you have been reported once already yet you haven't even talked about Summerset at all,can I respectfully request you return to your viewing platform until you can be more civil.as your upsetting people for no purpose,thankyou

[gv1]

What insight was that exactly?? Name one post of value. Just one - thats all I ask....Take a look through his post list - I double dare you.

You are not that dumb? No one in this forum are saying they are stockbrokers and what they say has to taken literally. You tell me what post of value you have in here. All you doing is cluttering this forum with utter rubbish. Don't like it just ship out or make some contribution which is of substance.

[Mista_Trix]

Riiiiiight.

So there seems to be an increasing amount of aggression across a few blogs on ST lately.
How about we just cut it out, certain people will have disagreements, some will always rub others the wrong way, the person that rubs me up the wrong way my not irritate you at all.
Lets just deal with it and have some civil discussions about the companies we invest in.

Excellent.

[Deej5]

Now back to Summerset ........ PLEASE!

[fiasco]

Guidance please, I remember seeing this somewhere and tried to search but came up with no avail.

With off market trades, what is generally the causation to the SP? Do they trade below the current listed price at a discount?

[macduffy]

Guidance please, I remember seeing this somewhere and tried to search but came up with no avail.

With off market trades, what is generally the causation to the SP? Do they trade below the current listed price at a discount?

As usual, it depends.

If the share is much sought after - and difficult to buy in large blocks - then it wouldn't be unusual to see an off-market go through at a premium to the last sale price. And the opposite effect if the market for the stock is liquid and trading freely in reasonable numbers. Depends also on what is perceived to be the motive for the sale - and who the seller and buyer are.

[skid]

looking for facts

[skid]

Skid I can't say exactly what I do in these companies for various reasons including having contracts to work in competing companies and not biting off the hand that feeds you, I have worked in 18 different retirement complexes over the years including 2 Summerset and 2 Ryman facilities,others include Bupa,Oceania,Presbyterian support,Terra Nova and various small private operators,never worked in a Met home to date though, so I've done a thorough study of the different continuum of care models,management structures,management operating styles,staffing operations including staff-management interactions and delivery of care standards etc, I have observed various changes over the last 2-3 years in certain companies in a negative way and others in an increasing positive way,so with my position on Sum I think you can draw your own conclusions,my wife also has extensive experience in the sector.

Correct me if Im wrong but I would have thought you could let us in on your thorough study of the different continuum of care models and still remain relatively anonymous--just put ''my research shows'' and give us the same sort of quality information that you have so often received from others.

You have to admit couts--just taking your word for it is a bit of a stretch-a bit more info would be extremely helpful.

[Joshuatree]

Yes i seem to remember you promising us this Retirement nous, knowledge way back when you arrived here couta?. Unfort i don't know how to find that thread.

[winner69]

excitement of the half year all over and everything back to normality again

SUM down and RYM up today

[ratkin]

Yes i seem to remember you promising us this Retirement nous, knowledge way back when you arrived here couta?. Unfort i don't know how to find that thread.

Skid , Joshuatree and Ginger steps , are you ganging up on Couta now?
Your all making posts relating to him and not the company. What value is that adding?

[fiasco]

excitement of the half year all over and everything back to normality again

SUM down and RYM up today


Strange indeed, oh well I think I need to just continue to not look at it and come back next year haha.

[couta1]

Skid , Joshuatree and Ginger steps , are you ganging up on Couta now?
Your all making posts relating to him and not the company. What value is that adding?
Thanks ratkin,yes good old social media beat up ,says a lot really,anyway I need to focus on other areas of my portfolio now which aren't looking too flash and make some tough decisions,if anyone has a genuine specific question on the likes of the continuum of care model please pm me,cheers

[Joshuatree]

Re RYM the cream always comes to the top ay:p
Yes reasonable questions ratkin and no; 3 strangers who have their own querys
What a long day so many half yearly reports out on the ASX today am stuffed, g nite

[ratkin]

Strange indeed, oh well I think I need to just continue to not look at it and come back next year haha.

Yep, a watched pot never boils. The internet has made it far to easy to monitor every little movement in price, every little hiccup, rumour and ramp. It's little wonder many fail to invest long enough to make really good returns

[kiora]

Thanks Ratkin : My thoughts exactly .I wonder how many on sharetrader let fear & greed tear themselves apart on a daily/hourly basis !If they where honest with themselves and equated in their time they spend looking at every bit of information they would have a piss poor quality of life and piss poor return IMHO ;)

Yep, a watched pot never boils. The internet has made it far to easy to monitor every little movement in price, every little hiccup, rumour and ramp. It's little wonder many fail to invest long enough to make really good returns

[fiasco]

Agree, as Roger's analogies go, I shall go fishing while sailing around the sea!

[winner69]

Just like Taleb's fictional dentist in Fooled by Randomness suffers - (extract)

This hypothetical investor is guaranteed to earn 15% per annum from his portfolio with an associated volatility of 10%. These statistics are not open to dispute.

But if our investor friend monitors his portfolio in real time, however, the random price oscillations of his portfolio are likely to trigger extreme anxiety. Depending on the frequency with which he observes his portfolio, our dentist will experience varying degrees of heartache and distress. The frequency of portfolio observation versus probability of a pleasurable shown below:

1 second 50.02%
1 minute 50.17%
1 hour 51.30%
1 day 54%
1 month 67%
1 quarter 77%
1 year 93%
(Source: „Fooled by Randomness‟, by Nassim Nicholas Taleb

The message is clear. Too much observation can be bad for you. If Taleb‟s dentist simply restricts the frequency with which he checks his portfolio – a fundamentally sound portfolio – he will boost his chances of incurring a positive emotional outcome from his monitoring. Note that nothing changes about the composition of his portfolio – only the frequency with which he checks it. Investors determined to watch the pot may end up being scalded

[Beagle]

I agree with the sentiments expressed above regarding volatility and time. Investment returns in a solid steady growth company like this will be a function of capital invested and time in the market.

Not sure how many of you have had a good look through the full results presentation that was attached to the full year announcement on the stock exchange website so I have posted a link here for your convienience. You can learn a lot about the company by studing this presentation in great detail.
https://www.nzx.com/files/attachments/189890.pdf

[ratkin]

Well constructed post there.(winner) Have to confess I check mine multiple times a day even though it's very rare to take any action.
Would rather fill my empty computer moments with sharetrader than looking at pictures of funny cats on Facebook

[Mista_Trix]

I also agree.

But,

it would be easier if we were in a slightly different part of the cycle. I think most peoples nerves are up anyway, coz we know at some point in the not too distant future things are going to dramatically change, and we're all trying to protect our capital...

[ratkin]

Just taken Rogers advice and actually bothered to look at the result.
I wonder if they will be so keen to include one off losses in future results, as they were to include the 8m brownfield gain in this one.

[Harvey Specter]

Just taken Rogers advice and actually bothered to look at the result.
I wonder if they will be so keen to include one off losses in future results, as they were to include the 8m brownfield gain in this one.Auditors will require it.

Most look at underlying earnings anyway, which strips out unrealised valuations fluctuations.

[ratkin]

EVer since Ryman and summerset have been around, property and land prices have pretty much risen every year (correct me if I'm wrong)
should that situation change then results are going to look very different.

Question. What proportion of these companies success is a result of

A) Increasing numbers of oldies
B) years of rising property prices

[MAC]

It seems to be a frequent presumption by some that there is some magical correlation between the property market and the aged care retirement market.

Sure elderly people sell property to buy aged care and security, but that aged care and security is a different service based market.

We don’t value SKL on the property value of their factories, nor AIA on the property value of their runways. Sure swings and round abouts in property valuation will alter book values, but not necessarily the market cap significantly. This is the reason why aged care retirement stocks are listed by the NZX in the ‘service sector’ and not in the ‘property sector’.

The respectful oldies will still require aged care and/or will still require security in knowing they have access to aged care if the property market takes a dip. The demand doesn’t evaporate and the surplus between the average house price and the cost of an aged care contract is quite large.

If an elderly person gets a lower price for their property it is much more likely they would continue their care and security plan, and then perhaps reallocate the surplus accordingly. Health, wellbeing and security in knowing they are going to be cared for is always going to be the top priority for the elderly.

[ratkin]

Thats all correct, however supposing brownfield values had fallen by 20m rather than risen by 8m

There would then have been an underlying profit of zero. Might not matter too much in the long run but
there would be a big shift in sentiment which would knock chunks of the large p/e multiples we have now

[skid]

It seems to be a frequent presumption by some that there is some magical correlation between the property market and the aged care retirement market.

Sure elderly people sell property to buy aged care and security, but that aged care and security is a different service based market.

We don’t value SKL on the property value of their factories, nor AIA on the property value of their runways. Sure swings and round abouts in property valuation will alter book values, but not necessarily the market cap significantly. This is the reason why aged care retirement stocks are listed by the NZX in the ‘service sector’ and not in the ‘property sector’.

The respectful oldies will still require aged care and/or will still require security in knowing they have access to aged care if the property market takes a dip. The demand doesn’t evaporate and the surplus between the average house price and the cost of an aged care contract is quite large.

If an elderly person gets a lower price for their property it is much more likely they would continue their care and security plan, and then perhaps reallocate the surplus accordingly. Health, wellbeing and security in knowing they are going to be cared for is always going to be the top priority for the elderly.

MAC If you own alot of property(even if its service orientated) then theres nothing magic about the correlation with the property market.
If property crashed 30% dont you think an elderly person (who got 30% less for their property)would balk at paying the same price as before for their serviced unit --The service would be just as good ,but the value of the unit itself would be less.
I think it is naive to think that the service part of the equation completely outweighs the value of the property it is sitting on.
I dont know if they own all their units freehold but if there is any debt,then that also has to be taken into consideration in terms of interest rates.
I think that the retirement sector is less likely to be as affected by economic problems ,but to discount them altogether is shortsighted IMO.
These are uncertain times economically and alot of recent posters have not lived through some of the ''blood on the floor'' situations some years back.
You only have the security in knowing you have access to aged care if you have the dosh to pay for it.

Ratkin--Do you think that trying to get a bit more information from Couts is ganging up on him?
If he posted it, there would certainly be some ''added value'' IMO

[baller18]

There are some signs which shows the housing market is cooling off, but not too show if this is a temporary setback, a few more months we would get a clearer picture. Volume being sold have been dropping in the past couple months, last month was 17% less, average price have gone down a tinny bit, but if volume keeps declining in the upcoming months then definitely price would go down with it. The question is how much...

[MAC]

Target markets and demographics are all important Skid. It's unlikely that a 75 year old non freehold mortgaged candidate would fall within Summersets target market demographic unless they had alternate equity. And, the pool of within market candidates is set to grow at a higher rate than villages are being built in NZ over the next several years perhaps even a decade.

Markets are about supply and demand. If demand dips in the residential property market, any correlation with a dip in Summersets target 75 year old plus aged care market does seem a bit tenuous given the forward demand.

Consider the rest of the healthcare market by example also, the market cap of a southern cross inc hospitals is unlikely to decrease just because the residential property sector takes a brief dip.

[False Profit]

@1371
What a brilliant post and one I can absolutely relate to :/

[Snow Leopard]

So we are speculating about the value of the investment properties and where the price will go and the correlation with everyday house prices.

All of SUM, MET & RYM not only now (re)value their properties using very similar assumptions but they detail what those assumptions are in their reports.

So why not scuttle off, make a nice cup of tea, read the facts and then come here and discuss with a bit more knowledge behind your posts.

Best Wishes
Paper Tiger

Disc: I could just tell you but I think a lot (but not all) of posters need to actually read company reports a bit more thoroughly.

[ratkin]

So we are speculating about the value of the investment properties and where the price will go and the correlation with everyday house prices.

All of SUM, MET & RYM not only now (re)value their properties using very similar assumptions but they detail what those assumptions are in their reports.

So why not scuttle off, make a nice cup of tea, read the facts and then come here and discuss with a bit more knowledge behind your posts.


The discussion was more about whether it actually matters if the current units/land are devalued or not

[Harvey Specter]

All of SUM, MET & RYM not only now (re)value their properties using very similar assumptions but they detail what those assumptions are in their reports.From memory they even use the same firm dont they?

[skid]

Cant seem to find a balance sheet for SUM--trying to find amount of debt(if any) in relation to income

[777]

Cant seem to find a balance sheet for SUM--trying to find amount of debt(if any) in relation to income

It is on their website for the previous half year. The annual report will be their on the 24/3/14.

http://www.summerset.co.nz/assets/Investor-Centre/Annual-Reports/Summerset-Mid-Year-REPORT-2013-v4.pdf

[MAC]

If summerset were to sell a village;

If a prospective buyer was to purchase a village and start a business on similar aged care residential contract terms then their valuation would be based on the net present value of forward aged care residential free cashflows, plus revaluations of assets (structures) within the sector market.

If a prospective buyer was going to convert the village into residential property apartments, then the valuation to them would be the sum residential property market valuation of the apartments. But, this is why their bid would fail, it’s not a value added competitive offer.

How then to value a village;

What is not entirely provided to us, and yes I read the reports too, is absolutely all the criteria the valuer's apply in assessing fair value movements.

The valuer's criteria must surely apply the supply and demand expectations of prospective village purchasers.

Let’s face it, Mum, Dad and the kids or others in the residential property market are never going to buy an aged care retirement village are they.

It’s the prospective pool of potential village owner operators that determine supply and demand and therefore village valuation.

And, it would seem there will probably be quite good demand for a few years ahead.

[Beagle]

Thats all correct, however supposing brownfield values had fallen by 20m rather than risen by 8m

There would then have been an underlying profit of zero. Might not matter too much in the long run but
there would be a big shift in sentiment which would knock chunks of the large p/e multiples we have now

You need to have another read of the report my friend.
Underlying profit, or another name for it is core operating profit already strips out revaluation gains either up or down. i.e a $20m brownfields reduction in capital value would still leave an underlying profit exactly the same as the underlying profit that was reported on Tuesday. In that report you'll see that realised development margins are set to improve in the 2014 calendar year with all developments now being managed in house and that with 250 units being built this year, an increase of just on 25% that will be a major driver behind profit growth in 2014 and will the realised development margin on 300 units in 2015 :)

Mac's point about being a service provider is bang on the money in my opinion.

[Fisherking]

I have some experience of residential valuations from my time investing in property and can say with some certainty that valuing property is at best an imprecise science. Assuming commercial is similar, I wouldn't read too much into the RE valuations even if done by the same company YOY.

I tend to agree, it's more about supply and demand.

[Snow Leopard]

So we are speculating about the value of the investment properties and where the price will go and the correlation with everyday house prices.

All of SUM, MET & RYM not only now (re)value their properties using very similar assumptions but they detail what those assumptions are in their reports.

So why not scuttle off, make a nice cup of tea, read the facts and then come here and discuss with a bit more knowledge behind your posts.

Best Wishes
Paper Tiger

Disc: I could just tell you but I think a lot (but not all) of posters need to actually read company reports a bit more thoroughly.


I have some experience of residential valuations from my time investing in property and can say with some certainty that valuing property is at best an imprecise science. Assuming commercial is similar, I wouldn't read too much into the RE valuations even if done by the same company YOY.

I tend to agree, it's more about supply and demand.

There is a saying, that I have personally detested until now: "Assume makes an ass of u and me". But I am beginning to see it's merits.

Best Wishes
Paper Tiger

[DarkHorse]

Am I missing something? Not just this forum (eg post 1389) but just about every online and other media discussion mentioning 'supply and demand' seems to focus almost exclusively on demand, and to overlook cost of supply. Not totally sure my distant memories of stage one economics are correct, but doesn't a fall in the marginal cost of supply move the supply curve, and therefore the price? So in the case of retirement villages, assuming a truly competitive market, wouldn't a fall in land prices make it cheaper to supply new ones and therefore reduce their market price?

[Bjauck]

There is a saying, that I have personally detested until now: "Assume makes an ass of u and me". But I am beginning to see it's merits.

Best Wishes
Paper Tiger
The best two pieces of "advice" I got from watching several episodes of Judge Judy was that nugget plus "shoulda, coulda, woulda don't cut it with me!"

[artemis]

The best two pieces of "advice" I got from watching several episodes of Judge Judy was that nugget plus "shoulda, coulda, woulda don't cut it with me!"

Heh. I liked 'if you tell the truth you don't have to have a good memory'. And of course - never never co-sign a loan for someone else.

[skid]

Did you know that Judge Judy was convicted of insider trading and sent to jail?---oh no wait ,that was Martha Stewart----It always amazes me how these posts can stray:)

[skid]

Can you imagine being the one to have to care for her? OMG

[couta1]

I'm just chucking it out there but there may be a possibility that the share price is being suppressed by the anticipation of interest rate increases and the uncertainty of how much these may be?

[Jasemc]

I'm just chucking it out there but there may be a possibility that the share price is being suppressed by the anticipation of interest rate increases and the uncertainty of how much these may be?


Ryman seems not to be suffering?

[couta1]

Ryman seems not to be suffering?
Ryman has also been down from a high of $8.39,today's is its first day above $8 for a while,as I've observed many times the price is driven up at the end of the day by buyers on the international index on good volume(Have a look at the intraday chart)perhaps tomorrow will be a better day for Sum?

[winner69]

Couta - prob good news for if i have erred

I have thrown SUM out and and added to RYM with the dosh.

SUM been a great ride for a couple of years but it seemed a dumb idea to have both, esp when price movements are pretty highly correlated.

My rationale was i believe that the worst RYM can do is match SUM but over time RYM has more upside potential. From a market sentiment perspective RYM is the sector leader and because of its size will remain so. A well performing SUM helps maintain the high profile of the sector, a sector certain to rise.

But if the world turns to custard in the next week or so an the market starts to collapse RYM will be sold off ....an then waiting for the next recovery

[MAC]

Sector traders just follow squiggly lines, can't be much of a life really, sitting behind a screen glued to a squiggle for 40 hours a week. What we are seeing is them playing catch up with Ryman following that exceptional report and boost for Summerset.

Oh well, if Ryman has to tag along too on Summersets coat tails then that's got to be good for the NZ50 and the sector and investors in general. Onward and upward for all.

[Beagle]

I'm just chucking it out there but there may be a possibility that the share price is being suppressed by the anticipation of interest rate increases and the uncertainty of how much these may be?

When you consider the price is basically the same now as it was in early November 2013 and since then we've seen the 4th consequetive best retirement company award, exceptional sales for the 4Q 2013 and the annual result with underlying profit up 46% I think we have seen some price earnings contraction already, consistent with anticipated increases in interest rates this year.

On another subject, the world as we all know is a crazy place at present but none of what's going on in Crimea or possible expansion into or incursions into the Ukraine has any effect on elderly folks desire to live in a safe caring environment in N.Z.

On the other subject of the relative merits of RYM and SUM, with the growth rate of SUM being clearly superior to RYM and with SUM's laser focus on N.Z., to coin the phrase so often used by Percy, we're well positioned :) Settle in for the long haul and enjoy the prevailing tailwinds highly supportive of an enjoyable cruise.

SUM is currently trading on a PEG ratio of less than 1, i.e. price earnings is circa 33 times, (based on underlying profit, excluding revaluations, which in many ways in my opinion understates true earnings seeing as property has a long history of gradually increasing in value) and the growth rate is 46%. PEG = 0.72 = exceptional value. History tells us that it is extremly rare to find growth stocks trading on a PEG of less than 1 and when you do there is a lot of money to be made. History has a way of repeating itself.

[MAC]

Agree Roger, Summerset is due for an outperform phase now Quadrant are gone.

I find the views of some concerned about interest rates a little quizzical;

Excluding non interest bearing occupancy advances which have no external interest rate exposure, Summersets debt/equity ratio becomes 19%, quite a low exposure really for any company, Ryman’s figure is a little higher at 29%.

Higher interest rates may influence the small market of village owner operators who would be interested in buying a Summerset village, but then Summerset are not selling, have no intention of doing so, and thus it becomes a moot market matter.

Also, it is entirely unlikely that the respectful target market of 75 year old plus freehold home owners are going to be at all influenced by interest rates in deciding when or if they will require aged care.

They typically have no mortgage or debt and will generally gain from a higher interest rate environment as the surplus cash from their house sale will actually earn them interest.

Higher interest rates, no problem.

[Harvey Specter]

Also, it is entirely unlikely that the respectful target market of 75 year old plus freehold home owners are going to be at all influenced by interest rates in deciding when or if they will require aged care.They are probably not concerned with a war in Crimea either. What keeps them up at night is whether they remembered to turn the light of in the lounge and what is the name of the person lying in the bed next to them that they have been married to for the past 60 years.

[777]

What is the wait period for buying one of these units. If it is short then it will lengthen slightly if oldies are slowed in selling the family home. The build rate can also be adjusted to allow for this. So is there really in great affect in the medium term?

Bought another 20,000 last week and looking at more.

[Xerof]

Not sure MAC has COMPLETELY missed the point, snapiti, in fact ALL the points he made are highly relevant.

I take your point onboard also, but come on, the selling time for residential fluctuates between low 20 days in the good times and about 90 days at the nadir, a variance that is immaterial in the selling cycle of retirement units.