RYM - Ryman Healthcare

[winner69]

Just bought some land in devonport:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11248246

I see that both SUM and RYM include that phrase about "freeing up other properties for resale". Seems like they see themselves as the saviour to the perceived housing shortage.

Hope there buyers for these 'freed up' properties at good prices

[couta1]

Just wish it was me selling the 250,000 !!
Your 1000 is about to go buddy,Gone

[In4a$]

Your 1000 is about to go buddy,Gone

"Ka Ching"" another $500 profit

[In4a$]

Your 1000 is about to go buddy,Gone

"Ka Ching"" another $500 profit

[winner69]

"Ka Ching"" another $500 profit

Jeez - 2 lots of $500 in next to no time ....well done

[Harvey Specter]

Did they buy the land on leasehold, or did they buy it freehold?
I inferred it is freehold. It says sell and refers to the CBD land which is leasehold and saying now Ryman will reap the benefit, not Ngati Whatua.

The actual media release is more vague just saying they have 'secured'. I am not sure how their model would deal with a leasehold type structure unless it was prepaid.

[winner69]

I inferred it is freehold. It says sell and refers to the CBD land which is leasehold and saying now Ryman will reap the benefit, not Ngati Whatua.

The actual media release is more vague just saying they have 'secured'. I am not sure how their model would deal with a leasehold type structure unless it was prepaid.

150 year lease

The Herald has a story

[Bjauck]

Did they buy the land on leasehold, or did they buy it freehold?
Good question...per the media release: "Ryman has secured a 4.2 hectare site owned by Ngāti Whātua Ōrākei on Ngataringa Rd, where it plans to build retirement village which will eventually be home for up to 300 residents". It makes it sound as if Ngati Whatua still own the land and that Ryman will develop and operate it. However the Scoop item http://www.scoop.co.nz/stories/BU1405/S00060/ryman-buys-north-shore-land-from-ngati-whatua-orakei.htm in the first paragraph specifically states that Ryman has bought the land.

However, back in the media release it goes on to state: “Ngāti Whātua Ōrākei wanted to ensure there was a long-term development at Wakakura, which would provide not only for its people but also create housing opportunities for the community and we believe this will achieve that.’’ To me this indicates that Ngati Whatua wants the development to provide for its people. Would that be by way of reserving units for Ngati Whatua in the Ryman village built on the land...or by way of receiving rent from Ryman for building on what will legally remain Ngati Whatua owned land? Or, neither of the preceding? It is not clear cut. Whatever the position, Ryman have secured for development a very attractive piece of land.

[winner69]

Good question...per the media release: "Ryman has secured a 4.2 hectare site owned by Ngāti Whātua Ōrākei on Ngataringa Rd, where it plans to build retirement village which will eventually be home for up to 300 residents". It makes it sound as if Ngati Whatua still own the land and that Ryman will develop and operate it. However the Scoop item http://www.scoop.co.nz/stories/BU1405/S00060/ryman-buys-north-shore-land-from-ngati-whatua-orakei.htm in the first paragraph specifically states that Ryman has bought the land.

However, back in the media release it goes on to state: “Ngāti Whātua Ōrākei wanted to ensure there was a long-term development at Wakakura, which would provide not only for its people but also create housing opportunities for the community and we believe this will achieve that.’’ To me this indicates that Ngati Whatua wants the development to provide for its people. Would that be by way of reserving units for Ngati Whatua in the Ryman village built on the land...or by way of receiving rent from Ryman for building on what will legally remain Ngati Whatua owned land? Or, neither of the preceding? It is not clear cut. Whatever the position, Ryman have secured for development a very attractive piece of land.

150 year lease

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11248246

[winner69]

Make some serious money over at Sum aye winner over 3-5 years on the lower multiple or Met even lower again but then they will be spending all their profits on upgrading older buildings aye:cool:

Been wondering what '...last year's profit growth was unlikely to be emulated this year' really means for SUM. RYM wouldn't dare say that

To be fair lets assume only a miserly 25% increase. That gives underlying profit of $28m \ and so at 350 a earnings multiple of just under 30

SUM doesn't go back far as RYM to assess the relationship between PE and future returns but I would expect SUM to be about the same .... there at this 30 at best minimal or negative returns over the next 3 years and 5 years

If that's your timeframe couta not good .... just stick to the trading you are doing

[In4a$]

Sold at $8.88 to someone who paid too much for them like I did for my Xros and others,off to work at a Ryman facility now naked of shares for a few weeks or maybe months,have a nice day all:cool:
Nice profit Couta :), It's a great feeling going home on a Friday having made a few bob on the sharemarket

[Beagle]

Sold at $8.88 to someone who paid too much for them like I did for my Xros and others,off to work at a Ryman facility now naked of shares for a few weeks or maybe months,have a nice day all:cool:

Congrats mate, nice trade and great sale price. PE is FAR too high at the current price so definitly a good sale in my opinion.
Thanks again for the lift the airport the other day :)

[troyvdh]

Dear Winner no offence intended its my belief that the RYM share price will never reach $15 "they" are to smart to allow that to happen...."they" had a share split a few years back at about $11...I believe it was 5/1...but I do get your point however.
Cheers troy

[winner69]

Congrats mate, nice trade and great sale price. PE is FAR too high at the current price so definitly a good sale in my opinion.
Thanks again for the lift the airport the other day :)

Long at a lot of things when only considering 'half cycles' is a bit dangerous, especially if one thins that recent trends are the norm.

RYM share price gone from $2 bucks odd to $8 bucks odd over the last 4 years or so. Great stuff reinforcing best buys are when market valuations are low. In that period RYM actual performance only accounts for 30% of the increased shareprice, the other 70% coming from multiple expansion / more positive market sentiment.

Back to the 'half' / 'whole' cycle concept. Over the whole market cycle from 2001 to now RYM average PE (underlying earnings) has been 22.. It's been as long as 13 and is at it highest now close to 40

Underlying earnings have grown at 22% pa over the same period. That average PE seems about right then.

So on a 'whole' cycle basis it is inevitable that RYM will see its PE fall below 20 (ouch). No much hop of any decent returns over the next 3 or 5 years if buying close to 9 bucks today (buy and hold that is)

No idea when but I will keep holding RYM as long as the current uptrend remains in place. When that broken take the profits and wait for the next big rise from wherever it will end up. (See you do need to follow those squiggly lines)

Interesting SUM is already undergoing a rerating down. Only a few years since floating so much to work on but it's PE since floating has drifted down from 40 odd to below 30. Looks like that heading to 20 odd as well (another ouch)

All a load of **** eh because this time is different eh. Old buggers like me don't think so and as Mr P said 'the market giveth and the market taketh away'. My approach is that I don't like that taketh away bit.

[Vaygor1]

…...RYM share price gone from $2 bucks odd to $8 bucks odd over the last 4 years or so.

You are factually correct in your statement Winner however RYM share price has also gone from $2 bucks odd to $8 bucks odd over the last 7 years.

Buying RYM at $2.10 in April 2007 was a great buy (I don't think anyone would argue with that), and then RYM got even cheaper from then until recovering back to the same price of $2.10 in about June 2010.

Using $2.10 in April 2007 as the datum, and using 25% growth increase year-on-year, I get the share price in April 2014 as $10.01

If I use $2.50 in April 2007 as a fair price for RYM as my datum and then use 20% as my year on year growth, I get a share price of $8.95 for April 2014.

I don't see anything unusual about RYM's current share price (I don't think you do either from reading your previous posts), and I can't see any reason why RYM's existing growth rate, whatever the measure, is going to diminish in the next 5-7 years.

It then follows that if one wants to invest in something that pays a dividend plus earns 20% return per annum by way of capital gain, then buying RYM now anywhere below $9 looks like a way of achieving it.

PE will drop considerably upon announcement in 11 days (assuming approx 20% growth in earnings) unless current share price climbs 20% to $10.67 in the same period, and I can't see that happening.

Disc: Holding.

[winner69]

You are factually correct in your statement Winner however RYM share price has also gone from $2 bucks odd to $8 bucks odd over the last 7 years.

Buying RYM at $2.10 in April 2007 was a great buy (I don't think anyone would argue with that), and then RYM got even cheaper from then until recovering back to the same price of $2.10 in about June 2010.

Using $2.10 in April 2007 as the datum, and using 25% growth increase year-on-year, I get the share price in April 2014 as $10.01

If I use $2.50 in April 2007 as a fair price for RYM as my datum and then use 20% as my year on year growth, I get a share price of $8.95 for April 2014.

I don't see anything unusual about RYM's current share price (I don't think you do either from reading your previous posts), and I can't see any reason why RYM's existing growth rate, whatever the measure, is going to diminish in the next 5-7 years.

It then follows that if one wants to invest in something that pays a dividend plus earns 20% return per annum by way of capital gain, then buying RYM now anywhere below $9 looks like a way of achieving it.

PE will drop considerably upon announcement in 11 days (assuming approx 20% growth in earnings) unless current share price climbs 20% to $10.67 in the same period, and I can't see that happening.

Disc: Holding.




All my historical numbers going back to last century are based on RYM financial years (September) and using December year end shareprices. At end of December the market has had time to digest the previous full result and to some extent includes anybody's first cut outlook for the following year

You are using April 2007 at 250 as a 'fair price'. That point in time was when RYM earnings multiple was at its previous highs - a PE of 35 on trailing earnings (FY06) or if punters forecast were spot on a PE of 31 on forecast earnings

As such I don't see 250 in April 2007 as a fair price to use as a starting point.

If was trading at average PE over the cycle of 22 then a fair price would have been 155 to 175

Lets take midpoint of 165 at April 2007 and multiple by 22% pa growth you get 663 for April 2014 - not quite 865

I just think you have picked a good starting point for your calcs, not a realistic one

RYM shareprice will hopefully increase for some time (maybe to the next US election) bit inevitably there will be a PE contraction. So not a good long term buy and hold investment at todays price I reckon

All a load of **** though - because this time its different eh

[Vaygor1]

I am not disagreeing with you Winner, just putting a different perspective on it.

What I do know is that purchasing at $2.15 in April 2007 was a move I am very pleased with (and I bought a lot more RYM for a lot cheaper as the price reached significantly lower levels after that, much to my pleasure and astonishment).

Dividends/share since then have paid me 47.44 cents to-date with another 6.6c/share (my forecast) due around 20 June bringing the total to 54.14 cents.

If dividends rise by an average of only 18%/annum from now on, then by June 2021, I will have received a total of $2.30 back in dividends alone from my $2.15 purchase. That makes the actual PE for that purchase only 2021-2007 = 14 on dividends alone let alone earnings. ( I guess you could call it a PD or Price Dividend Ratio of 14)

I find it difficult therefore to think that $1.65 in April 2007 would be considered a fair price with the benefit of hindsight we now all have and I would have happily bought for $2.50 if that was the price at the time knowing what I know now.

Oddly enough, using an April-2007 price datum of $2.25 and compounding by your 22%/annum, I get today's price at $9.05 … again, no surprises there from my viewpoint.

I am not saying you are wrong or right in any of this and I am not saying I am either. 'Fair price' is what we all strive to work out when buying/selling anything, including shares. It is the difference in what one person perceives as fair compared to another that makes this whole thing so interesting.

[winner69]

Agree with every word you say there vaygor. We both seem to have done very well.

You bought in 2007 when the PE was historically high and have been fortunate that the PE has continued to expand (slightly)

I bought in 2011 (at a slightly higher price than your but not that much higher) when the PR was sub 20 and have been fortunate to have benefitted from the doubling of RYMs PE / improved market sentiment)

I beliwve that the PE cant go any higher and inevitably some time it will fall to 20 again.

That's why I am following the squiggly line on the chart .... and keep most of what the market has giveth

[winner69]

Vaygor -

'Fair price' is what we all strive to work out when buying/selling anything, including shares. It is the difference in what one person perceives as fair compared to another that makes this whole thing so interesting.

Over time most things don't ever trade at 'fair price' / 'fair value' or whatever

Invariably the actual price is way abover or way below fair value. Take RYM as a case in point - if fair value was say at a PE of 22 than the actual price has only been within 5% of fair value only about 15%-20% of the time ...the rest of time it has been overvalued or undervalued

The ups and downs of the sharemarket eh

[winner69]

Really bored tonight

Updated an old chart from the archives

The black line is RYM actual price (monthly) and the red line is a price at 22 times underlying earnings. The September year reported eps number is pushed back to previous April (market is clever forecasting a year end result) and advanced to the next March (market knows previous years result but not quite sure of the next number). A sort of trailing as well as forecast PE.

So significant periods of being 'under valued' but heck it surely is overvalued at the moment

[winner69]

Sorry PT ..... forgot to post the log scale chart

Same story though

[winner69]

Really really bored ....waiting for a mate to drop around with a duck

Hate blood sports like duck shooting but if I don't know where it came from it will OK to eat

Anyway another chart

How march the actual RYM price is under/over if it was priced at 22 times underlying earnings (22 being a long term average through a full market cycle)

The dip at the end is assuming that this years underlying earnings will be up 20% to $120m and assuming the market has started to factor this in

RYM has never ever been so highly overvalued .... but hoping it will become even more so ... but follow those squiggly lines

[winner69]

No reason to sell RYM at the moment ...... still going up and within the upward trending channel.

Rate currently 0.8% a week ..... but lower than a few months ao but still pretty good

[muss1]

No reason to sell RYM at the moment ...... still going up and within the upward trending channel.

Rate currently 0.8% a week ..... but lower than a few months ao but still pretty good

Have you used a standard deviation to form the channel in this one winner (if so how big?)? Or have you drawn the channel yourself?
Cheers

[winner69]

Have you used a standard deviation to form the channel in this one winner (if so how big?)? Or have you drawn the channel yourself?
Cheers

std dev = 0.7 for best fit

[blocker3]

Looks like activity on the buying front going on here once again. Is it national or international? "That is the question". We wil never know.

[troyvdh]

wouldn't it be great to have a chin wag with both the buyer and seller of 140000 RYM shares....

[troyvdh]

dear moose...I fully understand your sentiment...but do not the likes of Gaynor make decisions as well...cheers

[Jasemc]

It made it to $9.

[blocker3]

Looks like the Bears came out to play at the end of the day and pushed aside the Bulls.You cant blame them really for cashing in. I am with ASB and they say SELL.

[Jasemc]

Think a lot of people playing this stock at the moment easy money for now.

[Jasemc]

Well done!

[Joshuatree]

Out now . Hope it is up to expectations.Lotsa good numbers.
Profit +17.9%
Rev +12.1%
fair value movement of prop +46%
total income +45%
NPBT +35%
NPATre $195Mill +42%
Earnings per share +43%
Div + 15%

[percy]

Yet another cracker result.Well done RYM.

[Beagle]

Reasonable but not outstanding result in my opinion and I agree that it will be interesting to see the market reaction after a huge ramp up in the SP over the last three years. Increase in build rate to 850 units a year but not till 2017....
Lower build rate in 2014 and lower new unit sales compared to pcp.
Much lower growth in cash flow this year compared to last.
Core EPS excluding revaluations of 27.3 c.p.s. puts them on a PE of 32.2 on a growth rate in EPS of 18%.

[stoploss]

Just been listening to the dial in . It is very good to hear the executives talk in such a positive manner. They have come a long way in the 15 years since the listing . One can only wonder at the possible growth over the next 15 years in Australia. Congratulations to the team @ Ryman. These are still firmly in the bottom drawer.

[stoploss]

down she goes
http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by NewGuy http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=468553#post468553)
I would suggest that RYM is nearing bubble territory with a PEG ratio of about 1.5 compared to only 0.5 for SUM. However, I agree that any correction is unlikely to occur over the next few months.



Hi newGuy,
Just a quote from someone a lot smarter than any of us ..." markets can stay irrational longer than you can stay solvent" So words like Bubble , or Coutas "lot priced in " or " over exuberance" should be used sparingly .
Remember people thought AAPL was expensive @ $ 50.00 and $ 100, $ 200, $ 300, $400, $ 500, ........ ( probably a few share splits on the way as well ) So the lesson is stay with the winners .

NewGuy, thought we did the bubble thing a few months ago ........

[Vaygor1]

if the SP continues to grow like it has, the PE will soon be off the chart and way into bubble territory (IMHO)

The PE is a ratio so will only climb if the SP growth outstrips earnings growth.
Earnings/Share (Basic and diluted) are up 43% from last year. Number of shares has not changed so Earnings are up 43%
By my calcs, this means the PE ratio drops by 30% assuming a constant share price.

As per my last few posts, SP growth should be measured from 2007 imho, not from 2010 when the SP was a bargain.

[Beagle]

My policy is not too pay for growth that isn't there. Using a fair value long term PE of 8.5 for a zero growth company and adding in consistent growth at 18% per annum my simple model gives me a long term fair value PE of 26.5 times for Ryman.
26.5 times core EPS of 27.3 c.p.s. = $7.23 fair value. I wouldn't buy or own the stock above this level.
EPS growth is not 43%, this includes revaluations.

[Jasemc]

probably bounce up as day gets to an end. Couta1 might have some easy money again.

[Vaygor1]

My policy is not too pay for growth that isn't there. Using a fair value long term PE of 8.5 for a zero growth company and adding in consistent growth at 18% per annum my simple model gives me a long term fair value PE of 26.5 times for Ryman.
26.5 times core EPS of 27.3 c.p.s. = $7.23 fair value. I wouldn't buy or own the stock above this level.
EPS growth is not 43%, this includes revaluations.

RYM have always been very clear of only using realised gains in their official financials
Last financial years earnings/share (basic and diluted) was 27.3 cents
This financial year just completed, earnings/share (basic and diluted) is 39.0
An increase of 43%

Where do you get your EPS of 27.3 cents for this financial year from Roger?
PS. It is 5:30am here in Bangkok so my mind is not entirely functioning at the minute.

[stoploss]

Thanks also stoploss for you very insightful quote, which I believe you've already posted several times before...

yes , not sure if the links came through ok. Anyway was a copy and paste .I believe you conceded then that bubble was the wrong word to use with a stock like RYM.
Since you seem pretty keen to bash it , just wondering do you have any disclosures you should be making re your employment or position in this stock ?

[Beagle]

RYM have always been very clear of only using realised gains in their official financials
Last financial years earnings/share (basic and diluted) was 27.3 cents
This financial year just completed, earnings/share (basic and diluted) is 39.0
An increase of 43%

Where do you get your EPS of 27.3 cents for this financial year from Roger?
PS. It is 5:30am here in Bangkok so my mind is not entirely functioning at the minute.

As an accountant I can tell you there's a lot of confusion surrounding EPS for these sort of companies.
In brief IFRS, (International Financial Reporting Standards), require inclusion of unrealised revaluations in the financial statements.
Here's the result release, I have highlighted the pertinent part.

Ryman Healthcare’s underlying profits rise 18 per cent
8:30am, 15 May 2014 | FLLYR
Media release – May 15 2014

Ryman Healthcare’s underlying profits rise 18 per cent

Strong retirement village earnings fund extra investment in care services

Ryman Healthcare today announced an underlying profit of $118 million thanks to a buoyant property market and strong demand for retirement village living. Valuation gains lifted the reported profit after tax to $195 million.

“It’s another standout result for us thanks to some strong earnings growth from our new villages,’’ Chairman Dr David Kerr said.

“It is a great way to mark our 30th birthday and to thank the investors who’ve backed us for all these years. We’re pleased to be able to increase our final dividend to investors by 18 per cent to match the rise in underlying profits.’’

Ryman has lifted its underlying profit for 12 years in a row and has again exceeded its medium term target of growing underlying profits by 15 per cent a year.

“There have been a number of highlights in the past year but welcoming the first residents into the Weary Dunlop Retirement Village in Melbourne this month stands out as a significant milestone for this company,’’ Dr Kerr said.

“We’re also pleased to have bought another site in the eastern suburbs of Melbourne. We’re still learning about Australia but our experience so far has exceeded our expectations and given us the confidence to expand.’’

Dr Kerr said the growth in retirement village earnings funded extra investment into care for residents. Ryman has increased wage rates for care staff, put in additional training resources and increased staff numbers.

“We put the care of our residents at the heart of everything we do – without them and the support of their families we simply wouldn’t be in business.’’

“Our residents and their relatives rate us highly but we want to raise the bar higher – we want them to be genuinely delighted with the village they live in and the care they receive.’’
Ryman shareholders will receive a final dividend of 6.2 cents per share which will be paid on June 20 2014, taking the total for the year to 11.8 cents per share. The record date for entitlements is June 6 2014.

Operating cashflows reached record levels at $238 million, up 7 per cent from the year before.

The company acquired six new sites in New Zealand during the year, which has extended its landbank out to just under 4000 beds and units.

As a result Ryman raised its build rate target, and aims to be building 850 beds and units a year in New Zealand by 2017.
Ryman’s Bruce McLaren Retirement Village is on target to open in Howick later this year, and work is due to start on a new village in Petone after it gained consent.

Planning consent has been lodged for a new village at Birkenhead and Ryman has also unveiled plans to build a new village on a prime site at Devonport on Auckland’s North Shore.

NOTE: Underlying profit excludes deferred taxation and unrealised gains on investment properties, because these items are non-cash and do not reflect the trading performance of the company. Underlying profit determines the dividend paid to shareholders, and is reconciled to reported profit in the key statistics attached to this release.

About Ryman: Ryman Healthcare was founded in Christchurch in 1984 and owns and operates 27 retirement villages in New Zealand and Australia. Ryman villages are home to 7500 residents, and the company employs 3500 staff.

Media advisory: For further information, photos, interviews or comment please contact Corporate Affairs Manager David King on 03 366 4069 or 021 499 602.

CONSOLIDATED OPERATING STATEMENT FOR THE YEAR ENDED 31 MARCH 2014

Audited.

Current Year NZ$; Up/(Down) %; Previous Corresponding Year NZ$

UNDERLYING PROFIT:
118,204,000; + 17.9%; 100,229,000

OPERATING REVENUE:

Trading Revenue:
202,491,000; + 11.9%; 181,001,000
Other Revenue
732,000; 169.1%; 272,000
Total Operating Revenue
203,223,000; + 12.1%; 181,273,000

Fair value movement of investment properties:
174,019,000; + 46.3%; 118,935,000

TOTAL INCOME:
377,242,000; + 25.7%; 300,208,000

NET PROFIT BEFORE TAXATION:
203,287,000; + 35.3%; 150,279,000

Less tax on operating profit:
8,482,000; (37.4)%; 13,549,000

NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF LISTED ISSUER:
194,805,000; + 42.5%; 136,730,000

Earnings per share:
39.0 cps; + 42.9%; 27.3 cps (basic and diluted)
Final Dividend
6.2 cps; + 14.8%; 5.4 cps
Record Date: 6 June 2014
Date Payable: 20 June 2014
Imputation Tax Credit: No Imputation Credit

But I must confess at this early stage I am still a bit confused as the company made it clear underlying profit is $118m and according to the Direct Broking website there's exactly 500m shares on issue so this gives underlying EPS of only 23.6 c.p.s. ? If I had some shares in this company I'd spend the time necessary to fully investigate this but I don't and even on the higher EPS diluted number disclosed by the company it's a stock that's too "fashionable" for my value tastes...but good luck to all holders :)

[stoploss]

I am not holding this stock, nor do I have anything to do with the company or any of its competitors. I just think its funny watching people buy it blindly assuming its always going to be a good deal.

I made excellent money on this last year, but sold out after making 78% in 12 months. Now consolidated in SUM.

Happy?

Congratulations on your trade last year . I am very happy .You u do not have anything to do with RYM or any of its competitors ....apart from the fact you are LONG stock in a competitor. So thanks for the disclosure adds a bit more balance to your posts on RYM.

[Vaygor1]

As an accountant I can tell you there's a lot of confusion surrounding EPS for these sort of companies.
In brief IFRS, (International Financial Reporting Standards), require inclusion of unrealised revaluations in the financial statements.
Here's the result release, I have highlighted the pertinent part.

I'll take your word for it on the IFRS rule on including unrealised revaluations for the EPS, but isn't 27.3 cents last years number?
i.e. 5.4 cents was last years final dividend.

Earnings per share:
39.0 cps; + 42.9%; 27.3 cps (basic and diluted)
Final Dividend
6.2 cps; + 14.8%; 5.4 cps

[muss1]

NewGuy is raising some good points that should be considered. If you own Ryman and don't need to worry about fluctuations until you might want to sell in 20 years, then holding is a great option. If you actively manage your portfolio then it can be argued that Ryman is near the top of one of its surges and may or may not be quite flat over the next few years.

I am in the second camp, and sold out a couple of weeks ago. I believe i can get better mid-term SP appreciation elsewhere (next 1-3 years). I love the company and will definitely own it again in the future.

It all depends on your investment philosophy. As long as you understand what you want out of Ryman for the next year or 20 years then your desired position in the stock should be obvious.

If you expect another huge growth year I would hope you have thought very carefully about it

[stoploss]

Roger - surely you only care about underlying earnings? Why even bother with the other numbers?

Stop loss - how does being long in SUM have any bearing on my RYM-related posts? Obviously I prefer SUM to RYM, but so what? that doesn't invalidate my comments about RYM in any way. further, I have nothing to gain from my SUM shareholding by berating RYM, do I? I mean, really! :cool:

I did not say it invalidates your comments it just puts them more in perspective. RYM has outperformed SUM over the past 6 months so maybe you feel if you bash them a bit , put emotive words in your posts like bubble people will sell out & switch their holding to SUM , then maybe you offload your SUM.

[Beagle]

I'll take your word for it on the IFRS rule on including unrealised revaluations for the EPS, but isn't 23.7 cents last years number?
i.e. 5.4 cents was last years final dividend.

Earnings per share:
39.0 cps; + 42.9%; 27.3 cps (basic and diluted)
Final Dividend
6.2 cps; + 14.8%; 5.4 cps

Apoligies, my mistake. Its clear the 39 cents per share this year is calculated on the full revaluation profit, .39 x 500m = $195M which is inclusive of all revaluations, realised and unrealised i.e. IFRS and 27.3 c.p.s. is last years figure inclusive of all revaluations.

Underlying earnings were $100m last year on 500m shares = 20 c.p.s. and this year are $118m on 500m shares = 23.6 c.p.s.
$8.70 /23.6 cps = a PE of 37 times last years earnings or assumming another 18% profit growth for 2015 a forward PE of 31 times earnings. Much too "flavour of the "month" or should that be flavour of the decade ?, for my tastes.
That said I am sure the brokers will work their "fancy" DCF models to find a way to keep recommending the stock so they can keep the brokerage tills ticking over...



Roger - surely you only care about underlying earnings? Why even bother with the other numbers?

Mostly right but I look at the other numbers to get a guide on how I think this stock will travel going forward. i've got this sussed now. I see fair value on my corrected underlying EPS in the low to mid $6 range. I don't care that my intrinsic valuation is at a wide variation to the market's assessment of this stock. There's better prospects for SP appreciation elsewhere in my opinion.

[winner69]

This is my favourite measure of RYM performance - underlying profit per portfolio unit. I made it up and might be a bit crude but at the end of the day we don't really have too many numbers to play with me

What it does say is as even as more and more units are being created they are making more and more money out of each unit- probably a crude way of saying margin expansion (operating and development)

Whatever I like it

Yes a solid result as expected with underlying profit up about the normal 20% ... but one day that PE will contract and likely 3-5 years returns from todays price are likely to be negative (and that person who called me a cynical old coot in a reputation comment I still stand by this comment)

[Vaygor1]

Roger - surely you only care about underlying earnings? Why even bother with the other numbers?

All the numbers are important as they each put the others into context and is the reason the rules IFRS and GAAP require them to be reported. There are hundreds of different measures of performance, and each one tells a different story. On top of that there are other non-numberical measures like 'Does the company in question always meet its forecasts?'.



Stop loss - how does being long in SUM have any bearing on my RYM-related posts? Obviously I prefer SUM to RYM, but so what? that doesn't invalidate my comments about RYM in any way. further, I have nothing to gain from my SUM shareholding by berating RYM, do I? I mean, really! :cool:

A while ago I was accused of favouring RYM over SUM over on the SUM thread even though I support both. Both RYM and SUM are in my ShareTrader Stock Picks 2014 competition so I want them both to do well. I must admit though, I do find in general that those who hold shares in either RYM or SUM (but not both) tend to be more negative in their outlook and financial interpretation of the company they do not hold and more positive in the outlook and financial interpretation of the company they do. Perhaps it is an unintentional method of self-reinforcement that one has made the right decision. No specific names here, just a general feeling on an issue that I may have been guilty of myself.

[Vaygor1]

Apoligies, my mistake. Its clear the 39 cents per share this year is calculated on the full revaluation profit, .39 x 500m = $195M which is inclusive of all revaluations, realised and unrealised i.e. IFRS and 27.3 c.p.s. is last years figure inclusive of all revaluations.

Underlying earnings were $100m last year on 500m shares = 20 c.p.s. and this year are $118m on 500m shares = 23.6 c.p.s.
$8.70 /23.6 cps = a PE of 37 times last years earnings or assumming another 18% profit growth for 2015 a forward PE of 31 times earnings. ….

Thanks Roger. Much appreciated.

[Vaygor1]

Newguy, you only have to read this thread (and many others) to see how quickly the tone of peoples posts on any given stock change as soon as they sell out, particularly when it is in order to buy into a rival stock! It's so blatant its not funny.

Up to you to conclude why people do that.

DISC: Finally sold out of RYM completely the other day - @ $8.99 to be exact. Has been a great investment (and IMO still is) but time for me to exit for various reasons.

Agreed Turmeric. My sentiment echo's yours on the issue.

Regarding selling out of RYM, for me I think its too late. Have waited 7 years now to get a current annual dividend payment of approx 5.5% on my initial investment. Next year at 18% company growth I except 6.6% return, and 7.9% the year after that. ie The dividend as a long-term income stream that just keeps expanding has taken over the temptation to take the substantial capital gain. Imagine the dividend RYM could pay out if they stopped spending all that money on new capital.

[Beagle]

NewGuy is raising some good points that should be considered. If you own Ryman and don't need to worry about fluctuations until you might want to sell in 20 years, then holding is a great option. If you actively manage your portfolio then it can be argued that Ryman is near the top of one of its surges and may or may not be quite flat over the next few years.

I am in the second camp, and sold out a couple of weeks ago. I believe i can get better mid-term SP appreciation elsewhere (next 1-3 years). I love the company and will definitely own it again in the future.

It all depends on your investment philosophy. As long as you understand what you want out of Ryman for the next year or 20 years then your desired position in the stock should be obvious.

If you expect another huge growth year I would hope you have thought very carefully about it

High quality post that one, well said. Like you I think there's better prospects elsewhere taking a medium term 1-3 year viewpoint but for those that just want to own this passivly until they retire eventually, this is arguably "the premier" growth stock on the N.Z. exchange. They have the long term proven track record and the market appears willing to price this at a premium at this stage. If the PE drops back to mid 20's where I see fair value I'll be back in without any hesitation.

Its very interesting to note that SUM are trading on a historic underlying PE of 35 times.
I think they can grow EPS faster than RYM over the medium term for a range of reasons i've outlined in that thread but I would be the first to acknowledge that RYM are the ones to have the very long term track record of earnings growth, whereas SUM are a fairly new company and need more runs on the board to be able to prove a consistent ability to grow profits at a rate higher than 20% per annum to enjoy meaningful SP appreciation from their current level. Only time will tell which company can grow its underlying earnings at the faster rate going forward from here.

[winner69]

. Imagine the dividend RYM could pay out if they stopped spending all that money on new capital.

Would mean they don't need to borrow to pay the dividend They did reinvest every penny of cash flow generated but shareholders want their piece of the cake as well so off to the bank we go

From their cash flow statement

[winner69]

Updating all my Ryman financial models the first impression I get is that such a stellar result (both underlying and reported NPAT) is a result of the rising property prices we have seen over the last 12 months

The other thing I noticed is that NPBT after taking out revaluations appears to be down

[Onion]

Imagine the dividend RYM could pay out if they stopped spending all that money on new capital.

Ryman is a growth company. Shareholders own RYM because of its growth prospects. It borrows extensively to fund the growth. It needs to pay market interest rates. Any dividend it pays effectively increases the level of borrowing.

The "market" expects NZ companies to pay dividends. This is at odds with a pure growth strategy, as we should expect a growth company like RYM to generate more wealth from reinvesting any profit than from paying out as dividend.

Read "A Great Company at a Fair Price" by Brian McNiven, he is a strong advocate for [growth companies] reinvesting instead of paying dividends.

I don't own RYM so haven't studied their dividend policies, but I do have some SUM and believe they try to pay a minimal dividend to keep the "market" happy while retaining most earnings for reinvestment.

[macduffy]

Agreed Turmeric. My sentiment echo's yours on the issue.

Regarding selling out of RYM, for me I think its too late. Have waited 7 years now to get a current annual dividend payment of approx 5.5% on my initial investment. Next year at 18% company growth I except 6.6% return, and 7.9% the year after that. ie The dividend as a long-term income stream that just keeps expanding has taken over the temptation to take the substantial capital gain. Imagine the dividend RYM could pay out if they stopped spending all that money on new capital.

Never "too late" to sell, Vaygor, if the cash can be deployed better somewhere else. Don't be excessively blindsided by yield on original investment - what can be earned on current "value" is what's important. Having said that, I'm a longterm holder of RYM - and SUM - and I don't always follow my own advice!

Cheers

[macduffy]

Thanks, Harvey.

Fancy, it took seven years for me to find that out!

:ohmy:

A note of caution from yesterday's announcement as reported by the DomPost.

"The company was still learning about operating in Australia, including overcoming challenges within the construction, regulatory and industrial relations areas."

Doesn't seem to have deterred RYM from pressing ahead with a second Melbourne village, however.

[Harvey Specter]

Thanks, Harvey.

Fancy, it took seven years for me to find that out!Always best to hide your errors ;)


A note of caution from yesterday's announcement as reported by the DomPost.

"The company was still learning about operating in Australia, including overcoming challenges within the construction, regulatory and industrial relations areas."

Doesn't seem to have deterred RYM from pressing ahead with a second Melbourne village, however.But if they can overcome them, then those challenges become a moat.

[Beagle]

Ouch...have to say that's pretty much how I see it too.


Shares in Ryman Healthcare weakened for a second day on the expectation New Zealand's largest listed retirement village operator will post slower earnings growth in coming years as its costs increase.

Christchurch-based Ryman yesterday posted an 18 percent rise in underlying earnings to $118.2 million for the year ended March 31. Increased costs from adding staff and boosting wages for its aged care workers meant annual earnings growth slowed to a 14 percent pace in the second half, from a 22 percent rate in the first half, brokerage Craigs Investment Partners said in a note.

Shares in Ryman fell as much as 1.2 percent to a four-day low of $8.60. At midday, the stock was down 0.9 percent at $8.62, adding to yesterday's 2 percent decline.

Ryman's costs will probably accelerate in coming years as the company is likely to have exhausted its accumulated tax losses, meaning it will have to start paying tax on its assessable earnings which will grow over time, Craigs said. In addition, Ryman's operating costs at its aged care facilities will step up as it raises wages to caregivers and invests in additional staff and training.

"In FY15, we expect earnings per share growth will remain robust but slow back towards trend of about 15 percent per annum following several years of growing above trend, as Ryman pays tax for the first time and as increased costs in its aged care business roll through," Craigs research analyst Stephen Ridgewell said in the note.

Ryman's earnings per share growth slowed to 17.9 percent in 2014, from 19.2 percent in 2013, Craigs said. EPS growth is likely to weaken further to a 13.9 percent in 2015 and 11.9 percent in 2016 before picking up again to a 15.9 percent pace in 2017, the brokerage estimates.

Ridgewell maintained his 'sell' recommendation on Ryman shares, saying the company's strong growth outlook is already priced into the stock.

http://www.sharechat.co.nz/article/8737ed15/ryman-shares-drop-to-four-day-low-as-increased-costs-seen-weighing-on-future-earnings.html?utm_medium=email&utm_campaign=Ryman+shares+drop+to+four-day+low+as+increased+costs+seen+weighing+on+future +earnings&utm_content=Ryman+shares+drop+to+four-day+low+as+increased+costs+seen+weighing+on+future +earnings+CID_0f7e61df47d5b72eeb5cde21e76d0235&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle8737ed15ryman-shares-drop-to-four-day-low-as-increased-costs-seen-weighing-on-future-earningshtml

[Vaygor1]

... Imagine the dividend RYM could pay out if they stopped spending all that money on new capital.


Would mean they don't need to borrow to pay the dividend They did reinvest every penny of cash flow generated but shareholders want their piece of the cake as well so off to the bank we go.


Ryman is a growth company. Shareholders own RYM because of its growth prospects. It borrows extensively to fund the growth. It needs to pay market interest rates. Any dividend it pays effectively increases the level of borrowing.

Not disputing the above. My view is that whatever RYM borrows could be deemed to be spent on any given part of the business be it dividend payments, land purchases, construction, operations etc. In Ryman's own words though ( http://www.rymanhealthcare.co.nz/investor-centre/competitive-advantage ), they say that all borrowing is due to getting new villages completed.

'Access to capital - We only borrow to fund the work in progress for new villages, and therefore we have a low level of gearing. Debt is repaid in full for each village, including our care facilities, once all Occupancy Advances for retirement village units have been collected on village completion. This means we have no debt across a portfolio worth over $2.4 billion today; and therefore can comfortably access capital for future planned developments.'

One could argue that they aren't borrowing enough, and that if RYM can borrow at 7% per annum and make 18% per annum out of it then maybe their gearing should be higher than it currently is. For me though, I am comfortable with around 30% Debt to Equity. Don't want it too high in case of a Black Swan event.

5825

[winner69]

At least the old guard who ran this place have been sacked

Next time when the inevitable outbreak occurs they will do the right things

http://www.stuff.co.nz/dominion-post/10057778/Elderly-residents-in-dark-over-virus

[blocker3]

$8.44 at the close today.Support must be close.(My ASB charts do not show Support/Rersistance)

[Beagle]

Ryman to spend more than $100 million on second Melbourne village
Wednesday 21st May 2014
Ryman Healthcare, which last week reported a 43 percent boost in annual profit, has secured a site for its second retirement village in Melbourne, which it expects to spend more than $100 million to build.

The Christchurch-based company purchased a 5.5 hectare property in Melbourne's eastern suburbs from the Victorian government as part of the state's surplus land programme, it said in a statement. The former Brandon Park Secondary College site will be redeveloped into a retirement village for 400 residents, including residential aged care amenities and dementia care.

"It's a site we've had our eye on for a number of years," managing director Simon Challies said. "We're delighted to have secured it."

The company had cash and equivalents of $1.8 million as at March 31, with undrawn bank facilities of $222.4 million.

Ryman expanded into Australia with the first residents moving into its Wheelers Hill village earlier this month, and signalled the latest acquisition when reporting its annual earnings last week.

Like other retirement village developers and operators, Ryman is looking to latch on to an ageing demographic, and it increased its annual building target to 850 beds and units a year in New Zealand by 2017, from a rate of 700 a year.

Ryman owns and operates 27 retirement villages housing 7,500 residents.

The shares dropped 3 percent to $8.44 yesterday, and have gained 7.5 percent this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters, with a median target price of $8.25.

Interesting that 5 analysts have a median price target for the stock at $8.25 in 12 months time....and you get what, a 1% dividend yeild in the meantime...

[winner69]

$8.44 at the close today.Support must be close.(My ASB charts do not show Support/Rersistance)

My Chanel chart has support at 825 today

100MA is 822

No need to panic yet

[Beagle]

That is assuming you trust the analysts though right Roger? My understanding (in hind sight) is that analysts have generally been pretty average with respect to 12 month targets.

That being said, the SP is now a 7.5% discount to what I sold at not more than 2 weeks ago. Seriously considering getting back in now for a short term trade off the 100MA.

The signs are all there that growth is slowing in my opinion. Second half growth was well short of first half and many of their best staff have been sent to Australia. Their build rate is short of the 700 target last year and the Australian economy is in real trouble at the same time Ryman are expanding there. PE is still too high for my perception of average future year's growth. I expect a breech of the 100 day MA very soon.

[winner69]

The signs are all there that growth is slowing in my opinion. Second half growth was well short of first half and many of their best staff have been sent to Australia. Their build rate is short of the 700 target last year and the Australian economy is in real trouble at the same time Ryman are expanding there. PE is still too high for my perception of average future year's growth. I expect a breech of the 100 day MA very soon.

Roger, that woll probaby happen

My little chart of a few weeks ago says it all. When RYM PE goes over 30 the 3 to 5 year returns are likely to be disappointing, even negative.

Even though earnings will grow at 15%-20% pa but that PE will shrink

Hold for a very long time you will be OK though

[Beagle]

Roger, that woll probaby happen

My little chart of a few weeks ago says it all. When RYM PE goes over 30 the 3 to 5 year returns are likely to be disappointing, even negative.

Even though earnings will grow at 15%-20% pa but that PE will shrink

Hold for a very long time you will be OK though

Agreed, although honestly I doubt they'll be able to meet their own target of 15% growth in the medium term. The collapse of the Australian motor vehicle industry and all the related component manufacturers and the downstream effect of that on the south Australian economy and Melbourne in particular is something I believe many people including Ryman are underestimating. Add in the slowdown in China and the effect on Australia's mining industry and the Australian $50 billion dollar deficit and you have the perfect storm. That said if one is inclined too try and expand in Australia it almost beggars belief why they didn't choose a warmer state...I would have thought it would be completly obvious that people want to retire somewhere warm and that Queensland would have been the obvious choice. While they're trying to expand over there and using all their best staff to do so are they losing focus in N.Z. ?
My concern is the effect a declinig SP will have on SUM, who although having a far more focused approach may get tarred with the same brush if the sector is perceived too no longer be flavour of the decade.
Incredible as it may seem, there's growth stocks on a 2015 PE of less than 10, HNZ and AIR are two that spring to mind.

[troyvdh]

giday I accept all the arguments above..re the likely future SP performance.....however I cannot help thinking...could it be that perhaps folk think the SP is now to "high"....should RYM have another share split (the last being ..about 11.34 approx. several years ago)...would folk view RYM as "better value"..I acknowledge that this rationale is totally absurd..but would it work ????

[Joshuatree]

As a comparison AOG has jus bought two sites' one in sanctuary cove in aus , 15 plus hectares that will accommodate 1000 people including care/ dementia patients.

[winner69]

My concern is the effect a declinig SP will have on SUM, who although having a far more focused approach may get tarred with the same brush if the sector is perceived too no longer be flavour of the decade.
Incredible as it may seem, there's growth stocks on a 2015 PE of less than 10, HNZ and AIR are two that spring to mind.

No doubt SUM will be affected but not to the same extent.

PE on last years earnings (underlying) is over 30. Even at $28m profit this year PE is still at 27 odd (current price). Possibility that even SUMs PR will revert back to 20 odd

Watch those charts ... esp the 100MA or the 200MA squiggly lines

[percy]

Agreed, although honestly I doubt they'll be able to meet their own target of 15% growth in the medium term. The collapse of the Australian motor vehicle industry and all the related component manufacturers and the downstream effect of that on the south Australian economy and Melbourne in particular is something I believe many people including Ryman are underestimating. Add in the slowdown in China and the effect on Australia's mining industry and the Australian $50 billion dollar deficit and you have the perfect storm. That said if one is inclined too try and expand in Australia it almost beggars belief why they didn't choose a warmer state...I would have thought it would be completly obvious that people want to retire somewhere warm and that Queensland would have been the obvious choice. While they're trying to expand over there and using all their best staff to do so are they losing focus in N.Z. ?
My concern is the effect a declinig SP will have on SUM, who although having a far more focused approach may get tarred with the same brush if the sector is perceived too no longer be flavour of the decade.
Incredible as it may seem, there's growth stocks on a 2015 PE of less than 10, HNZ and AIR are two that spring to mind.

Most people who have a house in this area,would be able to sell it,have a couple of world trips,buy a couple of new Mercs,a Ryman unit and still have plenty left over.
Again we must say "well done Ryman,you have done it again."

[troyvdh]

Dear Percy..good point...and I for one appreciate your admiration for what a certain paint manufacturer (British paints ?)

However can we agree that the fortunes of all retirement companies are linked with the health of the NZ residential property market ?.

I was going to say "at the end of the day" but could not stomach it.

cheers.

[percy]

Dear Percy..good point...and I for one appreciate your admiration for what a certain paint manufacturer (British paints ?)

However can we agree that the fortunes of all retirement companies are linked with the health of the NZ residential property market ?.

I was going to say "at the end of the day" but could not stomach it.

cheers.

"At the dawning of a new day" when Nanna needs to go into a retirement home,she needs to go now!! Nanna's health,safety,security has nothing what so ever to do with the state of the property market.
Craigs and other brokers tried to link retirement villages fortunes to residential property market without success a number of years ago.Any new attempt will fail too.
Just think when Nanna needs to go,she needs to go now !!!! In a lot of cases she is living alone,just had a fall, or something,family live out of town,are worried, and need to act straight away.
This was recently brought home to me by my elder brother who lives in Hobart.He had some bad health last year,worried his wife will not be able to manage their property should anything happen to him.He is looking to move them into a village.He is a retired property valuer.His comments were " property is very hard to sell in Hobart at present,we will have to meet the market."

[winner69]

Dear Percy..good point...and I for one appreciate your admiration for what a certain paint manufacturer (British paints ?)

However can we agree that the fortunes of all retirement companies are linked with the health of the NZ residential property market ?.

I was going to say "at the end of the day" but could not stomach it.

cheers.

McCains is you've done it again

British Paints was "Trust British Paints Sure Can" ......must be embarrassing for them that dirty Rolf made that jingle famous. Trust Rolf Sure Can .... Jake the Peg and Tie Me Kangaroo Down Sport etc etc all take on a new meaning

[troyvdh]

Gee Percy ..that was/is a good post.My father resides in a Bupa establishment.
What you are saying is surely not wrong.....and no offence or what ever..intended....at all...and yes you are correct..when Oma or Opa need to go ...then they need to go..no question....but surely Retirement home providers can only flourish if folk can afford to buy...Am I wrong...

cheers

[troyvdh]

Dear Winner ...I apologise...I understand now why you are a legend...cheers......(I hate that)

[percy]

Gee Percy ..that was/is a good post.My father resides in a Bupa establishment.
What you are saying is surely not wrong.....and no offence or what ever..intended....at all...and yes you are correct..when Oma or Opa need to go ...then they need to go..no question....but surely Retirement home providers can only flourish if folk can afford to buy...Am I wrong...

cheers

Right here goes.Our house has a rateable value of approx $560,000.I have no idea what it would sell for.I guess somewhere between $500,000 and $600,000. I think our house is about NZ average value.Without checking I expect we could get a very nice unit in most NZ retirement villages for about $350,000 to $450,000. Enough left over to buy a few more Heartland shares.!!!
I will add the fact there are a great deal of New Zealanders who have no mortgage on their property,so there is no shortage of people who can afford to go into a retirement village.

[winner69]

Dear Winner ...I apologise...I understand now why you are a legend...cheers......(I hate that)

and you will be guru when RYM do a share split again .... and we will recall yes Troy told us that

[percy]

McCains is you've done it again

British Paints was "Trust British Paints Sure Can" ......must be embarrassing for them that dirty Rolf made that jingle famous. Trust Rolf Sure Can .... Jake the Peg and Tie Me Kangaroo Down Sport etc etc all take on a new meaning

Life is very hard.Adjusting to one's heroes having feet of clay.I went to a Rolf Harris concert as a boy.Thought he was great.So I am very disappointed in him.
Worse, was I always wanted to be like Rock Hudson ,until he came out of the closet !!!!

[troyvdh]

Dear percy...me thinks your last comment is somewhat questionable...especially about NZers who can afford.
In recent times I have communicated with two elderly folk in CHCH who were only able to afford moving into a RYM village because the value of their homes in recent times had "gone ballistic".
I really do not like to raise this issue again but are you aware of a looming disaster which some say may eclipse the Earthquake in $dollar terms.
Leaky homes...i.e. poly castles...with towers.
In CHCH we have 1000's of them....please surely you have driven around some inner suburds.....around say CHCH Girls High for example...there are hundreds...
cheers

[winner69]

Dear percy...me thinks your last comment is somewhat questionable...especially about NZers who can afford.
In recent times I have communicated with two elderly folk in CHCH who were only able to afford moving into a RYM village because the value of their homes in recent times had "gone ballistic".
I really do not like to raise this issue again but are you aware of a looming disaster which some say may eclipse the Earthquake in $dollar terms.
Leaky homes...i.e. poly castles...with towers.
In CHCH we have 1000's of them....please surely you have driven around some inner suburds.....around say CHCH Girls High for example...there are hundreds...
cheers

Poly as in polystyrene?

Not many houses I see being built these days will last 60-100 years plus like they did in the old days

Even some newish retirement homes look a bit dodgy

[winner69]

Life is very hard.Adjusting to one's heroes having feet of clay.I went to a Rolf Harris concert as a boy.Thought he was great.So I am very disappointed in him.
Worse, was I always wanted to be like Rock Hudson ,until he came out of the closet !!!!

What was your favourite Rolf song Percy?

[percy]

Dear percy...me thinks your last comment is somewhat questionable...especially about NZers who can afford.
In recent times I have communicated with two elderly folk in CHCH who were only able to afford moving into a RYM village because the value of their homes in recent times had "gone ballistic".
I really do not like to raise this issue again but are you aware of a looming disaster which some say may eclipse the Earthquake in $dollar terms.
Leaky homes...i.e. poly castles...with towers.
In CHCH we have 1000's of them....please surely you have driven around some inner suburds.....around say CHCH Girls High for example...there are hundreds...
cheers
You are right.There are thousands of NZders living in camping grounds.Others can't afford a house ,so live in a bus.A lot reach retirement age with huge mortgages on their homes.Others have to get reverse mortgages .A great number have to get a good price for their home to pay for a retirement village unit.
I am right.There are thousands of NZders who reach retirement age and have an have an average value houses approx. $500,000 with out a mortgage.There are huge number of NZders who own more than one home.There are thousands who own more than two homes.There are thousands who own holiday homes worth more than a retirement village unit.

[percy]

What was your favourite Rolf song Percy?

Tie me Kangaroo down sport.!

[Beagle]

Most people who have a house in this area,would be able to sell it,have a couple of world trips,buy a couple of new Mercs,a Ryman unit and still have plenty left over.
Again we must say "well done Ryman,you have done it again."

One one proper Mercedes mate...we're talking S Class :) Ryman have had a great run, their SP is up circa 500% in the last 5 years and at $8.30, even after the recent SP correction they trade on 35.17 times last years underlying earnings of 23.6 cps. As Craig's top analyst correctly pointed out, growth slowed in the second half and their projected growth in build rates are not what they once were. A further slowing of EPS growth or an increase in interest rates could see that "market darling" PE come under considerable pressure. On a balanced perspective I see considerably more downside potential than anything else as its already priced for absolute perfection in my opinion. Share split would make no difference as a 35 PE in a stock whose prospects for growth appear to be slowing is a 35 PE no matter which way you slice and dice it. Better prospects for yeild and capital growth elsewhere. Correction is already having an effect on SUM with perhaps more of that to come..buckle up, turbulence ahead ?

[Vaygor1]

British Paints was "Trust British Paints Sure Can" ......must be embarrassing for them that dirty Rolf made that jingle famous. Trust Rolf Sure Can .... Jake the Peg and Tie Me Kangaroo Down Sport etc etc all take on a new meaning


Life is very hard.Adjusting to one's heroes having feet of clay.I went to a Rolf Harris concert as a boy.Thought he was great.So I am very disappointed in him.
Worse, was I always wanted to be like Rock Hudson ,until he came out of the closet !!!!


What was your favourite Rolf song Percy?


Tie me Kangaroo down sport.!

I wish you guys would stop knocking Rolf Harris. When I was 8, he arranged a game for my classmates to milk a cow blindfolded.

[Snow Leopard]

5837

Orange bordered blue areas:

Lower Right: Weary Dunlop RV
Upper Left: New Ryman Site

Distance between: less than 3km

Best Wishes
Paper Tiger

[Snow Leopard]

5838

Best Wishes
Paper Tiger

[Vaygor1]

[QUOTE=Paper Tiger;481602]Distance between: less than 3km/QUOTE]

Thanks PT.
Nice couple of posts.

Distance is 2.3 kms by the main road if you measure it on Google Earth.
The new location appears to be called Notting Hill.
Far enough away to appeal to a new set of locals but close enough to economise on some management functions and mobile assets during both the construction period and day-to-day village operations once complete.

Maybe they could keep the football field in place and get a 75+ veterans footy league established between the two sites.:eek2:

[Snow Leopard]

The new location appears to be called Notting Hill.:eek2:

Any one who has lived in Melbourne will have had a few copies of the Melway book in their time and so if we go to map 71 square C9 we can clearly see that the new site is also in Wheelers Hill. Notting Hill is a little further west.

I did work at a couple of customer sites in this part of Melbourne and my then employer moved offices to Notting Hill... But I never went there!

Best Wishes
Paper Tiger

http://online.melway.com.au/melway/

[percy]

I wish you guys would stop knocking Rolf Harris. When I was 8, he arranged a game for my classmates to milk a cow blindfolded.

Learning to grope at an early age?? !!! lol.

[percy]

One one proper Mercedes mate...we're talking S Class :) Ryman have had a great run, their SP is up circa 500% in the last 5 years and at $8.30, even after the recent SP correction they trade on 35.17 times last years underlying earnings of 23.6 cps. As Craig's top analyst correctly pointed out, growth slowed in the second half and their projected growth in build rates are not what they once were. A further slowing of EPS growth or an increase in interest rates could see that "market darling" PE come under considerable pressure. On a balanced perspective I see considerably more downside potential than anything else as its already priced for absolute perfection in my opinion. Share split would make no difference as a 35 PE in a stock whose prospects for growth appear to be slowing is a 35 PE no matter which way you slice and dice it. Better prospects for yeild and capital growth elsewhere. Correction is already having an effect on SUM with perhaps more of that to come..buckle up, turbulence ahead ?

Sorry if I don't know Mercedes prices.!!
I totally agree with your post.

[Vaygor1]

The signs are all there that growth is slowing in my opinion. Second half growth was well short of first half and many of their best staff have been sent to Australia. Their build rate is short of the 700 target last year and the Australian economy is in real trouble at the same time Ryman are expanding there. PE is still too high for my perception of average future year's growth. I expect a breech of the 100 day MA very soon.

I don't see any slowdown in growth-rate at all. Not a single graph from RYM's 2014 results point to any slowdown, and neither does NZ median house price indications (refer graph below) which only impact's RYM 5-7 years later when each unit comes up for resale.

Concerns re Australian economy are unfounded for the retirement sector there. Aussy is currently only a very small part of RYM's business, and entrance costs into Australia can only reduce now along with increasing economies of scale.

In the recent presentation to shareholders, even if RYM continue to grow at their existing rates they will only be servicing 18% of New Zealand's market well into the 2040's so there is loads of room there.

The big bad news about sales dropping is a red herring. Sales haven't dropped as such, they only adjusted for a blinder of a year last year. Referring to the graph below, if 2013 Sales had been around 850 instead of nigh on 1000 then both last years and this years results would be perfectly acceptable to the market.

5839 5840

[winner69]

Vayoger - when you say neither does NZ median house price indications (refer graph below) which only impact's RYM 5-7 years later when each unit comes up for resale.

Is this good or bad....don't quite follow what you mean with this statement

[Vaygor1]

Vayoger - when you say neither does NZ median house price indications (refer graph below) which only impact's RYM 5-7 years later when each unit comes up for resale.

Is this good or bad....don't quite follow what you mean with this statement

Hi Winner.

Gains in the underlying profit for the results just released were up 18% but the IFRS profit is up 42%.
This is because the underlying profit does not recognise the increase in RYM'S property values worth until it is actually realised. ie when the oldie moves on and the unit has its occupancy right signed up & resold at the value on the day. So RYM's profit is up 42% due in part to their independently valued assets gaining in value, but only up 18% due to actual realised gains.

The average length of tenure for a resident is 5-7 years, so the impact of the gain in NZ's housing economy is not reflected into RYM's underlying profit until say 7 years later.

Referring to the graph below, I can't see any time where the value of property is less than it was 7 years prior. ie Any 7 year period where the area between the red line and the zero line is greater on the negative side of zero than the positive side. Based on the graph and what I have just said, recent times have been historically the worst for RYM regarding capital gain on its assets.

So I think it is good. The 42% will get realised eventually, or pretty much immediately if RYM chose to liquidate over the next few months.

5841

[Beagle]

I don't see any slowdown in growth-rate at all. Not a single graph from RYM's 2014 results point to any slowdown, and neither does NZ median house price indications (refer graph below) which only impact's RYM 5-7 years later when each unit comes up for resale.

Concerns re Australian economy are unfounded for the retirement sector there. Aussy is currently only a very small part of RYM's business, and entrance costs into Australia can only reduce now along with increasing economies of scale.

In the recent presentation to shareholders, even if RYM continue to grow at their existing rates they will only be servicing 18% of New Zealand's market well into the 2040's so there is loads of room there.

The big bad news about sales dropping is a red herring. Sales haven't dropped as such, they only adjusted for a blinder of a year last year. Referring to the graph below, if 2013 Sales had been around 850 instead of nigh on 1000 then both last years and this years results would be perfectly acceptable to the market.

5839 5840

With respect, I think you've missed the point. On an annual basis, yes their undelying profit growth is up 18% but as Craig's top analyst pointed out that's on the back of 22% profit growth in the first half and only 14% profit growth in the second half compared to the pcp.

N.Z. has the third most expensive housing in the world on a per capita basis and Australia is right up there too from memory.
Australia raising the superannuation benifet age to 70 will have some impact on the retirement sector over there, likewise the other factors I recently mentioned.

The N.Z. Reserve bank's recent increase in interest rates of 2 x 25 bps here is having quite an effect on the real estate market according to people I speak too so even if they relax their recently introduced low equity loan restrictions at some stage in the future its quite likely this will be offset by further interest rate increases.

Even if Ryman do manage to meet their own publicly stated medium term objective of 15% increases in underlying profit I'd argue a PE of 35 isn't warranted and argue that their SP outperformance in the last two years in particular has lead to a situation where the SP has run ahead of its true intrinsic value.

The average 2015 PE of the S&P 500 stocks is currently 18, (source CNBC), many of these stocks are growing strongly too.
I'm with W69, and am expecting a period of SP underperformance, possibly quite protracted.

[winner69]

With respect, I think you've missed the point. On an annual basis, yes there undelying profit growth is up 18% but as Craig's top analyst pointed out that's on the back of 22% profit growth in the first half and only 14% profit growth in the second half compared to the pcp.

N.Z. has the third most expensive housing in the world on a per capita basis and Australia is right up there too from memory.
Australia raising the superannuation benifet age to 70 will have some impact on the retirement sector over there, likewise the other factors I recently mentioned.

The Reserve bank's recent increase in interest rates of 2 x 25 bps here is having quite an effect on the real estate market according to people I speak too so even if they relax their recently introduced low equity loan restrictions at some stage in the future its quite likely this will be offset by further interest rate increases.

Even if Ryman do manage to meet their own publicly stated medium term objective of 15% increases in underlying profit I'd argue a PE of 35 isn't warranted and argue that their SP outperformance in the last two years in particular has lead to a situation where the SP has run ahead of its true intrinsic value.

There is a phrase some analysts/commentators use - in private that is

THE FUTURE IS NOW

[Vaygor1]

With respect, I think you've missed the point. On an annual basis, yes their undelying profit growth is up 18% but as Craig's top analyst pointed out that's on the back of 22% profit growth in the first half and only 14% profit growth in the second half compared to the pcp.

N.Z. has the third most expensive housing in the world on a per capita basis and Australia is right up there too from memory.
Australia raising the superannuation benifet age to 70 will have some impact on the retirement sector over there, likewise the other factors I recently mentioned.

The N.Z. Reserve bank's recent increase in interest rates of 2 x 25 bps here is having quite an effect on the real estate market according to people I speak too so even if they relax their recently introduced low equity loan restrictions at some stage in the future its quite likely this will be offset by further interest rate increases.

Even if Ryman do manage to meet their own publicly stated medium term objective of 15% increases in underlying profit I'd argue a PE of 35 isn't warranted and argue that their SP outperformance in the last two years in particular has lead to a situation where the SP has run ahead of its true intrinsic value.

The average 2015 PE of the S&P 500 stocks is currently 18, (source CNBC), many of these stocks are growing strongly too.
I'm with W69, and am expecting a period of SP underperformance, possibly quite protracted.

With sincere respect too Roger, we will have to agree to disagree I think.

I have received the most terrible advice from Craig's in the past… actually, all the brokers at different times. Their role in this game is by its nature a conflict of interest. They need to convince people (through fear and greed) to buy and sell otherwise they don't make any money.

Only today, RYM's new whizz bang director George Savvides just put his money where RYM's mouth is. Purchased over NZ$100 Grand and bought at $8.42/share. https://www.nzx.com/companies/RYM/announcements/250763 . I think George has a better idea about RYM's business than any broker out there.

The measure of cost-of-housing is subjective as there are many ways of measuring it. The graphs I have posted tell the story there. Not once, ever, has it been cheaper to buy a house than it was 7 years earlier, either here or across the ditch.

RYM doesn't sign up with customers under 70 year olds (Actually, I think 75 might be the number) except under special circumstances so there won't be an impact due to Aussies retirement age. Also in Oz, many retiree's have retirement bonds thus aiding affordability for them. Committed interest in Wheelers Hill was more than double the requirement in RYM's business model to enter Australia.

RYM's PE is higher than others because its EPS growth rate is far more predictable and it has the history to prove it. I bought in 2007 when PE was historically high (over 22 but don't have the exact figures on me). Dividends alone will give me a pre-tax cash payback in under 14 years. And with earnings more than double dividend payouts (I recall), that makes an actual PE of 7. ie. My shares have already earned me more than they cost me to buy. I think the same ratios will apply now... Buy at a PE of 35 today. Actual PE will be about 10 or 11.

Here is NZ's population growth. The trend is the same for Victoria, Australia. There will not be a shortage of tenants.

5843

You will not find a sweeter graph in all of the NZX (and probably the ASX too) than this one:

5842

All said and done. You may be right Roger. Market sentiment is the great unknown lurking at all times. As SparkyTheClown stated 'The market giveth, and the market taketh away'. Never a truer word said.

[blocker3]

With sincere respect too Roger, we will have to agree to disagree I think.

I have received the most terrible advice from Craig's in the past… actually, all the brokers at different times. Their role in this game is by its nature a conflict of interest. They need to convince people (through fear and greed) to buy and sell otherwise they don't make any money.

Only today, RYM's new whizz bang director George Savvides just put his money where RYM's mouth is. Purchased over NZ$100 Grand and bought at $8.42/share. https://www.nzx.com/companies/RYM/announcements/250763 . I think George has a better idea about RYM's business than any broker out there.

The measure of cost-of-housing is subjective as there are many ways of measuring it. The graphs I have posted tell the story there. Not once, ever, has it been cheaper to buy a house than it was 7 years earlier, either here or across the ditch.

RYM doesn't sign up with customers under 70 year olds (Actually, I think 75 might be the number) except under special circumstances so there won't be an impact due to Aussies retirement age. Also in Oz, many retiree's have retirement bonds thus aiding affordability for them. Committed interest in Wheelers Hill was more than double the requirement in RYM's business model to enter Australia.

RYM's PE is higher than others because its EPS growth rate is far more predictable and it has the history to prove it. I bought in 2007 when PE was historically high (over 22 but don't have the exact figures on me). Dividends alone will give me a pre-tax cash payback in under 14 years. And with earnings more than double dividend payouts (I recall), that makes an actual PE of 7. ie. My shares have already earned me more than they cost me to buy. I think the same ratios will apply now... Buy at a PE of 35 today. Actual PE will be about 10 or 11.

Here is NZ's population growth. The trend is the same for Victoria, Australia. There will not be a shortage of tenants.

5843

You will not find a sweeter graph in all of the NZX (and probably the ASX too) than this one:

5842

All said and done. You may be right Roger. Market sentiment is the great unknown lurking at all times. As SparkyTheClown stated 'The market giveth, and the market taketh away'. Never a truer word said.

Wow ....great information Vaygor1. Thank you.

As the saying goes " do what the directors do and not what they say"

Cheers Blocker

[muss1]

With sincere respect too Roger, we will have to agree to disagree I think.

I have received the most terrible advice from Craig's in the past… actually, all the brokers at different times. Their role in this game is by its nature a conflict of interest. They need to convince people (through fear and greed) to buy and sell otherwise they don't make any money.

Only today, RYM's new whizz bang director George Savvides just put his money where RYM's mouth is. Purchased over NZ$100 Grand and bought at $8.42/share. https://www.nzx.com/companies/RYM/announcements/250763 . I think George has a better idea about RYM's business than any broker out there.

The measure of cost-of-housing is subjective as there are many ways of measuring it. The graphs I have posted tell the story there. Not once, ever, has it been cheaper to buy a house than it was 7 years earlier, either here or across the ditch.

RYM doesn't sign up with customers under 70 year olds (Actually, I think 75 might be the number) except under special circumstances so there won't be an impact due to Aussies retirement age. Also in Oz, many retiree's have retirement bonds thus aiding affordability for them. Committed interest in Wheelers Hill was more than double the requirement in RYM's business model to enter Australia.

RYM's PE is higher than others because its EPS growth rate is far more predictable and it has the history to prove it. I bought in 2007 when PE was historically high (over 22 but don't have the exact figures on me). Dividends alone will give me a pre-tax cash payback in under 14 years. And with earnings more than double dividend payouts (I recall), that makes an actual PE of 7. ie. My shares have already earned me more than they cost me to buy. I think the same ratios will apply now... Buy at a PE of 35 today. Actual PE will be about 10 or 11.

Here is NZ's population growth. The trend is the same for Victoria, Australia. There will not be a shortage of tenants.

5843

You will not find a sweeter graph in all of the NZX (and probably the ASX too) than this one:

5842

All said and done. You may be right Roger. Market sentiment is the great unknown lurking at all times. As SparkyTheClown stated 'The market giveth, and the market taketh away'. Never a truer word said.

Im a bit confused about your argument vaygor. When you say "buy at a PE today of 35, actual PE will be about 10". Are you talking about 7 years in the future? Otherwise how do you come up with this number?

[Vaygor1]

Im a bit confused about your argument vaygor. When you say "buy at a PE today of 35, actual PE will be about 10". Are you talking about 7 years in the future? Otherwise how do you come up with this number?

PE of 35 assumes the companies earnings will be constant for the next 35 years from the purchase date.

eg
1 Share = $35. Earnings per Share at purchase time = $1/annum. PE = 35
Share earns $1/annum every year for 35 years. Share pays for itself in 35 years. So 35 years on, looking back the PE was in fact 35.

But if the Share's earnings grow by 20%/annum compounding, its earnings one year later will be $1.20 so earnings for the 11 years following purchase date are:
$1.2+$1.44+$1.73+$2.07+$2.49+$2.99+$3.58+$4.30+$5. 16+$6.19+$7.43 = $38.58
ie after 11 years since purchasing the share, it has earned itself more than the value you payed for it so the actual PE (with 11 years hindsight) you bought it for was less than 11. About 10.5 in fact.

Goes the other way too of course. Buy a $35 share with a PE of 35 and the company goes broke soon after. Final PE = infinity. ie The Share will never pay for itself.

[Snow Leopard]

Whilst not wishing to take sides in the RymaBear vs RymaBull (pretty neat names heh! :cool:) debate I am a bit perplexed by this P/E of 35. This is the current(ish) share price divided by this 'Underlying Profit' (not a GAAP or IFRS measure).

So what about the P/E of 21.6 based on IFRS (True) Profit?

Or even the P/E of 17.6 using Operating Cashflow?

Anyway I have been through the FY financials and the numbers seem especially wild this year with some being lower than expected and others being higher but I think I have made some sense of it and they may live to build some more villages :D.

It looks, for instance, to me, suspiciously like there will be a bit of a rush of new units leased in the next HY.

So I reckon that Ryman will basically continue to grow much as they have done, but I still can not believe it trades at such a high price.
Whilst the SP is not going (properly) down I will continue to hold the RYM I have got.


Best Wishes
Paper Tiger

[winner69]

Whilst not wishing to take sides in the RymaBear vs RymaBull (pretty neat names heh! :cool:) debate I am a bit perplexed by this P/E of 35. This is the current(ish) share price divided by this 'Underlying Profit' (not a GAAP or IFRS measure).

So what about the P/E of 21.6 based on IFRS (True) Profit?

Or even the P/E of 17.6 using Operating Cashflow?

Anyway I have been through the FY financials and the numbers seem especially wild this year with some being lower than expected and others being higher but I think I have made some sense of it and they may live to build some more villages :D.

It looks, for instance, to me, suspiciously like there will be a bit of a rush of new units leased in the next HY.

So I reckon that Ryman will basically continue to grow much as they have done, but I still can not believe it trades at such a high price.
Whilst the SP is not going (properly) down I will continue to hold the RYM I have got.


Best Wishes
Paper Tiger

Like you PT maybe price is too high but will continue to hold as long as price is going up

On multiples nobody ever mentions the Price Book Value one ......currently about 4.5 times Book Value.

This seems really high for a property company which RYM essentially is.

[winner69]

PE of 35 assumes the companies earnings will be constant for the next 35 years from the purchase date.

eg
1 Share = $35. Earnings per Share at purchase time = $1/annum. PE = 35
Share earns $1/annum every year for 35 years. Share pays for itself in 35 years. So 35 years on, looking back the PE was in fact 35.

But if the Share's earnings grow by 20%/annum compounding, its earnings one year later will be $1.20 so earnings for the 11 years following purchase date are:
$1.2+$1.44+$1.73+$2.07+$2.49+$2.99+$3.58+$4.30+$5. 16+$6.19+$7.43 = $38.58
ie after 11 years since purchasing the share, it has earned itself more than the value you payed for it so the actual PE (with 11 years hindsight) you bought it for was less than 11. About 10.5 in fact.

Goes the other way too of course. Buy a $35 share with a PE of 35 and the company goes broke soon after. Final PE = infinity. ie The Share will never pay for itself.

Suppose one way of looking at it

So if that stock you paid 35 for on earnings of 1 today growing at 20% pa is still 35 in 11 years time it would be on a PE of 7 ....seems fair enough

Another way of looking at it if the stocks PE is still 35 in 11years time you have made 20% pa. - but if PE drops to 20 in 11 years your return falls to 14% pa .....if PE falls to 15 then return is to 11% pa. Last cases still pretty god eh but not as good as you paint it

[winner69]

PE of 35 assumes the companies earnings will be constant for the next 35 years from the purchase date.

eg
1 Share = $35. Earnings per Share at purchase time = $1/annum. PE = 35
Share earns $1/annum every year for 35 years. Share pays for itself in 35 years. So 35 years on, looking back the PE was in fact 35.

But if the Share's earnings grow by 20%/annum compounding, its earnings one year later will be $1.20 so earnings for the 11 years following purchase date are:
$1.2+$1.44+$1.73+$2.07+$2.49+$2.99+$3.58+$4.30+$5. 16+$6.19+$7.43 = $38.58
ie after 11 years since purchasing the share, it has earned itself more than the value you payed for it so the actual PE (with 11 years hindsight) you bought it for was less than 11. About 10.5 in fact.

Goes the other way too of course. Buy a $35 share with a PE of 35 and the company goes broke soon after. Final PE = infinity. ie The Share will never pay for itself.

Suppose one way of looking at it

So if that stock you paid 35 for on earnings of 1 today growing at 20% pa is still 35 in 11 years time it would be on a PE of 7 ....seems fair enough

Another way of looking at it if the stocks PE is still 35 in 11years time you have made 20% pa. - but if PE is 20 in 11 years your return falls to 14% pa .....if PE is 15 in 11 years time then return is 11% pa. Last cases still pretty good eh but not as good as you paint it

[Vaygor1]

PE of 35 assumes the companies earnings will be constant for the next 35 years from the purchase date.

eg
1 Share = $35. Earnings per Share at purchase time = $1/annum. PE = 35
Share earns $1/annum every year for 35 years. Share pays for itself in 35 years. So 35 years on, looking back the PE was in fact 35.

But if the Share's earnings grow by 20%/annum compounding, its earnings one year later will be $1.20 so earnings for the 11 years following purchase date are:
$1.2+$1.44+$1.73+$2.07+$2.49+$2.99+$3.58+$4.30+$5. 16+$6.19+$7.43 = $38.58
ie after 11 years since purchasing the share, it has earned itself more than the value you payed for it so the actual PE (with 11 years hindsight) you bought it for was less than 11. About 10.5 in fact.

Goes the other way too of course. Buy a $35 share with a PE of 35 and the company goes broke soon after. Final PE = infinity. ie The Share will never pay for itself.



Winner69:
Suppose one way of looking at it

So if that stock you paid 35 for on earnings of 1 today growing at 20% pa is still 35 in 11 years time it would be on a PE of 7 ....seems fair enough

The way I see it is if PE is 35 and stock grows at 20%/annum compounding, actual PE for that particular purchase will be 10.5 irrespective of what the future PE of the share might be in the market.

Another way of looking at it if the stocks PE is still 35 in 11years time you have made 20% pa. - but if PE is 20 in 11 years your return falls to 14% pa .....if PE is 15 in 11 years time then return is 11% pa. Last cases still pretty good eh but not as good as you paint it.

For me the stocks future market PE is irrelevant as market sentiment will push the PE around almost randomly at times. What matters after the purchase date is the company's earnings (growth or decline). I think at the end of the day we are talking the same language Winner but in my mind I define the PE as the number of years the share purchased takes to pay for itself. The problem is that the PE as stated by the bourse at any given instant assumes constant earnings over a long time period by the said company, which is hardly ever the case.

[Vaygor1]

Whilst not wishing to take sides in the RymaBear vs RymaBull (pretty neat names heh! :cool:) debate I am a bit perplexed by this P/E of 35. This is the current(ish) share price divided by this 'Underlying Profit' (not a GAAP or IFRS measure).

So what about the P/E of 21.6 based on IFRS (True) Profit?

Or even the P/E of 17.6 using Operating Cashflow?

Anyway I have been through the FY financials and the numbers seem especially wild this year with some being lower than expected and others being higher but I think I have made some sense of it and they may live to build some more villages :D.

It looks, for instance, to me, suspiciously like there will be a bit of a rush of new units leased in the next HY.

So I reckon that Ryman will basically continue to grow much as they have done, but I still can not believe it trades at such a high price.
Whilst the SP is not going (properly) down I will continue to hold the RYM I have got.


Best Wishes
Paper Tiger

RymaBull and RymaBear… nice names indeed. Better than two names already trademarked as RakaDonkey and RakaDog.

I agree though PT, whichever way you look at it, stating a current PE of 35 is the most pessimistic viewpoint one can take using the available data.

[muss1]

Winner69:
Suppose one way of looking at it

So if that stock you paid 35 for on earnings of 1 today growing at 20% pa is still 35 in 11 years time it would be on a PE of 7 ....seems fair enough

The way I see it is if PE is 35 and stock grows at 20%/annum compounding, actual PE for that particular purchase will be 10.5 irrespective of what the future PE of the share might be in the market.

Another way of looking at it if the stocks PE is still 35 in 11years time you have made 20% pa. - but if PE is 20 in 11 years your return falls to 14% pa .....if PE is 15 in 11 years time then return is 11% pa. Last cases still pretty good eh but not as good as you paint it.

For me the stocks future market PE is irrelevant as market sentiment will push the PE around almost randomly at times. What matters after the purchase date is the company's earnings (growth or decline). I think at the end of the day we are talking the same language Winner but in my mind I define the PE as the number of years the share purchased takes to pay for itself. The problem is that the PE as stated by the bourse at any given instant assumes constant earnings over a long time period by the said company, which is hardly ever the case.

I don't buy this view I'm afraid. As much as we would like them to be, earnings are not actually tied to te share price. You can't earn the amount you have stated because the company does not pay out 100% of earnings. Therefore you have to rely on the SP to grow at the same rate as the earnings to achieve your stated return. If the PE contracts as winner stated, your return reduces. Isn't it better to find a company that will grow at 20% that isn't as highly valued currently?

The PE is not a pessimistic way to look at things, it is a valuable measure in determining fair price. The PE is currently high compared with historical values. That raises a flag for me. Winner has discussed how this historically reduces mid term returns.

[Vaygor1]

I don't buy this view I'm afraid. As much as we would like them to be, earnings are not actually tied to te share price. You can't earn the amount you have stated because the company does not pay out 100% of earnings. Therefore you have to rely on the SP to grow at the same rate as the earnings to achieve your stated return. If the PE contracts as winner stated, your return reduces. Isn't it better to find a company that will grow at 20% that isn't as highly valued currently?

Yes, if you can find one. I can see where you are coming from here and I don't disagree per se. It is just the difference in the way we look at it. For me, earnings are earnings and the share price one requires when selling to get their return is something else that depends on recent earnings, other measures like cashflow & NTA etc, forecasts, board honesty, and market sentiment.


The PE is not a pessimistic way to look at things, it is a valuable measure in determining fair price. The PE is currently high compared with historical values. That raises a flag for me. Winner has discussed how this historically reduces mid term returns.

I didn't say using PE as a measure was pessimistic. I said using 35 was pessimistic. Given PT's comment a few posts ago, I would use a current PE of around 25 in my calcs. The IFRS profit will almost certainly be realised over time in my view so I see a current PE of 25 as reasonably conservative.

[muss1]

Fair enough. I use the 35 based on the underlying earnings and because it is conservative. That could be too simplistic, but it makes me uneasy about holding in the mid-term

[Vaygor1]

Fair enough. I use the 35 based on the underlying earnings and because it is conservative. That could be too simplistic, but it makes me uneasy about holding in the mid-term

If I was thinking about buying any more RYM, I don't know if I would get in now or hold off for a while.

With 6 months till the next announcement now, prospective buyers lose a bit of interest over the next 4 months and the price could drop, but I have difficulty imagining it dropping below $8.

On the other hand, most of the insto's take a few weeks to analyse the results and won't really do so until the official annual report is released. Once analysed, the price could jump…it reached $9.10 not long ago on pre-announcement and 42% increase in IFRS profit is a pretty awesome result.

A RYM director investing 6 figures yesterday on RYM at $8.42 would give me some comfort.

If your thinking of selling, I can't help you. I have never sold any so it would be hypocritical of me to advise otherwise. If it's any consolation, I'm not about to sell and would only do so if I really needed the money for something else.

[Beagle]

PE of 35 assumes the companies earnings will be constant for the next 35 years from the purchase date.

eg
1 Share = $35. Earnings per Share at purchase time = $1/annum. PE = 35
Share earns $1/annum every year for 35 years. Share pays for itself in 35 years. So 35 years on, looking back the PE was in fact 35.

But if the Share's earnings grow by 20%/annum compounding, its earnings one year later will be $1.20 so earnings for the 11 years following purchase date are:
$1.2+$1.44+$1.73+$2.07+$2.49+$2.99+$3.58+$4.30+$5. 16+$6.19+$7.43 = $38.58
ie after 11 years since purchasing the share, it has earned itself more than the value you payed for it so the actual PE (with 11 years hindsight) you bought it for was less than 11. About 10.5 in fact.

Goes the other way too of course. Buy a $35 share with a PE of 35 and the company goes broke soon after. Final PE = infinity. ie The Share will never pay for itself.

You sir are dreaming if you think RYM's long term perpetual growth rate is 20%...we need to coin a new phrase, you know a derivitive of rose coloured glasses, perhaps Ryglass, (with apoligies to Rayglass who make very good boats).
You can buy good stocks that are also growing for a thrid of the price or less, on a relative PE basis, (AIR HNZ and a speccy on PGW), or buy a stock in the same sector that grew underlying earnings at 46% last year on the same PE, (SUM).

Any way you slice and dice this RYM thing it reads "Market darling, priced for absolute perfection"...but what if they don't achieve perfection in execution and growth going forward...

[Vaygor1]

You sir are dreaming if you think RYM's long term perpetual growth rate is 20%...we need to coin a new phrase, you know a derivitive of rose coloured glasses, perhaps Ryglass, (with apoligies to Rayglass who make very good boats).
You can buy good stocks that are also growing for a thrid of the price or less, on a relative PE basis, (AIR HNZ and a speccy on PGW), or buy a stock in the same sector that grew underlying earnings at 46% last year on the same PE, (SUM).

Any way you slice and dice this RYM thing it reads "Market darling, priced for absolute perfection"...but what if they don't achieve perfection in execution and growth going forward...

In my example I wasn't referring to Ryman.

[Joshuatree]

vaygor is either (a) clearly trolling and has caught some big fish in this thread, or (b) has no idea how company valuation works. Both are equally amusing. :cool:

Really not necessary stooping like this. Its been a great debate , no need to bring it down.

[Vaygor1]

p.s. vaygor. The PE is completely agnostic to the potential rate of future growth.

And that is the problem in relying solely on it.

As per PT's post ( http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=481906&viewfull=1#post481906 ) is RYM's current PE 35, 21.6, or 16.6? What would it be if reported under GAAP?

Further, how subjective is RYM's future growth rate? Obviously quite subjective given this thread. But one can look back and work out the PE historically that one purchased at (make up a different name for it if you don't like the term PE in this sense), and using predictable company growth, one can also look ahead. it's just another tool.




Also, just FYI: What really matters is the PEG ratio, not the PE itself. The former equals the latter divided by the expected rate of growth. Thus, if the expected rate of growth exceeds the current PE, the ratio is less than one and usually considered a good buy (and vice versa).

Hope this helps. Sounds like you might need it! :)

Thanks for stating the obvious re PEG.
Personally I prefer YPEG. http://www.fool.com/investing/beginning/how-to-value-stocks-earnings-based-valuations.aspx

[Beagle]

Raising the tone a bit, (hopefully), what I find more than a little frustrating is that while SUM appears to be substaintially better value than RYM, (last years profit growth 46%) for a PEG of well under 1, PEG of Ryman is about 2, Sum's reluctance to give any forward guidance (other than it won't replicate last years growth rate), is somewhat annoying, especially seeing as its peer group, both MET and RYM are happy to do so, (note MET's projected profit upgrade today). I think SUM's directors need to have a think about this at some stage in the future.

[Harvey Specter]

Or maybe they are reluctant because they think growth will be so great, that forecasting to far in advance may cause issues should their aspiration targets not be met. Glass half full approach.

[Joshuatree]

And the winner is...... Metlifecare Year To date 31.45% gain

Ryman YTD 27.5%

Summerset YTD 17.06% source NZX

[Beagle]

Does it really matter, Roger? It just means the SP will be a bit more "surgey" than it might be otherwise, but shouldn't affect its long term prospects (IMHO).

Yes and No mate.. Forecasting and clearly articulating stratagy is never a bad thing...my impression is as they're a relativly young company and they don't really have the technical ability. Some computerised modelling wouldn't do any harm IMHO.

[Vaygor1]

Raising the tone a bit, (hopefully), what I find more than a little frustrating is that while SUM appears to be substaintially better value than RYM, (last years profit growth 46%) for a PEG of well under 1, PEG of Ryman is about 2, Sum's reluctance to give any forward guidance (other than it won't replicate last years growth rate), is somewhat annoying, especially seeing as its peer group, both MET and RYM are happy to do so, (note MET's projected profit upgrade today). I think SUM's directors need to have a think about this at some stage in the future.

I too would be frustrated with SUM's silence on forward guidance, especially after announcing they won't replicate last year's growth rate… a statement that I feel needs some kind of basis to back it up and should additionally provide some kind of guidance band/range. I mean, as Harvey Specter alludes to, does 'wont replicate' imply a better or worse result compared to last year? It certainly begs the question.

My own take on SUM is that they are a good company with a great future. While Norah Barlow was MD & CEO I have had my trust in them dented a few times by for example this piece of prose written about herself around 2010/2011:

"Ms Barlow has Summerset Retirement Villages starting to sway to a 'more interpretive consumer' rhythm. As her competitors build by rote, she, with the finest attuned ear in the sector, has subtlety reshaped the product to meet a market in flux."

In my experience is that this sort of stuff is auto-biographical 99% of the time; the same sort of fluff that Rakon would write about themselves.

With Norah gone now (as I understand), I will be very keen to take a fresh look at SUM, but not before the next set of audited results come out. In my (possibly paranoid :scared:) mind there is a small chance that SUM's latest sterling results might have been a little too ahead of themselves at the expense of next year's figures. Something that I hope with all sincerity is not the case.

[Beagle]

^^ I don't have any qualms about the veracity of the financial results. To be clear, there's absolutely no question in my mind that they're talking lower growth this year. I guess they've clearly articulated their forward build guidance and report quarterly sales results, (others in the sector don't), so I figure, (for now anyway), its up too analysts and investors to try and extrapolate the dots for themselves but I would muse that perhaps this lack of meaningful forward guidance in some small way may have contributed to SUM underperforming its peers over the last year in particular ?

[Beagle]

Guys, SUM hasn't underperformed its peers over the last year. Only its SP has. Huge difference.

What do you attribute that too ?

[Onion]

Sentiment. Basically, the market hasn't yet realised the potential of SUM. When it does, expect much more rapid SP growth

You sound just like couta!

[Joshuatree]

lol thats what i thought too Onion. Be great to see some of this extensive research you've "done" new guy.

[blocker3]

My crude rule of thumb is that SUM is half the price of RYM (last year) .So is now RYM to over valued (YES in my opinion) or is SUM to under valued ( YES in my opinion).

Interesting

[Joshuatree]

Any newspaper articles we can check on that?

[Beagle]

My crude rule of thumb is that SUM is half the price of RYM (last year) .So is now RYM to over valued (YES in my opinion) or is SUM to under valued ( YES in my opinion).

Interesting

Pretty much how I see it too. SUM are fair value around $3.50 and RYM around $6.50 IMHO. Anything above that is blue sky market darling stuff and I for one will never pay for market darling status where its not backed up by fundamentals. SUM need more runs on the board to justify a higher price than this.
RYM need to keep growing at the same rate, (18%) to justify anything like their current SP and I doubt that will happen.

[stoploss]

Pretty much how I see it too. SUM are fair value around $3.50 and RYM around $6.50 IMHO. Anything above that is blue sky market darling stuff and I for one will never pay for market darling status where its not backed up by fundamentals. SUM need more runs on the board to justify a higher price than this.
RYM need to keep growing at the same rate, (18%) to justify anything like their current SP and I doubt that will happen.

Roger , do you work for Morningstar ?

[stoploss]

harsh call, stoploss.

I totally agree with Roger. SUM is well priced, while RYM is overpriced. No emotion, just cold hard facts.

I suppose the upside will be , we won't have to hear from Rog on the RYM thread until the s/p is $ 6.50 !!!!!

[Beagle]

Roger , do you work for Morningstar ?

No absolutly not. Its just that when a stock goes up 500% in 5 years and isn't backed by growth in earnings at anything even remotely like that, some of us arn't afraid of making the call that the stock is a sell and has run well ahead of itself.

By the way, I see the analyst at Craig's that's also rates RYM a sell was again voted as one of N.Z's top analysts at the recent industry awards, sorry havn't got a link at this point in time.

Stoploss - Believe it or not, some people enjoy a good healthy debate.

[Vaygor1]

No absolutly not. Its just that when a stock goes up 500% in 5 years and isn't backed by growth in earnings at anything even remotely like that, some of us arn't afraid of making the call that the stock is a sell and has run well ahead of itself.

I have stated this before.
RYM has gone up 400% in 7 years.
7 years ago RYM was a bargain at $2.15. Today it is $8.40
Equates to 21.5% per annum compounding.

Result: SP growth has matched earnings growth.

Refer http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=478686&viewfull=1#post478686 and the following 3 posts by myself and Winner.

[Vaygor1]

Vaygor - what about over the last 12 months? What was the sp growth and underlying profit growth over that period?

12 months is too short a time frame for the measure. 10 years is too long in my opinion too.

One can look at a range of RYM Share Prices as datum points over 10 years for what the share was 'worth' then…. and a range of SP over the the last 12 months say to deem what the share is worth now.

Using different datum points and different current worth values, one can get a large range in calculated growth rate.

What I do know is this. In 2007 I bought RYM shares when there PE was 35. Seven years on, I am confident that that particular purchase will give me pre-tax 100% return on my investment in dividends alone within 14 years. In terms of earnings I would need to get out the calculator but I think that very purchase has already earned itself more than what I paid for them…. in only 7 years.

Isn't RYM's PE 35 at the minute? I should buy more... but I have enough... and need to diversify my portfolio a bit more.

[Vaygor1]

Cards on the table. Here are my purchases of RYM. I have never sold:

Sept 2007 Bought at $2.11
Sept 2007 Bought at $2.08
Oct 2007 Bought at $2.16
Oct 2007 Bought at $2.16
Oct 2007 Bought at $2.08
Nov 2007 Bought at $2.15
Nov 2007 Bought at $2.06
Nov 2007 Bought at $2.09
Nov 2007 Bought at $2.10
Jan 2008 Bought at $1.99
Jan 2008 Bought at $1.88
Jan 2008 Bought at $1.88
Nov 2008 Bought at $1.38
May 2009 Bought at $1.61
July 2009 Bought at $1.57
July 2009 Bought at $1.68
April 2010 Bought at $2.10
April 2010 Bought at $2.09
June 2010 Bought at $2.07
July 2010 Bought at $1.98
Dec 2012 Bought at $4.17
Dec 2012 Bought at $4.15
Feb 2013 Bought at $4.52
Mar 2013 Bought at $4.80
Mar 2013 Bought at $4.93
Mar 2013 Bought at $5.06

Average buy price taking volume of each purchase into account is $2.42 including brokerage.

For sake of simplicity, assume each buy order was an equal amount of shares. You can imagine around Nov 2008 how much I was wishing I had held off buying… how anxious I was about RYM's future. The mixture of emotion… delight at being able to buy more at an even cheaper price combined with immense frustration at making a large paper loss on my then investment to date.

But after being through what I have been, if RYM were to drop by the same ratio today as it did between Sept 2007 and Nov 2008, that would make its share price $8.40 x 1.38/2.11 = $5.49 at which point, given RYM's predictability, I would buy the entire company if that were at all possible. Even $7 would be a steal. So the question begs is $8.40 today too expensive? Not in my most humble of opinions, nor obviously the current opinion of the directors. https://www.nzx.com/companies/RYM/announcements/250763

[Winston001]

I'm a longterm holder too and can't remember when I bought RYM - 2005 probably.

Nevertheless I am considering selling some to insulate against any major downturn in the markets.

The other reason is that high PE stocks always fall back to average, even Berkshire Hathaway. If this was not true then RYM would be on track to be the largest company in the world and own everything. That's silly. In reality all businesses reach a maturity where future growth becomes modest and reliable and the PE drops way down.

I've seen too many NZ businesses fail in Australia. I can't see what is so specialised about retirement villages that RYM will succeed above Australian operators. It isn't rocket science.

Having said that, on the strength of the NZ operation alone I expect to continue to hold RYM long term.

[Beagle]

I have stated this before.
RYM has gone up 400% in 7 years.
7 years ago RYM was a bargain at $2.15. Today it is $8.40
Equates to 21.5% per annum compounding.

Result: SP growth has matched earnings growth.

Refer http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=478686&viewfull=1#post478686 and the following 3 posts by myself and Winner.

Its interesting that the last time you bought on a PE of 35, (your first purchase) the SP declined by approximatly 25% in the following two years and they have never been on a PE of 35 again until very, very recently which serves to illustrate my point and that made by Winner 69 earlier in this thread that they're not worth a PE of 35 and the short term could see a meaningful and for some people a very painful price reallignment, especially if they recently paid $9. If history repeats and the company becomes more reasonably valued with a similar 25% drop I think they'll be good buying at around $6.20 provided their growth record stays intact in the meantime. This is by no means a certainty.
If growth slows this year like I think it will you could easily see the market darling status being brought into question and a lower PE in the mid - late 20's could result. Personally I think a 20-30% price correction is quite likely in the next 18-24 months whereas the prospect of the same quantum in SP gain is exceptionally unlikely.

[Vaygor1]

Its interesting that the last time you bought on a PE of 35, (your first purchase) the SP declined by approximatly 25% in the following two years and they have never been on a PE of 35 again until very, very recently which serves to illustrate my point and that made by Winner 69 earlier in this thread that they're not worth a PE of 35 and the short term could see a meaningful and for some people a very painful price reallignment, especially if they recently paid $9. If history repeats and the company becomes more reasonably valued with a similar 25% drop I think they'll be good buying at around $6.20 provided their growth record stays intact in the meantime. This is by no means a certainty.
If growth slows this year like I think it will you could easily see the market darling status being brought into question and a lower PE in the mid - late 20's could result. Personally I think a 20-30% price correction is quite likely in the next 18-24 months whereas the prospect of the same quantum in SP gain is exceptionally unlikely.


It is interesting Roger, I agree.
Winner might be able to give me the PE for each purchase. I don't have the data and I am on holiday at the moment. I am not sure if 35 was the highest PE I purchased at.

For RYM, my message is that buying at a PE of 35, considering their growth, was a move that I can look back at and be very very happy with. Buying with a PE under 35, which is probably the case from the 1st purchase until around Dec 2012 really was an extra bonus period and provided a return that most investors can only dream of. Looking forward, the share will bounce around as usual but theoretically it's price is going up on average by 2.9 cents a week given RYM'S current growth rate. Means that all other things being equal SP = $10.66 in 18 months. So a market contraction would have to be significant to bring it down to $6.60 in 18 months from now. I have trouble envisaging that unless the NZ sharemarket itself collapses for some reason. I can however imagine (just imagine) the share stagnating for a good length of time in the $8 to $9 range due to market sentiment but I still think this is unlikely and will continue rising.

5861

I get the feeling from your posts that you are experiencing the same issues with SUM now, as I did with RYM from Jan 2008 to Jan 2012 (refer graph). That is 4 years and a bloody long time to wait. In the SUM thread you have stated that you are in boots and all after selling out of RYM http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=441324&viewfull=1#post441324 and that if SUM's SP doesn't reach at least $4.33 by early November this year you will eat your hat. http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=438892&viewfull=1#post438892

In 5 months from now, you may have to get the cutlery out. But if so, that is still okay. One year or even two is a relatively short wait compared to the four years I had to wait. SUM could also drop like RYM did and you will experience the same mixture of delight and further frustration as I did but if you hang in there and use the opportunity to buy more, you will ultimately come out well on top.

Two of your other post of yours I note with interest:
http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=444465&viewfull=1#post444465 and
http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=471685&viewfull=1#post471685

I can 't even begin to imagine what you and your family must have gone through and I am truly sorry to hear what happened here. As difficult as it must be though, I can only advise to try your best to separate being a shareholder from being a customer. I used to be a shareholder (and concurrently a customer) in WestpacTrust (WPT) going back. As a WPT shareholder I was very happy. As a WestpacTrust customer I was extremely unhappy. It was hard enough to keep the two separate without experiencing the emotional torment you must have undergone. I haven't lost a parent yet and can not even begin to imagine what that must be like.

Hang onto your SUM. I envisage some rocks on the path with them, as you do with RYM. But ultimately patience, and the strength of your convictions not to sell will prevail.

[Beagle]

Thanks for your kind words and advice mate. I've recovered from that very difficult part of my life now and Dad is in a better place now :)
I admire the tenacity you've shown to hold through the ups and downs of Ryman's journey as a company. In the very long run I am sure they will continue to reward you and others. What you've suggested, (a period of price stagnation in the $8-9 range is probably the most likely outcome of the correction process as the company continues to grow its PE gets more realistic but shareholders have to endure an unimputed 1% dividend yeild for a period of time with no SP gains. The correction scenario is something I see as almost equally likely and a 20-30% SP gain over the next 18-24 months is something I would see as a less than 5% chance.

I am polishing the cutlery up :) Since posting that remark on SUM some time back its clear they're not growing as quickly as I originally anticipated. I think the holding costs of carrying seven years land supply, (which is a policy I must confess I'm not entirely comfortable with), will also be a factor in this year's results and have pulled back on my estimate for 2014.

To be honest I think the whole sector isn't cheap by any stretch of the imagination and am looking for better value elsewhere and finding it.

[Joshuatree]

And the winner is...... Metlifecare Year To date 31.45% gain

Ryman YTD 27.5%

Summerset YTD 17.06% source NZX



Correction folks MET has outperformed RYM and SUM over 1 YEAR not YTD. :D Even more impressive

[blocker3]

Correction folks MET has outperformed RYM and SUM over 1 YEAR not YTD. :D Even more impressive

I am surprised by the result Joshuatree. Just shows you that MET can have its day and shows that it can shine also.Cheers

[winner69]

Correction folks MET has outperformed RYM and SUM over 1 YEAR not YTD. :D Even more impressive

Wasn't newguys question who has performed the best financially over the last year

[Mothman]

So Ryman paid $47.5m for the new development site in Melbourne. Victorian government thought it was worth at least $25m. They must have some confidence in the Australian market if they are purchasing another site for quite a high price, maybe sales at the Weary Dunlop village are going well? Source is The Age, story entitled "Land sales to net $250m windfall"

[Beagle]

Seems bloody expensive ? Seen the article and its as posted above, sorry havn't got time for posting a link. That's N.Z$51.6m I guess its related to how many untis they can build on the 5.5 ha site, (400 is quite a lot), I'm not sure i'd like to live in one of these high intensity retirement villages that Ryman are now building, (have at look at the Orewa one...I'd take a pass on that.

Interesting contrast, SUM added 5 sites in the 2013 year for a total cost of $97m Kiwi, (source 2013 Annual Report).

[Vaygor1]

So Ryman paid $47.5m for the new development site in Melbourne. Victorian government thought it was worth at least $25m. They must have some confidence in the Australian market if they are purchasing another site for quite a high price, maybe sales at the Weary Dunlop village are going well? Source is The Age, story entitled "Land sales to net $250m windfall"

Here's the link:
http://www.theage.com.au/victoria/land-sales-to-net-250m-windfall-20140524-38vrs.html

Looking at Google Earth, Google Maps, or Paper Tiger's post at http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=481602&viewfull=1#post481602 it seems to be a very big site (3 to 4 times bigger) compared to their Weary Dunlop site 2.5kms down the road now in the final stages of completion.

Where did you get the $25m figure you refer to above Mothman? I can't see it in the article.

[Mothman]

Found it here

http://www.theage.com.au/victoria/napthine-government-sells-off-public-land-ahead-of-election-20140426-37b3u.html

[Mothman]

Found it here

http://www.theage.com.au/victoria/napthine-government-sells-off-public-land-ahead-of-election-20140426-37b3u.html

[Vaygor1]

Found it here

http://www.theage.com.au/victoria/napthine-government-sells-off-public-land-ahead-of-election-20140426-37b3u.html

Thanks very much Mothman.

Regarding the value of the school property, either the government at $25m or Ryman at $47.5m (or both) have their figures wrong or there is a long-term deferred payment scheme as part of deal.

On the assumption that RYM paid a AUS$22.5m premium, at the current exchange rate that works out to be NZ$4.9c/share which didn't sound a lot to me until I viewed it at over 1/3 of their dividend payout last year.

I can only trust that RYM did their due diligence prior to submitting their tender for the school, or strategically the site was just too important not to secure given for instance its zoning rules maybe, and/or the sites proximity to their current village.

[Vaygor1]

A somewhat interesting recent article here on retirement village supply and demand in NZ. Was going to post this on the SUM thread too but just saw that Winner beat me to it.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11264161

[Vaygor1]

Here is a news article published 12 days ago from the business section of The Australian regarding Ryman's new purchase in Wheeler's Hill.

http://www.theaustralian.com.au/business/ryman-healthcare-on-a-roll/story-e6frg8zx-1226924583842#

Interesting to note that the zoning is approved for building up to 5 stories and that there were 19 tenders submitted for the site.

[Toulouse - Luzern]

Hi all,

Fisher Funds Management Newsletter for May advises (E&OE) that they have taken profits and reduced their stake in RYM.

I have had a look and mid March FFM advice via NZX for NTA valuations showed RYM holdings at 14% ( of FFM NZ Growth Fund portfolio).

Now they are 12% ( of FFM NZ Growth fund portfolio).

( As a reasonably large seller FFM sales may be part of the share price pull back from 4 week high of 889 to 1 week high around 840 to 850 ish, E&OE)

It seems to me as a major holder you have a challenge, reduce your holdings without reducing the SP and hence the value of your remaining shares.

[Zaphod]

I've just had a look at the annual meeting resolutions and I must say that I'm not sold on the proposal to increase the directors fee pool to $730K.

The staff share scheme also seems lopsided, with a $5m pool available to management for interest free loans, while the rest of the staff have a mere $0.12m pool for 50% interest free loans. Personally, I'd rather see both aligned at 50% and a re-balancing of the pool particularly on the line-staff side of the equation.

What are your thoughts?

[percy]

I've just had a look at the annual meeting resolutions and I must say that I'm not sold on the proposal to increase the directors fee pool to $730K.

The staff share scheme also seems lopsided, with a $5m pool available to management for interest free loans, while the rest of the staff have a mere $0.12m pool for 50% interest free loans. Personally, I'd rather see both aligned at 50% and a re-balancing of the pool particularly on the line-staff side of the equation.

What are your thoughts?

The Pope would most probably think they are being greedy.
I would have to agree with him.

[Snow Leopard]

This share-scheme ?started? last year (see discussion on this very thread (http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=413480&viewfull=1#post413480)).

I thought it showed an unhealthy them and us attitude from the top then and my opinion has not changed since.

As for the Directors fees I am sure they could survive on an increase of 4% instead of 9%.

Best Wishes
Paper Tiger

[Harvey Specter]

Ryman have announced a new village to be built in Pukekohe. Looks like some strong local support, which is good.

https://www.nzx.com/companies/RYM/announcements/252071Looks like a green fields site. I think the Birkenhead site looks far more promising. Though if they can fill them, which RYM can, any site is good.

[Vaygor1]

This share-scheme ?started? last year (see discussion on this very thread (http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=413480&viewfull=1#post413480)).

I thought it showed an unhealthy them and us attitude from the top then and my opinion has not changed since.

As for the Directors fees I am sure they could survive on an increase of 4% instead of 9%.

Best Wishes
Paper Tiger

Re the Share Scheme, I agree. The argument from the RYM Board being that if they didn't offer this type of scheme to Management as then they would have to offer them something else of the same dollar magnitude as part of their package anyway. Well fine, offer them something else that is not subject to FBT.

On the directors fees, I have mixed feelings. They are doing a great job but is 9% too much? They are achieving 15-20% growth per annum increase in my dividends and eventual share worth. Director's fees are not a great deal of money on the scheme of things. If anything, extra money for the Board means slightly more pressure on them to continue performing, but maybe 5% increase is more appropriate given that is the same %age they have increased their staff's wages by.

On other thing that slightly disappoints is that in the latest Annual Report RYM, apart from just stating the numbers, do not acknowledge that they didn't achieve their target build rate of 700 units for the year… only achieving "607 units/beds offset by 74 units/beds which are being redeveloped" (Note 3 at the bottom of page 17). I don't know what they mean by 'redeveloped' and if this offset of 74 is positive or negative. Assuming positive, this means 681 units/beds. It is a small amount to miss by but in my view they should have a sentence or two acknowledging the gap and providing a bit more detail…. accountability that might help justify a 9% increase in Director's fees.

[macduffy]

Another Ryman village on the drawing board.

http://www.stuff.co.nz/business/10228897/New-life-at-old-Tip-Top-site?cid=edm:businessday:dailybrief

[stoploss]

Another Ryman village on the drawing board.

http://www.stuff.co.nz/business/10228897/New-life-at-old-Tip-Top-site?cid=edm:businessday:dailybrief

The old Tip Top bread factory .A stones throw from Countdown and 2 minutes walk to the hospital ...very well located. Ryman been very busy the last couple of months .

[Beagle]

http://www.sharechat.co.nz/article/f77bcac6/ryman-buys-wellington-site-from-foodstuffs-for-new-development.html

Interestingly six analysts covering the stock have an average forecast price target of $8.25.

[Harvey Specter]

The old Tip Top bread factory .A stones throw from Countdown and 2 minutes walk to the hospital ...very well located. Ryman been very busy the last couple of months .
It will be interesting to see what they paid and whether foodstuffs were willing to take a loss just to ensure it didn't go to a competitor.

Do Ryman have any ogre small footprint villages or is this a new thing for them as they move into more intensified suburbs?

[macduffy]

It will be interesting to see what they paid and whether foodstuffs were willing to take a loss just to ensure it didn't go to a competitor.

Do Ryman have any ogre small footprint villages or is this a new thing for them as they move into more intensified suburbs?

Not much chance of a competitor to Foodstuffs being interested now. Countdown opened their Newtown supermarket down the road a couple of years ago. Foodstuffs have plans for a store near the Basin Reserve.

[winner69]

The old Tip Top bread factory .A stones throw from Countdown and 2 minutes walk to the hospital ...very well located. Ryman been very busy the last couple of months .

And a minutes walk from the funeral home up the road

[winner69]

Funny as the fight between Progressive and Foodstuffs in Newtown.

Progressive were really pissed when Foodstuffs 'stole' the Tip Top site from them. It was going to be the car park for the Countdown. Buildign had to be redesigned to allow for an undergrowund carpark etc etc

Foodstuffs paid an outrageous price for it but achieved their aim of pissing Pprogressive off. Hopefully Ryman got it a lot cheaper than $8m.

Foodstuffs (according to folklore) encouraged (paid_ the local night time artists to do some beautification of the building in an really ugly way so the nice new shiney Countdown looked a bit out of place. After a while a peace accord seems to have been reached and not too much graffiti on it at the moment

Whatever Ryman build hope they don't have something the Angus Rita in Kilbirnie .... that's an eyesore in its own right

[couta1]

http://www.sharechat.co.nz/article/f77bcac6/ryman-buys-wellington-site-from-foodstuffs-for-new-development.html

Interestingly six analysts covering the stock have an average forecast price target of $8.25.
Come on mate you can't believe these clowns they must be looking for more brokerage from their clients selling, Ryman seem to be uping the anti SP will probably be $10 this time next year aye:cool:

[stoploss]

Come on mate you can't believe these clowns they must be looking for more brokerage from their clients selling, Ryman seem to be uping the anti SP will probably be $10 this time next year aye:cool:

Thats a bit better than your $ 6.50 valuation Roger . Now back in your box till the share price reaches your lvl :)

[Onion]

ogre small footprint villages

I'm not sure there are enough small footprint ogres in Wellington to justify a whole village. You must be thinking of Orcland. :scared:

[winner69]

Interesting Milford have little exposure to Ryman in their biggest funds (not amongst the list of holdings of 1% or more of the fund)

Have Summerset though

Without doing the sums properly it appears that have a (surprisingly) low exposure to the retirement sector in their Trans Tasman holdings

[Snow Leopard]

Milford does not like Ryman because Brian thinks continuous 15-20% annual growth is too conservative:

Brian Gaynor: Top firms need to lift earnings performance (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11287924)

"Ryman Healthcare has excellent long-term growth prospects but it only has targeted earnings growth of between 15 per cent and 20 per cent per annum because of land constraints and the unwillingness to take on too much risk."

Best Wishes
Paper Tiger

[percy]

Unlike Brian I prefer to hold Ryman instead of Mercers [non-retirement sector].

[Yoda]

12 months is too short a time frame for the measure. 10 years is too long in my opinion too.

One can look at a range of RYM Share Prices as datum points over 10 years for what the share was 'worth' then…. and a range of SP over the the last 12 months say to deem what the share is worth now.

Using different datum points and different current worth values, one can get a large range in calculated growth rate.

What I do know is this. In 2007 I bought RYM shares when there PE was 35. Seven years on, I am confident that that particular purchase will give me pre-tax 100% return on my investment in dividends alone within 14 years. In terms of earnings I would need to get out the calculator but I think that very purchase has already earned itself more than what I paid for them…. in only 7 years.

Isn't RYM's PE 35 at the minute? I should buy more... but I have enough... and need to diversify my portfolio a bit more.
Is the PE 21 now? According to IRG and ASB....... are they missing something ?

[Vaygor1]

Is the PE 21 now? According to IRG and ASB....... are they missing something ?

It is 10:55pm where I am so can't go into too much detail at the minute.

To briefly answer your question (kind of) is… well… it depends. Refer to this post from PT for the issues to think about:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=481906&viewfull=1#post481906

..and this post from Roger is very helpful and may help clarify:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=480634&viewfull=1#post480634

Suggest you read and absorb the last 8 months of posts on this thread to clarify further; there is a lot of other good info amongst it all too.

[Harvey Specter]

Is the PE 21 now? According to IRG and ASB....... are they missing something ?Missing something you are.

Research more you should do.

[Yoda]

It is 10:55pm where I am so can't go into too much detail at the minute.

To briefly answer your question (kind of) is… well… it depends. Refer to this post from PT for the issues to think about:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=481906&viewfull=1#post481906

..and this post from Roger is very helpful and may help clarify:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=480634&viewfull=1#post480634

Suggest you read and absorb the last 8 months of posts on this thread to clarify further; there is a lot of other good info amongst it all too.

Thanks Vaygor1. I appreciate your help and will look back. Very helpful. I read back some, but not quite that far.
im just trying to get my head around these things, its not easy to DYOR when you dont know where to start. Thanks. It looks like in the mid term it beats the bank, so got to be good. need to dedicate time to this.
sommerset taking a hammering . All in the same sea but different boats ?

[bull....]

heres a great article on why these companies are such great cash cows lol

http://www.abc.net.au/news/2014-07-1...candal/5584412 (http://www.abc.net.au/news/2014-07-10/kohler-retirement-village-rorts-the-booming-national-scandal/5584412)

[macduffy]

It seems that it's not only in the villages that Ryman has occasional problems. Invitations to a public meeting to discuss the new Petone development were sent to shareholders in the Wellington region, based on details from the share register. Unfortunately, Ryman "....made an administrative error in extracting some information from it and this caused a number of flyers to go out with incorrect details." Apologies followed this cock-up which my spy tells me included complete strangers being coupled together on one letter!

Not a good look but no lasting damage to the company or its shareprice - hopefully.

[Snow Leopard]

It seems that it's not only in the villages that Ryman has occasional problems. Invitations to a public meeting to discuss the new Petone development were sent to shareholders in the Wellington region, based on details from the share register. Unfortunately, Ryman "....made an administrative error in extracting some information from it and this caused a number of flyers to go out with incorrect details." Apologies followed this cock-up which my spy tells me included complete strangers being coupled together on one letter!

Not a good look but no lasting damage to the company or its shareprice - hopefully.

We emailed them about that and got an apology.
They very much stressed that it was their fault and nothing to do with Link...

But the address was incomplete and when I checked Link updated our address a couple of weeks ago by removing part of it !

Update: In one of those coincidences that happen from time to time we have, in the last few minutes, received another one!

Best Wishes
Paper Tiger

[stoploss]

Looks like Ryman are going to be busy ...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11296775

[Joshuatree]

How the sentiment has changed.With 3 positive announcements since june. Not long ago the s/p would have jumped with each one. Under 50DMA now.

[percy]

I was at Barrington Mall this morning and noticed a very good display by Ryman, advertising their Beckenham Courts Village.Nicely set up with a good video on a village benefits , playing on large screen TV.Good printed material for people to pick up and take home,with a nice free pen.[no I didn't!].
You have to hand it to Ryman,they lead by example.!

[Food4Thought]

http://www.stuff.co.nz/entertainment/music/10291092/New-Zealands-answer-to-Pharrell-Williams

Looks like they are getting some good positive hip exposure...

[winner69]

Time has caught up with RYM ..... the long term uptrend is over, not because the price is falling but just it is not going anywhere when it has been going up

But I will show some ill discipline and hold in hope that just a temporary aberration and that another spurt up to 9 bucks is coming soon. Hope can be a strategy, sometimes

Its been such a good ride I can afford to be lax ..... but below 8 bucks and out they go

Sign of a tired market .... so likely to buy back in the low 7 dollar range methinks

[percy]

You may be happier using Yahoo charts as it shows the share price is still above the 200 day moving average.!! lol.

[winner69]

You may be happier using Yahoo charts as it shows the share price is still above the 200 day moving average.!! lol.

Yes it is but with the MA200 at 807 its not that far above is it

That's one reason I am showing ill discipline and hoping this is not the end of the uptrend at all.

Percy, even you have to admit that the price has gone nowhere for the the last 4 months or so

It'll be ok though cows this time it's different

[percy]

Yes it is but with the MA200 at 807 its not that far above is it

That's one reason I am showing ill discipline and hoping this is not the end of the uptrend at all.

Percy, even you have to admit that the price has gone nowhere for the the last 4 months or so

It'll be ok though cows this time it's different

Well according to Yahoo the share price was $8.35 today,while the Simple 200 day moving average was $8.11, and the Exponential 200 day moving average was $7.99.
Don't worry about the cows this time,think of your Rata trees,don't expect they have done much over the past 4 months either!!!
ps.Surely you are enjoying a free ride anyhow???

[Beagle]

Time has caught up with RYM ..... the long term uptrend is over, not because the price is falling but just it is not going anywhere when it has been going up

But I will show some ill discipline and hold in hope that just a temporary aberration and that another spurt up to 9 bucks is coming soon. Hope can be a strategy, sometimes

Its been such a good ride I can afford to be lax ..... but below 8 bucks and out they go

Sign of a tired market .... so likely to buy back in the low 7 dollar range methinks
That chart looks suspiciously like another one you posted recently except the other one's downwards break was more developed....which should suggest that might be where this one is going...
Three positive land acquisition announcements and the price goes down, hmmm.
Is the market "over" stocks trading on a PE of >30 ?

[couta1]

That chart looks suspiciously like another one you posted recently except the other one's downwards break was more developed....which should suggest that might be where this one is going...
Three positive land acquisition announcements and the price goes down, hmmm.
Is the market "over" stocks trading on a PE of >30 ?
Just a bit of a resting phase Roger IMHO with 11 sites now landbanked long term this pup is only going in one direction.

[winner69]

Just a bit of a resting phase Roger IMHO with 11 sites now landbanked long term this pup is only going in one direction.

Exactly couta

But to maximise future returns I not going to give too much back and will sell at 800 odd and will be able to buy heaps more when price is say 650 odd

[Beagle]

Just a bit of a resting phase Roger IMHO with 11 sites now landbanked long term this pup is only going in one direction.

Agreed long term mate, but short term isn't so clear. I wouldn't mind getting back in but I don't see any reason to be in any sort of hurry. I'm expecting the market to track sideways for the balance of 2014, at least, so my investment thesis at present centres around staying liquid and being patient to wait for compelling opportunities, if any, and / or buying value or yield stocks where you're being paid to wait.
Its interesting to note we now have a clear break below the 100 day moving average which currently stands at $8.43.
When you take into account recent positive news x 3 didn't help stop that break there's plenty to ponder in terms of its short term SP direction in my opinion, likewise for SUM.

Then there's this proposed IPO which will suck even more life out of the market in general and this sector in particular.
http://www.sharechat.co.nz/article/753a1043/oceania-living-mulls-listing-in-midst-of-retirement-village-building-boom.html?utm_medium=email&utm_campaign=Oceania+Living+mulls+listing+in+midst +of+retirement+village+building+boom&utm_content=Oceania+Living+mulls+listing+in+midst+ of+retirement+village+building+boom+CID_fab5203162 80ad2349569e33395b965d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle753a1043oceani a-living-mulls-listing-in-midst-of-retirement-village-building-boomhtml

[Joshuatree]

Ive been shaken out of my final 33%, S/P dropped lower to $8.17 but back to my sell price $8.22.More buyers than sellers now so good luck either way. If i don't get a chance again to buyback lower later i may buy more AOG (way below NTA) or maybe some of the new listing Oceania if it stacks up.

[winner69]

Moosie would remind us that' bollies tightened and when this happens a break out occurs in direction of prevailing short term trend ....this case down (or something lie that)

But I reckon it will back to 830 by close today - no worries as hope is a strategy

[winner69]

Well according to Yahoo the share price was $8.35 today,while the Simple 200 day moving average was $8.11, and the Exponential 200 day moving average was $7.99.
Don't worry about the cows this time,think of your Rata trees,don't expect they have done much over the past 4 months either!!!
ps.Surely you are enjoying a free ride anyhow???

Well percy ....the gap to the MA200 must be shrinking by the day

Do I hope ....hope can be a strategy ........hoping like buggery but I fear tomorrow or Friday is the day to say farewell

But 650 will be a good re entry

[percy]

Well percy ....the gap to the MA200 must be shrinking by the day

Do I hope ....hope can be a strategy ........hoping like buggery but I fear tomorrow or Friday is the day to say farewell

But 650 will be a good re entry

We are certainly living in interesting times.The EMA has moved up to $8.00 and the SMA to $8.12, while the SP has fallen to $8.20,so the gap is quickly narrowing.
Now comes the interesting times.! Will the SP go through the 200 EMA,and stay under it,or will it go through it and then rise above it in the not to distant future ?We will have to watch and see. Great excitement!
Either the up trend will be confirmed over,or it "rise from the dead" and continue its merry way.

[couta1]

Well percy ....the gap to the MA200 must be shrinking by the day

Do I hope ....hope can be a strategy ........hoping like buggery but I fear tomorrow or Friday is the day to say farewell

But 650 will be a good re entry I was kinda hoping you'd put up that little chart again relating current happiness to how often you view your share portfolio that chart could be the best advise we all could take right now. Disc-In the red on this one now but holding tight should bounce back to $8.30 plus soon I reckon:cool:

[winner69]

How's that 200MA going Percy

[percy]

How's that 200MA going Percy

Best summed up by that great Queen song "Under Pressure."
Share Price $8.14
200 day SMA $8.13.
200 day EMA $8.12.

[winner69]

Best summed up by that great Queen song "Under Pressure."
Share Price $8.14
200 day SMA $8.13.
200 day EMA $8.12.

Under pressure eh ... thought tomorrow would have to be the day ..... but still hoping like buggery that today is the low for a while

Mind you it was $7.00 a year ago and $6.50 does sound a nice re-entry point. But then even 650 is a PE of over 20 this years forecast profit ...... maybe $5.50 is more realistic price to hang out for

[percy]

Under pressure eh ... thought tomorrow would have to be the day ..... but still hoping like buggery that today is the low for a while

Mind you it was $7.00 a year ago and $6.50 does sound a nice re-entry point. But then even 650 is a PE of over 20 this years forecast profit ...... maybe $5.50 is more realistic price to hang out for
The simple pleasure of living in "interesting times" is being able to sit back and enjoy whatever the market does.?! The market giveth and the market taketh?!
ps.Time is the friend of a good company,and the enemy of a poor company.
NB.Ryman is a good [great] company.

[winner69]

The simple pleasure of living in "interesting times" is being able to sit back and enjoy whatever the market does.?! The market giveth and the market taketh?!
ps.Time is the friend of a good company,and the enemy of a poor company.
NB.Ryman is a good [great] company.

Agree with you wholeheartedly mate

Mr P had a version of that market behaviour thingie ....something like the market taketh away but often giveth back heaps more (for great companies)

I won't be taketh camp away but looking forward to the giveth back heaps bit.

Ryman will continue to make heaps of money but the market sometimes only wants to pay 15 times earnings and sometimes 30 times earnings .....hence large cyclical swings in the shareprice,

Maybe selling tomorrow (not allowing the taketh away) and waiting for the giveth heaps back time.

But I appreciate you are long term investor type which is good. You know a bit of short term pain not too bad as in 5 to 10 years time you be a lot richer eh. You been through al these cycles before eh.

[percy]

Agree with you wholeheartedly mate

Mr P had a version of that market behaviour thingie ....something like the market taketh away but often giveth back heaps more (for great companies)

I won't be taketh camp away but looking forward to the giveth back heaps bit.

Ryman will continue to make heaps of money but the market sometimes only wants to pay 15 times earnings and sometimes 30 times earnings .....hence large cyclical swings in the shareprice,

Maybe selling tomorrow (not allowing the taketh away) and waiting for the giveth heaps back time.

But I appreciate you are long term investor type which is good. You know a bit of short term pain not too bad as in 5 to 10 years time you be a lot richer eh. You been through al these cycles before eh.

Having a "free ride" makes a big difference in the way one views the Ryman share price.[In fact any share price.] !!!!!

[Joshuatree]

Yes its a fab feeling and has been easy to get triple bagger with RYM.Being free carried is the oh so sweet spot to be in. I will be back lower down if they keep dropping for a quadruple bagger later.:)

[Beagle]

Under pressure eh ... thought tomorrow would have to be the day ..... but still hoping like buggery that today is the low for a while

Mind you it was $7.00 a year ago and $6.50 does sound a nice re-entry point. But then even 650 is a PE of over 20 this years forecast profit ...... maybe $5.50 is more realistic price to hang out for

Some people think I'm nuts waiting for $6.50 re-entry, $5.50 might be pushing it a bit :)

[winner69]

Some people think I'm nuts waiting for $6.50 re-entry, $5.50 might be pushing it a bit :)

You not nuts mate ......I reckon you will get your wish

[couta1]

You not nuts mate ......I reckon you will get your wish
I doubt it very much I'd say $7.90 bottom:cool:

[Vaygor1]

RYM in fully fledged panic-sell mode now…. the snowball effect of fear driving fear.
Wait for the steady upturn whatever price that might be at and buy more.
With 4 months till the 1/2 year result, could be a while way yet… or not.

[couta1]

RYM in fully fledged panic-sell mode now…. the snowball effect of fear driving fear.
Wait for the steady upturn whatever price that might be at and buy more.
With 4 months till the 1/2 year result, could be a while way yet… or not.
We have the AGM in a week so that may help,went to a Ryman meeting yesterday and as far as i can see the only thing to fear here is fear itself:cool:

[percy]

Interesting??????????????????????
Where to now???????????????????????????
Will it continue to fall,or will settle and turn up again????
So many questions!!
And all will be answered in a week or twos time..!!
Watch this space!!!!

[Jim]

We have the AGM in a week so that may help,went to a Ryman meeting yesterday and as far as i can see the only thing to fear here is fear itself:cool:

I was at the meeting last night and I was very impressed with the presentation, saw the share price dropped below $8 I jumped in and bought a parcel. In the long run I believe RYM has a great future

[percy]

I was at the meeting last night and I was very impressed with the presentation, saw the share price dropped below $8 I jumped in and bought a parcel. In the long run I believe RYM has a great future

Well good on you Jim.
I don't know whether to call you a "trend breaker" or a "trend setter"???
Time will tell!!
Whatever happens, Ryman will just get on with setting the standard for others to aim for!!.

[janner]

Well good on you Jim.
I don't know whether to call you a "trend breaker" or a "trend setter"???
Time will tell!!
Whatever happens, Ryman will just get on with setting the standard for others to aim for!!.

The Oracle has spoken !!..

[winner69]

Interesting??????????????????????
Where to now???????????????????????????
Will it continue to fall,or will settle and turn up again????
So many questions!!
And all will be answered in a week or twos time..!!
Watch this space!!!!

Well percy that MA200 has been broken eh

But RYM has been so so so brave the last few days hasn't, tenaciously refusing to close below $8.00. How it has hung in there has been so commendable it has almost bought me tears. I gave the brave wee fella one more chance last week but today was another shocker so got rid of some.

Hoping like hell this brave fella will get a second wind so the remaining ones can head up again. Hope is a strategy isn't it percy?

[percy]

No hope is not a strategy,therefore hope must be??!!
I am not sure what the 200 EMA 200 is.Yahoo chart have it at $8.00 but that was on the 25th.
So the share price today at $8.04 must be on,just above,or just below the 200 EMA.
I am prepared to sit and watch for a week or two,before deciding my course of action.

[Jay]

On my data it has not yet crossed the 200EMA - touched it the other day with the day's low
Also closed higher than it opened yesterday ( still loweret than the day before, so it appears a turn or stability maybe starting or does someone know something that will come out in the AGM and hence the sell-off

(Don't think so, mainly whole sector and others all struggling a little)

[couta1]

On my data it has not yet crossed the 200EMA - touched it the other day with the day's low
Also closed higher than it opened yesterday ( still loweret than the day before, so it appears a turn or stability maybe starting or does someone know something that will come out in the AGM and hence the sell-off

(Don't think so, mainly whole sector and others all struggling a little)
The AGM will be very positive:cool:

[Jay]

I think so too - closed up 5 cents today - just having a breather

Not too worried at present as bought mine for around $2.65 and sold off some to fund some work on the house and still something like 250% up on my initial investment

[percy]

Today is the day, that yesterday we worried about,and all is well.!

[Joshuatree]

MET SUM and RYM have all done a classic Uturn; synchronised swimming.Should have sent them to the pool at.Glasgow

[Beagle]

What do shareholders do who have shares in MFT and RYM and their AGM's are on the same day in different places...go to the company AGM who provide the best scones afterwards ?

[Harvey Specter]

I think so too - closed up 5 cents today - just having a breather
Closed down 4c today.

Was anyone at the AGM. Two new (?) villages announced should keep the growth rate up?

[percy]

What do shareholders do who have shares in MFT and RYM and their AGM's are on the same day in different places...go to the company AGM who provide the best scones afterwards ?

I had to make that choice last year between EBO and PGW.As I had nearly five times the amount invested in EBO than PGW, I went to the EBO agm.
I really do enjoy EBO agms as Mark Waller is a real straight shooter.Tells you where they are, and where they want to be.
With MFT and RYM I would think Don Baird would always worth listening to.

[couta1]

Unable to make the AGM but everything on track but some may think they are overstretching themselves with a land bank of 10 sites lined up, sticking by my $7.90 bottom though hit $7.92 so far, no one else willing to pick a bottom price other than Rogers very hopeful $6.50 ?

[Jim]

Closed down 4c today.

Was anyone at the AGM. Two new (?) villages announced should keep the growth rate up?

I was at the RYM AGM today. It was a boring meeting mostly attended by I think retires. There was a gentleman challenge the board fee increases by 5% comparing an elephant's 5% to a mouse's 5% refering to the workers that employed at RYM, very entertaining. The refreshment provided was very minimal should have been a bit generous I think

[couta1]

I was at the RYM AGM today. It was a boring meeting mostly attended by I think retires. There was a gentleman challenge the board fee increases by 5% comparing an elephant's 5% to a mouse's 5% refering to the workers that employed at RYM, very entertaining. The refreshment provided was very minimal should have been a bit generous I think
The difference being Jim is the meeting we attended last week was about selling a village while the AGM is just about presenting a whole bunch of facts and figures to converted believers:cool:

[Beagle]

Unable to make the AGM but everything on track but some may think they are overstretching themselves with a land bank of 13 sites lined up, sticking by my $7.90 bottom though hit $7.92 so far, no one else willing to pick a bottom price other than Rogers very hopeful $6.50 ?

Hey, I can't let that one slide through to the keeper without a response, especially after you comment earlier in the Air thread, you keep bowling bounces eventually I have to hit one away even though we're mates and all that..its time I updated you on my SUM position, (Sold out half at $3.58 and then the other half at $3.52 some time back) :cool: Sometimes technical analysis works, sometimes it doesn't :)

[couta1]

Good going on the Sum sale Roger, are you still holding any?

[winner69]

Hey, I can't let that one slide through to the keeper without a response, especially after you comment earlier in the Air thread, you keep bowling bounces eventually I have to hit one away even though we're mates and all that..its time I updated you on my SUM position, (Sold out half at $3.58 and then the other half at $3.52 some time back) :cool: Sometimes technical analysis works, sometimes it doesn't :)

And $6.50 is a pretty fair valuation as well- esp as Things are only 'on track' for 2015 as Simon says at AGM so another 16% profit increase year still has 800 at elevated multiples whichever one you want to use.

[Beagle]

Good going on the Sum sale Roger, are you still holding any?

None at present mate.

[couta1]

None at present mate.
Make sure you buy a few back before next year so you can attend the AGM, actually stuff the AGM better of just going cruising in the big block I reckon:cool:

[Beagle]

Make sure you buy a few back before next year so you can attend the AGM, actually stuff the AGM better of just going cruising in the big block I reckon:cool:

Yeah it was great catching up with you and the other blokes. Its a moving fest mate. Ryman and SUM have corrected considerably since we hooked up 3 months ago. When the price is right I'll be back.
Yeap bring the big block next time mate :cool:

[Vaygor1]

And $6.50 is a pretty fair valuation as well- esp as Things are only 'on track' for 2015 as Simon says at AGM so another 16% profit increase year still has 800 at elevated multiples whichever one you want to use.

It can't get to $6.50 Winner, based on the simple fact that if the SP drops to anywhere near $7.00, I will be buying every share in existence from those who want to sell. :D

[Vaygor1]

Unable to make the AGM but everything on track but some may think they are overstretching themselves with a land bank of 13 sites lined up, sticking by my $7.90 bottom though hit $7.92 so far, no one else willing to pick a bottom price other than Rogers very hopeful $6.50 ?

Hi Couta.

Can you clarify where you get the number 13 from? From RYM's announcement yesterday (Refer https://www.nzx.com/companies/RYM/announcements/253278 ),

New villages are being planned at:
1 Birkenhead, Auckland
2 Devonport, Auckland
3 Brandon Park, Melbourne
4 Pukekohe
5 Newtown, Wellington
6 Tropicana Farm, Blockhouse Bay, Auckland
7 Greenlane, Auckland
8 Rangiora, Canterbury

I note that they have not included the new college site at Wheeler's Hill in this list, are there any others?

On top of this, there are 3 under construction but as such I wouldn't count them as Land Bank, especially numbers 1 and 2 below which now have residents I understand.

1 Bruce McLaren Retirement Village, Howick, Auckland
2 Weary Dunlop Retirement Village, Wheelers Hill, Melbourne
3 Petone

[Beagle]

I started this $6.50 thing by stating that's where I saw it at fair value to me a little while back and stand by that view.

In my opinion many people, myself included have a required rate of return in equities that fairly rewards them for the specific risk of a stock and the market risk. Lets suppose for the sake of this argument that a typical expected return on an equity investment is 15%. Lets also suppose that RYM achieve their medium term stated goal of 15% EPS growth and we know their dividend yield is 1.4%.

I'd be expecting a 13.6% improvement in the SP to compensate me for the equity risk and woefully low dividend yield. The stocks trailing PE had blown out to 35 times last years underlying EPS results when I made that comment a while ago and in my view this isn't supported by a 15% growth rate in EPS.

My contention is that a PE in the mid-late twenties is more appropriate with a 15% growth rate going forward which is supportive of a price of approx. $6.50 as at about 2 months ago.

I think its more likely that we will see a lengthy pause in the SP at around current level's while we wait for growth to catch up. If the stock price does nothing for say 18 months in effect shareholders only get a 1.4% dividend yield and in my case, this undershoots my required rate of return by 13.6%. Therefore I am indifferent to paying $6.50 now or about $8 in 18 months or so.

Look at it another way, the stock price is up 125% in the last two years and the EPS growth has been 40%. Ask yourself whether the price can keep going up unsupported by EPS growth ?
PE expansion cannot go on forever and in my opinion is highly likely we'll get PE contraction either through continuing price correction of lengthy SP stagnation.

[winner69]

I started this $6.50 thing by stating that's where I saw it at fair value to me a little while back and stand by that view.

In my opinion many people, myself included have a required rate of return in equities that fairly rewards them for the specific risk of a stock and the market risk. Lets suppose for the sake of this argument that a typical expected return on an equity investment is 15%. Lets also suppose that RYM achieve their medium term stated goal of 15% EPS growth and we know their dividend yield is 1.4%.

I'd be expecting a 13.6% improvement in the SP to compensate me for the equity risk and woefully low dividend yield. The stocks trailing PE had blown out to 35 times last years underlying EPS results when I made that comment a while ago and in my view this isn't supported by a 15% growth rate in EPS.

My contention is that a PE in the mid-late twenties is more appropriate with a 15% growth rate going forward which is supportive of a price of approx. $6.50 as at about 2 months ago.

I think its more likely that we will see a lengthy pause in the SP at around current level's while we wait for growth to catch up. If the stock price does nothing for say 18 months in effect shareholders only get a 1.4% dividend yield and in my case, this undershoots my required rate of return by 13.6%. Therefore I am indifferent to paying $6.50 now or about $8 in 18 months or so.

Look at it another way, the stock price is up 125% in the last two years and the EPS growth has been 40%. Ask yourself whether the price can keep going up unsupported by EPS growth ?
PE expansion cannot go on forever and in my opinion is highly likely we'll get PE contraction either through continuing price correction of lengthy SP stagnation.

History shows that whenever RYM gets to elevated multiples the next 3-5 year returns are generally negative (a post of some months ago giving the details for which I got some red marks)

Your day will come ....even voyager will run out money at $7 to give us the opportunity at $6.50 and we will make heaps of money (again)

(and for couta - during this turmoil RYM will still build heaps and make heaps of money)

[Beagle]

History shows that whenever RYM gets to elevated multiples the next 3-5 year returns are generally negative (a post of some months ago giving the details for which I got some red marks)

Your day will come ....even voyager will run out money at $7 to give us the opportunity at $6.50 and we will make heaps of money (again)

(and for couta - during this turmoil RYM will still build heaps and make heaps of money)

Yeah mate we are definitely on the same page with this one. People who keep citing the strong demographic tailwinds in this sector forget that this has been trumpeted from every hilltop and frankly you'd have to be living under a rock, (probably on the moon), to have not already heard the "favourable demographics" message many times over which means its already fully priced in and then some. I'm out of this sector completely until common sense valuations start to prevail again.

[Vaygor1]

… Look at it another way, the stock price is up 125% in the last two years and the EPS growth has been 40%. Ask yourself whether the price can keep going up unsupported by EPS growth ?
PE expansion cannot go on forever and in my opinion is highly likely we'll get PE contraction either through continuing price correction of lengthy SP stagnation.

I know your view Roger. We have discussed it at length in the past. Not only that, I respect your viewpoint and in many ways hope you are right (via SP contraction or stagnation), for if you are it will afford me another opportunity to increase my RYM holding at even more of a bargain than exists today.

My view is that 2 years ago the stock price was undervalued. The 125% growth in SP is magnitudes smaller than the likes of speculative XRO and DIL have witnessed in recent times.

RYM's short term growth is a function of what they were doing 5-7 years ago regarding expansion. If you look back 5-7 years this was a time RYM took another leap up in build rate, resident numbers etc. Based on statistics those new residents back then are now 'moving on' (as we all will one day), and the gain in property prices upon resale of the occupation rights will become realised.

When I bought at a PE of 35 a long time back, the shares paid for themselves by way of earnings in 7 years given RYM's growth rate which is substantially the same today as it was back then.

You refer a lot to the dividend yield as a measure which is okay, but it is this retention of what would otherwise be payed out as dividends that fuels RYM's growth. Many companies over the years have paid zero dividends and retained every sent of their earnings every year with spectacular results in growth and share price.

As always, time will tell. We are all so much wiser after the event. :)

[Vaygor1]

Just looked back in the 5-7 year ago region for RYM and housing prices:


2007-2008 Sales of occupation rights jumped from 480 to 580. Increase of 21%
2006-2014 Median NZ house price moves from $300k to $425k. Increase of 42%

Build rate:

6073

So by about now, new residents will be paying 42% more then RYM's current book value for the units being vacated. The number of resales should be up about 21% on last year. Then add to this the new sales occurring currently in Bruce McLaren and Wheelers Hill.

Is there demand for RYM's existing portfolio and future portfolio given the size of their land bank? Well, I think the scales are about to tip. If anything, RYM is late. Refer below from RYM 2011 results briefing.

6074

To the best of my recall, I think Simon Challies stated quite recently that if RYM maintain their existing growth rate every year until 2040, their NZ market share will only be 18% so plenty of room for SUM, MET and potential new players like Oceania.

[percy]

In the next 10 to 20 years the number of people in NZ 65 and older is expected to be over 1,000,000.
May pay RYM,SUM and others to up the build rate yet again?

[Beagle]

In the next 10 to 20 years the number of people in NZ 65 and older is expected to be over 1,000,000.
May pay RYM,SUM and others to up the build rate yet again?

Yes mate but will we be here to see it in 20 years ?

Property Developer sees the market cooling.
http://www.stuff.co.nz/business/industries/10332821/Developer-sees-softer-property-market?cid=edm:businessday:dailybrief

Vaygor1 - I think the Reserve Bank are determined to cool the property market down and the market is starting to ask have we hit a peak with house prices and if so what does that mean that in the long run ? Are these Retirement village operators going to face declining profit margins on resale in the medium term ?
The market has had an exceptional run in Auckland. Are you coming back to N.Z. ?
Certainly if you look at it from an issue of affordability with the average house price in Auckland now ~ $700,000 you'd have to wonder. You've only got to get the slightest doubt on future growth on a PE of 35 and the market can correct quickly.
We're already down about 7-8% in Rym and SUM in the last 3 months.

[percy]

[QUOTE=Roger;495259]Yes mate but will we be here to see it in 20 years ?

I certainly will be.Older and bolder.!!!
However it did occur to me that the next ticket for retirement home operators to click could be funeral parlours.
"Total care,you never have to leave the village,ever." Don't know whether I would like my ashes around the rose garden,or overlooking the bowling green.

[winner69]

[QUOTE=Roger;495259]Yes mate but will we be here to see it in 20 years ?

I certainly will be.Older and bolder.!!!
However it did occur to me that the next ticket for retirement home operators to click could be funeral parlours.
"Total care,you never have to leave the village,ever." Don't know whether I would like my ashes around the rose garden,or overlooking the bowling green.

Seems a logical bolt on acquisition .... probably more profitable than care facilities

Cost for spreading ashes around the rose garden will be $200 - great money making idea here for the operators

[Winston001]

The Southland Times reports that there are are no vacancies for resthome residents.

http://www.stuff.co.nz/southland-times/news/10330215/Long-waiting-lists-for-rest-home-rentals

I'd guess this is not quite accurate because there are other rest homes, but PSS is the major player in the market.

[percy]

The Southland Times reports that there are are no vacancies for resthome residents.

http://www.stuff.co.nz/southland-times/news/10330215/Long-waiting-lists-for-rest-home-rentals

I'd guess this is not quite accurate because there are other rest homes, but PSS is the major player in the market.

Loved the comments from local Gun-Ho MP.!!!!

[Vaygor1]

Yes mate but will we be here to see it in 20 years ?

Property Developer sees the market cooling.
http://www.stuff.co.nz/business/industries/10332821/Developer-sees-softer-property-market?cid=edm:businessday:dailybrief

Vaygor1 - I think the Reserve Bank are determined to cool the property market down and the market is starting to ask have we hit a peak with house prices and if so what does that mean that in the long run ? Are these Retirement village operators going to face declining profit margins on resale in the medium term ?
The market has had an exceptional run in Auckland. Are you coming back to N.Z. ?
Certainly if you look at it from an issue of affordability with the average house price in Auckland now ~ $700,000 you'd have to wonder. You've only got to get the slightest doubt on future growth on a PE of 35 and the market can correct quickly.
We're already down about 7-8% in Rym and SUM in the last 3 months.

Hi Roger.

The reserve bank is sure trying to cool the market, but the the government won't want property values to start going negative.
I have posted this graph before I think, not sure if it it was on this thread.

6079

The only year the since 1992 the median has dropped by any real margin was in 2009 and it took a Global Financial Crisis to do it.

The 7 year cycle from sale to resale of a retirement unit irons this out further. Eyeballing the chart above, I get the following:

6083

This shows that the last year (or last two years if using a 6-year cycle) of realised property value increase through the resale of occupation rights should be the worst to-date for RYM, and yet their last two years' results have still been sterling.

So in this respect, and with retirement unit demand further outstripping supply as per the graph in my last post, I am comfortable.

[couta1]

Hi Couta.

Can you clarify where you get the number 13 from? From RYM's announcement yesterday (Refer https://www.nzx.com/companies/RYM/announcements/253278 ),

New villages are being planned at:
1 Birkenhead, Auckland
2 Devonport, Auckland
3 Brandon Park, Melbourne
4 Pukekohe
5 Newtown, Wellington
6 Tropicana Farm, Blockhouse Bay, Auckland
7 Greenlane, Auckland
8 Rangiora, Canterbury

I note that they have not included the new college site at Wheeler's Hill in this list, are there any others?

On top of this, there are 3 under construction but as such I wouldn't count them as Land Bank, especially numbers 1 and 2 below which now have residents I understand.

1 Bruce McLaren Retirement Village, Howick, Auckland
2 Weary Dunlop Retirement Village, Wheelers Hill, Melbourne
3 Petone
Hi Vaygor, That 13 was a wrong figure it should be 10 counting the new college site at Wheelers Hill and you would count Petone as it is still only at the earthworks stage,cheers

[Beagle]

Hi Vaygor1,

Fair enough but just FYI I had the GM of one of the major Australian owned real estate companies in my office last week and he told me the Reserve bank's policies have been extremely tough on the provinces and that's before the last 25 bps increase. Prices down on average $30,000 in many of the provinces year on year.

That there is plenty of demand going forward in the retirement sector, that's a given.

Hi Percy,

You make a good point about funeral parlours with great humour, good post :)

[percy]

"I say is that the smell of roast pork for lunch?"
"No, they are cremating old Percy who died the other day.!"

[Joshuatree]

Or dehydrate you and tan your hide and make 10,000 bookmarks :)

[Vaygor1]

In New Plymouth, the crematorium with its belching chimney is right next door to the water treatment plant. Maybe a market there for bottled drinking water with extra nutrients, from the source. Yum :drool:

[Beagle]

The Oracle of Plymouth...yes folks rock up... this very special water will give you magic powers conferred upon us by the legendary share trader uncle Percy himself...get that goodness right inside you :)

[winner69]

Was last week but good on ryman
http://www.scoop.co.nz/stories/BU1407/S00837/ryman-wins-most-trusted-retirement-village-brand.htm

More credible Han some other awards in the sector?

[Joshuatree]

...."No one has ever escaped our dementia wards (but we seem to always have a few extra stroppy patients when we headcount)".....

[Vaygor1]

Was last week but good on ryman
http://www.scoop.co.nz/stories/BU1407/S00837/ryman-wins-most-trusted-retirement-village-brand.htm

More credible than some other awards in the sector?

Thanks Winner.
Yes, in my view this award is a lot more credible than some of the awards that other players in the sector claim.

On a separate note. I see SUM down to $3.00 today.