RYM - Ryman Healthcare

[Beagle]

Most trusted car brand in the same survey - Toyota Hmmm, let me think, how many problems have they had lately. .unintended acceleration, settling massive legal claims in the States, recalls, quality control issues e.t.c.
Could it just be that respondents just blurted out the name they knew the best ?

[percy]

With both the EMA and the share price sitting on $8.00 we are living in interesting times?!

[couta1]

I doubt it very much I'd say $7.90 bottom:cool:
Hey winner im sticking by my prediction she hit $7.90 low this morning .

[winner69]

Hey winner im sticking by my prediction she hit $7.90 low this morning .

Hope that is the bottom then ... isn't that what you were implying

Doubt it

[couta1]

Hope that is the bottom then ... isn't that what you were implying

Doubt it
Well see has held for 3 weeks now without going below $7.90 since I posted the above:cool:

[Beagle]

Well see has held for 3 weeks now without going below $7.90 since I posted the above:cool:

Honestly mate I think you can take it as read that SUM's result is an indicator its not all a bed of roses in this sector anymore. Be careful and set a maximum stop loss of 10%.

[winner69]

Hey winner im sticking by my prediction she hit $7.90 low this morning .

Bugger

Tomorrows another day eh

[couta1]

Bugger

Tomorrows another day eh
Yeah never mind at least it lasted 3 weeks, right now I'm looking out the motel window at Lake Wakatipu and straight above that the Remarkables close enough to touch almost and tomorrow its time to hit the slopes and even with one arthritic knee I can still ski well so let the share price do its own thing for now, one things for sure this sector will shine again in the not too distant future:cool:

[troyvdh]

I acknowledge that daily debate is...interesting but where the share price will be in 5-10 years is of more importance to me...hopefully it will be about 2.50 after two further share splits....cheers

[dingoNZ]

I acknowledge that daily debate is...interesting but where the share price will be in 5-10 years is of more importance to me...hopefully it will be about 2.50 after two further share splits....cheers


Exactly my thoughts, my portfolio is very overweight with Health/Agecare currently and I'll be holding for the 10 year+ timeline.

Heard through the grapevine support around $8.00ish was lost due to a large offshore insto stopping buying yesterday. Will be picking up more over the next month or two.

[winner69]

Exactly my thoughts, my portfolio is very overweight with Health/Agecare currently and I'll be holding for the 10 year+ timeline.

Heard through the grapevine support around $8.00ish was lost due to a large offshore insto stopping buying yesterday. Will be picking up more over the next month or two.


likes of me and Roger just maximising those long term returns. Sell when totally overvalued and then buy heaps more when undervalued. Oh dear that called trading but not really as we probably only need to buy or sell every few years.

Can't speak for Rog but I'm sure he knows like me RYM will be $2.50 again some time, after a couple of splits

So for some us this chatter is useful, and meaningful

No doubt there are some others who even trade the 20 / 30 cent swings as well. Not for me though

[Joshuatree]

Sold the last of my 3 tranches @ re $8.20 too( just before the MDA was hit.). I guess the overhang now is Oceania and when it plans to list and at what multiples etc..Mkt doesn't like uncertainty.

[winner69]

Big village operators mentioned as to blame for the impending demise of Ropota

Not far from the s****y soon to be built Ryman village

http://www.stuff.co.nz/dominion-post/news/local-papers/hutt-news/10372834/Retirement-villages-future-in-doubt

[Harvey Specter]

Big village operators mentioned as to blame for the impending demise of Ropota

Not far from the s****y soon to be built Ryman village

http://www.stuff.co.nz/dominion-post/news/local-papers/hutt-news/10372834/Retirement-villages-future-in-doubtNothing to do with the watertight issues?

[couta1]

Nothing to do with the watertight issues?
Nah margins are too tight I hear through the grapevine.

[percy]

"Weir blamed the growth of large retirement villages that could offer cheaper fees and a wider range of service among other factors [watertight?]
Hardly think Ropota will be missed??

[Longhaul]

Nothing to do with the watertight issues?

Are you suggesting that new residents wouldn't want to buy an apartment that has a history of water tightness issues? I would think that's a perfect reason not to buy, just as we see in the residential market. Who in their right mind wants to open that can of worms?

[Harvey Specter]

Are you suggesting that new residents wouldn't want to buy an apartment that has a history of water tightness issues? I would think that's a perfect reason not to buy, just as we see in the residential market. Who in their right mind wants to open that can of worms?exactly. They are trying to blame the big operators but the biggest issue appears to be watertight issues which are very expensive to fix, especially when compared to the low value of the apartments $100k apartment with $100k of remedial work (and 6 months empty) is worthless.

[winner69]

OMG did I see RYM at $7.60?

[Vaygor1]

OMG did I see RYM at $7.60?

Yes. If they get below $7.40 I will begin to prepare my takeover offer of the entire company. :cool:

[Beagle]

Big village operators mentioned as to blame for the impending demise of Ropota

Not far from the s****y soon to be built Ryman village

http://www.stuff.co.nz/dominion-post/news/local-papers/hutt-news/10372834/Retirement-villages-future-in-doubt

Where did they find the architect for that monstrosity, the Blind Institute ?

[In4a$]

My sentiments exactly, the perfect shape for a leaky building,

[Vaygor1]

Where did they find the architect for that monstrosity, the Blind Institute ?

I once gave a blind friend of mine a cheese grater for christmas…. he reckoned it was most violent book he ever read. :eek2:

[Vaygor1]

Big village operators mentioned as to blame for the impending demise of Ropota

Not far from the s****y soon to be built Ryman village

http://www.stuff.co.nz/dominion-post/news/local-papers/hutt-news/10372834/Retirement-villages-future-in-doubt

I think the share trader automated moderation algorithm needs an upgrade…. a bit over top when it takes the wạṉḳ out of swạṉḳy.

[winner69]

Boston Consulting Group do an annual TSR (Total Shareholder Return) report. This year it covers an analysis of 1620 companies, filtered out of over 10,000 companies world wide. So a true global analysis

There Value Creators rankings are based on TSR over the last five years\

Ryman is ranked 8th in the Healthcare Services category.

TSR has averaged 45.4% pa over the last 5 years. Sales gowth accounts for 18%, margin change 34% and surprisingly multiple changes is negative 13%

Great effort and ahead of the likes of Cigna

Well done Ryman, one of the great global Value Creators

In all the Top 10 Tables for all the other sectors the only other ANZ company mentioned is Fortuscue in Australia

[percy]

Boston Consulting Group do an annual TSR (Total Shareholder Return) report. This year it covers an analysis of 1620 companies, filtered out of over 10,000 companies world wide. So a true global analysis

There Value Creators rankings are based on TSR over the last five years\

Ryman is ranked 8th in the Healthcare Services category.

TSR has averaged 45.4% pa over the last 5 years. Sales gowth accounts for 18%, margin change 34% and surprisingly multiple changes is negative 13%

Great effort and ahead of the likes of Cigna

Well done Ryman, one of the great global Value Creators

In all the Top 10 Tables for all the other sectors the only other ANZ company mentioned is Fortuscue in Australia

And I think it would be fair to expect they will continue to create value for the foreseeable future, with the huge ageing population tail wind .

[Joshuatree]

Also Qube in Australia is a top 10 too. Thanks winner really int ,cheers JT(looking forward to the day i buy back in.)

[dingoNZ]

Happen to have a link/copy to said report?

[winner69]

Happen to have a link/copy to said report?

https://www.bcgperspectives.com/content/articles/value_creation_strategy_turnaround_transforming_va lue_creation/


And then download in what format you want

[winner69]

Ryman Healthcare wins praise

http://www.stuff.co.nz/business/better-business/10407278/Ryman-Healthcare-wins-praise

[troyvdh]

...Wow...that was the post I was going to make yesterday.....Wow ...that is the post I making Im making today...I would really appreciate a post of someone who sold in the mid $7 range....basically why....I would love to here the rationale....

I also have made grave errors...I sold POT at $1 ...years ago...still crying

[winner69]

Oh shucks

An aussie view

http://seniors-housing.net/core/ryman-share-price-to-come-under-further-downwards-pressure/

Ryman share price to come under further downwards pressure

August 20, 2014


stock-market-trendsCHRISTCHURCH: The market does not fully appreciate how Ryman’s business model is based on constantly rising property prices.
It underpins re-sale price points, and is a tide constantly lifting balance sheet valuations.
Any prolonged blip would be disastrous.
But dark clouds are forming. Ryman has overpaid to land bank in Melbourne. Now a major listed ASX company is forecasting a rate of growth of only 1 per cent. And in NZ Westpac’s latest Home Truths Newsletter predicts a “pervasive downturn in property prices within 6 months…

… Full story covered in the AGED CARE HOUSING WEEKLY

[troyvdh]

mmmm....have not some of us not mentioned this connection before.....

lets not forget that folk will still sell there homes...and will still purchase whatever retirement homes (RYM et al).....what ever the market....but hey do folk expect the historic returns from Ryman to continue !!!!!!!!...gee even half the returns would be enough for me...cheers

[winner69]

Shareprice getting down to levels not seen for some time

The 750/760 level is technically very important

If it goes lower than the 750 than likely to go to 700 or less

Half year not until early November ... so could be lacking a bit of interest up to then

Ryman less than 7 bucks .... could be

The Future is Now .... no that was a few months ago so maybe the Future is in the Past is appropriate

[Beagle]

$6.50 here we come. More than happy to wait until then, all the risk is to the downside. I honestly believe they vastly over-paid for their Australian sites and what they're building on there is not something to be proud of.

[dingoNZ]

My last by at $8.15 isn't looking too sharp at the moment! Luckily I'm in for the longhaul and happy to just chip away getting more as I see fit :)

Still a firm believer in their model and management.

[Vaygor1]

The current (Sept 2014) site-development design/engineering/construction work being undertaking by RYM is:

6283
Source: http://www.rymanhealthcare.co.nz/images/Ryman_Times_Spring14_Spreads.pdf

The above is just FYI, but while on the subject, RYM's 2008 build-rate increased by over 200% compared to 2007; the biggest percentage increase this century in RYM's construction volume.

This year's Median NZ House price is up 22% from 2007
This year's Median NZ House price is up 25% from 2008

Average length of occupancy is about 7 years but bear in mind that in terms of resales 7 years down the track (ie about now), the timing of each unit's final completion and occupation together with the variability of life expectancy, this 200% increase in gets considerably ironed out.

Concerning the 3500 retirement village units and care beds occupied in or before 2007 these will be coming up for resale now. This years median NZ house price is:
42% more than in 2006
52% more than in 2005
77% more than in 2004
112% more than it was in 2003

With demand for retirement village living well outstripping supply I expect resale volumes to begin ramping up considerably between now and the next 3 years with a realised increase in the value of each unit averaging, well, …. a lot.

[In4a$]

My last by at $8.15 isn't looking too sharp at the moment! Luckily I'm in for the longhaul and happy to just chip away getting more as I see fit :)

Still a firm believer in their model and management.
Me to - I have been topping up as funds permit. Bit overweight in this sector now but hoping it will all pay off in 2 or 3 years.

[dingoNZ]

Me to - I have been topping up as funds permit. Bit overweight in this sector now but hoping it will all pay off in 2 or 3 years.


Between MET and RYM that's over 30% of my holding, which I'm comfortable with. Same position as you I'm just adding more as funds permit and into as the price dips down.

[Harvey Specter]

What's up at RYM today (other than the share price)?

Any news or just a random spike?

[Vaygor1]

What's up at RYM today (other than the share price)?

Any news or just a random spike?

No official news. My hunch is as follows...

Pinning down exactly what a fair price is for RYM is difficult but one thing for sure is that this is not a speculative share like DIL and XRO… the consistent results, cashflow, income, and tangible assets are all there, steeped in history.

If for whatever reason you decide say $8.00 is a fair share price today, then at 18% annual growth, all else being equal, this fair price becomes $8.03 one week later, $8.12 in a month, $9.44 in a year.
If you believe that $7.00 is a fair price right now then 18% growth puts this at $8.26 one year later.
Even if you go as low as $6.50 as Winner and Roger are hoping for, then the same calc puts the price back up to $7.80 in 12 months.
All these scenarios exclude the additional 13.5 cents in pre-tax dividends expected this financial year, so over one year you really have nothing to lose if buying at $7.85 now (today's opening price), save a Black Swan event.

The 52-week high is currently $8.95. Around that time (about 5 months ago) intra-day trading peaked over $9.00 I recall. RYM Directors are happy to buy reasonable volumes at $8.30 some time back.

The next announcement (1/2 yearly un-audited result) will be released in the next 60 days.

My expectation is for the SP to move up substantially in about a month's time in anticipation of this announcement and we all know that minimum 15% growth will be reported. Possibly quite a bit more in reflecting my last post.

So someone(s) will likely want to jump early.

Either the above hunch, and/or any combination of the following:


Two or more keen buyers competing for a while
Some insto's decision to gain a respectable holding
Director(s) buying up large (assumes the Directors are inside their allowable trading window)
Rumoured take-over offer
A tear in the fabric of space-time
The price of fish in Bulgaria.

[Harvey Specter]

Followed by a drop today. Any Chartists have an opinion, From my google finance, it looks like it is hovering around a cross of the 50 and 200 day moving average which are intersecting at the moment.

[Vaygor1]

Yes a golden cross (from a TA viewpoint)..
http://www.investopedia.com/terms/g/goldencross.asp
Not that close to intersecting yet on ASB Sec's website but they use 30day and 60day Moving Average so yours is a better indicator in this respect.

With the impending announcement 8 weeks away I expect the odd high volume buyer/accumulator insto to spike the price up. There'll likely be another spike soon, and then a more-or-less permanent move up a couple (or more) weeks before the 6-monthy result is released (on 20 or 21 Nov my guess).

[Beagle]

No mate we will have to agree to disagree on this one. I'm still waiting for my correction and I am very patient. It can be $6.50 now or $7.50 in 12 months or $8.00 in 18 months, I am ambivalent but still believe the PE is simply too high and that growth has already peaked for this company. Growth below 15% this year is my expectation, gut feel. They VASTLY over-paid for their Melbourne sites and are consequently building villages that are sub-optimal in terms of a lifestyle experience. Expansion into Australia has cost them plenty already in my opinion, momentum in N.Z., key management time and the fundamentals are not compelling with those land acquisition prices.
Oceania and the other float over-hang the market and I see no reason why this stock shouldn't have had a SUM type correction, (down 20% from the peak), which would have them at $7.20 now and still a bit expensive at that.
Happy to avoid until there's better value and a clear new uptrend emerging. Its not like with a sub 2% dividend yield anyone is being paid to be patient is it !! The market darling has run out of steam in my opinion.

[Vaygor1]

No mate we will have to agree to disagree on this one. I'm still waiting for my correction and I am very patient. It can be $6.50 now or $7.50 in 12 months or $8.00 in 18 months, I am ambivalent but still believe the PE is simply too high and that growth has already peaked for this company. Growth below 15% this year is my expectation, gut feel. They VASTLY over-paid for their Melbourne sites and are consequently building villages that are sub-optimal in terms of a lifestyle experience. Expansion into Australia has cost them plenty already in my opinion, momentum in N.Z., key management time and the fundamentals are not compelling with those land acquisition prices.
Oceania and the other float over-hang the market and I see no reason why this stock shouldn't have had a SUM type correction, (down 20% from the peak), which would have them at $7.20 now and still a bit expensive at that.
Happy to avoid until there's better value and a clear new uptrend emerging. Its not like with a sub 2% dividend yield anyone is being paid to be patient is it !! The market darling has run out of steam in my opinion.


We have already agreed to disagree Roger. I know from my end, and I am sure from your's, that there is no animosity between us on this difference of view whatsoever.

Time will tell. I hope I am not proved wrong.

For those reading your view, I just want to add that my pre-tax dividend started at well under 2% of my entire RYM investment. This year it will be 5.7%. Next year it will be 6.7%

Also, If you are right about RYM being ripped off for the two Melbourne sites:

1) For Wheelers Hill, it is all paid for anyway when fully occupied, and there is no shortage of takers… over double the required rate of sign-ups that formed the basis behind RYM's investment decision when buying the site.

2) For the old college site, RYM have the cash to buy it, and the transaction will be neutral from both a balance sheet and an equity viewpoint won't it? Only the carrying cost is impacted on the income statement which on the scheme of things its not that much. Happy to be corrected on this issue.

[winner69]

Yes a golden cross (from a TA viewpoint)..
http://www.investopedia.com/terms/g/goldencross.asp
Not that close to intersecting yet on ASB Sec's website but they use 30day and 60day Moving Average so yours is a better indicator in this respect.

With the impending announcement 8 weeks away I expect the odd high volume buyer/accumulator insto to spike the price up. There'll likely be another spike soon, and then a more-or-less permanent move up a couple (or more) weeks before the 6-monthy result is released (on 20 or 21 Nov my guess).

I think a golden cross some time off

50MA is 791 (trending down) and 200MA is 819 (still just trending up) so not getting any closer

Death Cross was about a month ago when shareprice was above 8 bucks

[couta1]

I think a golden cross some time off:cool:

50MA is 791 (trending down) and 200MA is 819 (still just trending up) so not getting any closer

Death Cross was about a month ago when shareprice was above 8 bucks
Not worried about what sort of crosses show on charts you can even chuck in a Death Star from star wars if you like but looking forward this stock will be a Shining Star again :cool:

[Beagle]

We have already agreed to disagree Roger. I know from my end, and I am sure from your's, that there is no animosity between us on this difference of view whatsoever.

Time will tell. I hope I am not proved wrong.

For those reading your view, I just want to add that my pre-tax dividend started at well under 2% of my entire RYM investment. This year it will be 5.7%. Next year it will be 6.7%

Also, If you are right about RYM being ripped off for the two Melbourne sites:

1) For Wheelers Hill, it is all paid for anyway when fully occupied, and there is no shortage of takers… over double the required rate of sign-ups that formed the basis behind RYM's investment decision when buying the site.

2) For the old college site, RYM have the cash to buy it, and the transaction will be neutral from both a balance sheet and an equity viewpoint won't it? Only the carrying cost is impacted on the income statement which on the scheme of things its not that much. Happy to be corrected on this issue.

I totally respect your point of view mate.
I simply think everything good about the stock is already factored into the SP and while its stays under its 100 day MA I can't make a case to myself to re-establish a position in RYM.
Classic case of waiting for TA to give the right signal to get back in IMO. SUM is weak too, the whole sector has had a heck of a good run.

[dingoNZ]

Interim results aren't too far away hold tight folks!

Still a happy LT holder here!

[percy]

Interim results aren't too far away hold tight folks!

Still a happy LT holder here!

I was speaking to a guy the other night, who had visited Wheelers Hill Melbourne village,Their new site, and opposition retirement villages.He was most impressed. In fact he thought it was fantastic.Stage one is 70% sold.

[winner69]

I totally respect your point of view mate.
I simply think everything good about the stock is already factored into the SP and while its stays under its 100 day MA I can't make a case to myself to re-establish a position in RYM.
Classic case of waiting for TA to give the right signal to get back in IMO. SUM is weak too, the whole sector has had a heck of a good run.

Jeez getting close to 750

Still quite a long way to go I fear

[Beagle]

Jeez getting close to 750

Still quite a long way to go I fear

Agree 100%. I've lost any interest in re-entering this sector. See post on long term fundamentals in SUM thread.
Future profits in my opinion will be undermined by a slowing in house price increases, (third most expensive country in the world for house prices on a per capita basis), simple logic suggests the most likely direction is our real estate will get cheaper on an international comparative basis, why with rising interest rates and a collapse in the dairy sector why would it continue to go up ?), so long term profits from resale will be compromised. Only Auckland is being propped up by massive level's of new immigrants, that can't last forever.

Been a great ride, party is over, PE too high, reality bites, beware the lengthy and painful hangover. Three companies looking to list in the retirement sector sucking ALL the wind out of the incumbent players sails, how could the stock possibly head north swimming against that tidal wave of new IPO's ? Stock is a great short position to take in my opinion, for those that get into that sort of thing.

[dingoNZ]

I'm a happy LT holder - ups and downs don't bother me too much, although on paper its hurting currently. Results aren't too far away however.

[Mista_Trix]

Lower lows, lower highs, and a death cross... surely a long down-trend ahead regardless of results.
RYM and SUM look to have turned, MET still chugging along though.

[Beagle]

Lower lows, lower highs, and a death cross... surely a long down-trend ahead regardless of results.
RYM and SUM look to have turned, MET still chugging along though.

Totally agreed but have you noticed the almost complete lack of depth to the buy side of MET today ?
The other thing is another nice warm winter and fewer residents vacating their units (SUM's resales announcements), doesn't give a bright indication of resales for RYM in the pending half yearly result.

[couta1]

I'm a happy LT holder - ups and downs don't bother me too much, although on paper its hurting currently. Results aren't too far away however.
Ditto but it doesn't matter if you have a 5 year time frame, would be nice to be buying at these lower prices rather than at $8 plus but I've given up trying to time the market I've learnt its a futile exercise for companies like Ryman with such good fundamentals and as Percy posted over on the Sum thread there's a gale force wind developing in terms of demand going forward.

[macduffy]

An interesting article by Patrick Smellie in today's DomPost - which doesn't seem to have found its way to the Stuff website yet - titled "Housing sector could be English's legacy".

According to Bill English "There's room for a product, not a gold-plated Ryman product, for around 15,000 tenants in some kind of medium-density communal living. We could have Housing Corp do that. It would be a long slow process. Or we could have a market compete to provide that product ......."

Implications for Ryman and the other retirement village providers - if/when it ever happens.

[Mista_Trix]

An interesting article by Patrick Smellie in today's DomPost - which doesn't seem to have found its way to the Stuff website yet - titled "Housing sector could be English's legacy".

According to Bill English "There's room for a product, not a gold-plated Ryman product, for around 15,000 tenants in some kind of medium-density communal living. We could have Housing Corp do that. It would be a long slow process. Or we could have a market compete to provide that product ......."

Implications for Ryman and the other retirement village providers - if/when it ever happens.

I only skimmed the article but wasn't that more in relation to state provided houses. So the types of individuals they're talking about wouldn't have the capacity to retire into a home anyway..??

[macduffy]

I only skimmed the article but wasn't that more in relation to state provided houses. So the types of individuals they're talking about wouldn't have the capacity to retire into a home anyway..??

Probably, but there's also a segment who may opt for the cheaper version to have more money to spend in other ways - on family, hobbies, travel etc. The other implication is that it may attract RYM etc to be the providers of this cheaper option - under a different brand, of course!

[percy]

Probably, but there's also a segment who may opt for the cheaper version to have more money to spend in other ways - on family, hobbies, travel etc. The other implication is that it may attract RYM etc to be the providers of this cheaper option - under a different brand, of course!

There will always be people who live on top of the hill,while others live at the bottom of the hill.
The challenges is going to be catering for all the different income levels.
We will see Penthouse to camping grounds,and all the time governments providing more services to keep people in their own homes.

[winner69]

Well well RYM below $7.50

You won't remember what I posted a few months ago because you all said it would never happen.

I pointed out that history shows that whenever RYM has a PE over 25 the future 3 to 5 years returns from holding RYM are negative, even when earnings steadily increase at their long term average of 15% plus every year. This happens because the PE reverts to more normal levels (overshoots on the downside at times)

If they continue to grow earnings at 18% pa and if history repeats itself expect the RYM shareprice to be sub $6 sometime in the next year or two (possibly even $5.00)

That's how I see it playing out and patiently waiting. The squiggly line on the chart is my guidance now ....and playing out how I thought it would, so far at least

[Vaygor1]

30-July-2014 And [RYM SP of] $6.50 is a pretty fair valuation as well...

18-August-2014 OMG did I see RYM at $7.60?
25-September-2014 RYM closes above $8.00


9-October-2014 Well well RYM below $7.50
You won't remember what I posted a few months ago because you all said it would never happen…

You are a stirrer Winner :), and no it is not near $6.50 yet.

I am a little surprised RYM is under $8.00 (it closed over $8.00 just two weeks ago) but it's not even close to 10% below that after nearly 2.5 months since your's and Rogers $6.50 figure appeared into existence.
History won't repeat itself because back then RYM was a relatively quiet and unknown share but not any more unfortunately and now it is only 6 weeks until the H1 results are out.

Even taking gains as per RYM's guidance and a modest share price of $7.50, RYM should be going up by 10 cents/month. (ie 1/12 of 16%/annum growth rate with $7.50 per share investment)

So if RYM is to fall below $6.00 or even $5,00 as you suggest (say $5.50) over the next year or two (say 18 months), then that would equate to a market price now of $5.50 (in 18 months from now) less $1.80 (ie 18 x 10 cents) = $3.70

In essence your saying RYM's SP right now is over double what the market will value RYM (with a 16% growth rate) at in 18 months from now.

I'm all for panic artists that sell through fear (it's where I, and you I suspect, make a lot of money) but don't you think you're over-encouraging the fear factor by more than just a tad here?

[winner69]

25-September-2014 RYM closes above $8.00



You are a stirrer Winner :), and no it is not near $6.50 yet.

I am a little surprised RYM is under $8.00 (it closed over $8.00 just two weeks ago) but it's not even close to 10% below that after nearly 2.5 months since your's and Rogers $6.50 figure appeared into existence.
History won't repeat itself because back then RYM was a relatively quiet and unknown share but not any more unfortunately and now it is only 6 weeks until the H1 results are out.

Even taking gains as per RYM's guidance and a modest share price of $7.50, RYM should be going up by 10 cents/month. (ie 1/12 of 16%/annum growth rate with $7.50 per share investment)

So if RYM is to fall below $6.00 or even $5,00 as you suggest (say $5.50) over the next year or two (say 18 months), then that would equate to a market price now of $5.50 (in 18 months from now) less $1.80 (ie 18 x 10 cents) = $3.70

In essence your saying RYM's SP right now is over double what the market will value RYM (with a 16% growth rate) at in 18 months from now.

I'm all for panic artists that sell through fear (it's where I, and you I suspect, make a lot of money) but don't you think you're over-encouraging the fear factor by more than just a tad here?

Most of all that reply, esp the $3.70 bit, qis based on bad logic.

I don't think you read my post, except the $5 bit which seems to have fired you up.

[Vaygor1]

Most of all that reply, esp the $3.70 bit, qis based on bad logic.

I don't think you read my post, except the $5 bit which seems to have fired you up.

Hi Winner.

I aren't fired up in the slightest.

I provided a rationale that says if the market was behaving in such a way to value RYM at $5.50 in 18 months from now as you suggest then what would the same market be valuing it at today given RYM's average SP growth rate of 10 cents/month? …. and I get $3.70.

If I toss out the 10cents/month basis and just use the 16% growth rate per annum for 18 months then the said market would be trading RYM at about $4.40 today. Still a far cry from $7.50 even if one assumes that $7.50 is irrationally high at present.

I believe the market giveth and the market taketh away but I know what the RYM board would be advising its shareholders to do in the event a takeover offer appeared for $5.00/share, and $6, and $7, and $8...

[winner69]

Vaygor - all I was saying was this: If RYM continues to grow EPS by 18% pa and if history repeats itself then a much lower RYM shareprice is likely.

The history is when Rymans PE gets over 30 then 3 to 5 year returns in subsequent years have been negative even though Ryman continued to grow EPS (in other words multiples shrink / sentiment is less bullish)

I repost this chart from several months (updated) as what I see happening in the future. Maybe the price might not fall to $5 or $6.50, it must drift sideways for a few years)

[Beagle]

W69 - Mate why are you using an 18% compound growth rate. RYM themselves claim their medium term growth rate is 15%. I think as house price growth slows they'll be lucky to get even that in the foreseeable future.

[winner69]

W69 - Mate why are you using an 18% compound growth rate. RYM themselves claim their medium term growth rate is 15%. I think as house price growth slows they'll be lucky to get even that in the foreseeable future.

Just that the last 2 years have been 19% and 18% ..... and I didn't want to paint a worse picture

[winner69]

Nice graph, winner. Any chance of redoing it using a PE of 25 or 30 (or both?) :)

Bit messy from the turn of the century

Suppose you and Vaygor like the black dotted line

[Beagle]

Bit messy from the turn of the century

Suppose you and Vaygor like the black dotted line

What do you know, a PE of 25 gives $6.50 :)

I am wondering if it'll over-correct to the downside below a PE of 20. I won't be buying when its $6.50 in due course that's for sure !!
So much new stock supply (both in terms of scrip and physical buildings) coming to market in this sector on both sides of the Tasman.

[Harvey Specter]

Bit messy from the turn of the century

Suppose you and Vaygor like the black dotted line
Arguable whether the best fit is PE of 20 or 25. Hard to see it getting below $6 (I was going to put $7 but didn't want to be wrong with the next 5 days)

[winner69]

What do you know, a PE of 25 gives $6.50 :)

I am wondering if it'll over-correct to the downside below a PE of 20. I won't be buying when its $6.50 in due course that's for sure !!
So much new stock supply (both in terms of scrip and physical buildings) coming to market in this sector on both sides of the Tasman.

And SUM might hit $2.50 soon as well

[Beagle]

And SUM might hit $2.50 soon as well

Poor old Norah with her 500,000 left in her family trust.

[winner69]

Need to keep an eye on chart to see where the downtrend will end so have one of my linear regression channel thingies. When price breaks out of this channel probably a time to think about buying again

Cant be right though vaygor. Price going down 0.6% a week when it should be going up 0.3% a week to match earnings growth

Chart starts May 1st this year - more than 5 months ago - things grind out slowly

[Vaygor1]

Bit messy from the turn of the century

Suppose you and Vaygor like the black dotted line

Thanks for the charts Winner.
They are very informative. I agree that, as nothing material has changed within RYM's growth/operation apart from their Australian business's economy-of-scale which can only improve from here-on-in, that irrespective of where the SP might eventually trend up again, that a TA analysis is the way to go at present and in the absence of any major news, squiggly lines are the order of the day. It appears to have certainly worked for you in selling around the low-mid $8 mark.

One question I have is that from 2002 until now you have used an EPS +18% per annum.
But looking at the graph below, the average actual figure from 2002 to-date is EPS +23% per annum.... slightly more than this if going to only 2012.

6321

6322


A graph using EPS +23% from 2002 to 2014 (No problems in using +16% looking forward in the interests of conservatism) and a PE of say 22 all the way from 2002 to the future would be of interest. Can you provide? Much appreciated if you can. Vaygor.

[Vaygor1]

Hi Winner.

I decided to create my own graphs given my post below (with tools a bit more basic than yours) using the historical EPS growth since 2000 of 23%.
I had to bring the graphs forward to 2005 as I am using a picture of the share price over time and can only go back 10 years.

Firstly I used a EPS growth of +18% since Jan 2000 with a PE of 20 right the way through so see if it looks like yours. Pretty close I think...

6323

Then I tried it with a EPS growth of +23% since Jan 2000 up to Jan 2014 to reflect actual history and then an EPS growth of +16% thereafter. PE is still 20 ....

6324

Lastly, is an EPS growth of +23% from Jan 2000 right through into the future. PE remains at 20. Not much diff in the short term to the one above...

6325

Raw data (in the same order) for the 3 graphs above are below. I have highlighted in bold Jan-2015 as it is only 3 months away and Jan-2018 for comparison for about 3 years out. I think you will need to click on the data to see it properly.

6327

Would welcome constructive critisism of this as the last two graphs almost look too good to be true. But regarding the 1st graph, unless something major changes down the track, I do struggle to imagine a RYM shareprice as low as $8.85 in Jan-2018 given the SP has peaked above that already, and that some months back the directors had no trouble at purchasing good volumes around the $8.30 mark.

[winner69]

Vaygor

Take it you using underlying earnings (per share)?

I can't quite follow your rationale about taking a 2000 figure and applying growth rates for the next 18 years.

The 'validity' of that methodology is to reconcile with reality in 2014. Underlying eps in 2014 was 23.6 cents. Your tables for 2014 have 22.83 cents for the first chart and 40.82 cents for the other charts

Whereas the first chart uses an eps close to reality)actual) there is some credence in what the chart represents going forward.

But when you use a 2014 number which is significantly higher than reality(actual) and then extrapolate that number forward aren't you really painting a false picture? Note: you have 2018 eps on the most optimistic view at 93.43 cents - that's an implied growth rate of 41% pa from actual 2014 to your assumed number. You believe that?)

I would contend (and how my charts were created) that you need to start with the latest known numbers (March 2014 eps) and then extrapolate forward using whatever assumptions you think are reasonable.

Bottom two charts look good (as you say) but I feel my lead into a false sense of security, because it essentially showing RYM as very much undervalued at the moment.

Hope constructive criticism

[Snow Leopard]

If you want a really frightening way of looking at Ryman:

For the FY2014 they made an operating NPBT of about $30m (EPS = 6c) on a NTA (property) of $1.85.

They were able to achieve this great result because apart from the $0.55 per share in bank loans they have $2.61 per share of interest free loans from granny and granddad which they refuse to repay until someone lends them a replacement (practically a PONZI scheme).

They are in the position where they can grow that operating profit & NTA at 18% pa, which in my books is worth a P/E of 20.

So in March it was either worth $0.06 * 0.72 (nominal tax paid) * 20 = $0.84 based on profits or the $1.85 based on NTA.

Maybe you could really stretch the valuation and say it was worth $1.85 plus the $2.61 robbed from the elderly for a grand total of $4.64.

Oh and because they pay a dividend greater than the operating profit they have to borrow money for that!

Best Wishes
Paper Tiger

Disc: Currently hold none of MET, RYM or SUM. Will buy again when the trend becomes friendly, but I do worry about how these things get valued.

[winner69]

If you want a really frightening way of looking at Ryman:

For the FY2014 they made an operating NPBT of about $30m (EPS = 6c) on a NTA (property) of $1.85.

They were able to achieve this great result because apart from the $0.55 per share in bank loans they have $2.61 per share of interest free loans from granny and granddad which they refuse to repay until someone lends them a replacement (practically a PONZI scheme).

They are in the position where they can grow that operating profit & NTA at 18% pa, which in my books is worth a P/E of 20.

So in March it was either worth $0.06 * 0.72 (nominal tax paid) * 20 = $0.84 based on profits or the $1.85 based on NTA.

Maybe you could really stretch the valuation and say it was worth $1.85 plus the $2.61 robbed from the elderly for a grand total of $4.64.

Oh and because they pay a dividend greater than the operating profit they have to borrow money for that!

Best Wishes
Paper Tiger

Disc: Currently hold none of MET, RYM or SUM. Will buy again when the trend becomes friendly, but I do worry about how these things get valued.

As one poster puts it not sure if you are taking the piss PT

No way will RYM be $5 (let alone $4.64) again I'm told ....the market is that irrational

[Snow Leopard]

As one poster puts it not sure if you are taking the piss PT

No way will RYM be $5 (let alone $4.64) again I'm told ....the market is that irrational

It is interesting to model a mature retirement village scenario where all growth is just the nominal 2.5% inflation figure and see how much you want to pay for that.

Best Wishes
Paper Tiger

[Vaygor1]

Vaygor

Take it you using underlying earnings (per share)?

I can't quite follow your rationale about taking a 2000 figure and applying growth rates for the next 18 years.

The 'validity' of that methodology is to reconcile with reality in 2014. Underlying eps in 2014 was 23.6 cents. Your tables for 2014 have 22.83 cents for the first chart and 40.82 cents for the other charts

Whereas the first chart uses an eps close to reality)actual) there is some credence in what the chart represents going forward.

But when you use a 2014 number which is significantly higher than reality(actual) and then extrapolate that number forward aren't you really painting a false picture? Note: you have 2018 eps on the most optimistic view at 93.43 cents - that's an implied growth rate of 41% pa from actual 2014 to your assumed number. You believe that?)

I would contend (and how my charts were created) that you need to start with the latest known numbers (March 2014 eps) and then extrapolate forward using whatever assumptions you think are reasonable.

Bottom two charts look good (as you say) but I feel my lead into a false sense of security, because it essentially showing RYM as very much undervalued at the moment.

Hope constructive criticism

Very constructive thanks Winner and much appreciated.

Yes, the basis behind using an historical growth of 23% annum is based on Underlying Profit as per my first post yesterday.
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=510810&viewfull=1#post510810
Underlying Profit being non IFRS measure but a better reflection of the actual profits realised by RYM excluding one-offs etc.

1st chart in my previous post has 2014 EPS of 22.83 cents and the 2nd two charts have 2014 EPS of 40.82 cents.
According to page 19 of RYM's latest audited Annual Report, the EPS at 31-March-2014 was 39 cents/share.

6328

So what's the best to use? Your term of underlying EPS at 23.6 cents/share (Underlying profit divided by number of shares) or the reported EPS of 39 cents/share (net income less dividends all over number of shares)?

I hear a lot of companies reporting Underlying Profit to its stakeholders but don't recall hearing any company reporting Underlying EPS.
Not trying to be smart-arse here, just trying to understand.

[winner69]

RYM, SUM et al prefer to use Underlying Profit as a means of measuring financial operational performance of the company. The Report Profit is IFRS (what you posted)and includes the unrealised fair value adjustments. From your past comments I get the impression that you use the underlying profit figure.

As new guy posted on sum thread - Underlying profit differs from NZ IF RS net profit after tax. The directors have provided an underlying profit measure to assist readers in determining the realised and non-realised components of fair value movement of investment property and tax expense in the Group’s income statement. The measure is used internally in conjunction with other measures to monitor performance and make investment decisions. Underlying profit is an industry-wide measure which the Group uses consistently across reporting periods.

I use both but preference is for the IFRS figure. The charts yesterday were on underlying numbers because most readers of this thread think this is best.

Use what suits you best. But take into account IFRS number is a lot higher than underlying so assumptions around multiples are different ( PE from 2002 to 2012 using underlying profit is about 20 but reported IFRS profit it is 17)

For reference below is the data I have used over the years (all care no responsibility for accuracy)

[couta1]

For those worried about the effect the possible listing of Hercules and Oceania will have on the current big three go and have a read of Taking Stock 25th Sept on the Chris Lee website, a very good article which I completely agree with and why I'm not worried if these two listings take place.

[Vaygor1]

… Use what suits you best. But take into account IFRS number is a lot higher than underlying so assumptions around multiples are different ( PE from 2002 to 2012 using underlying profit is about 20 but reported IFRS profit it is 17)…

Thanks again.

Makes sense to use lower PE if using IFRS EPS.

So using historical underlying profit growth rate of 22.6% per annum (up to 2014) and then 16% thereafter, but using a PE of 17 right the way through I get the following chart. The reason for adjusting EPS multiplier slightly to 22.6% (from 23% as per last post) is so that the EPS for Jan 2014 comes out at 39 as per RYM's March 2014 report.

6334

Raw Data as follows:

6333

As much as I don't want to be, I know I am biased being a holder but this graph 'feels' more realistic to me anyway. I know… each to their own and there's always more than one way to skin a cat.

Interesting that the 2018 figure hits $12.00 exactly. If using a growth of 22.6% instead of 16% all the way through to 2018, this number becomes $14.98

[winner69]

vaygor, when your table says Jan-14 $6.63 when in 2014 does that suggest the price could be $6.63? Assuming that Jan-14 is xls for 2014

I hope $12 plus sometime in 3 to 4 years - esp if it overshoots historical trends, My immediate interest is how it gets there and whether my returns are from $5 or $6 or $7 only time will tell

And this is all dependent on ever increasing property prices eh, earnings did go backwards one year didn't they

[Vaygor1]

vaygor, when your table says Jan-14 $6.63 when in 2014 does that suggest the price could be $6.63? Assuming that Jan-14 is xls for 2014 ….

Yes it does.
It also says Share Price in Jan-2015 three months from now (assuming a rational market) should be $7.69 but if EPS growth remains at the historical average of 22.6% for the year (instead of the projected 16%), this would be $8.13
I'd have to check back on the earnings history to see if they went backwards in one year. Will take a look.

[winner69]

Yes it does.
It also says Share Price in Jan-2015 three months from now (assuming a rational market) should be $8.13
I'd have to check back on the earnings history to see if they went backwards in one year. Will take a look.

the year you topped up I think when you were down the gurgler but held strong

[Vaygor1]

the year you topped up I think when you were down the gurgler but held strong

Hi. Sorry, just amended my last post, the Jan-2015 figure, which I read off the wrong chart version. Corrected now.

My drawn-out holding period at a large paper loss was from Jan-2008 till April-2010 as per my super disclosure post...
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=482295&viewfull=1#post482295

Have not purchased anymore RYM since Mar-2013 as I have enough. Have never sold any to-date either.

Note in the link (posted in late May this year) that I consider at the time that $8.40 was still a good price. Not so sure now, but how much is a share worth with a reliable and ongoing expanding rate-of-return of 15%-25% per annum? If everyone knew 100% that such a growth rate was going to be sustained in the medium to long term (and I think it will) then I am sure the SP would be quite a lot higher than it is at the minute.

[winner69]

Hi. Sorry, just amended my last post, the Jan-2015 figure, which I read off the wrong chart version. Corrected now.

My drawn-out holding period at a large paper loss was from Jan-2008 till April-2010 as per my super disclosure post...
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=482295&viewfull=1#post482295

Have not purchased anymore RYM since Mar-2013 as I have enough. Have never sold any to-date either.

Note in the link (posted in late May this year) that I consider at the time that $8.40 was still a good price. Not so sure now, but how much is a share worth with a reliable and ongoing expanding rate-of-return of 15%-25% per annum? If everyone knew 100% that such a growth rate was going to be sustained in the medium to long term (and I think it will) then I am sure the SP would be quite a lot higher than it is at the minute.

2009 was the year profits went backwards

[Vaygor1]

2009 was the year profits went backwards

Underlying profits or IFRS (GAAP?) profits? Underlying profit looks like it stagnated (even went up slightly) from 2008 to 2009.

UPDATE:
From 2007 to 2008 RYM took a huge leap in underlying profits. Maybe RYM got ahead of itself in that year as I think SUM might have done last year.

One thing i do know, is when any share performs poorly against expectations, then the market hammers the price through the floor. Great time to buy if the fundamentals remain intact.

[winner69]

Underlying profits or IFRS (GAAP?) profits? Underlying profit looks like it stagnated (even went up slightly) from 2008 to 2009.

Reported profits, not the underlying profit

[Vaygor1]

…..

Oh and because they pay a dividend greater than the operating profit they have to borrow money for that!
…..


RYM would disagree with that.

Refer http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=481023&viewfull=1#post481023

[winner69]

Vaygor, you might be interested in this plot of RYM earnings (reported eps) and shareprice over the years (as it happens the dots are in year order from left to right so joining the dots gives a shareprice line - well almost except for the year earnings went backwards).

The line of best fit is also shown which is the long term correlation between the 2.

I made a note that 2008 and 2011 were the years to buy for excessive returns for a long term holder and the last 2 years indicate future below average returns are likely

Not noted but 2006 wasn't a good time for an investor to buy if you didn't want to endure the paint of seeing your wealth shrinking or not growing for many years - but OK if you did a couta and held in there for the good times

[Vaygor1]

Vaygor, you might be interested in this plot of RYM earnings (reported eps) and shareprice over the years (as it happens the dots are in year order from left to right so joining the dots gives a shareprice line - well almost except for the year earnings went backwards).

The line of best fit is also shown which is the long term correlation between the 2.

I made a note that 2008 and 2011 were the years to buy for excessive returns for a long term holder and the last 2 years indicate future below average returns are likely

Not noted but 2006 wasn't a good time for an investor to buy if you didn't want to endure the paint of seeing your wealth shrinking or not growing for many years - but OK if you did a couta and held in there for the good times

Well noted thanks Winner & very interesting.
I guess not too many of these graphs on the NZX have the dots in order going nicely from left to right over the passage of time.

One question I have is that the line of best fit seems too low, I would have thought the line of best fit (only possible for this graph as the dots are in time order) is where the area bounded by the curve above the best fit line equals the area bounded by the curve below the best fit line. ie The orange line below.

6336

6337

I do understand though that this could be a false measurement as time is not actually a factor in this type of chart, so perhaps a better best-fit line is such that the total of each of the vertical distances from the best-fit line to each dot below equals the total of the vertical distances from the best fit line to each dot above. Just eye-balling it, this would bring the slope of the orange line down a bit I think, but not by much. Not sure this is right either but makes more sense than looking at areas.

[Vaygor1]

I've run enough regressions to say with (almost absolute) confidence that this is NOT the line of best fit. It would definitely be steeper. Those dots around the $8 mark are what we describe as "influential" and have an inordinate impact on the shape and location of least squares trendlines. Then again, perhaps you are using a different objective function (rather than minimising the sum of squared residuals) :)

Not sure but I think the x-axis may need to be logarithmic. You can see the data points getting further apart (maybe due to market variance?) along the horizontal plane. The graph is more like a scatter-plot of two non-time dependant variables. Interesting for sure.

[winner69]

NG, as you say about yourself sometimes I too was rather loose with my words. I meant to say the line of best fit based on 2002 to 2012 data extended out to 2014 with the assumption that 202/12 was more normal behaviour and 2013/14 has seen a year or two of behaviour not in line with previous times. Very remiss of me and probably immoral and unethical behaviour to disclose.

Highlights how far away from 'normal behaviour' the last 2 years have been for the RYM shareprice.

Pace car out at Bathhurst again

[Goldstein]

Well noted thanks Winner & very interesting.
I guess not too many of these graphs on the NZX have the dots in order going nicely from left to right over the passage of time.

One question I have is that the line of best fit seems too low, I would have thought the line of best fit (only possible for this graph as the dots are in time order) is where the area bounded by the curve above the best fit line equals the area bounded by the curve below the best fit line. ie The orange line below.

6336

6337

I do understand though that this could be a false measurement as time is not actually a factor in this type of chart, so perhaps a better best-fit line is such that the total of each of the vertical distances from the best-fit line to each dot below equals the total of the vertical distances from the best fit line to each dot above. Just eye-balling it, this would bring the slope of the orange line down a bit I think, but not by much. Not sure this is right either but makes more sense than looking at areas.

As others have mentioned best to use the least squares fit.

Note that the slope of the resulting (red) line is the PE ratio. There is a very good fit up to and including 2012. There's quite some evidence though that the PE ratio changed during 2013. If you use only the 2013 and 2014 data points (and constrain it to go through the origin) you end up with something a lot steeper and more like the orange line.

Question: Which one is currently the one to use (i.e., are we going to revert to the historical PE ratio)?

[Vaygor1]

Yup. It's effectively a cross sectional correlation analysis of time series data. Totally legit if done properly, but also highly prone to spurious inferences due to "stationarity" problems. :)

You are welcome to correct me if I am wrong, but time forms no axis on this chart so using traditional methods is questionable. Yes, each dot represents a data point at a given instance in time at regular intervals once a year, but if RYM experience a particularly bad year (say this financial year) then the 2015 red dot would almost certainly appear in the bottom left quadrant of the chart somewhere, and Time (for this chart) is well and truly out the window.

Using a bounded area to look at an the average cannot normally be used in this type of chart at all, but as qualified when I posted it, it can (kind of… just) be used on this occasion because as it happens the years 2002-2014 line up left to right nicely.

As such, I'm not sure what the right approach is. I think a least squares fit is up for debate too.

I am currently thinking about it but like any statistical analysis, differing methods and views can lead to differing results; none of them necessarily right or wrong.

[Goldstein]

Yes, you have a scatter plot there with a line drawn say using least squares fit. This procedure assumes each point is completely independent, order doesn't matter etc. No matter how you order those points you'll still get the same line.

However, by ordering the points in time you start to see something interesting, which you do here.

If you start to worry about relationships between points from year to year (serial correlation) , then you lose the independence between points and you need to so something a lot more involved as NewGuy suggests.

[Vaygor1]

So I did a bit of work. Tossed various scenarios here and there and decided to throw it away as a Log/Log seemed worth a try.

It occurred to me that as both the EPS and Shareprice numbers (ie both x and y axis) increased from 2002 to 2014 that variance increased too. This was evident in the bunching up of the data points of both the EPS and the share price in the earlier years, towards the left and the bottom respectively on the linear chart.

I further realised that in terms of percentage difference between any data point and its corresponding value on a a variety of lines-of-best-fit on a linear plot that the 2013 data-point was not as far off the mark as either 2006 or 2009. So on this basis if one opted to treat 2013 as an out-lie which seems a reasonable thing to do then 2006 and 2009 should be treated as out-lies too.

Anyway, with no trendline, here is the result. I have labelled each data point with its corresponding year:

6345

Now I have never taught stats, but I did get 97.5% in it at 2nd Pro Engineering school at Canturbury Uni (never was able to figure out at the time where I lost that elusive 2.5% :mellow: - sorry, can't find a smily face for a nerd) and it was all too long ago with little application since to re-educate myself on it. But throwing some trendlines in there, using excel, bears some interesting results. Any advise before I post some trendlines? On excel, a linear trendline is not a straight line (but nearly) whereby a power trendline does in fact produce a straight line on a log/log scale and seems to be the best one to use as RYM's figures generally speaking have been increasing at a fairly constant rate to-date.

[Vaygor1]

Nice graph Vagygor. I am not surprised that log/log transformation reveals a linear relationship. This is tantamount to a constant elasticity between EPS and Price. In other words, a given % change in EPS is associated with a constant % change in Price. This is to be expected IMHO.

Sorry about the 2.5%. I was never happy to leave any marks on the table :)

Thanks NG.

While what you say is true and correct, as you no-doubt know the SP-EPS relationship will differ between different types of business. ie A software company will have a very different SP-EPS relationship than a power station or an architectural consultancy etc.

This exercise is proving to be very insightful, thanks for sparking the interest up Winner… and such a relationship between the EPS and SP could well be used to analyse other companies in the same sector (ie SUM and MET) to give investors an additional method of arriving at a future (rational market) share price against an estimated future, or recent announced, EPS.

Arrrgh…. now I know where my 2.5% went !!! :)

Will post some trendlines later.

[Snow Leopard]

Anyway, with no trendline, here is the result. I have labelled each data point with its corresponding year:

6345



A quick check shows that while the '13 & '14 EPS are IFRS based (which includes the revaluation of investment properties) '04 & '05 EPS are GAAP based (which did not).
I am not sure when the changeover occurred.

But you need to be consistent with your inputs.

Best Wishes
Paper Tiger

[nextbigthing]

Ole Tiger aye. Doesn't miss a beat. :t_up:*




*Did however miss my birthday :t_down:

[Vaygor1]

A quick check shows that while the '13 & '14 EPS are IFRS based (which includes the revaluation of investment properties) '04 & '05 EPS are GAAP based (which did not).
I am not sure when the changeover occurred.

But you need to be consistent with your inputs.

Best Wishes
Paper Tiger

Thanks!!
I agree it can make a huge difference. Will review.

[Vaygor1]

Hi Winner.

The data points I used came directly off your graph earlier in the thread:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=511046&viewfull=1#post511046

Can you please let me know if you took the GAAP to IFRS conversion into account whatever year that happened in?
Will save me some trouble of delving back (and some conversion work) if you did.

Regards,
Vaygor.

[Vaygor1]

Hi Winner.

The data points I used came directly off your graph earlier in the thread:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=511046&viewfull=1#post511046

Can you please let me know if you took the GAAP to IFRS conversion into account whatever year that happened in?
Will save me some trouble of delving back (and some conversion work) if you did.

Regards,
Vaygor.

PS. I am sure you are aware that I could have PM'd the above message to you and not publicly 'passed the buck' so-to-speak. But I couldn't resist. :blush:
It is still my own fault for not checking first. Anyway, please let me know. Vaygor.

[Vaygor1]

I decided to use this graph from RYM (as it was handy) to produce an Underlying Profit vs Shareprice Plot.

6351

Think I will stick with Underlying profit which appears to be EPS under GAAP anyway. In 2002 to 2006 EPS and Underlying profit are identical, but I haven't checked back yet to find the year RYM actually converted to IFRS. Converting the early years to IFRS will create as many problems and uncertainties as it will solve, and I haven't got the time at present anyway. A few data points shifted slightly to my original log/log post, but nothing substantial in terms of the overall shape of the plot has changed even though the underlying profit has come down as it should.
.

So here it is:
6350

Here with a linear trendline including forecast for 1 period (the way that excel does it anyway on log/log):
6349

Power trendline, again with a forecast for 1 period:
6348

[Vaygor1]

If I treat 2006,2009, and 2013 as out-lies and take them completely out of the equation, the resulting trendline is almost identical:

6352

So there you have it (assuming I have it right this time PT). Take Underlying Profit per share to the power of 1.141 and multiply the answer by 31.92 and you should have a fairly good indication of the shareprice the market will trade RYM at under rational (non-bull non-bear) and existing market conditions. Famous last words aye? :)

There are some unique attributes to Ryman (adequate historical data, relatively constant growth, current economy of scale, no new share issues/buybacks, no acquisitions etc etc) which may make it risky to use this result in analysing other companies in the RV sector. Even Ryman's dynamics could change with its fairly recent entrance into Oz.

But apart form that, if RYM's underlying profit is up circa 19% at 31-March-2015 to NZ$140 million (28 cents/share), according to this method (one of many) the trendline equation equates this to a Shareprice of $7.47. Makes today's shareprice close of $7.30 look, well, okay I suppose.

Have I changed my tune a bit Winner ???? :)

[winner69]

If I treat 2006,2009, and 2013 as out-lies and take them completely out of the equation............)

Vaygor, to me those 3 points are the most important ones (though is your 2009 point meant to be for 2008?). They represent the points when Ryman shareprice is extremely under/over valued.

Times when you should be buying to get excessive above average returns or selling (or not buying) to lock in excessive returns previously made.

From 2006 subsequent 1,3 and 5 year returns were negative. But from 2008 returns have been significantly above average.

I have had only 2 Ryman trades. First from 2002 to 2007 and the 2nd from 2011 to a few months ago. On a time in the market basis returns about 50% pa compared to about 20% pa long term returns from holding Ryman

[Beagle]

Nice trades mate, you're a real winner :D

[winner69]

Nice trades mate, you're a real winner :D

Be another one one day ....when there is another outlier on vaygors chart.

Only buy when cheap, sell when expensive - nothing radical

And in the meantime Ryman will still churn out increasing earnings

[Beagle]

I'll be with you mate when the time is right. Buffett was right, best of breed.

[Vaygor1]

Vaygor, to me those 3 points are the most important ones (though is your 2009 point meant to be for 2008?). They represent the points when Ryman shareprice is extremely under/over valued.

Times when you should be buying to get excessive above average returns or selling (or not buying) to lock in excessive returns previously made.
…….

Totally agree.
What is interesting is that the line of best fit with those 3 years ('06, '09, & '13) included, is practically identical to the line of best fit with all 3 years removed. This fact helps me to gain a bit more confidence in the trendline.

Pretty sure I have the 2009 point correct, if you did :). Got the share price for each year from your original linear plot here...
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=511046&viewfull=1#post511046

And I took the Underlying Profit/share from this chart here...
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=511414&viewfull=1#post511414
by dividing each year's figure by 500,000,000 shares.

Hence raw data table is:

6354

There may be a slight anomaly in the 2009 year (and all the other years for that matter) as your share price data was dated January of each year. RYM super-low best buy share price during my main buying period was around late 2008. I picked up a lot of shares in very late Nov 2008 for a great buy of $1.38 but this was not quite the lowest price reached around that time (which was about $1.24 if I recall correctly)…so your 2009 figure could be more relevant to 2008.

Incidentally, I used the RYM trendline formula for Summerset 31-Dec-2013 Annual Report figures just for curiosity.
SUM U-lying value $22,154,000, No. of shares 216,543,091. Plug them in and I get a Shareprice of $2.368 and that figure drops to $2.355 if you take the extra one million odd shares issued since then. Only about 5 months before the Year-End 31-Dec-2014 report is out so current share price of $2.64 looks about right at the minute (according to this method) if you assume their under-lying profit will increase by 16% this financial year. Bit dangerous to use this analysis, RYM and SUM a bit different in business model and scale from each other.

Come back to me if you think I need to readjust a figure or two in my log/log plot.

[winner69]

Vaygor,

re using the formula for Summerset. Without really thinking it through wouldn't using the same slope imply that SUM should be valued on same long term multiple as RYM?

Maybe a good enough assumption to make and of course not enough history to test. But within NG's exciting news may be SUM should have steeper line!

Interesting though

[Beagle]

RYM has earned the respect of the market over a long, long period of time with their consistent EPS growth and market leading efficiencies with construction and even leaving SUM's questionable governance standards aside as a separate issue, in my view Ryman should command the respect of a decent PE premium to SUM.
I have SUM on a 2014 forecast of 8.4 cents EPS and feel a fair PE for them is at absolute most 25 = $2.10 BUT, if they're worth a PE of 25 I reckon Rym is worth a PE of 30.
Problem comes when you look at the projected average growth rate of RYM I don't think a PE of 30 is appropriate so maybe 25 for Ryman and 20 for SUM which sheets SUM's fair value back to $1.68 !!!!

[winner69]

Jeez Roger, SUM at anything less than $1.90 is 50% off it's all time high.

Lets hope you wrong with your forecast else here will be many sorry people

[Beagle]

Selling most of my holding at $3.58 a few months back is looking like the best decision of the year for me :)
They be okay though, there's a broker forecast out there at $4.50 so everyone has this wrong and the broker is bang on the money, right :D

[couta1]

Hey come on guys go easy on the down ramping and throwing out these loose figures like $1.68 for Sum, a lot of people are hurting at the moment and I'm not just talking about myself(Yes I still sleep at night) Enjoy your success with timing it right but mix your comments with a bit of compassion and constraint please,cheers

[percy]

Hey come on guys go easy on the down ramping and throwing out these loose figures like $1.68 for Sum, a lot of people are hurting at the moment and I'm not just talking about myself(Yes I still sleep at night) Enjoy your success with timing it right but mix your comments with a bit of compassion and constraint please,cheers

Markets are devoid of any feelings.
They overshoot,undershoot and go their own way.
They can stay wrong for a long time.
What we say and do will have very little, if any affect on the NZ index.
What I do when things look awful is look at RYM and SUM villages,and say to myself would I like to live here? If you think no,you sell,if you think yes,you know you are right! Easy!But wait,"It really works."!!!

[couta1]

Markets are devoid of any feelings.
They overshoot,undershoot and go their own way.
They can stay wrong for a long time.
What we say and do will have very little, if any affect on the NZ index.
What I do when things look awful is look at RYM and SUM villages,and say to myself would I like to live here? If you think no,you sell,if you think yes,you know you are right! Easy!But wait,"It really works."!!!
My post was not aimed at the market or with any thought of having any influence on the market I just feel for other members of the forum who are suffering at the moment and I don't think stirring and making too light of things is good for those toughing it out currently. I have no problem with holding Sum or Rym at a large paper loss as I work in their villages frequently but others don't have the luxury of that coalface experience and the comfort that comes with it if you get my drift.

[percy]

My post was not aimed at the market or with any thought of having any influence on the market I just feel for other members of the forum who are suffering at the moment and I don't think stirring and making too light of things is good for those toughing it out currently. I have no problem with holding Sum or Rym at a large paper loss as I work in their villages frequently but others don't have the luxury of that coalface experience and the comfort that comes with it if you get my drift.

This is a forum.You get the good,the bad and the ugly.
I usually make up my own mind on shares I buy by trying to do as much research as I can.Then if the company surprises on the upside I buy more.If they surprise me,with something I do not like, I sell,whether at a profit or not does not worry me.I am gone.
On sharetrader sometimes it pays not to listen to "the noise".There are a lot of threads I seldom read,and a lot of posters I do not bother to read either>!!!!

[axe]

Attended this evenings Fisher's Funds Wellington Roadshow. A very general presentation overall but Ryman did get a very special mention. In a good light too.

[Goldstein]

What I do when things look awful is look at RYM and SUM villages,and say to myself would I like to live here? If you think no,you sell,if you think yes,you know you are right! Easy!But wait,"It really works."!!!

Percy, I don't agree.

RYM are obviously doing something right, but their villages are quite frankly hideous. I drive past the monolithic RYM building in Orewa most days and I can't say it has what you would call street appeal. To call it a retirement village seems a stretch to me, and to name it after an artist a rather poor joke.

There's clearly a different thrust between SUM and RYM. I would suggest that RYM look after their shareholders while SUM look after their residents.

[Vaygor1]

Vaygor,

re using the formula for Summerset. Without really thinking it through wouldn't using the same slope imply that SUM should be valued on same long term multiple as RYM?

Maybe a good enough assumption to make and of course not enough history to test. But within NG's exciting news may be SUM should have steeper line!

Interesting though

Depends on how far out you mean by long term.
Remember the slope is not linear. It only looks linear because it is on a log/log scale.

In plotting the identical log/log trendline on a linear graph, it comes out as shown below in blue, which doesn't appear too far off linear to the naked eye. Trouble is us humans have difficulty intuitively detecting a change in slope unless it is reasonably pronounced and sudden. If you put your cheek near the screen and look along the blue line, the curve is a lot more apparent than when looking at it as one normally does from front on.

But if the blue-line slope was constant and remained at the same slope as it was when the underlying profit was in the 2 cents/share to the 6 cents/share vicinity, then you end up with the red line.

Note when underlying value is $0.66/share… this analysis (used as 1 amongst other methods) may help a willing seller decide that a hypothetical current market price of say $15 was too low, and patiently wait for the market to correct to $20

Just where SUM might sit on the blue curve is quite easy to calculate (I did it last post) but this relies on the pretty big assumption that SUM's curve is identical to RYM's.

6358

Strange as it may seem, your line of best fit originally posted (after doing all this) now appears it might be incorrect, not because of it's slope, but because it is straight.

[Bjauck]

Percy, I don't agree.

RYM are obviously doing something right, but their villages are quite frankly hideous. I drive past the monolithic RYM building in Orewa most days and I can't say it has what you would call street appeal. To call it a retirement village seems a stretch to me, and to name it after an artist a rather poor joke.

There's clearly a different thrust between SUM and RYM. I would suggest that RYM look after their shareholders while SUM look after their residents. We live in a ex-British country in Polynesia named after a Netherlands province with a capital named after a War Duke. If the buildings are dry, well-made and with good facilities, then the residents are doing better than most of us. SUM and RYM need to provide services with appeal to both residents and investors. Is Summerset a play on Somerset the bucolic English county? or a play on Somerset Maugham, the English author? A certain Norah Barlow coincidentally did very well from her time with SUM...

[percy]

Percy, I don't agree.

RYM are obviously doing something right, but their villages are quite frankly hideous. I drive past the monolithic RYM building in Orewa most days and I can't say it has what you would call street appeal. To call it a retirement village seems a stretch to me, and to name it after an artist a rather poor joke.

There's clearly a different thrust between SUM and RYM. I would suggest that RYM look after their shareholders while SUM look after their residents.
We agree on RYM's Orewa.
I have visited RYM villages in ChCh.I would live in Beckenham Courts,Ngio Marsh, Margaret Stoddart,and Anthony Wilding.Diana Isaac village does not appeal to me.
I would prefer SUM village in Nelson to RYM's.

[Harvey Specter]

I understand they have started work in relation to the Birkenhead site. Will see if I can find more details tonight.

https://www.google.co.nz/maps/place/Fernz+Lodge+and+Conference+centre/@-36.8078369,174.7062481,525m/data=!3m1!1e3!4m5!1m2!2m1!1sfernz!3m1!1s0x6d0d38c3 7e698813:0x389eda0a505a4a6f

[Vaygor1]

Hi Winner.

From my last post it occurred to me that I can map this trendline of Underlying Value (UV) onto your EPS chart.

By lining up both the 2002 UV (2 cents/share) & 2014 UV (24 cents/share) points physically onto the corresponding 2002 & 2014 EPS points on your chart on the x-axis only (as the EPS and corresponding UV for each year were 'snapped' at the same time)…. and also lining up the share price on the y-axis I get the following:

6360

Assuming this UV to EPS transform is valid, which it might not be (blue line still 'looks' a bit low to me), your line-of-best-fit is about as good as it can get really, given its linear.

You can see that for an EPS of 45 cents/share, the linear red line equates this to a rational-market share price of just under $7/share where the blue line gives an answer of about $7.50.

Going the other way, a rational-market price of $8 a share means an EPS of about 55c for the red line and 47c for the blue line. Enough to make a difference for some on their buy/sell decisions I suppose.

If you need to get from Hammersmith to Covent Garden, I would catch the blue line. :)

C'mon Everton!

[winner69]

RYM at 722 at end of this week ..... continuing its steady slide down from highs that were in overvalued territory.

Updated channel chart below. Has just broken the bottom channel line. Some would say bad news as support broken and anything could happen, A short term trader might say what the heck and trade the channel and make 10% on the rise back to the upper channel line ....before it starts it downtrend again.

You will see I have extended the channel lines out to sub 7 buck territory but fully expect to update with the scale starting with a 5 or if it overshoots on the downside and goes to a PE of 12 or something maybe even a 4 in front of the price

When will it stop going down ..... no idea .....only the squiggly line will tell me when

[couta1]

Keep playing those squiggly line games there winner, my squiggly line gutometer tells me she will hit double digits in a couple of years unless of course they do a share split in the interim period, you might have to extend that upper channel line in anticipation aye:cool:

[winner69]

Keep playing those squiggly line games there winner, my squiggly line gutometer tells me she will hit double digits in a couple of years unless of course they do a share split in the interim period, you might have to extend that upper channel line in anticipation aye:cool:

I agree couta. In a year or 2 RYM will be 10 bucks and probably even more

Great return is 5 bucks to 10 bucks - think it could be doubling your money.

Best part is that at 5 bucks I get 60% more shares than I had when I sold out above 8 bucks

That's the plan anyway and I patient

[Beagle]

Well several months ago when they were around $8.80 I called it as fair value being $6.50 and Winner and I agreed that was were it seemed to be fair value and many people on here thought those calls were so far off the mark, I could swear I almost sensed a sniff of derision coming out of my computer screen :)
Fast forward a few months and we have seen a steady and fairly steep decline and at $7.22 my value doesn't look so crazy anymore does it !! To give you an idea of how steep the drop has been the 100 day MA is still way back at $8.06 at present. In just the last 3.5 months it has dropped by $1.40 a share, (more than 15% so we are definitely in full correction mode), so by my calculations in early December if the trend continues at the present rate it might be time for some Christmas shopping or OTOH one could wait for the new year sale or perhaps even better still until the SP breaks back through the 100 day MA to the upside, whenever that might occur, maybe not for some considerable time. I'm very patient too. Who knows, maybe $5 isn't completely out of the question ?
Its dropped a full $1.80 from the intraday high when it just cracked $9 back in May, so another $1.80 and we'd be back to $5.42.

[winner69]

History shows that for RYM that the 'correction' from elevated PE ratios (>30) can be vicious and deep. A common happening with many stocks / indices.

RYM has fallen to a PE of 14 odd twice this century. The PE just before the current meteoric rise was 18/19.

Using FY15 forecast of say 28 cents/share RYM shareprice next year could possibly be $4 to $5 if history repeated itself. Maybe that is totally ridiculous as I sense the sniff of derision coming out the computer screen (thanks Roger) and $6 is a more realistic number.

I have no idea what may happen over the next few months or years. Today's $7.22 might be the low this time around, who knows. The price will go up on Monday and crisis averted.

Nothing to do with RYM financial performance or fundamentals. This is about market sentiment, what punters are willing to pay for a buck of earnings

[Beagle]

My rule of thumb for value is a PE of 8.5 for a no growth company and then add your average expected growth rate for the next five years. If we assume Ryman is capable of their target 15% growth rate over a sustained future period that implies to me a realistic PE is 23.5 times current year earnings. If underlying EPS is 28 cps I still get around $6.50 as fair value but its quite possible this correction could over-shoot to the downside. We're almost within 10% of where I see fair value so I'm now watching closely.

[Beagle]

Indeed, if it falls 10% from the current price, it WILL be $6.50

Its nice to have something in my crosshairs to buy...been a lot of selling lately and the cash is mounting up.

[Toulouse - Luzern]

For what it is worth,

people who picked RYM in the Paper Tiger NZX Share contest are down about 7% on RYM ...

[MAC]

Well, Morningstar have consistently held a valuation on RYM of $7.00 since May, perhaps they were right all along, imagine that ?

[Vaygor1]

Well, Morningstar have consistently held a valuation on RYM of $7.00 since May, perhaps they were right all along, imagine that ?

They have never been right all along MAC.

To-date since I have been holding RYM (for over 7 years now) Moaningstar have been entirely wrong throughout that entire time and nothing regarding their recommendations (right or wrong) re RYM from now and into the future can ever change that historical fact.

Given last week's RYM share price drop, I am amazed that Morningdump haven't yet reviewed their recommended price to $3 with a big red SELL.

Still, time for them to do it this week I suppose. :)

[MAC]

Not sure I'd go as far as slander, that's up to you, but I do agree somewhat that they are consistently low on a number of stock valuations.

It comes from building in too much risk into their base case, they think they are looking after the interests of lay cliental in doing so but I just find it a bit insulting when analysts do that, investors are capable of assessing a fair valuation alongside the risks when all laid out in front of them on the desk, they don't need brokers or analysts to merge and muddle the two aspects for them.

[Vaygor1]

Not sure I'd go as far as slander, that's up to you, but I do agree somewhat that they are consistently low on a number of stock valuations….

It cannot be called slander if it is true.

In over 7 years, I cannot recall a single instance of Morningstar recommending an ACCUMULATE or BUY for Ryman.*

There is a chance my memory has failed me here but the odds are low as I have been watching and waiting for the day so I can call Morningstar and congratulate them on finally reaching this most significant of milestones.

Regarding their track-record for RYM over the last 7 years, Morningstar should hang their head in shame.


* Something in the back of my mind thinks they may have had an ACCUMULATE for 1 solitary day (about 3 years ago?)… obviously a terrible mistake, made while the boss was away.

[Beagle]

It cannot be called slander if it is true.

In over 7 years, I cannot recall a single instance of Morningstar recommending an ACCUMULATE or BUY for Ryman.*

There is a chance my memory has failed me here but the odds are low as I have been watching and waiting for the day so I can call Morningstar and congratulate them on finally reaching this most significant of milestones.

Regarding their track-record for RYM over the last 7 years, Morningstar should hang their head in shame.


* Something in the back of my mind thinks they may have had an ACCUMULATE for 1 solitary day (about 3 years ago?)… obviously a terrible mistake, made while the boss was away.

+1 They're not colloquially called moaningstar for nothing.

[winner69]

RYM at 722 at end of this week ..... continuing its steady slide down from highs that were in overvalued territory.

Updated channel chart below. Has just broken the bottom channel line. Some would say bad news as support broken and anything could happen, A short term trader might say what the heck and trade the channel and make 10% on the rise back to the upper channel line ....before it starts it downtrend again.



Since hitting 722 RYM up to 749 on Friday

Be a boomer of a day on the NZX tomorror so RYM probably go over 760/765

The short term trader as suggested above doing OK trading the channel ....it will probably go to 780/785 soon .... and I reckon then it will recommence its downward trend. Still waiting for sub 700 .... maybe 650

[Beagle]

No hurry to buy. If SUM's recent half year result was a lead indicator then the forthcoming result for RYM could disappoint. I don't think we're out of the woods yet by any means with recent severe volatility in the international markets and on a historical long term average PE basis RYM's current SP is still trading at very stretched level's. Happy to keep my powder dry until the valuation becomes more realistic. All the indicators I see are slowing a clear slowing in house price inflation...end of the long period of golden weather for house price inflation that's taken our house prices to the third most expensive in the world on a per capita basis ?

100 day MA is $8.03 so we're still a long way away from breaking the downtrend. Even if it breaks that 100 day MA that just makes them too expensive. I hold fire for as long as it takes till TA and FA means ducks line up for a decent shot with both barrels :) If SP tracks sideways to allow PE to become more realistic as a natural process of gradual EPS expansion its not like those on the side-lines are missing anything with the very low dividend yield is it !!

Chart looks ugly, as you've noted in your image there's a clear downtrend for the last 6 months despite this recent minor bounce. Why bother fighting the trend ????

[percy]

Interesting to note that Medibank Private's Managing Director,George Savvides is a Ryman Director.

[winner69]

Since hitting 722 RYM up to 749 on Friday

Be a boomer of a day on the NZX tomorror so RYM probably go over 760/765

The short term trader as suggested above doing OK trading the channel ....it will probably go to 780/785 soon .... and I reckon then it will recommence its downward trend. Still waiting for sub 700 .... maybe 650
As expected got to 760 today

Still a bit of upside ....and then we should have an idea of the world is actually a happier place full of optimism again

[Beagle]

http://tvnz.co.nz/national-news/rest-homes-consider-appeal-against-landmark-pay-ruling-6117784

Looks like a ticking time-bomb this whole issue of a fair wage for rest home workers.
Would you change dirty adult nappies and wipe elderly people's bottom's clean for $15.30 an hour less PAYE ?

[couta1]

http://tvnz.co.nz/national-news/rest-homes-consider-appeal-against-landmark-pay-ruling-6117784

Looks like a ticking time-bomb this whole issue of a fair wage for rest home workers.
Would you change dirty adult nappies and wipe elderly people's bottom's clean for $15.30 an hour less PAYE ?
If she was working for Ryman she would already be getting between $16.50 and $18 per hour but she has chosen to work at the same home for over 20 years( Incidently a home I also worked in for many years before giving it the flick) Remember that should there come a binding universal ruling the extra money would come from the Govt via the DHB funding model, a model which is currently underfunded. The whole test case isn't really about rest home workers but is rather a gender issue in that females should be paid similar to there male counterparts doing similar work(Not male care givers as they already get as much as them) so who are they going to be compared to? male checkout operators perhaps, I think you see the problem.

[Vaygor1]

Since hitting 722 RYM up to 749 on Friday

Be a boomer of a day on the NZX tomorror so RYM probably go over 760/765

The short term trader as suggested above doing OK trading the channel ....it will probably go to 780/785 soon .... and I reckon then it will recommence its downward trend. Still waiting for sub 700 .... maybe 650





Hi Winner.

Referring your post, RYM closed at $7.90 yesterday.
Your prediction correct as was mine that it would spike again.
But is it a spike?
Looking at your recent linear regression chart, I have extended it with some arbitrary daily closes (as I don't have the data at hand) but finish it with the last 2 RYM daily closes.

Do you think this could be a breakout? If not, it must be close.
Their H1 unaudited result out in 16 days now.
When RYM go up, they seem to go up very fast these days.

6441

[Harvey Specter]

Big drop today. Still above your line - needs to drop below 7.50? to fall back in?

[winner69]

Big drop today. Still above your line - needs to drop below 7.50? to fall back in?

Did overshoot the top channel line by a few cents but we forgiven rym for that. Cant be perfect all the time

Main trend line is at 750 at the moment but can go all the way to 700/710 (depending on time( before hitting the bottom channel line.

I have no idea whatsoever what will eventuate but at this stage 650 or less is still on the cards .... price reverting to normal multiples that is.

[Vaygor1]

Big drop today. Still above your line - needs to drop below 7.50? to fall back in?

Yes 17 cent dropped today, but much more than that gained in the few days prior. Has all the classic hallmarks of either someone with a small heads up regarding a very good impending 1H unaudited result, or someone making a grab on speculation of the same.

I think the up-and-coming 1H announcement will be as expected (ie. "...on track for 15% increase or better in Underlying Profit by end of the financial year") and pretty typical (aka boring …. hence the thread name) really. Any super outstanding or under-performing impending result would have triggered a guidance announcement by now I would have thought.

I redid the extension to Winners graph so the x-axis gridlines aligned as well, and took the historical data between Winners latest posted data and today, and chucked in a basic representation of the last 2 months shareprice. (I hope you don't mind me doing this Winner. Imitation is the most sincere form of flattery). So RYM needs to drop back to $7.30 by this time next week to re-enter the top of the channel.

6445

I do have a great deal of difficulty envisaging a drop below $7.00. If I am right about a typical RYM result then, with 4 months until the end of the financial year and given RYM' strong predictability, I am picking most analysts will add on about an 8% increase to market capitalisation post announcement, taking a low so-far of $7.22 up to $7.80 equivalent… and I do have a couple of other reasons if anyone is interested.

….mind you, not so long ago I did have trouble imagining a RYM Shareprice below $8. :blush:

[winner69]

Ryman results will be good. It's all about property values and fair value adjustments. Property prices are still going up.

Could even be a boomer of a result ....maybe +20% or more. Just need to keep an eye on valuations.

[percy]

Nice to see Ryman share price is again above the 50 day and the 200 day EMA.
Looks to me as though the new uptrend is underway.

[couta1]

Nice to see Ryman share price is again above the 50 day and the 200 day EMA.
Looks to me as though the new uptrend is underway.
Don't forget its the half yearly announcement this Friday so uptrend may not last depending on market response after that but here's hoping.

[Beagle]

Ryman results will be good. It's all about property values and fair value adjustments. Property prices are still going up.

Could even be a boomer of a result ....maybe +20% or more. Just need to keep an eye on valuations.

Property only going up in Auckland and Chch, almost everywhere else its either flat or in decline, in some places in serious decline. You should have seen the regional breakdown in the Herald a few weeks back, it was a real eye-opener.
I maintain the sector is still fully priced and therefore continue to avoid.

[couta1]

Property only going up in Auckland and Chch, almost everywhere else its either flat or in decline, in some places in serious decline. You should have seen the regional breakdown in the Herald a few weeks back, it was a real eye-opener.
I maintain the sector is still fully priced and therefore continue to avoid.
Now come on Roger I hear Norah may be looking for a teddy bear type mascot for the upcoming childcare listing over the ditch, I'm sure she would love to have you back by her side:eek2:

[percy]

Property only going up in Auckland and Chch, almost everywhere else its either flat or in decline, in some places in serious decline. You should have seen the regional breakdown in the Herald a few weeks back, it was a real eye-opener.
I maintain the sector is still fully priced and therefore continue to avoid.

The ageing population is through out NZ.

[Beagle]

Now come on Roger I hear Norah may be looking for a teddy bear type mascot for the upcoming childcare listing over the ditch, I'm sure she would love to have you back by her side:eek2:

If you make the teddy bear with Norah's face I promise I'll throw darts at it LOL.
If one must pay these silly 30+ PE's for a retirement stock then there's no doubt this is the best of breed. i.e If you put a gun to my head and said you must invest in this sector then it would be a no brainer decision to buy Ryman but I'd definitly want said teddy bear for therapeutic reasons :D

[Beagle]

The ageing population is through out NZ.

Exactly mate and that's why many regional retirement homes are in real trouble when it comes to revaluation. Those with most of their retirement villages in Chch and Auck might be okay for a bit longer...but I think the whole revaluation model these lofty PE's are built on looks vulnerable in the medium term.

[percy]

Exactly mate and that's why many regional retirement homes are in real trouble when it comes to revaluation. Those with most of their retirement villages in Chch and Auck might be okay for a bit longer...but I think the whole revaluation model these lofty PE's are built on looks vulnerable in the medium term.

Yes,No,Maybe???
A friend of mine found it impossible to find a good retirement home in Ashburton for his mother-in-law.
Another friend had to move both his mother and father into care in Timaru as there was no dementia care in Temuka.
Outside of Christchurch,Dunedin and Nelson it can be difficult finding suitable retirement villages,and or care.
Demand is driven by "Nana needs care" rather than property values.
Most people who decide to move into a retirement village decide for security,safety reasons.lifestyle,selling their home to pay for their unit.,and are usually prepared "to meet the market."
This sector has huge tailwinds driving it.We are seeing the likes of Ryman setting higher standards all the time,to take advantage of growing demand,both here and in Australia.
Retail,office,warehousing,industrial property do not have the same huge tailwinds.
Retained earnings are being well reinvested in further growth.
Values may go up,down,sideways in the short term,but resale stock,care fees,building/development margins,etc will prove this a very rewarding sector for us investors.

[Beagle]

Ryman is perhaps the only one that actually makes some of its money from the day to day operation of its villages and to that extent is a little more insulated from a sudden down-draft in revaluations that the others rely on for most of their profit.

No debate about the tailwinds or lack of demand for services, debate for me centres on whether that's already fully reflected in the SP with these lofty 30+ PE's or perhaps still a little over-cooked ?
Priced for absolute perfection and what if there's some chink in the perfection story just around the corner...like Friday ?
Retail Office wharehouse priced around 11-13 PE and divvy yield's 6-7 times this sector.

No problem with the long term fundamentals and no problem buying into the tailwind story if your investment horizon is 20-30 years it doesn't matter if you pay a PE of 30+, long term growth will see you right in the long term but what if one decides one wants to sell in 2-3 years and PE's contract with an increase in interest rates and lower resale margins being achieved by retirement players with slower growth in house prices / declines in same perhaps ?
Look what's happened to SUM's SP when they suddenly have a year of no or negative EPS growth...or was that just Norah shooting the company in the foot ?
I'm happy to wait to see where the perfection story starts to develop a flaw or three :)

[percy]

Ryman is perhaps the only one that actually makes some of its money from the day to day operation of its villages and to that extent is a little more insulated from a sudden down-draft in revaluations that the others rely on for most of their profit.

No debate about the tailwinds or lack of demand for services, debate for me centres on whether that's already fully reflected in the SP with these lofty 30+ PE's or perhaps still a little over-cooked ?
Priced for absolute perfection and what if there's some chink in the perfection story just around the corner...like Friday ?
Retail Office wharehouse priced around 11-13 PE and divvy yield's 6-7 times this sector.

No problem with the long term fundamentals and no problem buying into the tailwind story if your investment horizon is 20-30 years it doesn't matter if you pay a PE of 30+, long term growth will see you right in the long term but what if one decides one wants to sell in 2-3 years and PE's contract with an increase in interest rates and lower resale margins being achieved by retirement players with slower growth in house prices / declines in same perhaps ?
Look what's happened to SUM's SP when they suddenly have a year of no or negative EPS growth...or was that just Norah shooting the company in the foot ?
I'm happy to wait to see where the perfection story starts to develop a flaw or three :)

I guess it is all a matter of timing.
I brought into RYM at about $2.07 and progressively sold down,as the market over shot.I am left with a holding that owes me nothing,however I am again looking to add to our holding,as I think the market has under valued them recently.The sp is now above both the 50 day and the 200 day EMA,which signals a buy to me.
Much the same with SUM, although not a free ride, I think av cost down to about 35 cents per share.Until SUM's share price goes above both the 50 day and 200 day EMA I am not buying more.

[longy]

I guess it is all a matter of timing.
I brought into RYM at about $2.07 and progressively sold down,as the market over shot.I am left with a holding that owes me nothing,however I am again looking to add to our holding,as I think the market has under valued them recently.The sp is now above both the 50 day and the 200 day EMA,which signals a buy to me.
Much the same with SUM, although not a free ride, I think av cost down to about 35 cents per share.Until SUM's share price goes above both the 50 day and 200 day EMA I am not buying more.

That sounds good to me that the SP is above the EMA at current... so out of interest when do you sell? I have sold out completely but just got back in yesterday.

[percy]

That sounds good to me that the SP is above the EMA at current... so out of interest when do you sell? I have sold out completely but just got back in yesterday.

The best advice on timing buying and selling has been given by KW.
Go to Forum,then Investment Strategies,then Using TA to time entries and exits.

[Beagle]

Yep, clear break up through 100 day MA. If its sustained through to Friday afternoon RYM holders appear to have ridden out the correction. Looking at the super charts on ANZ securities and comparing RYM with NZX 50 for the 12 months to 19/11/14 RYM is up 1% and the NZX is up 13%. Meanwhile over in the cheap PE part of the NZX50 I couldn't help notice HNZ is up 27%, PGW 16% and AIR 31%. Interesting albeit small short term analysis on whether cheap PE stocks are a better bet that expensive ones. I expect a basket of those three cheap PE stocks, (which are still cheap), to easily outperform RYM over the next`12 months regardless of whether this RYM correction is over or not. When something is priced for absolute perfection, I can't see where the upside is. Maybe Norah has played havoc with my vision in this sector, only time will tell.

[winner69]

RYM sure on fire the last week .... while SUM still trending down

I still reckon the price will be much lower one day .... that's my plan and sticking to it

[couta1]

RYM sure on fire the last week .... while SUM still trending down

I still reckon the price will be much lower one day .... that's my plan and sticking to it
He says as he tries not to imitate an ostrich or a mule? maybe a bit of both:cool:

[troyvdh]

...Without wishing to be repetitive ...and acknowledging the wisdom expressed by many....RYM's performance ..in my opinion will continue to be outstanding ..indeed stellar....for perhaps decades to come...given my limited degree of knowledge of the founders of this company...the only proviso perhaps would be perhaps an unprecedented fall of NZ residential house values...which given NZ's location in the world is probably unlikely....cheers...

Hate to disagree Winner

[winner69]

...Without wishing to be repetitive ...and acknowledging the wisdom expressed by many....RYM's performance ..in my opinion will continue to be outstanding ..indeed stellar....for perhaps decades to come...given my limited degree of knowledge of the founders of this company...the only proviso perhaps would be perhaps an unprecedented fall of NZ residential house values...which given NZ's location in the world is probably unlikely....cheers...

Hate to disagree Winner


Troy I agree whole heartedly with what you say. I have never run said anything bad about the company. It is fantastic company and will continue to churn out increasing profits. Even this year I expect another 20% plus or minus a bit increase in profit.

Ryman is best in breed and the envy of other operators.

My point is that Ryman shareprice cycles through periods of extreme under and over valuation (even though profits keep going up every year) I think it is overvalued at the moment and beginning that cyclical move to being undervalued. It happens quite often. Hence I patiently waiting at the moment.

Ryman probably will be $15 plus sometime in the future. I intend to be a shareholder when that happens, hopefully buying when they have a 6 in front of it, even better a 5

That's my strategy and I sticking to it

[winner69]

He says as he tries not to imitate an ostrich or a mule? maybe a bit of both:cool:

Don't get it mate but probably offensive but I am thick skinned

You have your strategy which you sticking to and I don't rubbish you for that.

Check in again when RYM shareprice starts with a 6 - my head might have come out of the sand by then

[troyvdh]

Thanks winner for your reply...For the record I for one hope that RYM never achieve a $15 share price given that (in my believe anyway) NZ folk remain so financially illiterate re finance MKTS that most see a stock at a high dollar value as less value than blah blah...Im sure you get this...And I hasten to add that this ignorance is not likely to improve soon...sadly....My son attended CBHS....last year and left with virtually nil savvy about finances ...other than what I had told him...as I have posted before the last SP split was around $11.30 ?....years ago....cheers

[couta1]

Don't get it mate but probably offensive but I am thick skinned

You have your strategy which you sticking to and I don't rubbish you for that.

Check in again when RYM shareprice starts with a 6 - my head might have come out of the sand by then
The icon wearing the glasses indicates it was a tongue in cheek kinda comment there winner, no offense intended. PS- You really will need the stubborness of a mule to see a 6 in front of this share IMHO.

[Beagle]

I'll be sticking with my formula on a PE of 8.5 for a no growth company plus the five year average of EPS growth. This suggests PE in the mid 20's is fair value x whatever their underlying profit is and last time I worked these numbers it had a 6 in front of it. I'll have another look at it tomorrow when we get the latest EPS numbers and growth but an underlying EPS gain of less than 20% is my pick but broadly speaking I agree with W69's prognosis.

Ryman is a fantastic company and extremely well run, a company that other players in the industry especially SUM could learn a lot from, a company that's got ahead of itself in term of a fair price based on earnings which is why over the last 12 months its so dramatically under-performed the market as I posted yesterday and why it will continue to do so in my opinion for the foreseeable future until it trades on a fair price earnings ratio for the current growth rate. My chequebook stays in my pocket until RYM trades at what I consider to be a fair price and if that makes me a donkey, mule, horse or any other type of equine creature in others eyes, I'm all good with that :cool: Let's not forget the company's own stated medium term objective is for medium term EPS growth of 15%. Which investment bible please tell, suggests this modest growth warrants a PE north of 30 ????

Very few of you know how hard real estate has been belted around many of the provinces in N.Z. like I do being well connected with the GM N.Z. of one of the major real estate agencies who's travelling around N.Z. all the time...chinks are starting to appear in bullet-proof armour that many of you think is a never ending cycle of ongoing significant revaluations, you mark my words there are issues on the horizon.

As I said many many months back, it probably won't ever get down to my buy price of circa $6.50, far more likely the SP will track sideways for a significant period of time allowing EPS growth to gradually catch up to enable the $8 or thereabouts to be fair value...and of course what has the SP done for all those months, exactly what I said would be the most likely scenario. In the meantime while Ryman shareholders have had ostensibly no growth in SP for 12 months and a pretty pathetic unimputed dividend of only 1.5% the NZX50 has gone up quite considerably. RYM is red hot favourite in my book to significantly underperform the NZX50 in 2015 with my other trifecta picks for massive underperformance being SUM and XRO.

One day the company will have to start paying tax, let's not forget the quality of their results is very poor in that they're basically not paying any tax at present which is a situation that surely can't last indefinitely, so normalise their profit by the company tax rate of 28% and the valuation looks even more stretched :eek2:

[couta1]

Hey Roger I thought you were picking Sum as the red hot favorite to underperform the NZX50 in 2015 so your putting a dollar each way now but wait what about Met? (The other horse that's run ahead of itself)

[Beagle]

MET on a PE of 21 last time I looked so misses out on my trifecta bet by a nose. Development margin of over 20% at MET, margins Norah and team can only dream about.

[couta1]

MET on a PE of 21 last time I looked so misses out on my trifecta bet by a nose. Development margin of over 20% at MET, margins Norah and team can only dream about.
First appearances can be deceiving Met have a lot of issues to face that Rym and Sum don't in terms of buildingcost maintenance and less geographical diversity etc but tthat's another story. Anyway interesting day for Rym tomorrow re markets reaction or not to half yearly.

[winner69]

I reckon underlying earnings around $70m .... consistent to past performance

[winner69]

I reckon underlying earnings around $70m .... consistent to past performance

Whoops - I got a bit over excited ..only $66m

They will catch up in second half

[winner69]

The 37% increase in real profits is fantastic .....shareholders a lot wealthier now with sort of increase in book value.

[Vaygor1]

The 37% increase in real profits is fantastic .....shareholders a lot wealthier now with sort of increase in book value.

Yes. Another whopper in EPS increase which will eventually translate into Underlying Value.
13% increase in U.V. less than I was expecting. I was thinking 18% with fingers crossed for 20%
Will be watching the webcast in 10 minutes.

[Beagle]

Ryman posts improved underlying profit performance but growth slows to the slowest in many years.
Underlying profit was $66.3m on 500m shares = 13.26 cents per share at a growth rate of only 13%.

13.26cps x 2 suggests full year underlying earnings of 26.52 cents per share.

Taking into account that EPS growth , (after many years of very comfortably exceeding their medium term target of 15%) is now struggling to get there then I see fair value assuming they can in fact meet their 15% medium term profit growth target on a consistent basis going forward, (which is no certainty,) as a PE of 23.5 using my 8.5 PE + medium term growth, (15) so fair value $6.23.

I expect a lengthy ongoing period of market underperformance as reality bites based on slowing growth. Stock is presently over-priced by 30% in my opinion but I am pretty sure others will have a different opinion and that's fine :)

[couta1]

I see this as a bit of a consolidation year but if they make the 15% then that's pretty good for such a year, next year when a couple of big 440 bed villages like Petone come into full play then she's onward and upward aye:cool:

[Vaygor1]

Just watched the webcast. I don't see a major slowdown in anything (refer graph)… and especially in build-rate too. 450 units in the 1st half alone….that's 2.5 units per day.

Their Underlying Profit down to 13% for H1 due to some major payments for their land-banking from what I can gather from the presentation this morning. One more big payment for their new Melbourne College site due in May 2015…. well after the end of the 31-March full year result.

6493

Will be interesting to see how the market reacts today and over the next 3-4 weeks. Might head south if the Underlying Profit results drive the insto's... or head north if EPS is the flavour of the month. Either way the above is a beautiful chart that any company would be proud to brandish.

[Beagle]

Underlying profit up 22% last year at the half year, 16% in 2012, 15% in 2011. Sorry but 13% is underwhelming.

[Vaygor1]

Underlying profit up 22% last year at the half year, 16% in 2012, 15% in 2011. Sorry but 13% is underwhelming.

Yes, less than I expected but will look into the detail to verify the reasons they alluded to in the webcast. They confirmed twice they are on track to beat the 15% target for the full year and based on strong resale volumes, demand, good pricing, and other measures stated this morning, I think they will achieve it easily.

In the meantime market sentiment will do its own thing and there could be good opportunities to buy during this H2, and again after the H1 announcement next year during which they pay off the Melbourne College site... I was kind of right about my hunch in May on deferred payment for the site:
http://www.sharetrader.co.nz/showthread.php?626-Ryman-Too-boring-to-talk-about&p=483565&viewfull=1#post483565 although 1 year isn't exactly long term it's better than nothing and certainly helps with cash-flow planning.

RYM appear to have planned large settlements to their big debtors in H1 each year so as to finish with a good H2 recovery and a full-year result that meets and betters expectations.

In terms of RYM shareholder's equity, that's looking pretty awesome too:

6495

[percy]

A very pleasing result.
Good to read Australia is exceeding expectations.
Shareholders will be looking forward to "phenomenal growth."

[macduffy]

Underlying profit up 22% last year at the half year, 16% in 2012, 15% in 2011. Sorry but 13% is underwhelming.

Yes, it gets harder and harder to better past increases as the numbers grow!

I'm happy with the result.

[winner69]

Ryman doesn't seem the people not dying to plan problem that Summerset has.

But they do seem to have the same issue with ballooning expenses.

[Beagle]

And it'll only get worse as pressure grows for people to be paid the minimum liveable wage.

[percy]

And it'll only get worse as pressure grows for people to be paid the minimum liveable wage.

Looks as though Ryman are making a very strong commitment to staff going from The Chairman's comments in the half year result;
"We are working hard to develop the staff and systems we will need."
"with extra resources going into staff training and systems."

[Beagle]

With the greatest respect mate its not about staff training and systems. If you're paying people $16 an hour who work really hard and they need circa $18.30 an hour, (the recognised minimum liveable wage) to live with a modicum of some level of dignity. RYM make money by paying a substantial percentage of their staff at a rate where those staff have to live in poverty. Sorry if this unpalatable fact makes shareholders feel slightly uncomfortable. If they paid people properly they wouldn't have to spend so much on staff training as staff churn would be much lower. As the unquestionable market leader in this sector they definitely have a role to play and this role will place further pressure on costs.

The other aspect of this latest result that hasn't gone unnoticed, is yet again we have a low quality result in that there's basically an inconsequential amount of tax being paid. How long can this corporate get away with escaping its tax obligations remains to be seen but surely this can't go on forever ? So it pays next to NO tax and pays its staff to live in poverty. Good corporate citizen ? Hmmmm
The standard of care I saw for my Dad in his last few months in one of Ryman's secure dementia facilities was also highly questionable...The old saying of "if you pay peanuts you get monkeys" springs very readily to mind. Ryman's profit increases continue, (albeit at a slower rate) but at what price to staff and its most vulnerable and needy ?

[percy]

With the greatest respect mate its not about staff training and systems. If you're paying people $16 an hour who work really hard and they need circa $18.30 an hour, (the recognised minimum liveable wage) to live with a modicum of some level of dignity. RYM make money by paying a substantial percentage of their staff at a rate where those staff have to live in poverty. Sorry if this unpalatable fact makes shareholders feel slightly uncomfortable. If they paid people properly they wouldn't have to spend so much on staff training as staff churn would be much lower. As the unquestionable market leader in this sector they definitely have a role to play and this role will place further pressure on costs.

The other aspect of this latest result that hasn't gone unnoticed, is yet again we have a low quality result in that there's basically an inconsequential amount of tax being paid. How long can this corporate get away with escaping its tax obligations remains to be seen but surely this can't go on forever ? So it pays next to NO tax and pays its staff to live in poverty. Good corporate citizen ? Hmmmm

In total disagreement with your post!!!!! lol.

[couta1]

With the greatest respect mate its not about staff training and systems. If you're paying people $16 an hour who work really hard and they need circa $18.30 an hour, (the recognised minimum liveable wage) to live with a modicum of some level of dignity. RYM make money by paying a substantial percentage of their staff at a rate where those staff have to live in poverty. Sorry if this unpalatable fact makes shareholders feel slightly uncomfortable. If they paid people properly they wouldn't have to spend so much on staff training as staff churn would be much lowerahead.the unquestionable market leader in this sector they definitely have a role to play and this rolI've ill place further pressure on costs.

The other aspect of this latest result that hasn't gone unnoticed, is yet again we have a low quality result in that there's basically an inconsequential amount of tax being paid. How long can this corporate get away with escaping its tax obligations remains to be seen but surely this can't go on forever ? So it pays next to NO tax and pays its staff to live in poverty. Good corporate citizen ? Hmmmm
The standard of care I saw for my Dad in his last few months in one of Ryman's secure dementia facilities was also highly questionable...The old saying of "if you pay peanuts you get monkeys" springs very readily to mind. Ryman's profit increases continue, (albeit at a slower rate) but at what price to staff and its most vulnerable and needy ?
Have to disagree here Roger, Ryman are already leading the pack re staff pay rates paying between $16.50 - $18 per hour to caregivers , the Kristine Bartlett case only highlights what happens when a stingy company like Tera Nova only pays the minimum wage to someone who has worked for them for 20 years and then the question has to be asked why she has continued to work for them when she could get a job with any other company in the area (Of which there are many) Ryman are very proactive in there staff training opportunities and scholarship awards to those who are motivated to move ahead. Also they have put a lot of things in place over the last year or so to improve resident care, ive personally seen this occurring but it won't stop every problem or incident from happening and that's just life.

[Beagle]

Its good to hear of some improvements mate and that Ryman are supportive of staff that want to get ahead. Still a curiosity that a company making record profits with a market capitalisation of over four billion dollars is still paying most staff below the established minimum liveable wage, i.e. poverty wages and they're paying ostensibly no tax year after year after year.

[Harvey Specter]

Its good to hear of some improvements mate and that Ryman are supportive of staff that want to get ahead. Still a curiosity that a company making record profits with a market capitalisation of over four billion dollars is still paying most staff below the established minimum liveable wage, i.e. poverty wages and they're paying ostensibly no tax year after year after year.There is no such thing as a minimum liveable wage. It was made up by some pastor who is already fudging numbers as his original calls would be even more unrealistic now. Have you ever wondered why NZs made up living wage is hire than the made up living wage in London and the U.S.?

There is market wages and I understand Ryman pays above market.

Edit: RYM should not be force to pay more to its staff than its competitors just because it has a successful business model.

[dingoNZ]

No, but naturally you would think the two occur simultaneously

[Beagle]

There is no such thing as a minimum liveable wage. It was made up by some pastor who is already fudging numbers as his original calls would be even more unrealistic now. Have you ever wondered why NZs made up living wage is hire than the made up living wage in London and the U.S.?

There is market wages and I understand Ryman pays above market.

Edit: RYM should not be force to pay more to its staff than its competitors just because it has a successful business model.

They don't pay more than DHB's which is why they often can't attract quality staff. Phillipino's with limited or no English were the norm when my Dad was in a secure dementia facility at Orewa two years ago. Staff churn was so high and systems so poor that nobody seemed to really have a handle on patients needs. But all good, lets just drug them up to the eyeballs so they don't know any better that'll be good for profits and as long as we're paying more than other third rate players and talk about improving our systems we can claim the moral high ground and untaxed profits keep rolling in.
The least you'd think this corporate could do is pay a reasonable amount of tax so that when the majority of their staff living in poverty apply for benefit top-ups, family support, accommodation supplement, emergency food grants e.t.c. the company was in effect supplementing staff wages with corporate tax paid.
http://www.livingwage.org.nz/ Minimum wage to live in dignity now $18.80 per hour.
Meanwhile over at Air New Zealand they have 11,000 staff and their labour bill was $1.15 billion dollars, average salary is over $104,000 and AIR pay proper amounts of corporate tax.
Any wonder AIR is seen as an employer of choice with thousands of people apparently wait listed in their system waiting for jobs to come up.
I think we need an enquiry as to how this four billion dollar company never ever pays meaningful tax. Think I'll do my bit for the welfare system and pen a letter to Bill English. If they're using some accelerated depreciation allowances on building fit out to game the system maybe its time for a reform of this area of the tax system ? Gosh I'm starting to sound like I'm some sort of socialist, that feels a bit scary but at the same time good.:ohmy:

[percy]

It is in the goverment's and the country's interest, to have private enterprises develop retirement/care facilities.
RYM,MET,and SUM are doing their very best,but the retirement sector is/and will have trouble building ahead of the huge tail wind of the aging population.
The sector is creating great employment opportunities.

[Harvey Specter]

RYM pay the correct amount of tax. The impact of their occupation licences produces an unusual result but the IRD are well aware of it and have signed off on it multiple times for various operators over the past few decades.

[Joshuatree]

Disagree re your pay rates. I know a person working at Ryman for $14.50 an hour. No payment for meal breaks even if she works through it!!!


Have to disagree here Roger, Ryman are already leading the pack re staff pay rates paying between $16.50 - $18 per hour to caregivers , the Kristine Bartlett case only highlights what happens when a stingy company like Tera Nova only pays the minimum wage to someone who has worked for them for 20 years and then the question has to be asked why she has continued to work for them when she could get a job with any other company in the area (Of which there are many) Ryman are very proactive in there staff training opportunities and scholarship awards to those who are motivated to move ahead. Also they have put a lot of things in place over the last year or so to improve resident care, ive personally seen this occurring but it won't stop every problem or incident from happening and that's just life.

[Beagle]

Disagree re your pay rates. I know a person working at Ryman for $14.50 an hour. No payment for meal breaks even if she works through it!!!

WOW a whopping 25 cents above absolute lowest legal minimum adult wage of $14.25 per hour. Its the safest bet in town that she would be expected to work through her meal break if they were short handed, which would be quite often seeing as they're paying peanuts they'll have really regular problems with staff absenteeism and your friend will be expected to cover up for Ryman stinginess.

[winner69]

WOW a whopping 25 cents above absolute lowest legal minimum adult wage of $14.25 per hour. Its the safest bet in town that she would be expected to work through her meal break if they were short handed, which would be quite often seeing as they're paying peanuts they'll have really regular problems with staff absenteeism and your friend will be expected to cover up for Ryman stinginess.

So all up less than minimum wage (pay / actual hours worked)

But then Simon probably says he works 60 hours a week as well. Mind you relative to the greed of many listed corporates his $838,000 USA pittance.

Spose you could say his $400 plus an hour v $14.50 an hour for joshua's acquaintance is fair enough, like brains v doing the dirty work

[winner69]

Mind you Simon has a few million shares as well and the workers have a employee share scheme. So many are working for themselves, nice

[couta1]

Disagree re your pay rates. I know a person working at Ryman for $14.50 an hour. No payment for meal breaks even if she works through it!!!
I know dozens of Ryman caregivers who are on between $16.50- $18 so I'm going by that. Re getting paid for working through meal breaks that falls under a Health and Safety issue ie They must take their breaks and that's in the contracts they sign when joining the company so they unable to pay workers who choose to work through meal breaks without breaking the law, the reason why they choose to work through their meal needs to be addressed (Ryman forces no one to work through meal breaks) I'm sure your contact is genuine but one tree doesn't make a Forrest. PS-$14.50 would the starting rate for someone who rocks up for a job with No experience.

[Beagle]

http://www.reuters.com/finance/stocks/analyst?symbol=RYM.NZ
Average analyst view is slightly weak on RYM. (3.0 score is nuetral) but I note average analyst 2015 EPS is presently sitting slightly above company guidance of 15% growth issued recently and with only 13% growth in the first half I expect downgrade(s) once they finish crunching their numbers.
I'd be incredibly surprised if the recent break through the 100 day MA is the start of a new uptrend.

[Harvey Specter]

Back below $8. Doesn't look like the start of a new uptrend yet.

[percy]

Back below $8. Doesn't look like the start of a new uptrend yet.

Interesting enough the share price at $7.90 is now above both the EMA 50 [$7.76] and the EMA 200 [$7.86],so we will so find out soon whether or not it is the start of a new uptrend.

[winner69]

Interesting enough the share price at $7.90 is now above both the EMA 50 [$7.76] and the EMA 200 [$7.86],so we will so find out soon whether or not it is the start of a new uptrend.

Probably is a new uptrend as it roars up to a new all time high

Short term traders doing well if bought when squiggly line said so at $7.22 not that long ago

[couta1]

Probably is a new uptrend as it roars up to a new all time high

Short term traders doing well if bought when squiggly line said so at $7.22 not that long ago
So are you conceding that you won't be buying them with a 6 in front now?:cool:

[winner69]

So are you conceding that you won't be buying them with a 6 in front now?:cool:

I am patient - only buy bargains

Been at all time highs before haven't they

[Harvey Specter]

http://www.nzherald.co.nz/ryman-healthcare-ltd/news/article.cfm?o_id=182&objectid=11367176

As usual, objections from the neighbours but already fully consented so shouldn't be held up. Will be big though - 9 stories high which is completely out of charater for the area but due to the unique shape of the site, no one (except a few houses) will see any of it!

Edit:
https://www.google.co.nz/maps/place/Fernz+Lodge+and+Conference+centre/@-36.806707,174.705533,1012m/data=!3m1!1e3!4m2!3m1!1s0x6d0d38c37e698813:0x389ed a0a505a4a6f
I dont think any of the buildings will be visible from any of the roads though I could be wrong depending on where the place them.

[Winston001]

...the Kristine Bartlett case only highlights what happens when a stingy company like Tera Nova only pays the minimum wage to someone who has worked for them for 20 years and then the question has to be asked why she has continued to work for them when she could get a job with any other company in the area

That's what my dear old dad used to say about trade union complaints. If you don't like the job go elsewhere.

Unfortunately he couldn't extrapolate that to children going up chimneys and down into mines. He always thought employers were decent people - like himself. Sadly life isn't like that.

I'm a fan of Ryman and have no immediate reason to feel otherwise.

However on a wider level I am troubled that rest-home staff are paid such a low wage. Have any of you actually worked with elderly people? They are heavy and physically difficult to move out of bed and into chairs. They are often incontinent. Deaf. Frustrated. Obstinate. Afraid and bewildered.

Its distressing to work with some elderly day after day because these people were once dignified mums and dads who are now struggling with the dying of the light.

The staff are usually compassionate and cannot help but be affected by their work. Its quasi-nursing and deserves a higher level of wage.

[couta1]

Great article in the Herald today on Simon Challies its easy to see why they are best of breed. I also noticed the line from Forsyth Barr about Rymans Hospital and Dementia care being of particular significance to their growth due to demand in those areas and they are well positioned due to their fully integrated villages.

[Tevita]

That's what my dear old dad used to say about trade union complaints. If you don't like the job go elsewhere.

Unfortunately he couldn't extrapolate that to children going up chimneys and down into mines. He always thought employers were decent people - like himself. Sadly life isn't like that.

I'm a fan of Ryman and have no immediate reason to feel otherwise.

However on a wider level I am troubled that rest-home staff are paid such a low wage. Have any of you actually worked with elderly people? They are heavy and physically difficult to move out of bed and into chairs. They are often incontinent. Deaf. Frustrated. Obstinate. Afraid and bewildered.

Its distressing to work with some elderly day after day because these people were once dignified mums and dads who are now struggling with the dying of the light.

The staff are usually compassionate and cannot help but be affected by their work. Its quasi-nursing and deserves a higher level of wage.


Genuine sentiments nicely expressed. The Dylan Thomas allusion resonated to many about the human condition - handling the inevitability of advancing age.

[Beagle]

Great article in the Herald today on Simon Challies its easy to see why they are best of breed. I also noticed the line from Forsyth Barr about Rymans Hospital and Dementia care being of particular significance to their growth due to demand in those areas and they are well positioned due to their fully integrated villages.

Yes indeed, agree 110%. When you go to the pet shop to get your new puppy do you buy best of breed or some shabby mutt. I'm waiting for best of breed to go on special and I'm very patient :)

[percy]

Yes indeed, agree 110%. When you go to the pet shop to get your new puppy do you buy best of breed or some shabby mutt. I'm waiting for best of breed to go on special and I'm very patient :)
Looks as though it was only a one day special on October 17th at $7.22.
You missed it,and it does not look as though it will not come on special again in the foreseeable future .!! lol.

[Beagle]

Either of you fellas care to guess why SUM seems to be continually shunning your advice on this? Are you suggesting that they got the numbers wrong when the crunched the business case? Really??
Hmmm, Big Rodge casts a glance at well used soap box and is tempted to get on it again but is 110% sure all the regulars know what he thinks of SUM management and directors already.

Looks as though it was only a one day special on October 17th at $7.22.
You missed it,and it does not look as though it will not come on special again in the foreseeable future .!! lol.
The older I get the more I realise you need to think in terms of years not months in terms of your investment time frame. There will come a time, (it might be quite a long time away) when the market wakes up to PE's in this sector being too hot for the gradually cooling growth rate and even the show dog's fur will look less glossy. I've done well exiting this sector completely this year. RYM's done nothing.
Just did an analysis on the super charts menu on ANZ securities for interest.
12 months to 12/12/14
RYM up 2%
SUM down 12%
MET up 10%
NZX 50 up 17% Taking into account RYM has quite a big weighting in the NZX 50 the relative under-performance of RYM speaks volumes.
Selling most of my SUM holding at $3.58 and $3.52 !! I even beat Norah :lol: :lol:
I think this old dog's move to exit the sector entirely this year entitles him to a good woof woof !!!!

My thinking for 2015. This sector will continue to materially underperform the NZX 50 as valuations overall remain far too stretched.

[Beagle]

:lol: I had to edit my post again, bloody soap box use is addictive :lol:

[winner69]

Great buy by Infratil and Super Fund of RetireAustralia

Interesting slide from their presentation

Price paid ridiculously cheap relative to Ryman and Summerset .....or it shows that sensible people pay sensible prices and Ryman is ridiculously overpriced.

RetireAustralia hasn't got much in the way of care units. Add those over the next few years they will make heaps when they bring it back to market in a few years times .... at much higher multiples.

Well done guys

[percy]

Great buy by Infratil and Super Fund of RetireAustralia

Interesting slide from their presentation

Price paid ridiculously cheap relative to Ryman and Summerset .....or it shows that sensible people pay sensible prices and Ryman is ridiculously overpriced.

RetireAustralia hasn't got much in the way of care units. Add those over the next few years they will make heaps when they bring it back to market in a few years times .... at much higher multiples.

Well done guys

Certainly looks as though they have brought well [again].!
Great to see they intend to follow RYM and SUM model of "total care" rather than the Australian "lifestyle" model.
The Australian model also varies in the fact that the capital gain on units, is shared with the residents,while in NZ it is the operator that gains.
Whether they follow the RYM and SUM model of design,build etc done in house I am not sure?.
Again we are seeing RYM and SUM setting the standard.

[Beagle]

Great buy by Infratil and Super Fund of RetireAustralia

Interesting slide from their presentation

Price paid ridiculously cheap relative to Ryman and Summerset .....or it shows that sensible people pay sensible prices and Ryman is ridiculously overpriced.

RetireAustralia hasn't got much in the way of care units. Add those over the next few years they will make heaps when they bring it back to market in a few years times .... at much higher multiples.

Well done guys

Yep, buying on a PE of under 19 based on underlying earnings is where the sensible value is. Well done to infratil.

[Joshuatree]

The comparable company analysis at the bottom of the Infratil announcement is int. Aveo, Ryman, Summerset ,Metlifecare and Retire Aus. Retire Aus comes out well but AOG looks the best going on those figs. JHC may be worth a good look too with the sell down after the payroll stuffup.

[Beagle]

The comparable company analysis at the bottom of the Infratil announcement is int. Aveo, Ryman, Summerset ,Metlifecare and Retire Aus. Retire Aus comes out well but AOG looks the best going on those figs. JHC may be worth a good look too with the sell down after the payroll stuffup.

Agreed. Far better value in this sector on the ASX.

[percy]

Agreed. Far better value in this sector on the ASX.

Will be interesting to see whether the ASX retirement sector outperforms their NZ counterparts?
I have done well in this sector.INA in Aussie, which I no longer hold.gave me a great run,thank you KW,and I am enjoying my "free run" with RYM, and my SUM owe me under 40cents having sold down when they got over cooked.!!!

[Beagle]

Investors love RYM with their enviable long successful record of consistent growth so its priced for absolute perfection. Only time will tell if they can consistently grow with absolute perfection.
Nobody would try and make the case RYM is a value stock mate :)

[percy]

Investors love RYM with their enviable long successful record of consistent growth so its priced for absolute perfection. Only time will tell if they can consistently grow with absolute perfection.
Nobody would try and make the case RYM is a value stock mate :)

Yes I love my Ryman.Lovely people doing wonderful things for me.!!! lol.
Well you would feel the same if you were having a "free ride" too??!!!!!

[Beagle]

Yep, well done mate and to be honest I've made a few quid out of the stock in the past too :)

[winner69]

At this rate RYM at 9 bucks next week

All time high not that far away ...think that was 905

[percy]

Interesting enough the share price at $7.90 is now above both the EMA 50 [$7.76] and the EMA 200 [$7.86],so we will so find out soon whether or not it is the start of a new uptrend.

Above posted 25-11-2014.
With the share price at $8.60 today it would appear the renewed uptrend is confirmed.

[Vaygor1]

At this rate RYM at 9 bucks next week

All time high not that far away ...think that was 905

I recall about $9.05 too as the all time high.

Given my analysis (with your assistance Winner) of historical rational market value for RYM, then if RYM make the year-end Underlying Profit of NZ$140 million to be announced mid May 2015, which is still four and a half months away, then I get a non-bull non-bear market SP around the $7.70 mark.

What I do have trouble factoring in though is the enormous amount of design/construction work Ryman are currently undertaking which demonstrates to me that their growth rate still appears to be accelerating. Also RYM has enjoyed very high EPS gains in the last two years, these gains should convert to very high Underlying Profit gains in due course but still probably 3-4 years away before we see that… so maybe $8.00 plus justified then.

6632

[bull....]

Interesting developments happening accross the ditch, aveo introducing some big changes to the model

http://www.theage.com.au/business/review-of-retirement-sector-in-effort-to-simplify-fee-structure-20150108-12kf8l.html

[Harvey Specter]

Interesting developments happening accross the ditch, aveo introducing some big changes to the model

http://www.theage.com.au/business/review-of-retirement-sector-in-effort-to-simplify-fee-structure-20150108-12kf8l.html
33% over three years. Much more expensive than Nz which is normally 25-30% over 3-5 years unless it has changed since I last looked. No wonder Ryman is making moves there.

[Harvey Specter]

RYM need to watch out. This is probably quite reasonable when you consider it includes all costs and no 'capital loss' on the sale of your occupancy right agreement:

http://www.stuff.co.nz/travel/cruising/65291274/woman-lives-on-cruise-ship-for-seven-years

[stoploss]

RYM need to watch out. This is probably quite reasonable when you consider it includes all costs and no 'capital loss' on the sale of your occupancy right agreement:

http://www.stuff.co.nz/travel/cruising/65291274/woman-lives-on-cruise-ship-for-seven-years

mmmm, so if you went on for 5 years that's a million spent , not too many Kiwis be lining up for that IMO.

[Beagle]

mmmm, so if you went on for 5 years that's a million spent , not too many Kiwis be lining up for that IMO.

Now that's what I call a retirement plan !!!! Good on her !!!!

[stoploss]

Now that's what I call a retirement plan !!!! Good on her !!!!

Roger just keep paying those insurance premiums in case the unexpected happens..... then your wife will be off !!!!

[Harvey Specter]

mmmm, so if you went on for 5 years that's a million spent , not too many Kiwis be lining up for that IMO.With Ryman you loss 5% a year of your $700k apartment. Plus weekly fees of a few hundred add up to say $50k per year. Add in food and any extra costs charged for activities and you are probably up to - ok. Its expensive but sounds like great fun!

[Vaygor1]

With Ryman you loss 5% a year of your $700k apartment. Plus weekly fees of a few hundred add up to say $50k per year. Add in food and any extra costs charged for activities and you are probably up to - ok. Its expensive but sounds like great fun!

How many RYM apartments are $700k? Not many if any at all I think, and how does one lose 5%/annum?
Are you sure there are extra costs for activities? 1st I've heard, and how does a few hundred per week compare to being looked after and not starving at home?
How do these numbers (if they are true) compare to living in SUM or MET?
Or is your post all tongue-in-cheek?

[couta1]

How many RYM apartments are $700k? Not many if any at all I think, and how does one lose 5%/annum?
Are you sure there are extra costs for activities? 1st I've heard, and how does a few hundred per week compare to being looked after and not starving at home?
How do these numbers (if they are true) compare to living in SUM or MET?
Or is your post all tongue-in-cheek?
Must be tongue in cheek as the figures are all wrong so not your normal HS post.

[Harvey Specter]

Was tongue in cheek as I was trying to get the cost up to $150k.

But:
It won't be long till the top end units in Auckland top $700k (I thtink some of the 3 bed MetLife ones at takapuna were over that).

Deferred management fee is (and correct me if I am wrong as I haven't checked recently) 5% per year capped at 25% for Ryman and 10% capped at 30% for MetLife.

Not sure what weekly fees are. I expect cheaper than 200 but more than $100

Sure a weekly dance class maybe included but not the level of activities provided on a cruise liner. Remember she changed boats when they cancelled the daily dance class.

I tried my best but even exaggerating the costs, only got to a about 50% of the cruise cost so per my original conclusion - yes it is (much) more expensive. But sounds like a lot of fun (for those with the money).

[Bjauck]

Was tongue in cheek as I was trying to get the cost up to $150k.

But:
It won't be long till the top end units in Auckland top $700k (I thtink some of the 3 bed MetLife ones at takapuna were over that).

Deferred management fee is (and correct me if I am wrong as I haven't checked recently) 5% per year capped at 25% for Ryman and 10% capped at 30% for MetLife.

Not sure what weekly fees are. I expect cheaper than 200 but more than $100

Sure a weekly dance class maybe included but not the level of activities provided on a cruise liner. Remember she changed boats when they cancelled the daily dance class.

I tried my best but even exaggerating the costs, only got to a about 50% of the cruise cost so per my original conclusion - yes it is (much) more expensive. But sounds like a lot of fun (for those with the money).

I think the Cruising lady had been on quite a few voyages with her non-dancing husband. She presumably has a few bob (rather, a few dimes). However if her health deteriorates will she be able to keep up life on the high seas? Would the liner or her health insurer allow a sickly passenger to embark? So eventually she may still need to buy a unit at a Ryman's facility in the great cruising destination of NZ.

[Harvey Specter]

So eventually she may still need to buy a unit at a Ryman's facility in the great cruising destination of NZ.Yes but that is at the stage where she has to move from an independent unit to a higher level of care unit.

Note that I retract my earlier statement that RYM should be concerned. I have always said that villages are not for the top 5% of the population, more likely the next 10% after this (and definitely too costly for the bottom 50%). She is clearly in the top 5% so was never in RYMs target market (and not just because she isn't a NZer).

[Bjauck]

Yes but that is at the stage where she has to move from an independent unit to a higher level of care unit.

Note that I retract my earlier statement that RYM should be concerned. I have always said that villages are not for the top 5% of the population, more likely the next 10% after this (and definitely too costly for the bottom 50%). She is clearly in the top 5% so was never in RYMs target market (and not just because she isn't a NZer).

True, I am not sure at what stage that she would be unable to continue her cruising. However I think she could still move into a Ryman's village care facility and I think you can buy a licence-to-occupy a room in the private hospital wing of a Ryman's care unit (I know for certain that you can buy a licence in an Oceania hospital wing).

The top 5% of retirees...or maybe the top 1 or 2% may well be able to afford 24-7 nursing care at home if necessary, in addition perhaps to delegating the onus of overseeing the caretaking workload of occupying one's own home/estate. I do think that for some in the top 5%, moving into a retirement village may well be a lifestyle choice. In fact the lack of participation in capital appreciation of the retirement unit could be a less of a concern for the very wealthy as their investment portfolios may include other freehold real estate assets.

There is scope for the likes of Ryman to produce a product for a less wealthy segment of currently freehold home-owning retirees perhaps from the 15-60 percent range.

[Harvey Specter]

.or maybe the top 1 or 2% may well be able to afford 24-7 nursing care at home if necessary,$200k a year through an agency and I assume they aren't qualified carers. Ouch

[Vaygor1]

Deferred management fee is (and correct me if I am wrong as I haven't checked recently) 5% per year capped at 25% for Ryman and 10% capped at 30% for MetLife.

It appears the Deferred Management Fee for RYM is 4% per annum and capped at 20%.

Refer:
http://www.rymanhealthcare.co.nz/component/content/article/165-peace-of-mind-guarantees/813-deferred-management-fee-capped

and this Stuff article from two years ago:

http://www.stuff.co.nz/business/industries/8148217/Ryman-Healthcare-targets-NZX-high where the article states "Prices for the right to occupy a two-bedroom townhouse for life ranged from $329,000 to $359,000, with residents able to sell back the property less a deferred management fee that grew to 20 per cent over the first five years."

Not sure what it is for SUM & MET.

[Beagle]

SUM and MET are more greedy than 20%, SUM 25% and MET 30% IIRC. I think this is one of the many reasons why RYM are best of breed.

[troyvdh]

I wonder how many times the "3' read this forum...cheers

has anyone asked...

[couta1]

Dipped below $8 and the MA200, its a long wait until June.

[Beagle]

Of the super charts menu on ANZ securities, performance for the 2 years to 18 February 2015
SUM up 24%
MET up 51%
RYM up 74%
NZX50 up 37%
and just to put the sector into context because I think the whole sector has run too hard and PE's are really stretched...here's a couple of stocks, still with very modest PE's notwithstanding recent performance for comparison
HNZ up 91%
AIR up 109%

Hmmm...does performance for the last five minutes really matter...or should we focus on the quality of the management and their ability to execute well over time and whether a stock's PE multiple is stretched or not ?

[Beagle]

I've got some fresh rat bait in my garage...just bought it today, can't get any fresher than that :p

[troyvdh]

Low interest rates. ...houses go up as do shares.....they have to.