MET - Metlifecare - one for the fundies?

[BlackPeter]

Looking at the number of people trying to back out at 330 and the relative lack of depth, I wouldn't be too surprised to see it at sub 3 bucks today.

Well, the volume is not too shabby. One hour into trading and already more than 1% of all MET shares changed hands. Not sure, whether this is just mum and dad investors.

[traineeinvestor]

That will depend on what international financial and investment markets look like. My recollection is that takeover activity normally builds during the economic cycle and decreases during recessions. If so, an alternative takeover is less likely... but still possible.

A lot of companies are raising big amounts of equity so this is going to gobble up a lot of cash that is looking for an investment market home. There's also a lot of companies now trading at a lot lower price than previously, so the candidate pool of companies with knocked-down share prices is a lot larger.

I think if you are buying this one at present, its because you think it gives good value for money exposure to the retirement sector, not because there's a potential takeover around the corner to save your bacon.

While I 100% agree with all of these points, to add a few more to the mix:

1. the NZD has weakened since Covid-19 started to impact financial markets

2. NZ is currently getting a lot positive press for our handling of the crisis - it raises the possibility of NZ being seen as a relatively safe haven/early recovery candidate

3. central banks are flooding the world with liquidity and interest rates are expected (by me at least) likely to relay lower for longer - much longer making funding cheap and depressing required returns

4. reading through the latest round of confusing substantial shareholder notices I can't tell how many shares the big institutions who tried to arbitrage the offer still hold (they no longer have to report after they drop below the 5% level). If (and it's a big speculative if) they collectively still hold a reasonable percentage, I could imagine an investor getting commitments to accept a new offer from them which would provide a degree of confidence that such an offer would succeed

5. lastly, it's not clear whether the current offer is in fact dead. While the bidder would not have withdrawn unless they had at least a defensible legal position, the comments on this thread show that's it's not a certainty.

Of course, this is all very speculative and I would not be buying back in in the hope that either the current offer will go ahead or a new offer will emerge but with the shares trading at less than half the NTA reported with the last interim results* and relatively little interest bearing debt, value is starting to emerge.

Disclosure: former holder tempted to get back in.

* not sure how big a haircut the last NTA number should be given in the current environment?

[King1212]

Fear kick in again... remembered OCA... people sold at whatever price....the next day...it recovered

[Beagle]

Well, if you're comparing NTA's then the equal of OCA@40 would be MET@<280 :scared:

That's the only useful navigational marker we have at this point. Fair to say there's going to be a LOT of arbitrage players shares looking for a new home.

[BlackPeter]

That's the only useful navigational marker we have at this point. Fair to say there's going to be a LOT of arbitrage players shares looking for a new home.

Well, I feel with the people who thought buying in the 680'ies gives them a safe and well paid parking space for their money - but not sure I would sell now if I would be them.

Discl: bought a small parcel at 317 ...

[Beagle]

FWIW ... sold this morning out of MET. Not that I am too concerned about the takeover failing, but I see limited further up potential for the share price, but some down potential in case the takeover turns for some reason to custard (like lack of OIO approval or ongoing anti virus fear attacks).

Given the current viral fear mongering tsunami across social media it just might be better to have some more cash at hand to mop up various stock bargains after they have been hammered down rather than waiting for receiving 12 cents more for the share in May ...

Love thy scaremongers and shorters ... well, I don't.


1. The longer we go on with no superior bid the less likely it is one will emerge. (likelihood of a superior offer is now lower than it was)
2. OIO approval is not a certainty by any means considering the deal involves ceding control over a substantial amount of land and housing to overseas control.
3. The virus is the new wild card and the fine print is quite vague on what constitutes an "adverse event"
4. Major institutional shareholders who had previously agreed to sell at $7 have sold significant parts of their holdings meaning its now less likely that the deal will get 75% shareholder approval
5. The markets are under the pump and I think its less likely a competing higher would be made in the current investment climate.
6. A 12 cent premium represents only an annual return of just over 5.3%, assuming the takeover proceeds are paid out on 31 May 2020.
7. If for any reason this deal falls over I see a potential downside of as low as $5.00

I have also carefully reconsidered the potential rewards and the not inconsiderable risks and decided its time to move on.

From 3 February 2020. Perhaps we should allow ourselves a small pat on the back selling at ~ $6.90 :)

I don't think you are far off the mark at $3.17 but note you bought only a small parcel. I am thinking of dipping a paw in the water too but there's probably a VERY substantial overhang from disenfranchised arbitrage players so (oh my goodness), who knows how low it could go ?
OCA did get down to 38 cents at one point, (just 37.52% of its last reported NTA) so using that as the sole beacon of light by which to navigate, we could see 0.3752 x $7.00 = $2.63 :eek2:

[King1212]

Keep in mind OCA was at 38 cents because global sentiment...it was 23 march...the world was in fear....NZ was preparing the lockdown.... newspapers were bombarding the market with negative news.....

[winner69]

Guru investor Butch did his sums and declared “MET IS A BEARY GOOD BUY AT TODAY’S PRICE”



PA I keep reminding Butch to give his desk a decent clean

[dobby41]

PA I keep reminding Butch to give his desk a decent clean

What's he been snorting?

[Cyclical]

I am thinking of dipping a paw in the water too but there's probably a VERY substantial overhang from disenfranchised arbitrage players so (oh my goodness), who knows how low it could go ?

Well, you did say in the shopping list thread "MET $3.50 (inept management and imminent takeover failure, needs to be half NTA to get me interested)" haha.

I'm in.

[Joshuatree]

From 3 February 2020. Perhaps we should allow ourselves a small pat on the back selling at ~ $6.90 :)

I don't think you are far off the mark at $3.17 but note you bought only a small parcel. I am thinking of dipping a paw in the water too but there's probably a VERY substantial overhang from disenfranchised arbitrage players so (oh my goodness), who knows how low it could go ?
OCA did get down to 38 cents at one point, (just 37.52% of its last reported NTA) so using that as the sole beacon of light by which to navigate, we could see 0.3752 x $7.00 = $2.63 :eek2:

Yes anyone have some numbers of just how big that overhang is?. I noticed quite a few SSH notices from various entities on mET announcements.

[Joshuatree]

I make it re 63 million shares from Mitsui, Jp Morgan, Morgan stanly, UBS. If they are all bailing aways to go.S/P could drop alot more.Sub 10,000,000 gone today last i looked.

[Joshuatree]

Plus another at least 30 mill shares from Vanguard millennium and others.

[Balance]

Suspect the fundies who sold their shares at over $6.80 to the arbitrage players are stepping up and now and buying back at less than 50% or half price.

Ready for the next round!

[Joshuatree]

Could be too. Awaiting the next SPH notices with interest.

[Balance]

Guru investor Butch did his sums and declared “MET IS A BEARY GOOD BUY AT TODAY’S PRICE”



PA I keep reminding Butch to give his desk a decent clean

Reckon APVG will be back post lockdown (probably in 2021) with a new bid of say, $5.40 - 20% discount from NTA?

New shareholders will grab that kind of new offer with both hands.

[Beagle]

Well, you did say in the shopping list thread "MET $3.50 (inept management and imminent takeover failure, needs to be half NTA to get me interested)" haha.

I'm in.

Yeap...I'm definitely interested. Hmmm, timing this one could be tricky but if Winner's teddy bear reckons there's value here then who in their right mind would argue with that :lol:

[King1212]

God almighty...how many people lost the money during this covid 19?

[Cyclical]

Once the dust has settled, it will be interesting to see where this stock settles. Now that we know the take over is off the table, will it actually head higher than it was when people were still in denial? It's been humming around 380 for the last few days, give or take, so I wonder with the take over uncertainty gone, if it will get back up to more realistic levels. If we go back to OCA as a reference, currently trading at about 66% of NTA, can we expect MET to track towards ~460 in the not too distant future?

[Balance]

Once the dust has settled, it will be interesting to see where this stock settles. Now that we know the take over is off the table, will it actually head higher than it was when people were still in denial? It's been humming around 380 for the last few days, give or take, so I wonder with the take over uncertainty gone, if it will get back up to more realistic levels. If we go back to OCA as a reference, currently trading at about 66% of NTA, can we expect MET to track towards ~460 in the not too distant future?

Simple demand and supply imbalance at present - arbitrage funds all trying to head out through the one small door and NZ fundies who sold to them at $6.50+ salivating by the door to help them out at the lowest price possible.

[macduffy]

Once the dust has settled, it will be interesting to see where this stock settles. Now that we know the take over is off the table, will it actually head higher than it was when people were still in denial? It's been humming around 380 for the last few days, give or take, so I wonder with the take over uncertainty gone, if it will get back up to more realistic levels. If we go back to OCA as a reference, currently trading at about 66% of NTA, can we expect MET to track towards ~460 in the not too distant future?

There's probably enough potential buyers out there who're not entirely convinced that the action is over to keep the dust circulating for a while yet. Beagle for one? Me?

;)

[Balance]

There's probably enough potential buyers out there who're not entirely convinced that the action is over to keep the dust circulating for a while yet. Beagle for one? Me?

;)

Beagle sold out when the going got a bit wobbly (well done) so now buying back?

Not often one sells and buy back T less than half price within 3 months!

Imagine if you can do that with physical properties!

[Joshuatree]

Ive taken an initial parcel, no rush with that overhang. Up 24c a share atm but lets see what the final price today is im guessing it will be manipulated down or up;):t_up:. Prop stocks in general in for it over the next few months.

[Cyclical]

There's probably enough potential buyers out there who're not entirely convinced that the action is over to keep the dust circulating for a while yet. Beagle for one? Me?

;)

More than happy for you to whip up a dust storm so I can load up with some more at sub 3 ;)

[dreamcatcher]

Also in the not convinced camp ..........but looks like todays happy hours is over

[Beagle]

Simple demand and supply imbalance at present - arbitrage funds all trying to head out through the one small door and NZ fundies who sold to them at $6.50+ salivating by the door to help them out at the lowest price possible.

Hits the nail directly on the head !

[Balance]

Hits the nail directly on the head !

And don't forget that there were two other unsolicited expressions of interest in taking over Metlife - APVG moved its bid up to $7.00 (from $6.50) partly to head off any other competing bids.

At $3.50, MET has got to be in play again post the lockdown - as long as the retirement village sector does not have the same problems as those in Italy, ie. virus clusters.

Deals do not stop especially when there's going to be a lot of cheap money around with the trillions of dollars being pumped into the financial system. Prices will change for sure as nobody will want to pay pre-Covid19 prices.

[Beagle]

And don't forget that there were two other unsolicited expressions of interest in taking over Metlife - APVG moved its bid to $7.00 partly to head off any other competing bids.

At $3.50, MET has to be in play again post the lockdown - as long as the retirement village sector does not have the same problems as those in Italy, ie. virus clusters.

Woof woof, I hear ya ! It also has the lowest gearing in the sector, the highest embedded value per unit in the sector and can easily slow down its development plans to ensure a better balance between supply and demand for units. Effectively one is buying (mainly Auckland), property at half price, which would be compelling if Mr and Mrs Beagle didn't have so much of it, (non listed) already.

Half price is half price though...Hmmm..if Winner's teddy bear has told him this is a great buy, what could possibly go wrong :D

[Balance]

Woof woof, I hear ya !

Haha - we are both back in, I think and I can hear the howling too (of losses) from the arbitrage players as you bark at their heels. :p

[Beagle]

Haha - we are both back in, I think and I can hear the howling too (of losses) from the arbitrage players as you bark at their heels. :p

:lol: :lol: I'm not back yet but I am not sure how much longer I can resist the temptation of a bargain or whether I should resist at all. Biting a big chunk out of those arbitrage boys is such a compelling thing, only worry is they bite me back and smack it back to under $3. Risk and reward looks pretty good at half price I have to say as I'd go again at under $3 anyway.

[Cyclical]

Biting a big chunk out of those arbitrage boys is such a compelling thing, only worry is they bite me back and smack it back to under $3. Risk and reward looks pretty good at half price I have to say as I'd go again at under $3 anyway.

Yeah, that was and still remains my thinking. Even contemplated banking some of today's gains already, but that would probably be silly...I'm still emotionally scared from offloading some OCA too early a couple of weeks ago...

When it's raining gold... Just wish I had a bigger bucket.

[King1212]

No.no..no....depression ... recession...that all u guys saying...put your money at term deposit....2.1%

Leave the share market to the brave one....

[Cyclical]

Seeing the odd $.5m parcel going through at 350...what do we read into that? Manipulation to keep it there while the big boys off load?

[JeremyALD]

I'm not even a fan of MET, but even I picked up some today. The price just seemed too low for a long term hold. There's also a very off chance they could still be sold for $7. Worth the risk at this point imo, however not a large conviction purchase.

[Beagle]

I promised myself I would stay in my very well insulated and extremely well padded kennel until this storm has passed but when Winner's teddy bear and (I swear I could hear my last dog Basil who died late last year whisper telepathically to me that this would be a good food supply for my next dog, hopefully a Beagle) say its great value long term at half NTA I was powerless to resist.

Just recycled the excellent profits from my last (~$4.40 to ~$6.90 foray) back into this so just a free ride at this stage but if those arbitrage boys want to beat it down to about $3...in the memorable words of Clint Eastwood..."Make my day"...I'm ready to go again :t_up:

Gearing is the lowest in the sector at just 16% as at 31 December 2019 and they can easily slow down their development pipeline to suit changing market circumstances so buying at half NTA looks too compelling to resist. Perhaps the company will reinitiate its buy back program (which they only got a small way through) in due course again ?
Why build new units when you can buy existing ones through a buy back for half price ?

Their balance sheet is the strongest in the sector and their cash flow is also very good http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348968/317506.pdf

Well done to those that got in near the bottom today.

[Joshuatree]

18.5 mill shares through , s/p steady in arvo @ $3.51.

[Arbroath]

I'm not even a fan of MET, but even I picked up some today. The price just seemed too low for a long term hold. There's also a very off chance they could still be sold for $7. Worth the risk at this point imo, however not a large conviction purchase.


Im in the same boat. Never owned MET before as it's just been a little underwhelming and had historical issues etc. But at $3.30 I've bought a few. It is financially sound as Beagle points out with sector low gearing and just too cheap against NTA. Even if post virus NTA is trimmed 10-15% which I think is possible it's still selling for about 60% of a reduced NTA with multiple parties wanting to have bought it only a few months ago. A renewed bid around $6.00 could well succeed later this year but the BOard should insist on an unconditional offer after allowing confidential due diligence beforehand.

[Cyclical]

Guys, help me here... So how is it for example that we have depth of ~100k offers at say $3.51 and the other side we have ~100k bids at say $3.50 and then along comes a trade of 150k+ shares and yet it seems to have no impact on the visible market depth or price? Is that the brokers dealing direct with the institutions without the trade actually hitting the market per se? Thanks

[Beagle]

Guys, help me here... So how is it for example that we have depth of ~100k offers at say $3.51 and the other side we have ~100k bids at say $3.50 and then along comes a trade of 150k+ shares and yet it seems to have no impact on the visible market depth or price? Is that the brokers dealing direct with the institutions without the trade actually hitting the market per se? Thanks

Bigger parcels are often crossed in house, (brokers really love clipping both ends of the same ticket), as a special parcel or between broker houses. (SP after the trade volume denotes special parcel)

[Balance]

Guys, help me here... So how is it for example that we have depth of ~100k offers at say $3.51 and the other side we have ~100k bids at say $3.50 and then along comes a trade of 150k+ shares and yet it seems to have no impact on the visible market depth or price? Is that the brokers dealing direct with the institutions without the trade actually hitting the market per se? Thanks

It’s a crossing - done by the same broker, one client to another.

[Cyclical]

Im in the same boat. Never owned MET before as it's just been a little underwhelming and had historical issues etc. But at $3.30 I've bought a few. It is financially sound as Beagle points out with sector low gearing and just too cheap against NTA. Even if post virus NTA is trimmed 10-15% which I think is possible it's still selling for about 60% of a reduced NTA with multiple parties wanting to have bought it only a few months ago. A renewed bid around $6.00 could well succeed later this year but the BOard should insist on an unconditional offer after allowing confidential due diligence beforehand.

Me too. In this sector, I've tended to look more at OCA, with a cursory low bid in there for MET, just in case the take over turned to custard. That low bid didn't get hit today, but I grabbed some at 340 (falling knife), 316 (when it hit the floor with a clatter) and then another stab at 327. The key for me will be to put them in the drawer and forget about them. I'll be back in there again if/when it gets too close to $3.

[Cyclical]

Bigger parcels are often crossed in house, (brokers really love clipping both ends of the same ticket), as a special parcel or between broker houses. (SP after the trade volume denotes special parcel)


It’s a crossing - done by the same broker, one client to another.

Roger. Thanks guys. Been playing with the share market since I was a kid in '86 (thanks for helping me lose all my paper round money, Dad) but still have plenty to learn from you wise old dogs ;)

[King1212]

Anything cheaper than NTA..I am on....KPG...ARG...MET....love it....

Worth the risk....brick n motar....

[Beagle]

Was a pretty solid update the other day from ARG...KPG was more concerning.

[King1212]

No worries...debts are cheap...so long u have assests...then all good

Plus....the prime minister said today..there will be fund provided to businesses to help with lease.

Also...the hint....she kept saying businesses get ready...

We might see they lift the lockdown after Easter.

I remembered the government kept asking Kiwis to go home a week before lock down....

So... no worries. NZ is in a good position

[Cyclical]

We might see they lift the lockdown after Easter.

Not in a month of (Easter) Sundays. If the market has priced in that possibility, then we're in for another crash next week :-)

[troyvdh]

Ok...the sharemarket appears to be getting its mojo back..retirement entities appear to be gaining favour..albiet somewhat stutteringly....indeed NZ is in a good position.However...re the DOW etc...the US surely has yet to feel the pain...do folk believe that like in the past..our MKT..will suffer...despite.........cheers

[King1212]

That why I said...leave your money on term deposit....the market is now only for the brave one....

[Joshuatree]

You are right Troy. This is a rare euphoric ray of light for us investors and traders. Weve been held down by doubt and gloom and worry, selling, sitting in no mans land, stunned mullets etc.:blink: Things have happened at incredible speeds nothing much happening is making sense, the swings have been nuts.

They havnt gone , much more ahead imo especially when /if 2nd , 3rd etc waves of infection come. But pockets of value emerge like today. How long one holds this is another story dark days still to come.Ive enjoyed this brief jack in a box spring, sure needed some relief in something.:))

[blackcap]

Ok...the sharemarket appears to be getting its mojo back..retirement entities appear to be gaining favour..albiet somewhat stutteringly....indeed NZ is in a good position.However...re the DOW etc...the US surely has yet to feel the pain...do folk believe that like in the past..our MKT..will suffer...despite.........cheers

How does the US still have to feel the pain? (From a market perspective that is)

[troyvdh]

black surely you jest..Im no expert.However Im a news junkie..and have noticed..CNN FOX..have you noticed how day after day ....a percentage of American pop are becoming increasingly delusional...irrational..in denial ..I could go on here..many figures are around..say 10 million unemployed....say..20.. 30..."feel the pain"...it ain't started yet...I stress this is only my humble opinion cheers

[King1212]

One thing to sum up......for those that reading this forum.....

All of posts are opinions based....so right...bull eyes .. some wrong....

Some choose to follow....some don't...

Whatever u do....u make your own decisions based on the companies current condition.

No one have a crystal ball.....

A true recession will hit when investors are not aware and cautious....

That what my opinion....

[blackcap]

black surely you jest..Im no expert.However Im a news junkie..and have noticed..CNN FOX..have you noticed how day after day ....a percentage of American pop are becoming increasingly delusional...irrational..in denial ..I could go on here..many figures are around..say 10 million unemployed....say..20.. 30..."feel the pain"...it ain't started yet...I stress this is only my humble opinion cheers

No I am not jesting. What I mean is that yes they will feel pain, but would that not apply proportionally just as much to other Western countries? It's not going to be worse in the US than in NZ. So why should the DOW etc be worse off than the NZX? If anything NZ will feel a lot more economic pain than the US with our over-reliance on Tourism which probably will dry up for the next 12 months.....
For some context... 10m unemployed in the US is the same as 166,000 unemployed in NZ... think we might get there quite soon!

[Joshuatree]

I wouldn't watch Fox for more then 5 mins troy, ( other then for entertainment) its all delusional and their brief is to suck up to trump spread lies and fake news galore relentlessly. Unfort a lot of americans are brainwashed and sucked in. Anything goes no moral compass whatsoever. Trump blaming everyone but his own incompetent self.

[penn]

One thing to sum up......for those that reading this forum.....

All of posts are opinions based....so right...bull eyes .. some wrong....

Some choose to follow....some don't...

Whatever u do....u make your own decisions based on the companies current condition.

No one have a crystal ball.....

A true recession will hit when investors are not aware and cautious....

That what my opinion....
I like how you think King1212 but that last line "A true recession will hit when investors are not aware and cautious...."
Do you mean 'A true recession will hit when investors are not aware and not cautious....' i.e. Blindsided, or are you saying they will be cautious but not aware?

[troyvdh]

black..re the US I cannot say other than to read Joshua's post again.How ever history has indeed taught us many things.The US has been often underestimated .Mr Yamato I believe once said.."we have awoken a giant".However given..blah blah blah...essentially it's my belief that the US is suffering from an increasingly..percentage of the population feeling more emboldened... by trump..sadly...

[King1212]

What I meant....now investors are aware that there will be a slow down. Investors were cashing up since January. They all have heaps cash.

People are very cautious now....that is good....so recession won't happens in the short term.

Recession is only a worry...when the businesses are failing...at the moment this is a black swam event. Whether it will be one. .we will see it within 6 months.

Once the lockdown lifted..you will see all the people are spending like a horny virgin....bang...bang.. bang...non stop..

[Balance]

black..re the US I cannot say other than to read Joshua's post again.How ever history has indeed taught us many things.The US has been often underestimated .Mr Yamato I believe once said.."we have awoken a giant".However given..blah blah blah...essentially it's my belief that the US is suffering from an increasingly..percentage of the population feeling more emboldened... by trump..sadly...

Well, listening and believing in Trump’s BS is costing the US very dearly - just under 400k infected as of today there and 1,900+ deaths, taking the death toll there to over 12,800. And there’s worse to come.

[macduffy]

Seems the MET thread has morphed into, what?...………..

[Joshuatree]

Back to the past present and future
bout Metlifecare
Metlifecare is a leading New Zealand owner and operator of retirement villages, providing rewarding lifestyles and outstanding care to more than 5,600 New Zealanders. Established in 1984, it currently owns and operates a portfolio of 28 villages in areas with strong local economies, supportive demographics and high median house prices, located predominantly in New Zealand’s upper North Island.

Mkt cap $748.7 mill mkt cap was re double in Feb.! Same number of villages today:) Net assets in FEB $700 mill

Results Presentation (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348968/317506.pdf)

There has been re 45 SPH notices from big Insto Financial companies. since Jan.

I did a real quick rough and ready count of 7 instos down to Vanguard of re 60 million shares that could be an overhang.Dont rely on this fig.

S/P held steady this arvo @$3.51 after hitting allow of re $3.13 this morn after the no buy announcement with 18.7 mill share through. same again tomorrow and will the s/p hold up like today?
DOW futures currently -70
Market Screener, 4 holds t/p $6.79
Craigs hold valu $7.50
But what will the property mkt do?
Know when to hold know when to fold. say when. "when"

[Balance]

Seems the MET thread has morphed into, what?...………..

Into concerns by some posters that buying into undervalued stocks like MET at under half of last published NTA now may still yet be derailed by a further drop in US markets - brought about by the idiotic and incompetent gross mismanagement by Trump.

[troyvdh]

Balanced..you nailed it thanks.

[Joshuatree]

​PLUS


Baldwin St reclaims steepest street title | Otago Daily Times ...www.odt.co.nz (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwit_oaNzNjoAhVeyzgGHQLsDvUQFjABegQIAhAB&url=https%3A%2F%2Fwww.odt.co.nz%2Fnews%2Fdunedin%2 Fbaldwin-st-reclaims-steepest-street-title&usg=AOvVaw1C-2s7XO6gPANOx1wJfXJY) › news › dunedin › baldwin-st-reclaims-steepest-street...

[carrom74]

Extra money-7 cents per share if either party backs out- I read it somewhere early this year... is this taxable?

[Chinesekiwi]

I wouldn't watch Fox for more then 5 mins troy, ( other then for entertainment) its all delusional and their brief is to suck up to trump spread lies and fake news galore relentlessly. Unfort a lot of americans are brainwashed and sucked in. Anything goes no moral compass whatsoever. Trump blaming everyone but his own incompetent self.


You can apparently watch FOX for about 4 minutes longer than I can.:t_up:

[Joshuatree]

I know what you mean but, gotta keep your enemies close and see what they are up to;)

[nztx]

Extra money-7 cents per share if either party backs out- I read it somewhere early this year... is this taxable?

Not to forget the March 2020 dividend not paid while this was going on

Will the next dividend be even higher perhaps - for those hanging in or diving into it ?

[Balance]

Into concerns by some posters that buying into undervalued stocks like MET at under half of last published NTA now may still yet be derailed by a further drop in US markets - brought about by the idiotic and incompetent gross mismanagement by Trump.

And here's why it can be folly waiting for the next (if any) sharp drop in the US markets :

https://finance.yahoo.com/m/50bc3084-4caf-3bd8-a2d6-35559430cefc/waiting-for-a-stock-market.html

"Waiting for a stock-market bottom is ‘folly,’ says billionaire Howard Marks: ‘If something’s cheap…you should buy’"

He is not a billionaire by chance!

[King1212]

Wow....how many got burnt n sold in deep loss yesterday?

[winner69]

Maybe off topic but especially for beagle

Keep telling him cnbc bad for his health

[bottomfeeder]

Have dipped my toes in the MET water. Only 1500 at $3.69. I can see this as a long term hold till the eventual takeover at $5.50.

[dreamcatcher]

Have dipped my toes in the MET water. Only 1500 at $3.69. I can see this as a long term hold till the eventual takeover at $5.50.

Still may have a 7 until MET management advises otherwise

[Balance]

Have dipped my toes in the MET water. Only 1500 at $3.69. I can see this as a long term hold till the eventual takeover at $5.50.

3 potential bidders with one having done full due diligence - yup, I think we will see a takeover within the next 12 months if the sp remains below $4.50.

[crighton100]

Hi all,I live in a Metlife village { & own shares,only recently] I can tell you its like living in Colditz 13 since the lockdown,they are bending over backwards to look after us old farts,we do not leave the village [have changed all the exit gate locks],they have security on the only gate entrance & absolutely no one gets in [including family] or out unless an emergency.They do all the shopping for the residents & deliver to your door [its like being on a cruise ship only you have to cook for yourself].There is information given to us everyday as to what is happening & what we cannot do [which is basically stay in your unit].Its really not that bad. And if you are really lazy the kitchen will deliver meals at a price off course.Have to say I am really impressed with the way they have handled the situation & think the shares are really underpriced.Just thought an insite into the village life at this time would help you make some sane purchases.Have a great day,into the wine now [thats the luxury of retirement].

[psychic]

Thanks for that Crighton, good to hear.

[Balance]

Thanks for that Crighton, good to hear.

Yes, thanks Crighton - very useful.

[hoyinma]

Thank you Crighton. Your input is appreciated.

[peat]

OK guys, Im about to go through this thread, but can anyone post a quick summary of need to knows about etlife? Of course interested in both your valuations but perhpas more so the recent history of take over talk, and any major events. For what its worth, ~5-10 years back I was in both Somerset and Ryman (dont own either any more), and quite keen to explore have some retirement village exposure again.



Northern NZ centred.
has had some leaky issues but are not that big a deal really in the scheme of things
share price foundered and traded closest to NTA of all the retirement stocks.
lagged behind the others more and more.
someone noticed it was cheap as chips and accumulated with intent
traders noticed the build up even though it was camouflaged by SUM other retirement stocks doing very well, as well.
became common knowledge a bid was coming. around 6 dollar mark.
Bid came in at 7 , many disappointed.
Some stayed around for the full 7 to their regret , others even bought more to get the 5% t/o premium
BOOM COVID19!!
Much discussion on this thread as to the escape clause , but , as the magnitude of the pandemic became more wide-sweeping it became clear that probably the escape clause was triggered.
Took a while for this realisation that the Scheme would probably not go ahead to catch on and price stayed surprisingly buoyant but now reflects the new normal for stocks

[Beagle]

3 potential bidders with one having done full due diligence - yup, I think we will see a takeover within the next 12 months if the sp remains below $4.50.

Agreed. Even if nothing happens there's also the company's own share buy-back scheme that was only a small way through before it was suspended and if all else fails you're buying at around half asset backing for a company on a historical PE based on underlying earnings of just 8.25 that's grown underlying eps by an average of 15% per annum for the last 5 years, (faster growth than RYM over the same period).

Its increasingly looking to me highly likely that N.Z. is going to be a relatively safe haven in a world riddled with Covid 19 concerns. Ideal place to retire, some might say.

In my opinion this has, (you're highly likely to get a bloody good feed), written all over it. Disc: I'm quickly getting myself well positioned.

[dompf]

Northern NZ centred.
has had some leaky issues but are not that big a deal really in the scheme of things
share price foundered and traded closest to NTA of all the retirement stocks.
lagged behind the others more and more.
someone noticed it was cheap as chips and accumulated with intent
traders noticed the build up even though it was camouflaged by SUM other retirement stocks doing very well, as well.
became common knowledge a bid was coming. around 6 dollar mark.
Bid came in at 7 , many disappointed.
Some stayed around for the full 7 to their regret , others even bought more to get the 5% t/o premium
BOOM COVID19!!
Much discussion on this thread as to the escape clause , but , as the magnitude of the pandemic became more wide-sweeping it became clear that probably the escape clause was triggered.
Took a while for this realisation that the Scheme would probably not go ahead to catch on and price stayed surprisingly buoyant but now reflects the new normal for stocks



Thanks Peat for the summary.

& thanks Crighton for his on the ground insights enjoy your wine

[King1212]

It worth the risk...almost 50% off the NTA......

Oca is trading off 20% off....SUM is 15% extra....

So...the best pick at the current sector ...even my master Beagle dipped in his smooth paw!

[peat]

Thanks so much Peat - really helpful. SO is the take over officially off now? Otherwise nothing material has changed since $7 takeover bid?

The offeror is invoking the Material Adverse Change clause coz the world has changed.
Metlife haven't agreed that it is triggered, but are taking legal advice. They be well hard pressed to get the coin now.

[Balance]

The offeror is invoking the Material Adverse Change clause coz the world has changed.
Metlife haven't agreed that it is triggered, but are taking legal advice. They be well hard pressed to get the coin now.

I for one am grateful the takeover has not gone ahead - not often one gets to invest back in a quality well sought after sector stock at half price! :t_up:

Reminds me of AIA - deal to takeover by the Dubai interests was blocked by Cullen and one was able to buy shares at $2.00 after the deal fell over.

More! :t_up:

[Bjauck]

I for one am grateful the takeover has not gone ahead - not often one gets to invest back in a quality well sought after sector stock at half price! :t_up:

Reminds me of AIA - deal to takeover by the Dubai interests was blocked by Cullen and one was able to buy shares at $2.00 after the deal fell over.

More! :t_up: At $3.78 the MET sp is back up to the price level it was at prior to the invocation of the MAC clause. At this price I think it could be a toss up as to whether MET or OCA represents better value. Over the past 12 months, OCA has seen a greater fall in SP.

[Beagle]

I for one am grateful the takeover has not gone ahead - not often one gets to invest back in a quality well sought after sector stock at half price! :t_up:

Reminds me of AIA - deal to takeover by the Dubai interests was blocked by Cullen and one was able to buy shares at $2.00 after the deal fell over.

More! :t_up:

I quite like the company and think there is very deep value here so am happy to hold for the long term. I think there's a huge amount of resiliency built into their operations. They could stop development entirely and still grow underlying profit nicely off the huge level's of embedded value in their existing units.

SUM by comparison is trading at a 20% premium to book and its relatively highly geared 15 year + land bank holding, (at projected revised 2020 build rate), is frankly looking quite ridiculous in the new normal we will have going forward.

MET closed at a 46% discount to NTA and OCA at a 21% discount. MET a no brainer best share price prospects of the sector at the closing price today.

[Bjauck]

I think there needs to be an investigation by the NZX as to how and on what basis the MET board communicated the progress of the takeover. How many smaller investors were "duped" into keeping their MET shares on the basis of the representations from the MET board?

[dompf]

I found Metlifecare at 320 too good to resist against the other retirement competitors given domestic income and the large discount to NTA.

I was all in the keeping as much cash as I can while we rode this turmoil out - but I went in bought a chunk of 15k & may top up next week after seeing what Easter brings.

NZ appears to have the virus under control which bodes well for retirement stock and taking into consideration the protection retirement villages are putting in place and keeping their residents informed only further leans and tells me to a long hold on this.

My preference is Met over the other retirements at the moment at least given the discount and possibility they may find another (or one of the original buyers) in the next 12ms.

[Cyclical]

Gee, everyone is pumped. Kinda funny that it was at about this price last week, but because there was uncertainty (worse case would have been what we have now, best case was the take over was going ahead), people didn't want to touch it. Funny human behavior. Well I guess added to the mix is that the market thinks it's 2019 again and there was no virus. Again, funny human behavior. I don't know what to think about the markets any more. Keep sucking from the QE titty and kicking the can down the road...

[nztx]

At $3.78 the MET sp is back up to the price level it was at prior to the invocation of the MAC clause. At this price I think it could be a toss up as to whether MET or OCA represents better value. Over the past 12 months, OCA has seen a greater fall in SP.

but OCA's build up in part may be attributed to a few brokers waving their pick lists in the air earlier - $1.25 comes to mind

[Dlownz]

Just another question out there for people's thoughts. They held off paying a dividend in March so if the sale completely falls through will they announce a dividend

[Balance]

Just another question out there for people's thoughts. They held off paying a dividend in March so if the sale completely falls through will they announce a dividend

Don’t think so myself.

I believe the focus will be on financial flexibility in the environment we are in for the next 6 months to 1 year.

[Beagle]

Gee, everyone is pumped. Kinda funny that it was at about this price last week, but because there was uncertainty (worse case would have been what we have now, best case was the take over was going ahead), people didn't want to touch it. Funny human behavior. Well I guess added to the mix is that the market thinks it's 2019 again and there was no virus. Again, funny human behavior. I don't know what to think about the markets any more. Keep sucking from the QE titty and kicking the can down the road...

Pumped for a reason. There's deep value here and MET have the strongest balance sheet with the lowest gearing in the sector and will be least affected by a slowdown in development.

There was already a widely held belief the scheme of arrangement in its current form and price would not proceed. If that was not the case the market would have adjusted the ~ $3.90 price much, much closer to $7.00 which was due next month. My view is the activation of the material adverse event clause simply triggered an irrational response from some investors and anyone who was quick enough and jumped on board in the low to mid $3's should be very happy indeed. I don't think many people think its 2019 again, I'd suggest almost nobody does.

We have common ground in feeling a sense of bewilderment that the market per se is starting to react to unprecedented quantitative easing and there appears to be a real disconnect between the market and the likely underlying performance of the economy. I am very cautious as to how this all ends so am only buying companies like MET who are not only very deep value at the current price but also have very low debt, good cash flow and their business will only be affected by Covid 19 in a moderate way. It will be easy enough for them to slow down construction to meet the new normal market conditions and they have the strongest embedded value in the sector so the natural churn of existing units will see them able to maintain underlying profits at robust level's.

SUM by comparison is much higher geared, carries approximately a 17 year land bank (all debt funded) at the current build rate, which is frankly an absurd level of land to hold in the likely new normal in which we now live and most importantly of all, SUM relies on its development activities for the majority of its underlying profit.

MET has the oldest and most established portfolio of assets and is much better situated to weather this event and yet trades at a 46% discount to NTA whereas SUM trades at a 20% premium to NTA.

I think the chances of a takeover at a significant premium to the current $3.77 price sometime in the next 24 months are very good. I doubt whether this will be at $7 in the new environment but even $6 gives a potential 59% return on yesterday's closing price. Even if that doesn't happen the value relative to the rest of the sector is very clear to me and I would expect the company to be more proactive with reinitiating their share buyback scheme, at perhaps a significantly enhanced funding level if the shares stay anywhere around their current price.

On a 12-24 month view the chances of a decent gain from here look very good indeed.

[Balance]

deleted post

[Cadalac123]

Pumped for a reason. There's deep value here and MET have the strongest balance sheet with the lowest gearing in the sector and will be least affected by a slowdown in development.

There was already a widely held belief the scheme of arrangement in its current form and price would not proceed. If that was not the case the market would have adjusted the ~ $3.90 price much, much closer to $7.00 which was due next month. My view is the activation of the material adverse event clause simply triggered an irrational response from some investors and anyone who was quick enough and jumped on board in the low to mid $3's should be very happy indeed. I don't think many people think its 2019 again, I'd suggest almost nobody does.

We have common ground in feeling a sense of bewilderment that the market per se is starting to react to unprecedented quantitative easing and there appears to be a real disconnect between the market and the likely underlying performance of the economy. I am very cautious as to how this all ends so am only buying companies like MET who are not only very deep value at the current price but also have very low debt, good cash flow and their business will only be affected by Covid 19 in a moderate way. It will be easy enough for them to slow down construction to meet the new normal market conditions and they have the strongest embedded value in the sector so the natural churn of existing units will see them able to maintain underlying profits at robust level's.

SUM by comparison is much higher geared, carries approximately a 17 year land bank (all debt funded) at the current build rate, which is frankly an absurd level of land to hold in the likely new normal in which we now live and most importantly of all, SUM relies on its development activities for the majority of its underlying profit.

MET has the oldest and most established portfolio of assets and is much better situated to weather this event and yet trades at a 46% discount to NTA whereas SUM trades at a 20% premium to NTA.

I think the chances of a takeover at a significant premium to the current $3.77 price sometime in the next 24 months are very good. I doubt whether this will be at $7 in the new environment but even $6 gives a potential 59% return on yesterday's closing price. Even if that doesn't happen the value relative to the rest of the sector is very clear to me and I would expect the company to be more proactive with reinitiating their share buyback scheme, at perhaps a significantly enhanced funding level if the shares stay anywhere around their current price.

On a 12-24 month view the chances of a decent gain from here look very good indeed.

Is the balance sheet really that much better than Ryman or ARV.. there’s no real upward trend in metrics looks like it’s going to be stagnant to downwards growth wise

That said I guess you can’t argue with NTA argument and the fact that there’s been an overreaction to the deal being rejected

[Beagle]

Its about resilience for now. RYM has close to 40% external debt. That's a lot of debt to service with development shut down. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12319294

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348968/317506.pdf

[crighton100]

Just like to say as a village resident,these places are a gold mine for the owners.to give you some insight,my wife & are in the mid 70's [we moved in 11 years ago,because we have no live family & travel a lot,or we did,now cancelling heaps of trips,but now you have to be over 70 to get in]So why is that important,well you buy in & 3 years later if you move out or do the right thing & pass on . So in our case [not good for them as we have lived too long you lose 30% of what you paid to get in],we paid $300k & if we go we get back a maximum of $210k & if properties have gone up we get nothing extra,now if we pegged today,they would spend about $50k to completely upgrade the 2 bedroom unit & sell to the next mug for well over $600k on todays market.Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies.Hope that helps you guys out a bit,have a good easter AT HOME [to look after us old buggers who probably cant fight the virus].Happy days..

[Cyclical]

Just like to say as a village resident,these places are a gold mine for the owners.to give you some insight,my wife & are in the mid 70's [we moved in 11 years ago,because we have no live family & travel a lot,or we did,now cancelling heaps of trips,but now you have to be over 70 to get in]So why is that important,well you buy in & 3 years later if you move out or do the right thing & pass on . So in our case [not good for them as we have lived too long you lose 30% of what you paid to get in],we paid $300k & if we go we get back a maximum of $210k & if properties have gone up we get nothing extra,now if we pegged today,they would spend about $50k to completely upgrade the 2 bedroom unit & sell to the next mug for well over $600k on todays market.Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies.Hope that helps you guys out a bit,have a good easter AT HOME [to look after us old buggers who probably cant fight the virus].Happy days..

Thanks for another insightful post there, Crighton. Have a good Easter and take care.

[winner69]

Thanks crighton

I’m feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

Where your next travels taking you?

[artemis]

Thanks crighton

I’m feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

Where your next travels taking you?

Just because people are getting on in years does not mean they are stupid, ill informed or ill advised.

[fish]

Thanks crighton

I’m feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

Where your next travels taking you?

No guilt whatsoever
Providing a great lifestyle and a caring environment until the end of life.
It is easier for a camel to go through the eye of a needle than a rich man to enter the kingdom of Heaven

[Bjauck]

...Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies..... It sounds like you are in the best place during the Epidemic. I have heard similar from other retirement villages - that the village will organise prescription collection, have their own grocery ordering services and generally keep an eye on independent unit residents during the lockdown.

This is contrary to the down ramping narrative put about by some. If I were being cynical, that had been to try to buy back into the retirement stocks at as a cheap a price as possible - the epidemic being a not to-be-missed opportunity to exploit.

[cyclist]

This is contrary to the down ramping narrative put about by some. If I were being cynical, that had been to try to buy back into the retirement stocks at as a cheap a price as possible - the epidemic being a not to-be-missed opportunity to exploit.

To be fair, my recollection is that speculation of that nature was predominantly prior to the govt presenting a clear plan to minimise the risk of widespread community transmission.

[Bjauck]

To be fair, my recollection is that speculation of that nature was predominantly prior to the govt presenting a clear plan to minimise the risk of widespread community transmission. Villages had already introduced their own CoronaVirus responses some time prior to the government’s plan. However, Fair enough, I may well be being too cynical.

My recollection is that it was down-ramping of retirement villages in general as being a more risky place (in epidemics) for independent unit living by the elderly, as opposed to living in homes in the community.

My opinion based on from what I have heard, is that Whether in lockdown or not, the elderly in retirement villages have more facilities and village security measures to insure social distancing is possible.

I think the pivotal moment when down-ramping stopped was when the opportunity arose for purchase of shares at sufficiently deflated prices. Those purchasers may then have suddenly decided that would not give voice to their opinions that villages were more unsafe for the elderly than living outside of a retirement village.

[Cyclical]

Villages had already introduced their own CoronaVirus responses some time prior to the government’s plan. However, Fair enough, I may well be being too cynical.

My recollection is that it was down-ramping of retirement villages in general as being a more risky place (in epidemics) for independent unit living by the elderly, as opposed to living in homes in the community.

My opinion based on from what I have heard, is that Whether in lockdown or not, the elderly in retirement villages have more facilities and village security measures to insure social distancing is possible.

I think the pivotal moment when down-ramping stopped was when the opportunity arose for purchase of shares at sufficiently deflated prices. Those purchasers may then have suddenly decided that would not give voice to their opinions that villages were more unsafe for the elderly than living outside of a retirement village.

We also need to remember the context over the last few weeks has been changing rapidly as we start to understand the implications of the virus and the measures companies in the sector have been putting in place. The idea that it may be safer for the residents to be in such places as opposed to out in the general community wasn't really commonly accepted 3 or 4 weeks ago. In retrospect, I can see how investors may have been giving these companies a wide birth on the face value of the situation at hand.

Sentiment has evolved somewhat since then as we've started to appreciate that it's probably safer for residents in the villages and also the revenue streams are generally a lot safer than a good chunk of other sectors.

Still, when you consider what's happening in one or two Christchurch homes and the constantly evolving state of this virus situation, there is still plenty of scope for investor nervousness. The next two weeks will be telling.

[Bjauck]

...Still, when you consider what's happening in one or two Christchurch homes and the constantly evolving state of this virus situation, there is still plenty of scope for investor nervousness. The next two weeks will be telling. Sure many, in the absence of any evidence, were quite happy to level FUD - fear uncertainty and doubt - on the retirement villages. Quite the contrary was evident at the time.

If you are referring to those in rest home and hospital care, then of course there is always the possibility of infection and contagion. As there is in public hospitals. But what alternatives exist for those who cannot afford a posse of private nurses and carers, if they need rest home or hospital level care? Let us hope that the stockpilers of PPE have not cause a shortage of PPE for those that actually need it.

[troyvdh]

Thanks crighton..great post.Re the 30 % lose...i.e $210 is that a maximum or confirmed.Re properties going up in price..mmm..I cannot see it in the immediate future.That "mug" comment ..Im not so sure about that and the figure of $600 figure I have doubts about that too.Yes I understand the weekly figure is about $500 pw ($25k py)...I understand that circumstances differ,,but does the pension cover that ?.Again great post go well mate

[Joshuatree]

Another good article in the herald a bout this sector. Heres a teaser to encourage folks to take up the $64 for 8 weeks. Charts and comparisons between all listed companies.

"Nonetheless, economic slowdown or not, the growth in population of over-75s in both New Zealand and Victoria (Australia) will continue, underpinning longer-term growth in unit development and sales.In 30 years, the number of New Zealand over-75s will have increased from 330,000 today to around 850,000, with even greater growth in that age group forecast for Victoria."
Oliver Mander: Retirement village blues will fade away (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12323990)

[crighton100]

OK after 1 year in the village you lose 10%,after 2 you lose 20% after 3 or more years you lose 30% of your original buy in price.That applies to all of us,most of the units are the same in size etc & they now sell around the $600k & the price is assessed by a valuation by an outside company so you can see how inflation has increased the price of these units [we sold our 5 bedroom house 11 years ago for $525k,it would be over 1m now,so its all relative].The weekly fee for us is $130,people moving in today pay just over $150 pw,the fee is fixed for the duration of your stay & one pension more than covers this cost.For that fee it covers house insurance,water & property rates,rubbish collection,maintenance of your unit & the village amenities,gardening & lawnmowing,emergency call buttons in your unit,with 24hour nurse on site.Facilities include billiard & 8 ball table,lounge with all the sky channels on large tv,bowling green,putting green,petanque court,crochet & heated swimming pool & hot tub.The most important thing is security,the gates are locked at night & we have a night watchman.So mug was not the right word to use,as its more like a holiday camp.At present under the lock down,we are a bubble & required to also be unit bubbles,no mixing with the others,we can walk around the village but must be at least 2m apart.The staff do all our shopping & drop at our door & collect pharmacy stuff,the nurses ring everyone in the village at least twice a week to check we are OK.When you live here you have to be able to look after yourself,when you cannot you leave for a resthome [thats the places that are having problems you will have seen in the news].Hope that clarifies things a bit for you.Happy Easter.This was in answer to troyvdh,I did not know how to do a reply.

[Cyclical]

Thanks Crighton. That weekly fee seems almost too cheap. I can appreciate why they've bumped up the minimum age if the fee is locked in for the duration...


This was in answer to troyvdh,I did not know how to do a reply.

You just need to click that "Reply With Quote" button below the comment you wish to reply to. You can always click the "Edit Post" button on your posts if it doesn't work out as planned.

[winner69]

all this gloomy and pssimistic talk of deep recessions and even depressions is a worry

If adepression eventuates I wouldn’t think MET is ‘cheap’ at the moment

[King1212]

Nothing is cheap if a depression eventuate..... however depression or recession are not measured within weeks....it takes months and the market needs to see businesses start to fail.....

Recent money injected from all the world will hold businesses first least 6 months...after that we will see....

Let see who has a crystal ball.....shall we?

[Balance]

all this gloomy and pssimistic talk of deep recessions and even depressions is a worry

If adepression eventuates I wouldn’t think MET is ‘cheap’ at the moment

Depression?

Not with the tens of trillions of dollars being pumped into the global system imo.

And universal income entitlement is ready to be unleashed if it is needed.

Watch out what will happen to money in the bank instead. We have two generation of investors and general population who have no idea what out of control inflation is about - let's hope they do not have to find out!

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12322288 Who knows what the future is...we're all really throwing darts !
"We're all just throwing darts," says Kiwibank chief economist Jarrod Kerr when commenting on economists' forecast range of between negative 6 per cent to negative 9 per cent. (They are talking about the prognosis for the year ahead with real estate).

Crunching the numbers:-
If one assumes that their portfolio value of $3.6 billion was steaming ahead at close to full throttle for the first 2 1/2 months of 2020 and has perhaps risen 2.5% in that time followed by a 7.5% decline in the next 12 months (i.e. a net decline of 5% from 31 Dec 2019 values to projected value in April 2021) that would see a decline of $3.6 billion x 5% = $180m = ~ 84 cents a share for adjusted projected NTA as at April 2021 of $6.16

Economists are then forecasting a strong rebound in property prices for 2021 and 2022. MET good value at $3.77 relative to the rest of the sector and the market ?
Is the Pope a Catholic ?

[King1212]

Hope u put 99% of your cash in MET ...master Beagle!

[Beagle]

LOL Nothing like that but I am certainly taking a "dogged" approach :)

[winner69]

LOL Nothing like that but I am certainly taking a "dogged" approach :)

That which have been is now;

And that which is to be hath already been;

And God requireth which is past.

Ecclesiastes 3.15

[King1212]

Anything will do! That will create a good sentiment.....amen

[Beagle]

That which have been is now;

And that which is to be hath already been;

And God requireth which is past.

Ecclesiastes 3.15
A more modern translation - Whatever is, has been long ago, and whatever is going to be has been before. God brings to pass again what was in the distant past and disappeared.

I suppose you are referring to the chances of another great depression ? Who knows what the future holds, I certainly don't but its hard or near impossible to find better value in the market than this.
I guess the risk averse will take an appropriately sized position and / or look to hedge their position somehow ?

I think the market per se has got ahead of itself with the recent bounce but there is very deep value here for any scenario other than a protracted great depression.

For me I think a long position in MET and an offsetting short position in RYM makes a whole lot of common sense. One trades at close to half NTA and the other at 2.5 times NTA. RYM are good but they're not magicians.

[King1212]

Dang Master Beagle....I don't know that u study a Bible? We should hang out to do a Bible study ....

[Beagle]

Dang Master Beagle....I don't know that u study a Bible? We should hang out to do a Bible study ....

Now that's a good idea. Here's a good place to start searching for some truth :)
https://www.openbible.info/topics/wealth Plenty of food for thought in there !

[King1212]

Thanks Master Beagle!

[crighton100]

God almightyI have read some stuff on line today from you so called EXPERTS,Cannot believe how negative you guys are,hope you will be kicking yourselves up the backside soon.There are heaps of shares to buy that will not go down the drain including the retirement villages [get your head around it they are not resthomes]Get a life guys,cant have 75 year old guys telling you this stuff.

[Entrep]

Trigggered

[King1212]

Chill out mate! I appreciate your insight report. Don't worry about others negative comments....

This is a public forum.... people has their own goals here ...... however market is the one to decide where the SP goes....

[crighton100]

Seeing as you are frantic about where to put your money,the best place to make money is pph [one thing about the yanks they love giving to the church] & the other would be SCL,they supply fruit to the world,we have seen their product on our overseas trips],just dont freeck out,it will all be OK in 12 months

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12322288 Who knows what the future is...we're all really throwing darts !
"We're all just throwing darts," says Kiwibank chief economist Jarrod Kerr when commenting on economists' forecast range of between negative 6 per cent to negative 9 per cent. (They are talking about the prognosis for the year ahead with real estate).

Crunching the numbers:-
If one assumes that their portfolio value of $3.6 billion was steaming ahead at close to full throttle for the first 2 1/2 months of 2020 and has perhaps risen 2.5% in that time followed by a 7.5% decline in the next 12 months (i.e. a net decline of 5% from 31 Dec 2019 values to projected value in April 2021) that would see a decline of $3.6 billion x 5% = $180m = ~ 84 cents a share for adjusted projected NTA as at April 2021 of $6.16

Economists are then forecasting a strong rebound in property prices for 2021 and 2022. MET good value at $3.77 relative to the rest of the sector and the market ?
Is the Pope a Catholic ?

Blobbles made mention somewhere NZ property market could go the way that Ireland went a few years ago ....with prices collapsing 50% to 60%

Suppose if that did happen here the MET share price being so low now we’d still be OK

[Cyclical]

Blobbles made mention somewhere NZ property market could go the way that Ireland went a few years ago ....with prices collapsing 50% to 60%

Certainly reading Bobbles' posts tempers one's enthusiasm to climb further into this stock. I think the policy makers will cushion us from much of the doom and gloom though, by kicking the can further down the road.

[artemis]

That which have been is now;
And that which is to be hath already been;
And God requireth which is past.
Ecclesiastes 3.15

Another interpretation from multiple religious traditions - humans invented time to stop everything happening at once.

[Balance]

Certainly reading Bobbles' posts tempers one's enthusiasm to climb further into this stock. I think the policy makers will cushion us from much of the doom and gloom though, by kicking the can further down the road.

https://www.marketwatch.com/story/wall-street-analyst-who-called-the-2018-rout-says-dont-fight-the-fed-and-buy-the-dips-is-back-on-in-this-coronavirus-stricken-stock-market-2020-04-13?siteid=yhoof2&yptr=yahoo

Don't bet against the Federal Reserve or Central Banks.

They have only started with their money printing process.

[bottomfeeder]

Tried to accumulate at $3.80 first thing, but price took off. Dont want to chase the price.

[Beagle]

N.Z. Govt's books are in extremely good shape. We started this thing with debt to GDP of only 20%. Thank you Bill English for your prudent approach.

[Oliver Mander]

N.Z. Govt's books are in extremely good shape. We started this thing with debt to GDP of only 20%. Thank you Bill English for your prudent approach.

hear hear.
I think its become an ingrained principles of any government though, thank heavens. Low debt lets us cushion our regular natural disasters (earthquakes) and definitely will help us now.

[Beagle]

Blobbles made mention somewhere NZ property market could go the way that Ireland went a few years ago ....with prices collapsing 50% to 60%

Suppose if that did happen here the MET share price being so low now we’d still be OK

I haven't seen the post but I don't share that view. If we can really flatten this thing out and with all the precautions villages are taking, many might see (including hundreds of thousands of Kiwi's still overseas), little old N.Z., an island nation at the bottom of the world as a safe place to come back too and in particular with MET's vast predominance of independent living units, a safe place to retire too.

[King1212]

Master Beagle..... labour tends to spend it and national will come n fix the balance sheet

[Bjauck]

......
Its all over. Fair value ? Take $4.20 in 2019, less the average decline in this sector since MET was $4.20...I have yet to crunch the numbers but it wouldn't surprise me if it was under $3. The fact that they have the lowest gearing in this sector might save them from the indignity of a 2 handle on the share price.
...

That was posted on 26th March. What has changed since then? If anything I would tend to think that MET's fair value would be lower than about three weeks ago. Some pretty gloomy real estate forecasts have come out.

[Beagle]

That was posted on 26th March. What has changed since then? If anything I would tend to think that MET's fair value would be lower than about three weeks ago. Some pretty gloomy real estate forecasts have come out.

I was right and they were saved from the indignity of a 2 handle, (just). They say a week is a long time in politics and it is then 19 days has been an eternity in this market. Go back and have a look where we were on the virus bell curve back then. Its clear there is genuine hope now, (at least in N.Z.), we can get on top of this virus.

Movements from late March at the depth's of this crisis, low point to now
SUM $3.36 to $5.95 up 77%
ARV $0.88 to $1.36 up 55%
OCA $0.38 to $0.85 up 124%
RYM $6.61 to $11.18 up 69%
MET $3.16 to $3.90 up just 25%

I'll let you figure out what the market is trying to tell you and why MET is the odd one out, (clue, its a lot to do with the takeover offer being pulled and arbitrage players selling down)

Opportunity knocks for MET buyers at under $4 ?...you folks be the judge

[bottomfeeder]

General real estate prices will suffer, mainly because of the unemployment rate, except for retirement villages. The older portion of our population have no alternatives to really consider. As they are generally risk averse, they haven't lost their life savings. As inflationary pressures increase I see MET taking off, and just waiting for a takeover.

[macduffy]

General real estate prices will suffer, mainly because of the unemployment rate, except for retirement villages. The older portion of our population have no alternatives to really consider. As they are generally risk averse, they haven't lost their life savings. As inflationary pressures increase I see MET taking off, and just waiting for a takeover.

I hope so! Remember though, that the sector price their units/apartments as a percentage of real estate prices in the locality. Lower housing prices will translate into lower prices for the retirement sector, IMO.

[King1212]

Let us shave off 30% off $7 NTA because of property down turn.....that still value MET at $4.90

[bottomfeeder]

Went up to $3.88, will accumulate more if the price goes down below $3.60. I was looking for a safe haven share to invest some term deposits coming up. Interest rates are just way too low, to even bother reinvesting.

[Balance]

I hope so! Remember though, that the sector price their units/apartments as a percentage of real estate prices in the locality. Lower housing prices will translate into lower prices for the retirement sector, IMO.

Yup - there is a direct correlation between general house prices and retirement village prices (adjusted for locality obviously).

[Beagle]

Let us shave off 30% off $7 NTA because of property down turn.....that still value MET at $4.90

Economists are predicting 6-9%.

[IAK]

N.Z. Govt's books are in extremely good shape. We started this thing with debt to GDP of only 20%. Thank you Bill English for your prudent approach.

And English can thank Cullen for his prudent approach.

[King1212]

I don't see that will happen. As interest in record low...a lot of investors have cash.....shares are scary.....so... property will be the safe haven as u can see the assets....

[BlackPeter]

Yup - there is a direct correlation between general house prices and retirement village prices (adjusted for locality obviously).

No doubt - real estate prices will dip a bit in the months to come. Question is however - how will they look in say 3 or 5 years from now? Assuming NZ gets better through this crisis than others (and so far it looks like that), there are some million Kiwi Expats, some 20 million Australians and a handful of NZ permanent residents living abroad who all might want to consider moving (or moving back) to safe and healthy NZ.

Let just 1% of these move to NZ over the next year - this would be already 250,000 more residents (or something like 100,000 additional houses required. I wonder how this would impact on our property prices?

I don't think long term investors can lose at these prices.

[Balance]

Went up to $3.88, will accumulate more if the price goes down below $3.60. I was looking for a safe haven share to invest some term deposits coming up. Interest rates are just way too low, to even bother reinvesting.

You will be joining the NZ resident investors with term deposits of $171 billion and saving deposits of $82 billion (total $253 billion*) when risk aversion post the lockdown switch over to yield enhancement.

Imagine what will happen to stock prices when the bank depositors attempt to get better yield - if just 10% of the term deposits ($25 billion) attempt to get better yields via the stock-markets!

* RBNZ - https://www.rbnz.govt.nz/statistics/s40-banks-liabilities-deposits-by-sector

[Bjauck]

I was right and they were saved from the indignity of a 2 handle, (just). They say a week is a long time in politics and it is then 19 days has been an eternity in this market. Go back and have a look where we were on the virus bell curve back then. Its clear there is genuine hope now, (at least in N.Z.), we can get on top of this virus.

Movements from late March at the depth's of this crisis, low point to now
SUM $3.36 to $5.95 up 77%
ARV $0.88 to $1.36 up 55%
OCA $0.38 to $0.85 up 124%
RYM $6.61 to $11.18 up 69%
MET $3.16 to $3.90 up just 25%

I'll let you figure out what the market is trying to tell you and why MET is the odd one out, (clue, its a lot to do with the takeover offer being pulled and arbitrage players selling down)

Opportunity knocks for MET buyers at under $4 ?...you folks be the judge Fair value though? Sure let's hope people don't realise that NTAs will drop as property values drop as people become unemployed and the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.

[Balance]

Fair value though? Sure let's hope people don't realise that NAVs will drop as property values drop as people become unemployed, the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.

NZers always gravitate to property - always.

[Beagle]

Fair value though? Sure let's hope people don't realise that NTAs will drop as property values drop as people become unemployed and the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.

The difference between N.Z. and a lot of other countries is that we have VAST amounts of headroom for helicopter money to deploy and eventually this turns into inflation...that's what you're missing.

[Bjauck]

NZers always gravitate to property - always. If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on optimism regarding the state of NZ's economy and ability to sustain real estate valuations.

Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.

Of course this also applies to the other retirement village companies, perhaps to a greater extent.

[Balance]

If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on a lot of optimism regarding the state of NZ's economy and ability to sustain real estate valuations.

Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.

Property prices are going to drop over the next year and half - that's for sure. It's a question of by how much.

MET's last NAB was $7.00 so you can work from there, your downside scenario.

I think 15% is realistic so I get $5.95.

[Beagle]

If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on a lot of optimism regarding the state of NZ's economy and ability to sustain real estate valuations.

Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.

Go back and read my earlier post today. The last 3 weeks has been an eternity in N.Z. Three weeks ago many thought this virus would become rampant in N.Z. Today we have the real hope we can contain it. Look at the other sector share price movements for the last 3 weeks ! What was missing 3 weeks ago was hope, now we have some. $4.20 was never fair value for MET in 2019...that was the reason I was buying then and that's the reason 3 parties, (that's not a typo, yes three !) were interested in taking it over. You think one or two of those might still be lurking and interested at something bit less than $7 now ?

[Bjauck]

The difference between N.Z. and a lot of other countries is that we have VAST amounts of headroom for helicopter money to deploy and eventually this turns into inflation...that's what you're missing. Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

While the virus may not be as devasting as first thought. The productive economic consequences may be worse.

The other parties interested in MET, may find that they have cheaper investment opportunities elsewhere too.

[Balance]

Go back and read my earlier post today. The last 3 weeks has been an eternity in N.Z. Three weeks ago many thought this virus would become rampant in N.Z. Today we have the real hope we can contain it. Look at the other sector share price movements for the last 3 weeks ! What was missing 3 weeks ago was hope, now we have some. $4.20 was never fair value for MET in 2019...that was the reason I was buying then and that's the reason 3 parties, (that's not a typo, yes three !) were interested in taking it over. You think one or two of those might still be lurking and interested at something bit less than $7 now ?

If I am one of them, I reckon a stand in the market today at $5.50 will snare 20% of MET. A distinct possibility.

[Balance]

Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

Re-inflating residential property is the fastest way of creating 'the feel good wealth and spend more' economic factor.

[Beagle]

Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

Real estate prices and the health of the N.Z. economy are inextricably linked. I think you'll find little ol N.Z. is one of the safest places in the world to live / retire going forward.
Still over a million ex pats living overseas. You think a few of them might come to the same conclusion ? Demand and supply...think about it !

[bull....]

took my profits this morning thank you mr market

[Bjauck]

Real estate prices and the health of the N.Z. economy are inextricably linked. I think you'll find little ol N.Z. is one of the safest places in the world to live / retire going forward.
Still over a million ex pats living overseas. You think a few of them might come to the same conclusion ? Demand and supply...think about it ! The tourism industry is comparatively more important here, than for many of the countries where ex-pat NZers live - so if unemployment is more of a problem here, those returning from (say) Australia will have to be supported by the dole and that helicopter money. Those returnees may be the ones without the wherewithal to plonk down as a house deposit. However they could boost demand for cheap rental accommodation - some of the excess tourist accommodation could be put to good use.

I would be surprised if housing would re-inflate prior to income sources and the economy being re-established.

I think the high cost of NZ real estate, land and accommodation, whether owner occupied or rental, actually ends up sucking up money that otherwise could go towards other sectors, the productive economy and business.

Increasing real estate prices may produce a feel good factor that may feed back as increased consumer expenditure but this would be more than off-set by the extra deposits and costs needed to buy into the real estate market. Those that have the feel good factor may just end reinvesting in real estate and leading to further real estate inflation.

Just because this government may well have acted in manner that is forestalling the spread of this epidemic, does not necessarily mean that subsequent governments would act similarly with new threats. NZ has an open economy and with many of our people having family overseas and links to other countries.

[King1212]

Did another stab today....jabbb!

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351641/320765.pdf

[Cyclical]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351641/320765.pdf

I've noticed ACC buying a few of the ones I like to keep an eye on just lately...I'm sure they're not silly and of course they are in for the long haul. Could some of the government stimulus be coming from that direction, or do they just have shed loads of cash? I guess the cash keeps coming for them anyway and no one is having accidents right now haha.

[Beagle]

They have a good track record in my opinion. Nobody and no institution gets every decision right but they're certainly one of the more astute institutions in my opinion.

I see their average sale price was $6.85 and their average buy price buying back in was $3.94 over the last few months.

If ACC join in the hunt there's every chance you're chasing a feed in the right place :) https://www.youtube.com/watch?v=v0a6jM7PALg

[bottomfeeder]

Hate to think Mum and Dad investors were the ones to buy at the higher price and sell at the lower price. Could have shafted a lot of New Zealanders. Oh well I suppose thats the market. I am accumulating as well.

[bull....]

I've noticed ACC buying a few of the ones I like to keep an eye on just lately...I'm sure they're not silly and of course they are in for the long haul. Could some of the government stimulus be coming from that direction, or do they just have shed loads of cash? I guess the cash keeps coming for them anyway and no one is having accidents right now haha.

RBNZ QE could easliy be finding its way to ACC to prop the stockmarket. just like they do in the US

[RGR367]

A dampener for MET https://www.stuff.co.nz/national/health/coronavirus/121006913/coronavirus-kpiti-coast-retirement-village-resident-dies-from-virus

[winner69]

RBNZ QE could easliy be finding its way to ACC to prop the stockmarket. just like they do in the US

Could well be ...all that cash got to go somewhere ...inc MET

[bull....]

A dampener for MET https://www.stuff.co.nz/national/health/coronavirus/121006913/coronavirus-kpiti-coast-retirement-village-resident-dies-from-virus

glad i sold this morning might tank tomorrow

[bull....]

Could well be ...all that cash got to go somewhere ...inc MET

yep and i heard mention RBNZ might be going to double QE again lol wont take them to long to own the market

[bottomfeeder]

I know someone in MET Bayswater. I couldnt visit them weeks before the lockdown, as they were in lockdown early. I think they are doing their best in trying times. After all the virus is invisible and can enter a community in so many ways.

[allfromacell]

glad i sold this morning might tank tomorrow

So the person has been in hospital for 3 weeks since, at least it shows Metlife was able to contain the spread as no one else has since fallen ill. I wouldn't try paint it as something positive for the company but the risk of further spread in the village is very low.

RIP.

[peat]

the risk of further spread in the village is very low.

.

Should be virtually nil after 3 weeks

[Balance]

So the person has been in hospital for 3 weeks since, at least it shows Metlife was able to contain the spread as no one else has since fallen ill. I wouldn't try paint it as something positive for the company but the risk of further spread in the village is very low.

RIP.

https://www.stuff.co.nz/national/health/coronavirus/120509882/coronavirus-two-kpiti-retirement-village-residents-contract-covid19

Was public knowledge 23 March - over 3 weeks ago.

[Bjauck]

So the person has been in hospital for 3 weeks since, at least it shows Metlife was able to contain the spread as no one else has since fallen ill. I wouldn't try paint it as something positive for the company but the risk of further spread in the village is very low.

RIP.
I hope their family is being treated well too.
Older people definitely need to keep up self isolation after we leave levels 4 and 3. That is great if they managed to stop further infections. Many retirement villages were ahead of the curve when it came to taking care of unit occupiers and residents.

[crighton100]

I hope so! Remember though, that the sector price their units/apartments as a percentage of real estate prices in the locality. Lower housing prices will translate into lower prices for the retirement sector, IMO.
100% correct

[fish]

glad i sold this morning might tank tomorrow

I would like to know how many MET residents have been tested for SARS-COV-2 .
The company has stated no one else has tested positive
.In general we are not testing people unless they have been in direct contact AND have symptoms.
It looks as if most people with Covid-19 infections may not have symptoms
As Jacinda says(I think) absence of proof is not proof of absence

[Beagle]

I am just as confident in MET's procedures as any other of the listed companies and its well worth noting that the VAST majority of MET's units are independent living.
I'll leave that to you to decide for yourself if that's an advantage but I note the infection clusters so far in the country have come from close quarter rest home situations.

[Balance]

glad i sold this morning might tank tomorrow

Looks like bull.... has been banned so his ramping down (and ramping up) days are curtained if not over?

[Balance]

They have a good track record in my opinion. Nobody and no institution gets every decision right but they're certainly one of the more astute institutions in my opinion.

I see their average sale price was $6.85 and their average buy price buying back in was $3.94 over the last few months.

If ACC join in the hunt there's every chance you're chasing a feed in the right place :)

Well played by ACC!

Looks like ACC is sitting on a nice profit of $14m from their trading activity - that's another 3.6m plus MET shares they can buy at around current levels to build up their stake again.

They were sitting on 6% before they sold down below 5% in January.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/347743/315955.pdf

[Beagle]

Yeah I was thinking the same thing Balance. There's no Bull with their approach, they just got on and did the business and took the counter position of the arbitrage players and have done handsomely well.

At the end of the day companies in this sector derive most of their profits from the capital gain and resale of their units. They all operate in the same market with different versions of business models aimed at different segments of the retirement market but the one constant is that the majority of their profit comes from the development and churn of properties.

You can either pay 2.6 times the property value with the big name of RYM or 0.55 times the asset backing with MET. I recently looked at the most recent evidence of the 5 year growth rate of underlying earnings of these two which are at opposite ends of the value spectrum and what I found was very interesting.
MET's average growth rate over the last 5 years met the much targeted 15% average compound growth rate that RYM set themselves, whereas RYM itself had not and had achieved an average underlying growth rate of 14% per annum.

I think those numbers speak for themselves in terms of which company is likely to outperform the other going forward.

[macduffy]

14% v 15%. You're not splitting hairs there, are you, Beagle?

:huh:

[Beagle]

14% v 15%. You're not splitting hairs there, are you, Beagle?

:huh:

Agree there's not much in it so why would I illustrate how close their growth rates are?

The point I am trying to illustrate is how well MET have actually performed over the last 5 years, relative to the sector benchmark widely regarded as RYM, (slightly better).
Why is this point so important ?
With RYM you pay a very handsome premium for their growth, despite growing slower than the average for this sector. 2.6 times asset backing and based on last years underlying profit of $227m and 500m shares underlying eps of 45.4 cps gives a historical underlying PE of 26.3. i.e. One is paying a hefty premium for that below average sector growth.

On the other hand with MET one is paying only 55% of NTA and based on last years annual underlying profit of $90.5m http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/339727/306132.pdf underlying eps is 42.4 cps and the historical PE is just 9.3. i.e. one is paying nothing for the growth.

Historically a PE of 8.5 is considered to be the benchmark for a no growth company but that's with 10 year Govt stock at 4%. Where its is now a no growth company should have a PE of 11.

No matter whether you look at MET from an NTA perspective, an embedded value perspective or an earnings perspective, its dirt cheap.

Unless something is dirt cheap I am happy to keep my powder dry and will not participate in this market that is completely divorced from the economic reality of what the economy is starting to go through.

Actually when you really look into it, there's very little difference between the underlying eps of RYM SUM and MET. I believe ultimately the share market is a weighing machine, not a voting machine so from here MET's share price is highly likely to outperform its peers.

[macduffy]

Fair enough, Beagle. Seems the market is prepared to put a premium on a long track record of success.

I hold 'em all.

:)

[Cyclical]

Agree there's not much in it so why would I illustrate how close their growth rates are?

The point I am trying to illustrate is how well MET have actually performed over the last 5 years, relative to the sector benchmark widely regarded as RYM, (slightly better).
Why is this point so important ?
With RYM you pay a very handsome premium for their growth, despite growing slower than the average for this sector. 2.6 times asset backing and based on last years underlying profit of $227m and 500m shares underlying eps of 45.4 cps gives a historical underlying PE of 26.3. i.e. One is paying a hefty premium for that below average sector growth.

On the other hand with MET one is paying only 55% of NTA and based on last years annual underlying profit of $90.5m http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/339727/306132.pdf underlying eps is 42.4 cps and the historical PE is just 9.3. i.e. one is paying nothing for the growth.

Historically a PE of 8.5 is considered to be the benchmark for a no growth company but that's with 10 year Govt stock at 4%. Where its is now a no growth company should have a PE of 11.

No matter whether you look at MET from an NTA perspective, an embedded value perspective or an earnings perspective, its dirt cheap.

Unless something is dirt cheap I am happy to keep my powder dry and will not participate in this market that is completely divorced from the economic reality of what the economy is starting to go through.

Actually when you really look into it, there's very little difference between the underlying eps of RYM SUM and MET. I believe ultimately the share market is a weighing machine, not a voting machine so from here MET's share price is highly likely to outperform its peers.

Thanks for that breakdown, Beagle.

And as for this bit:


Unless something is dirt cheap I am happy to keep my powder dry and will not participate in this market that is completely divorced from the economic reality of what the economy is starting to go through.

I couldn't agree more. It stresses me out just looking at what the market is doing...completely whacko.

[King1212]

Thanks Master Beagle...gave another stab again!

[Balance]

Thanks for that breakdown, Beagle.

And as for this bit:

I couldn't agree more. It stresses me out just looking at what the market is doing...completely whacko.

https://www.livewiremarkets.com/wire...y-harry-moment

Who wants to bet against the Federal Reserve with it’s unlimited monetary arsenal?

Like the bear hedge funds who are licking their wounds after last week record rise on the US market?

Excerpt : The Fed is now arguably the biggest asset manager in the world (with over US$6 trillion in AUM) with one ace up its sleeve: it has never-ending capital through its unlimited ability to print money and can never, therefore, really lose.

If the market wants to try and bet against the Fed, the Fed will simply buy it--and I mean all of it.

Hence the aphorism, "Don't fight the Fed!"

[Cyclical]

https://www.livewiremarkets.com/wire...y-harry-moment

Who wants to bet against the Federal Reserve with it’s unlimited monetary arsenal?

Like the bear hedge funds who are licking their wounds after last week record rise on the US market?

Excerpt : The Fed is now arguably the biggest asset manager in the world (with over US$6 trillion in AUM) with one ace up its sleeve: it has never-ending capital through its unlimited ability to print money and can never, therefore, really lose.

If the market wants to try and bet against the Fed, the Fed will simply buy it--and I mean all of it.

Hence the aphorism, "Don't fight the Fed!"

Balance, that's a nice lead in to this one that I've been wondering were to post for a couple of days...

When Cindy and Grant had that press conference first announcing the impending lock down and associated ~$12b stimulus, one of the reporters asked where is the money coming from...I couldn't wait to hear the answer and to my disappointment, Grant just scoffed and said we'll borrow it, like there was no other option. I was thinking, why not just do what the big boys do and create it?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12323748

"In today's deflationary setting, there is no need for Government to kill off the short-term monetary effects of its increased spending. In severely recessionary circumstances such as the present, creating money, which neither firms nor households can do, is a valid and viable way to finance Government spending.
The political taboo on money creation is a political construct, not an economic one. A money-financed fiscal deficit in a non-inflationary setting leaves no necessary burden on future generations – just the benefits of an avoided recession and so a stronger economy."

[Arbroath]

In case you hadn't noticed the RBNZ has started $30b of QE so Grant is borrowing all the money from effectively new digital entries from the RBNZ.

[ynot]

Can anyone fill me in on the met dividend. It appears lower than others in the retirement sector.

[Balance]

In case you hadn't noticed the RBNZ has started $30b of QE so Grant is borrowing all the money from effectively new digital entries from the RBNZ.

That's principally to free up banks' balance sheets so they can lend more - which banks will not do as we saw during the GFC due to heightened credit risks. Hence, the government's decision to guarantee 80% of new loans of up to $500k for SME.

Governments need to borrow to fund expenditure - this could come from bond issues (underwritten of course by their central banks).

[Balance]

Just received a comprehensive report on the retirement village/age care sector done by one of the major Australasian brokers.

Should make for interesting reading this morning!

[Balance]

Not sure where you got that info from?

https://www.rbnz.govt.nz/news/2020/03/rbnz-to-implement-30bn-large-scale-asset-purchase-programme-of-nz-govt-bonds

The $30b is a RBNZ LSAP programme of New Zealand government bonds.

That’s how QE works.

[Arbroath]

Yes, but the RBNZ LSAP is NZ Govt Bonds only, varying maturities over the next 12 months - different from the QE that you are referring to where central banks buy other financial assets from commercial banks and other financial institutions.


I think youre both on the slightly wrong track here. the RBNZ LSAP is about ensuring that the Government can issue large amounts of bonds which they know is coming without significantly increasing the cost of borrowing. The objective is to keep NZ Govt bond yields low which in time flows through to investment grade corporate bonds also. They are not targeting the private banks here. It is all about the Government being able to borrow large to fund spending which is trying to replace the destruction in the economy.

[Balance]

You are right it secondary market purchases, but as you say, the point is largely to enable the government to borrow and spend. My point was that this is not QE as Balance was referring to.

https://www.reuters.com/article/us-newzealand-economy-rbnz-idUSKBN21914G

https://www.bloomberg.com/news/articles/2020-03-22/new-zealand-starts-quantitative-easing-to-support-economy

Guess the experts out there do not understand QE either.

[Arbroath]

https://www.reuters.com/article/us-newzealand-economy-rbnz-idUSKBN21914G

https://www.bloomberg.com/news/articles/2020-03-22/new-zealand-starts-quantitative-easing-to-support-economy

Guess the experts out there do not understand QE either.


“The RBNZ is, in effect, stepping up to fund the government,” said Nick Smyth, interest rate strategist at Bank of New Zealand in Wellington. “The QE program will, at the very least, help offset the upward pressure in yields that would have occurred due to the forthcoming increase in issuance.”

Guess the expert is backing up exactly what I said?

[Balance]

“The RBNZ is, in effect, stepping up to fund the government,” said Nick Smyth, interest rate strategist at Bank of New Zealand in Wellington. “The QE program will, at the very least, help offset the upward pressure in yields that would have occurred due to the forthcoming increase in issuance.”

Guess the expert is backing up exactly what I said?


The LSAP is the QE, and the QE is via the LSAP.

[Bjauck]

Much has been made of the Rym: Sum ratio of 2:1. Is there such a thing as a Met:Oca ratio though. I suspect their mix of care/ORAs and income sources may be more dissimilar though.

One year ago MET SP was at $4.79; OCA's was at $1.04 - a ratio of 4.606

Today MET $3.87; OCA $0.86 - a ratio of 4.500

MET at $3.96 would mean the ratio would be the same as 12 months ago. However in the meantime has MET's prospects improved relative to OCA, to justify a greater ratio difference and less of a difference in discount to NTA?

[Beagle]

Much has been made of the Rym: Sum ratio of 2:1. Is there such a thing as a Met:Oca ratio though. I suspect their mix of care/ORAs and income sources may be more dissimilar though.

Totally different business models. You think one of the three parties that expressed interest in taking over MET might still be interested at something a bit less than $7 :D

[bottomfeeder]

Totally different business models. You think one of the three parties that expressed interest in taking over MET might still be interested at something a bit less than $7 :D

Each dollar they can save per share, saves a buyer nearly $200,000,000. 20% less than $7 saves about $280 mill. I will pick that figure, so I see a takeover proceeding at $5.60. Based on that market value will go to $5 very quickly.

[Bjauck]

Totally different business models. You think one of the three parties that expressed interest in taking over MET might still be interested at something a bit less than $7 :D I guess it depends on how many other alternative opportunities have now opened up around the World.

As the NZ government hunts out taxation revenue sources, how confident should we be that they will not revisit the taxation rulings of retirement village companies? Wealth and capital gains taxes also may no longer be off the table.

Many more uncertainties exist by virtue of the Covid epidemic & the economic consequences. The World has changed since three parties were sniffing around. Will a 20% price drop compared with a year ago be enough to tempt suitors in these vastly changed circumstances?

[Balance]

That’s how QE works.


We know that Balance. But I take you back to your first comment on this when it was suggested that the NZ government is effectively borrowing with RBNZ QE assistance:

"That's principally to free up banks' balance sheets so they can lend more "



Economics 101 - How QE works.

https://www.economicsonline.co.uk/Global_economics/Quantitative_easing.html

To help unlock liquidity (when a liquidity trap exists) and encourage banks to lend, rounds of QE were embarked upon in the US (QE1 was started in December 2008, and QE2 in June 2011) and UK (QE1 was started in March 2009, and QE2 in October 2011).

[Beagle]

Each dollar they can save per share, saves a buyer nearly $200,000,000. 20% less than $7 saves about $280 mill. I will pick that figure, so I see a takeover proceeding at $5.60. Based on that market value will go to $5 very quickly.

$5.60 wouldn't get my vote but $6.30 would.

[Balance]

$5.60 wouldn't get my vote but $6.30 would.

It's going to go back to $5 in a matter of time anyway when the arb funds finish selling (they cannot sell forever).

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351669/320802.pdf

[JeremyALD]

There's an increased chance of the $7 takeover going through imo as the markets have bounced back in the past couple of weeks and things are looking fairly promising for the retirement sector again. I'd say it's gone from a 5% to 25% chance.

[Beagle]

It's going to go back to $5 in a matter of time anyway when the arb funds finish selling (they cannot sell forever).

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351669/320802.pdf

Yes I noted that the other day. They still have quite a few to sell but I have been working on my patience levels in recent years and can easily wait them out.

[bottomfeeder]

Its like the old joke, we now know you are a prostitute, the discussion is now only how much. I hope that doesnt sound sexist, I have been trying very hard over the past few years to be really sensitive about those things.

[dubya]

And I haven't totally dismissed the possibility of "some sort" of success with a legal claim against Asia Pacific Village Group Limited either.

[Cyclical]

Its like the old joke, we now know you are a prostitute, the discussion is now only how much. I hope that doesnt sound sexist, I have been trying very hard over the past few years to be really sensitive about those things.

I didn't see any reference to your preferred gender of service provider there, so you should be sweet.

[stoploss]

Its like the old joke, we now know you are a prostitute, the discussion is now only how much. I hope that doesnt sound sexist, I have been trying very hard over the past few years to be really sensitive about those things.
There are male prostitutes ....

[Cyclical]

Seen the back of the $3 handle do you think? If AIR can do it, surely this one can grow some wings and take off...

[bottomfeeder]

Been reading on other threads about sharsies and other new investors looking at sharetrader. I never really followed MET, because it always seemed to be at top dollar SP. It was only when I saw a lot of talk here on sharetrader abiut MET on both sides of the fence, that I started to accumulate. Looks like I am into a winner. Thanks guys and gals. Pride does however go before destruction so wont get too excited yet.

[Ecks]

Been reading on other threads about sharsies and other new investors looking at sharetrader. I never really followed MET, because it always seemed to be at top dollar SP. It was only when I saw a lot of talk here on sharetrader abiut MET on both sides of the fence, that I started to accumulate. Looks like I am into a winner. Thanks guys and gals. Pride does however go before destruction so wont get too excited yet.
Imagine the Nike logo, now add in an elongated Z onto the tail of the tick, this is how the share market will carry on through the entirety of Q2.

[bottomfeeder]

Must be a lot of buying pressure keeping the share price up as the overseas funds sell down.

[bottomfeeder]

It's going to go back to $5 in a matter of time anyway when the arb funds finish selling (they cannot sell forever).

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351669/320802.pdf

Oops can't really take credit for the eureka moment in my previous post.

[Balance]

Must be a lot of buying pressure keeping the share price up as the overseas funds sell down.

The arb funds were buying at $6.80 plus - by the millions of shares.

Whoever were selling to them must be crying into their champagne and caviar as they buy back at around current levels.

There is a Santa Claus!

[Beagle]

The arb funds were buying at $6.80 plus - by the millions of shares.

Whoever were selling to them must be crying into their champagne and caviar as they buy back at around current levels.

There is a Santa Claus!

I don't know about them but I know I am :lol: MET, the gift that keeps on giving :)

[Joshuatree]

I was getting bored with all that spin about SUM other company and relieved that another one has MET your brief (mine too).;)

[Beagle]

I was getting bored with all that spin about SUM other company and relieved that another one has MET your brief (mine too).;)

Sadly SUM has not MET expectations ;)

[bottomfeeder]

Somebody is buying and keeping the price up, Credit Suisse reduced exposure as well. Cant imagine why?

[Beagle]

I am taking a "dogged" approach. Added more today.

[bottomfeeder]

I am taking a "dogged" approach. Added more today.

Yes me too at $4.00. I think thats the highest I will go, will need the price to reduce below $4-00 to accumulate any more.

[nztx]

Yes me too at $4.00. I think thats the highest I will go, will need the price to reduce below $4-00 to accumulate any more.

the same here too

[Beagle]

Yes me too at $4.00. I think thats the highest I will go, will need the price to reduce below $4-00 to accumulate any more.

I am very comfortable with the deep value on offer around about $4 and won't quibble over a few cents here and there. I am currently trying to buy more at $4.05.

[oldtech]

I am very comfortable with the deep value on offer around about $4 and won't quibble over a few cents here and there. I am currently trying to buy more at $4.05.

Yep, that's where I topped up at, to add to earlier purchases in the last two weeks. :t_up:

[Balance]

Somebody is buying and keeping the price up, Credit Suisse reduced exposure as well. Cant imagine why?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348717/317120.pdf

EG. 16-Jan-20 $5,264,090.03 BUY 764,365 ($6.88 ouch!)

Buy at $6.50+ and sell at under $4.00 - guess CSFB has little option but to sell out.

Their mandate as an arbitrage fund is to play a different game (fixed interest alternative plus potential further upside from increased bid) when there's a takeover play rather than plain investing.

Don't look at a gift horse in the mouth - sp is being kept down by their selling activity. When the arb funds are finished, sp will be $5.00 looking at the depth of buying starting to emerge now.

There have to be shareholders in other retirement village/healthcare home stocks switching into MET - great opportunity!

[Beagle]

Yep, that's where I topped up at, to add to earlier purchases in the last two weeks. :t_up:

Gidday mate. Wouldn't it be a bloody good laugh if we got a revised takeover next week at $6.50 or the original takeover at $7 is back on :D

My understanding is that under lockdown 3 protocol's Real Estate Agents can return to work with some limitations, (can't operate from a shop) and can't have open homes or physical auctions). Translation (as I understand it) is sales people can show people units in a village in much the same way as they always have, meet at the village entrance and go from there so MET is back in the business of selling units as soon as we go to level 3 which should hopefully be next Thursday.

I was talking to John Bayley's right hand man earlier this week on a commercial deal one of my clients has signed. He told me he is hearing of a heck of a lot of Ex pat's that are looking to come back home to safe little ol N.Z. More than a million of them overseas, many of which are thinking of N.Z. as a nice safe little Island nation to come back and retire too.

[nztx]

Gidday mate. Wouldn't it be a bloody good laugh if we got a revised takeover next week at $6.50 or the original takeover at $7 is back on :D

My understanding is that under lockdown 3 protocol's Real Estate Agents can return to work with some limitations, (can't operate from a shop) and can't have open homes or physical auctions). Translation (as I understand it) is sales people can show people units in a village in much the same way as they always have, meet at the village entrance and go from there so MET is back in the business of selling units as soon as we go to level 3 which should hopefully be next Thursday.


that would just be the icing on the top for many .. the O/s Funds etc may be fairly gutted having read it wrong & sold down early though..

[oldtech]

Gidday mate. Wouldn't it be a bloody good laugh if we got a revised takeover next week at $6.50 or the original takeover at $7 is back on :D

Now there's a thought ... I have to say, MET has been good to me, despite the shennanigans with the takeover ... I sold out back in January and made a nice little profit, this time around could be even more fun! :)

PS As you know I am always grateful to you and other experienced investors who take the time to share your expertise, insights, and thoughts in general.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12325480

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12325480

Can’t be bothered clicking on links to see whether it’s relevant

I assume it’s a link to a story that METs leaky building problem is much bigger than they’ve disclosed

[Baa_Baa]

Can’t be bothered clicking on links to see whether it’s relevant

I assume it’s a link to a story that METs leaky building problem is much bigger than they’ve disclosed

Never click on links with no explanation, just good safety netiquette.

[winner69]

Never click on links with no explanation, just good safety netiquette.

Thats a good practice eh

That’s why I didn’t click on the link ..probably some advertising material (if you get the gist of that) or trying to seduce me into doing something I shouldn’t.

[Joshuatree]

Gidday mate. Wouldn't it be a bloody good laugh if we got a revised takeover next week at $6.50 or the original takeover at $7 is back on :D

My understanding is that under lockdown 3 protocol's Real Estate Agents can return to work with some limitations, (can't operate from a shop) and can't have open homes or physical auctions). Translation (as I understand it) is sales people can show people units in a village in much the same way as they always have, meet at the village entrance and go from there so MET is back in the business of selling units as soon as we go to level 3 which should hopefully be next Thursday.

I was talking to John Bayley's right hand man earlier this week on a commercial deal one of my clients has signed. He told me he is hearing of a heck of a lot of Ex pat's that are looking to come back home to safe little ol N.Z. More than a million of them overseas, many of which are thinking of N.Z. as a nice safe little Island nation to come back and retire too.

Reminds me of that great song by the Blam Blam Blam's, inserting Pandemic in the mix fits easily.


Blam Blam Blam - No Depression in New Zealand (1981) original version (https://www.youtube.com/watch?v=2HVogejKx_c)

[Beagle]

Can’t be bothered clicking on links to see whether it’s relevant

I assume it’s a link to a story that METs leaky building problem is much bigger than they’ve disclosed

You assume wrong.

I sometimes don't bother adding any comment if the article speaks for itself.

If some people can't be bothered paying a few bucks a week for behind the paywall access to the Herald, especially at a time like this, then I am sorry but sometimes I simply can't be bothered even posting a brief synopsis....besides that, you're all grown up now mate and don't need spoon feeding :p

[peat]

haha funny winner i saw that as sarcasm even if it wasnt.

the link is not specifically relevant to Met even if it is another rest home with covid sweeping through.

[penn]

"If some people can't be bothered paying a few bucks a week for behind the paywall access to the Herald, especially at a time like this, then I am sorry but sometimes I simply can't be bothered even posting a brief synopsis.." ...really Rogerthebeagle ?

You all could be forgiven for deducing that Rogerthebeagle is a sales rep for 'the HERALD' I look at many share sites and when links are posted behind 'paywalls' I believe that the poster should pay for us all to read the content. I can no longer call it the NZ herald because for a few years now it has been a very poor version of the NZ 'news' ....but I digress ;) MET has been ridiculously good to me as I was one who sold out to the arbitrage traders and have bought back nearly double my holding for the same amount invested am a but smug right now and look to hold on for another thirty years or so.

[Beagle]

Copywrite, heard of it ?

[Bjauck]

Gidday mate. Wouldn't it be a bloody good laugh if we got a revised takeover next week at $6.50 or the original takeover at $7 is back on :D

My understanding is that under lockdown 3 protocol's Real Estate Agents can return to work with some limitations, (can't operate from a shop) and can't have open homes or physical auctions). Translation (as I understand it) is sales people can show people units in a village in much the same way as they always have, meet at the village entrance and go from there so MET is back in the business of selling units as soon as we go to level 3 which should hopefully be next Thursday..

I would say that the still unresolved viral pandemic would be enough to trigger the MAC clause. Despite the gyrations of the share market and the recent increase in the price of share market listings, the likely economic consequences of this virus could well have an economic effect and an effect on real estate prices “reasonably likely” to result in a material drop exceeding $100m in the NTA of Metlifecare or resulting in a 10% drop in net profit in fy2020 and/or fy2021 and/or fy2021.

[troyvdh]

Sorry...why so much exuberant sentiment prior to a likely depression.

[Ecks]

"If some people can't be bothered paying a few bucks a week for behind the paywall access to the Herald, especially at a time like this, then I am sorry but sometimes I simply can't be bothered even posting a brief synopsis.." ...really Rogerthebeagle ?

You all could be forgiven for deducing that Rogerthebeagle is a sales rep for 'the HERALD' I look at many share sites and when links are posted behind 'paywalls' I believe that the poster should pay for us all to read the content. I can no longer call it the NZ herald because for a few years now it has been a very poor version of the NZ 'news' ....

NZME need all the help they can get!

Disclosure: I subscribe to support where I can

[winner69]

Hey Beagle me old mate. We all know you are a trader (won’t use the word punter) and not an investor per se.

We all know that you fall head over heels in love with a company but you tend to fall out of love very quickly and kick them out of your kennel.

So a question

With MET what is the trigger that causes them not to be ‘deep value’ any more and you give them the boot.





Disc: taking a punt essentially because the share price sunk really low and there’s still a chance the takeover might happen or another offer might be made ...but I have no faith whatsoever in the current Board and management extracting any ‘great value’ out of this dog

[Bjauck]

"...
You all could be forgiven for deducing that Rogerthebeagle is a sales rep for 'the HERALD' I look at many share sites and when links are posted behind 'paywalls' I believe that the poster should pay for us all to read the content. . .. Why? If you read an article that refers to other publications either in the body of the text or in footnotes you do not automatically get a copy of the publication to which reference is made. You should expect to pay for it. In your scenario if someone refers to a book, play, movie or game, then they have to buy you a copy or a ticket, or the original author should provide it gratis. You should be grateful that Beagle posted a link to where the information could be bought.

[bull....]

I would like to know how many MET residents have been tested for SARS-COV-2 .
The company has stated no one else has tested positive
.In general we are not testing people unless they have been in direct contact AND have symptoms.
It looks as if most people with Covid-19 infections may not have symptoms
As Jacinda says(I think) absence of proof is not proof of absence

you word it so much better than me

[Beagle]

NZME need all the help they can get!

Disclosure: I subscribe to support where I can

Exactly. If we don't support them we'll lose them. As I understand it they are currently running a 4 week trial subscription for just $1 a week !

[Beagle]

Hey Beagle me old mate.
Disc: taking a punt essentially because the share price sunk really low and there’s still a chance the takeover might happen or another offer might be made ...but I have no faith whatsoever in the current Board and management extracting any ‘great value’ out of this dog
Hey Winner me ol mate, you reckon $1 a week is a good deal for a trail 4 subscription to get access behind the paywall :p (Sorry mate, I couldn't resist)

MET, (despite management's occasional fumbling), is actually a very good business that has grown underlying earnings at an average of 15% per annum for the last 5 years, (faster than RYM) and just 1% slower than ARV. The vast predominance of their business model is independent living and we all know that the churn of property and clipping the ticket over and over again is where the real money is made in this sector.

Huge Embedded Value Underwrites Underlying Profit going forward http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348968/317506.pdf

MET have some other very important points of difference (apart from their dirt cheap price). They are the most established operator and have $1,155m in embedded value on their balance sheet, see page 24. Put an average churn of 9.1 years on that, see page 19 (average age of all residents across their portfolio of villages is now 82 years old, see page 32), and they can make $127m underlying gross profit per annum going forward just from churn of existing units. With the lifting of the entry age to 70 years some years back, (it used to be as low as 55 years at one stage), we will see very good churn level's going forward. For example the average age of new entrants to their new Gulf Rise village is 77 years, see page 32.

Operating expenses are better controlled than most in this sector, up just 3.7%, see page 18, reflecting the nature of their business model. Going forward I think the human resource cost of care is going to be a major drag for others in this sector, much less so for MET.

They're doing what amounts to a strategic review of their development model and have made some new hires in this area. One would hope this will lead to a considerable improvement in development margins down the track.

There's also the company's share buy-back which from memory was paused fairly early through the process. Might we see the scope of this expanded when it kicks off again given the huge current discount to NTA ?

Growing at very close to the same speed as RYM and ARV they do not deserve to be trading at such a deep discount to NTA and as you know there were three potential suitors looking to acquire the company.

I have been very happy to take a substantial long term position in MET. Whether it gets taken over or not I don't really care to be honest. Its the only company to offer really deep value in this sector and long term I think the sector has tremendous tail winds. The difference with MET is you are paying nothing for their growth and nothing for the sector tailwinds.

At least MET are smart enough to know that they need to offer fixed weekly fees for life unlike SUM other company's executives who still have their head in the sand and are wondering why they are struggling to sell their units.

The numbers and growth rate do not support your contention that this is a dog...I would reiterate, for the last 5 years they have grown average annual underlying profit at 15% per annum which is a little faster than the sector benchmark RYM. MET are trading at just 0.57 times NTA, RYM at 2.7 times NTA. At their core the real money is made from property.

[crighton100]

I reside in one of their villages.No one has been tested at our village [no one leaves the village except for doctor appointments & staff do all the shopping]We have a team of nurses 24 hours a day,they phone every resident twice a week to see if they are fine,besides looking after any resident with any ailment.They do not use any masks etc & so far no problems.One of MET villages had a case [the person had been overseas] & all residents & staff were fine with no symptoms according to our CEO Mr Sowry [who sends us regular updates on everything to do with Covid19 & any govt announcements].Just as a matter of interest all residents were given the current FLU vaccine just over 2 weeks ago,so they should now be active in us.Hope that helps you,good luck with investments.

[crighton100]

Yes the churn rate [very profitable for MET] has really picked up since they put entrance age up to 70.We were lucky to get in 11 years ago at 64 [we will live too long for their liking]Most of the current intake have been in their 80's.Must also point out that since MET took over our village they have spent heaps to keep the standard of the village really high so that we have a waiting list to get in.

[BlackPeter]

...

My understanding is that under lockdown 3 protocol's Real Estate Agents can return to work with some limitations, (can't operate from a shop) and can't have open homes or physical auctions). Translation (as I understand it) is sales people can show people units in a village in much the same way as they always have, meet at the village entrance and go from there so MET is back in the business of selling units as soon as we go to level 3 which should hopefully be next Thursday.

...



I still would hope that no retirement village allows non essential business in level 3 unless it is absolutely safe.

I would doubt that showing a bunch of interested buyers through an operating retirement village with vulnerable residents would be considered safe.

[winner69]

Great post there Beagle ..but you didn’t answer by question (important one from a risk perspective)

What’s the trigger for you to fall out of love with MET and kick them out of the kennel

[Beagle]

I still would hope that no retirement village allows non essential business in level 3 unless it is absolutely safe.

I would doubt that showing a bunch of interested buyers through an operating retirement village with vulnerable residents would be considered safe.

So interested couple (IC) meet the real estate agent at the village entrance. They walk down the street in the open air, (agent keeping at least 2 metres away from IC and ensuring IC keep at least 2 metres away from any other resident walking around the village) and have a look at a stand alone unit while the agent waits outside. Seems pretty reasonable to me.

My local village used to be a golf course and I remember playing there a fair bit. https://www.metlifecare.co.nz/our-retirement-villages/west-auckland/pinesong?gclid=CIjZ0cLN8OgCFQYkjgodg-cNcw&gclsrc=ds

[Ace]

So interested couple (IC) meet the real estate agent at the village entrance. They walk down the street in the open air, (agent keeping at least 2 metres away from IC and ensuring IC keep at least 2 metres away from any other resident walking around the village) and have a look at a stand alone unit while the agent waits outside. Seems pretty reasonable to me.

My local village used to be a golf course and I remember playing there a fair bit. https://www.metlifecare.co.nz/our-retirement-villages/west-auckland/pinesong?gclid=CIjZ0cLN8OgCFQYkjgodg-cNcw&gclsrc=ds

Reasonable yes, although I do doubt it given that the IC will most likely be 70+ of age due to entry requirements, and this demographic tends to be classed as 'vulnerable people' given that many have complicated medical histories or compromised immune systems. From memory, even at old level 2 and 3 alert levels vulnerable people were instructed to stay at home. I think it's unlikely for that to change. Maybe a possibility through video calling and viewing through a virtual tour?