OCA - Oceania Group - retirement villages

[Baa_Baa]

Rising tax free house prices = good for OCA but the costs seem to be a bit out of control currently.

The revaluation when it comes will favour a re-rate as it becomes clear how wrong the devaluation was prior to last results.

Not sure what you’re on about costs? Costs of what?

[Panda-NZ-]

There's pretty much all of the expenses for this increasing by CPI times 3-4. Though it won't be an issue if they can bring the revenue which can cover it.

2019 FY:
Revenue down nearly 10%
Expenses +20%

Maybe something of a track record is starting to be shown.

[BlackPeter]

There's pretty much all of the expenses for this increasing by CPI times 3-4. Though it won't be an issue if they can bring the revenue which can cover it.

2019 FY:
Revenue down nearly 10%
Expenses +20%

Maybe something of a track record is starting to be shown.

Actually - I don't think you pay attention.

There are in this thread plenty of posts explaining the OCA model ... Maveric explained the process at various times. Yes, on the way morphing old shabby old peoples homes in prime locations to top quality retirement villas there are times when you need to double up staff and run with less efficiency. While you empty an old building and move the residents into their new build housings you need to basically work with double staff and half efficiency. A temporary increase of the cost structure is inevitable and expected. Most people would call this investment :):

This is what we currently are seeing, but (reading their reports) it sounds they reached inflection point.

Note: While linear interpolations are always easy, they are often wrong unless you understand the underlying model.

[blackie]

"While linear interpolations are always easy, they are often wrong unless you understand the underlying model." BlackPeter

economic poetry, that is what a great line like that is :)

[Waltzing]

I for one hope MR M is right as there are some very fine shareholders and im sure some very fine residents. The next 24 months should throw some light on the model.

[Beagle]

https://thespinoff.co.nz/business/23-09-2020/what-recession-our-unstoppable-housing-market-marches-on/?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+24 +September+2020

Looking forward to hearing how things are tracking in FY21 at 2.00 p.m.

[winner69]

https://thespinoff.co.nz/business/23-09-2020/what-recession-our-unstoppable-housing-market-marches-on/?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+24 +September+2020

Looking forward to hearing how things are tracking in FY21 at 2.00 p.m.

Whenever I see an oceania preso I think of Elvis

[winner69]

What the property market is doing shouldn’t matter to Oceania. The revered Liz keeps reminding us that they are a needs based business (in throes of transformation) and that’s what drive the story and hence value

[Beagle]

What the property market is doing shouldn’t matter to Oceania. The revered Liz keeps reminding us that they are a needs based business (in throes of transformation) and that’s what drive the story and hence value

Most people have to sell their house to move into an OCA unit so price matters as does how easy it is to sell and in the long run if the average unit in an OCA village is say 60% of the average price of a house in the surrounding area and OCA are engaging in brownfields developments where they are more efficiently using existing land facilities for their developments that augers very well for future development margins, (which are already the highest in this sector and look likely to stay that way).

As Maverick kindly reminded us a while back not only are OCA building a lot of premium care suites but they're also going to be developing a lot of premium apartments over the next few years. Sands is a good example of what's coming.

[iceman]

Not directly related to Oceania but I can tell a story of a couple that visited several retirement & lifestyle villages here in Nelson 3-4 weeks ago. Found the one they liked which was at the high end and expensive. Put their home on the market and sold within a week. Went back to retirement village to sign a contract only to find the price had gone up $ 100,000. Yes that's right, + $ 100,000, from $750k to $850k in a lifestyle (+55 yo) village.

[Beagle]

Not directly related to Oceania but I can tell a story of a couple that visited several retirement & lifestyle villages here in Nelson 3-4 weeks ago. Found the one they liked which was at the high end and expensive. Put their home on the market and sold within a week. Went back to retirement village to sign a contract only to find the price had gone up $ 100,000. Yes that's right, + $ 100,000, from $750k to $850k in a lifestyle (+55 yo) village.

That would have done that retirement companies development margin / resale profit a massive power of good !!

[Bjauck]

Not directly related to Oceania but I can tell a story of a couple that visited several retirement & lifestyle villages here in Nelson 3-4 weeks ago. Found the one they liked which was at the high end and expensive. Put their home on the market and sold within a week. Went back to retirement village to sign a contract only to find the price had gone up $ 100,000. Yes that's right, + $ 100,000, from $750k to $850k in a lifestyle (+55 yo) village.
Quite ironic I guess when at the beginning of the coronavirus recession many were expecting the retirement sector in general to be the worst hit. Now it seems the villages are hot property - perhaps one of the hottest sectors in housing? Can people buying an ORA make their purchase conditional on selling their house - is that the usual practice?

[trader_jackson]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360346/331468.pdf

Slide 4 looks a bit blank, not alot of highlights I suppose.
Not too sure what makes it price sensitive either?

[Beagle]

Once the restrictions on sales eased in Alert Level Two, we recommenced sales activity and have
recorded strong sales levels through June, July and August – 26% higher than the same months last
year. We have seen particularly good levels of sales at both Meadowbank and The Sands over the last
few months. We have now sold 54 independent living apartments and 29 care suites at The Sands (with
a further 12 care suites occupied by residents paying a premium accommodation charge). At
Meadowbank, we have now sold 34 of the 64 independent living apartments in Stage Four and seven of
the 26 independent living apartments in Stage Five, as well as 38 care suites (with a further three care
suites occupied by residents paying a premium accommodation charge).
Many new residents who have submitted ORA applications since lockdown have commented to us about
how the lockdown period gave them an opportunity to reflect on their wellbeing and security, with the
benefits of retirement villages – including stronger communities, security and peace of mind - being more
prevalent over this period.


Extract from CEO's address. Looks pretty solid to me.

[winner69]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360346/331468.pdf

Slide 4 looks a bit blank, not alot of highlights I suppose.
Not too sure what makes it price sensitive either?

I like Slide 6 - SUSTAINABILITY

If it was in pink could have been lifted from another company’s preso

[Beagle]

Had a look at your favorite slide Winner. I reckon they have the ESG balance about right for a company in this sector looking after elderly vulnerable people.

[winner69]

Had a look at your favorite slide Winner. I reckon they have the ESG balance about right for a company in this sector looking after elderly vulnerable people.

Pretty good but could do more

Milton wouldn’t be impressed though ...not maximising shareholder profits by doing this.

[Beagle]

Okay now for some analysis that might mean something in terms of FY21's profitability.
First up one should note the increased sales rate noted above and given it takes time for people to sell their homes the extremely buoyant market augers well for the rest of the year both in terms of pricing and volumes sold.
Then there's this
Brent Pattison was appointed as Chief Financial Officer in January 2020. Since joining Oceania
Healthcare, Brent has been heavily involved in preparing the aged care industry’s funding claim from the
Government for additional costs incurred by the industry as a result of COVID-19 Its clear the industry is looking to get recompense for the extra Covid 19 costs incurred in their care operations.
Looking through Earl's address it would appear there were 176 apartments and care suites delivered last year and they are on track to deliver 217 in the ten months to 31 March 2020, 23% more but on an annualized basis 217 x 12/10 = 260 / 176 = 48% more.

With sales rates lifting nicely and them being at the point of inflection with their care income I can see a solid life in underling EBITDA for FY21.

Looks like a sound long term hold to me.

[Beagle]

Pretty good but could do more

Milton wouldn’t be impressed though ...not maximising shareholder profits by doing this.

A company that specializes in care must put the highest case standards as its primary objective to maximize profits...I think Milton would realize that. The carbon neutrality by 2030 looks good for the company and makes residents feel the company cares about the environment which conveys the right "feel good environmental sensitivity factor" so residents feel attracted to live there and the net result is the company can sell more units. All makes sense to me.

Now its sausage roll time :t_up:

[Baa_Baa]

Whats the Username & Password thing on the online meeting?

[sb9]

Whats the Username & Password thing on the online meeting?

Not a holder here, but if its on Lumi, then your CSN no is username and your post code is password.

[Baa_Baa]

Not a holder here, but if its on Lumi, then your CSN no is username and your post code is password.

Thank you :)

[Mudfish]

"Despite the disruption to these sites as redevelopment took place, our aged care earnings are accordingly now at a point of “inflection” and will increase going forward as we continue to execute our strategy."

"sales activity and have recorded strong sales levels through June, July and August"

Didn't need to use the word 'strong'. Has been consistent with the use of 'point of inflection'. Without fully understanding the numbers, this compassionate needs based business is about to soar.

[Beagle]

Once the restrictions on sales eased in Alert Level Two, we recommenced sales activity and have
recorded strong sales levels through June, July and August – 26% higher than the same months last
year. We have seen particularly good levels of sales at both Meadowbank and The Sands over the last
few months. We have now sold 54 independent living apartments and 29 care suites at The Sands (with
a further 12 care suites occupied by residents paying a premium accommodation charge). At
Meadowbank, we have now sold 34 of the 64 independent living apartments in Stage Four and seven of
the 26 independent living apartments in Stage Five, as well as 38 care suites (with a further three care
suites occupied by residents paying a premium accommodation charge).
Many new residents who have submitted ORA applications since lockdown have commented to us about
how the lockdown period gave them an opportunity to reflect on their wellbeing and security, with the
benefits of retirement villages – including stronger communities, security and peace of mind - being more
prevalent over this period.
Just running my Beagle nose for a feed over this again...
I think its very important to note that these are the most expensive units within OCA's portfolio of properties and that the valuers have discounted values down a record 27% back In April because of what they expected would be a downturn, which as we all know has not eventuated, in fact we're in boom times.

Reading between the lines we're on for a really cracker year, what say you Maverick ? I think I might have to have another look at my forecasts for FY21...$57m underlying is looking quite conservative even for 10 months operations to 31 March 2020.

[RTM]

Market seems unimpressed so far.
I'm happy to continue to sit on my slightly over sized holding and enjoy the modest dividend.
My average is now 98.2. So doing better than the bank and a real chance of growing my capital over the next 2-4 years.
Off to the workshop now...look forward to your later commentary.

Cheers
RTM

[Beagle]

Only 10 units and 3 care suites left at the Sands. Maverick must be impressed with that. Interest rates headed to zero and this gives about 4.7% plus the strong prospect of capital growth in the value of the shares. Hmmm...have I got enough ?

[Baa_Baa]

2:50pm 'meeting closed' online, got kicked out and can't rejoin. Anyone else?

[Nigel]

My question seemed to have been overlooked. While acknowledging a longer-term strategy at play, I cheekily asked what they attribute the absence of share price appreciation to, when the rest of the industry has been performing so well. I noted that this was an area of frustration for some shareholders. As I wrote the question, OCA was at $1.03 (exactly where we were 12 months ago to the cent), meanwhile RYM (7%), ARV (15%), SUM (33.5) and MET (34%) have all made attractive gains in that same timeframe. I provided those numbers as a comparison. There was either a technical glitch that prevented them from receiving my question, or my question was 'moderated'. Maybe we're not meant to ask that sort of question, but it's a genuine concern for many of us, and I can't help but feel slightly ignored.

[winner69]

Jeez all super duper ....what possibly could go wrong?

[Beagle]

My question seemed to have been overlooked. While acknowledging a longer-term strategy at play, I cheekily asked what they attribute the absence of share price appreciation to, when the rest of the industry has been performing so well. I noted that this was an area of frustration for some shareholders. As I wrote the question, OCA was at $1.03 (exactly where we were 12 months ago to the cent), meanwhile RYM (7%), ARV (15%), SUM (33.5) and MET (34%) have all made attractive gains in that same timeframe. I provided those numbers as a comparison. There was either a technical glitch that prevented them from receiving my question, or my question was 'moderated'. Maybe we're not meant to ask that sort of question, but it's a genuine concern for many of us, and I can't help but feel slightly ignored.

That's the problem I find repeatedly with online meetings and hard questions which is why I have a strong dislike for them. They simply ignore the hard questions...in my experience all companies do this regardless of what they say otherwise. The truth is the market needs to see some evidence that their strategy is working.
I think the market is going to get a large dose of that evidence when they report their half year results in late January 2021 and the present share price is a real opportunity but may not do much until closer to the report date so that leads us to consider what other support might be forthcoming before then ?
Where are the funds going to go when the takeover of MET is settled in late October ?
What about the billions coming up on term deposit maturity where people are being offered 1% to reinvest ?

Wonder how long it will take Maverick to rework his model ? Why wait...I got the dog bone for being closest to the mark for FY20 underlying profit...so wait for it folks...drum roll please.... after applying my super sniffer long range food sensing nose to this I get underlying profit for the six months ended 30/11/20 of ~ $35m up 46% on the previous corresponding period and I am picking ~ $25m for the 4 months ended 31/03/21 for a ten month total of $60m (annualized $72m or 11.5 cps).

Even applying a no growth (because the market will still be a doubting Thomas), PE of 11.5 to this my target share price is thus 11.5 cps x 11.5 = $1.32 by mid 2021.
The risk to this with negative interest rates is to the upside in my opinion as the market starts to wake up.

[winner69]

That annualised $72m forF21 is still quite a way short of $85m which Earl ‘promised’ for F20 a couple of years ago (his bonus depended on that but no doubt they’ve changed the bonus scheme now)

Always gunna be?

[Beagle]

Rome wasn't built in a day ;)

[Entrep]

Mr Beagle what are you top 5 stocks that pay a dividend on the NZX?

I have assumed OCA, GNE and HGH

[Maverick]

I`ll take your bait, Beagle.
My thoughts on the ASM was it was just as expected, there were definitely highlights but anyone serious about this sector already would have anticipate them such as;
-Sales up 26% on the PCP 3 months.
-Sales prices NOT reducing despite the CBRE reduced expectations 4 months ago.
-”Sands” sales are very strong and ahead of where they need to be.
-”Meadow bank” sales on track but not as strong as “Sands”. (there were actually 49 apartment deliveries of stage 4 . Earl`s number of 64 is incorrect so the fact they have only sold 34 so far is as per expectations)


One factor which has exceeded my own anticipation is how well the care suits are selling. They are selling 50% faster than they need to in order to replenish every 2.5 years.

Surely that was you Winner at Q & A time asking why “the story” isn't being told better? I liked Earl`s answer that we have passed the point of inflection, 3 new large developments are now nearing maturity and basically the profits will start growing. Imo that is really the only thing that people will actually believe that this complicated story is actually working. By the way folks that will happen in a VERY solid way next report- late January 2021.

Beagle, my underlying profit expectation this year is a bit loose. There is a large “one off” profit to estimate for the sales deferred from last FY to this FY because of covid sales delays. I'm expecting about a $6m “one off” straight on the bottom line for this. Basically profit differed from last FY because of Covid.

So I'm expecting an underlying profit (annualised) of about 57-60m FY2021 PLUS this $6m one off. I just cannot see for the life of me how a huge jump in profit cannot happen (without another massive disruptive event). We know enough history and numbers now to just add it all up with very few assumptions left.

As far as the share price appreciation goes , I'm very surprised with so much mounting evidence of the model's success that this company hasn't been seriously rerated by now. I do concede one does still need to dig a little bit still to see it but surely analysts out there must have bothered by now. With 3 years of history behind it, in my view, it has now been substantially de risked. Pretty soon it will be so clear that a drunk monkey will see “the story”.

There were no surprises from the meeting and nor should there be. OCA has a clear plan and executes it in a very pragmatic way. It was basically all good news and I see it as only a short time now before the market finally agrees.

[Beagle]

"Pretty soon it will be so clear that a drunk monkey will see the story". :lol: Surely that's the quote of the day :lol:
Disc: I topped up some more today because I think many market participants are drunk monkey's that need things handed to them on a silver platter before they can understand. Only 4 months to go until that happens and we are likely to see significant gains in my opinion. Patient puppies should be fed very well :t_up:

[Beagle]

Mr Beagle what are you top 5 stocks that pay a dividend on the NZX?

I have assumed OCA, GNE and HGH

I presume by you, you mean your ? The stocks I am holding for gross yield inclusive of imputation credits are HLG (~ 11%) HGH ( ~ 8%) GNE ( ~ 8%), WHS ( ~ 11% ), and ARG, (net PIE yield 4.8%, ~ 7% for gross for 33% taxpayers).
I'm mostly holding OCA for capital growth but the ~ 5% expected yield is now high for where interest rates are so people are being paid handsomely to enjoy the growth in the years ahead, (which is not the case with MET, SUM or RYM where average yield is less than half that).

I'm also holding BRM (8% net yield) and KFLWF, Kingfish warrants that I will convert to shares in March 2021 to earn 8% net.
I'm not holding any Marlin shares or warrants at this point as I feel both are overpriced for the NTA and I expect extreme volatility in the US markets leading into the election and that's right about where the Marlin warrants need to be exercised.

PAZ on the unlisted market is very exciting.

[Waltzing]

The only thing that could under cut MR M's model of profit is employment costs.

"extreme volatility in the US markets leading into the election "

and well after as it goes to the highest court and Trump refuses to move .. barricades himself inside.

[winner69]

Lot of discussion re moral / ethical behaviour of company / directors accepting government support when they make big profits

So new Oceania finance guy working hard to get heaps of corporate welfare ...hmm

We as shareholders should be pleased ...got to get every penny we can, from wherever.

A business model dependent on the whims of govt policy?

[Leftfield]

Lot of discussion re moral ...So new Oceania finance guy working hard to get heaps of corporate welfare ...hmm.....A business model dependent on the whims of govt policy?

Crikey there was a lot of postings by you and Beagle yesterday....... did something happen!?

Pretty gaverage result IMHO, and I always get a tab concerned when companies decide to change their balance date. Makes YOY comparisons that much more fuzzy. You got to wonder why?

Still a small rare div/yield hold for me, and I won't be rushing out to buy more.

[winner69]

Crikey there was a lot of postings by you and Beagle yesterday....... did something happen!?

Pretty gaverage result IMHO, and I always get a tab concerned when companies decide to change their balance date. Makes YOY comparisons that much more fuzzy. You got to wonder why?

Still a small rare div/yield hold for me, and I won't be rushing out to buy more.

Changing balance date often seen as a red flag and can muddy the waters for a few years ....but in these days of normalisation, covid look through and annualisation etc etc who cares.

At least they not doing the 15 month year and comparing it to a 12 month year trick ....(Comvita tried that trick)

[Beagle]

Lot of discussion re moral / ethical behaviour of company / directors accepting government support when they make big profits

So new Oceania finance guy working hard to get heaps of corporate welfare ...hmm

We as shareholders should be pleased ...got to get every penny we can, from wherever.

A business model dependent on the whims of govt policy?

Some of OCA's facilities are basic level care that the Government funds. Its perfectly fair and reasonable that if OCA incurs substantial extra costs as a result of Covid that the Govt should step up to the plate.

Bond issue appears imminent. https://www.nzx.com/companies/OCA
Good timing with interest rates at record lows. BNZ offered me 1.15% as their top term deposit rate just the other day...all banks will probably all be less than 1% in a few months :eek2:

[winner69]

Bond offer only days away by the looks of it

How many tens of millions they after ....or did they say something yesterday?

Keep loading up the debt ...what possibly could go wrong?

[Beagle]

LOL I knew you would say that. Bottom line is some companies are selling what they build and SUM other companies aren't :p
In OCA's case they are diversifying their source of funding. In SUM other companies cases they have to keep making bond issues to the market multiple times because of the above mentioned issue.

[RTM]

Will fix up......wrong part of original left...old eyes.

[RTM]

Some of OCA's facilities are basic level care that the Government funds. Its perfectly fair and reasonable that if OCA incurs substantial extra costs as a result of Covid that the Govt should step up to the plate.
ek2:

Why is it perfectly logical ? Are you joking ? Is COVID caused by the Government?. Everyone has their hand out....who do you think pays ? Yes...I am a holder.

[Beagle]

Why is it perfectly logical ? Are you joking ? Is COVID caused by the Government?. Everyone has their hand out....who do you think pays ? Yes...I am a holder.

State funded care is exactly that. OCA are caring for people as an agent for the state.

[winner69]

Bit of a worry when Mav says this - Meadow bank” sales on track but not as strong as “Sands”. (there were actually 49 apartment deliveries of stage 4 . Earl`s number of 64 is incorrect so the fact they have only sold 34 so far is as per expectations)

[RTM]

State funded care is exactly that. OCA are caring for people as an agent for the state.

Oceania putting their hand out is transferring money from tax payer to shareholders. Yes...I do know it’s not as simple as that.

[winner69]

$125m easy peasy - huge demand

Hope they put it to good use

[Beagle]

Smart move running a bookbuild to set the rate for these bonds. By early next month when the rate is set (5 October) rates will be plumbing all time fresh new lows.
There will be heaps of demand as these are literally better than money in the bank as these are tradeable and most importantly NOT subject to the Reserve bank open banking resolution. I expect a rate close to 2%.

[arekaywhy]

... and most importantly NOT subject to the Reserve bank open banking resolution...

Yeah, that.

Grinds my gears.

[thegreatestben]

Are we going to see a break through the 1.05 today?

[winner69]

Are we going to see a break through the 1.05 today?

no .... should be through 110 after that meeting

Sum others in the sector up so far today

[Beagle]

MET raised $100m in a debt issue at 3% in September 2019 and history shows their share price took off shortly afterwards. I know debt and equity are inextricably related but I found it curious that shortly after MET raised those funds the shares took off. Those bonds are currently trading on the NZDX secondary market at just 2.05%.

With OCA certain (in my opinion), to raise the full $125m at just on 2.0% one wonders if the shares will behave in a manner similar to MET and also take off soon ?

Why would they, how does one explain this ? I do not have any answers but only one theory.
In the process of doing a bond issue the company, its prospectus, (now known as a product disclosure statement) and its future prospects gets put in front of many powerful and influential investors and many of them ask why bother with a 2% bond return when I can get north of 5% dividend yield plus outstanding growth prospects ?

I think this theory of mine has genuine merit so I have believed my own creative B.S. and bought even more this morning :)

[forest]

no .... should be through 110 after that meeting

Sum others in the sector up so far today

What meeting are you referring to winner?

[thegreatestben]

What meeting are you referring to winner?

Annual meeting was yesterday 2pm.

[iceman]

Some of OCA's facilities are basic level care that the Government funds. Its perfectly fair and reasonable that if OCA incurs substantial extra costs as a result of Covid that the Govt should step up to the plate.

Bond issue appears imminent. https://www.nzx.com/companies/OCA
Good timing with interest rates at record lows. BNZ offered me 1.15% as their top term deposit rate just the other day...all banks will probably all be less than 1% in a few months :eek2:

The strange thing is though Beagle that household deposits with banks have not been reducing and I am starting to think a lot of those deposit holders are far too conservative and scared to invest them anywhere else except maybe Government Bonds https://www.rbnz.govt.nz/statistics/s40-banks-liabilities-deposits-by-sector

[thegreatestben]

no .... should be through 110 after that meeting

Sum others in the sector up so far today

We're meeting half way at the moment, just scratching 1.07

[winner69]

We're meeting half way at the moment, just scratching 1.07

Maybe the drunk monkey's have sobered up

If so 115 here we come

[bull....]

yea im a holder again major resistance breached so lets see how it goes , 1.10 next resistance then 1.20 not much in between based on price action

[winner69]

yea im a holder again major resistance breached so lets see how it goes , 1.10 next resistance then 1.20 not much in between based on price action

...and then back to 140 where it nearly got to before ...and this time macquaries won't ruin the party

[bull....]

$125m easy peasy - huge demand

Hope they put it to good use

yep the bigger the demand for the issue will reflect in some share price movement as a vote of confidence

[Waltzing]

the brilliant Mr B has done it again... and thanks to the man with the model who has been very generous in sharing his knowledge. We only have a very small holding this time and by the time we have funds to allocate again to this sector i actually think the train will have left the station.

[Beagle]

Maybe the drunk monkey's have sobered up

If so 115 here we come

:lol: :lol:


...and then back to 140 where it nearly got to before ...and this time macquaries won't ruin the party

Yes the overhang is gone...thank you for the reminder...onwards and upwards :t_up:

[Mudfish]

What's really exciting with this rise is, it's based on very solid company fundamentals. The SP movement is easily justified and we should at last see some steady upwards pressure looking forward. It's not pumped up by some random NZX movement or a bunch of Sharesies players. Maverick and Beagle are to be commended for sharing their understandings of how this company is evolving into a very solid growth company.

[winner69]

no Disc to NTA now

[Beagle]

... after applying my super sniffer long range food sensing nose to this I get underlying profit for the six months ended 30/11/20 of ~ $35m up 46% on the previous corresponding period and I am picking ~ $25m for the 4 months ended 31/03/21 for a ten month total of $60m (annualized $72m or 11.5 cps).

Even applying a no growth (because the market will still be a doubting Thomas), PE of 11.5 to this my target share price is thus 11.5 cps x 11.5 = $1.32 by mid 2021.
The risk to this with negative interest rates is to the upside in my opinion as the market starts to wake up.

From yesterday. I just want to add that I believe that is a very conservative price target and it won't surprise me in the slightest if we surpass that target well before mid 2021.
I am almost too scared to post what I really think its worth, (for fear some will call me a ramper) but the sector average PE is 18 and I think they can do 11.5 cents...I leave you good folks to do the maths. I don't see any compelling reason in the medium term why this should trade below the sector average PE.

In the due course of time when all the overseas based negative sentiment about Covid and rest homes passes we will see a substantial rerating in my opinion.

[Baa_Baa]

From yesterday. I just want to add that I believe that is a very conservative price target and it won't surprise me in the slightest if we surpass that target well before mid 2021.
I am almost too scared to post what I really think its worth, (for fear some will call me a ramper) but the sector average PE is 18 and I think they can do 11.5 cents...I leave you good folks to do the maths. I don't see any compelling reason in the medium term why this should trade below the sector average PE.

In the due course of time when all the overseas based negative sentiment about Covid and rest homes passes we will see a substantial rerating in my opinion.

Couldn't agree more. In the past when OCA SP moved up it kind of crept away, each day a few cents higher until you say whoa, wish I'd bought in earlier. Here's a classic depth chart showing the strong buyer support and a large spread of lower volume sells. You want them, you end up paying a lot more by mucking around.

11968

[Beagle]

MET raised $100m in a debt issue at 3% in September 2019 and history shows their share price took off shortly afterwards. I know debt and equity are inextricably related but I found it curious that shortly after MET raised those funds the shares took off. Those bonds are currently trading on the NZDX secondary market at just 2.05%.

With OCA certain (in my opinion), to raise the full $125m at just on 2.0% one wonders if the shares will behave in a manner similar to MET and also take off soon ?

Why would they, how does one explain this ? I do not have any answers but only one theory.
In the process of doing a bond issue the company, its prospectus, (now known as a product disclosure statement) and its future prospects gets put in front of many powerful and influential investors and many of them ask why bother with a 2% bond return when I can get north of 5% dividend yield plus outstanding growth prospects ?

I think this theory of mine has genuine merit so I have believed my own creative B.S. and bought even more this morning :)

So far this theory which appears to have no factual basis is working. Is it a coincidence that the very day they announce a bond issue the shares break out of their recent trading range or might this theory have some validity ? Interestingly in the MET case the shares rebounded just on 20% in the weeks following their bond issue at about this time last year, (prior to the APVG first expressing interest). It will be fascinating to see if a similar sized rerating occurs with OCA shares.

[winner69]

Beagle ..they might even do a MET and announce a share buyback :p

[Beagle]

Beagle ..they might even do a MET and announce a share buyback :p

LOL I nominate that one for the post of the day...although the one referencing that the drunk monkey's might be getting sober ran a very close second ;)

[peat]

So far this theory which appears to have no factual basis is working. Is it a coincidence that the very day they announce a bond issue the shares break out of their recent trading range or might this theory have some validity ?
The value of marketing clearly demonstrated , perhaps all companies should take note that it is more rewarding to promote than to perform.

[Cyclical]

The value of marketing clearly demonstrated , perhaps all companies should take note that it is more rewarding to promote than to perform.

Yes, I noted over at HGH the other day they were making noises about the SP not reflecting the true value and exploring ways to make amends. Will watch with (vested) interest to see what cunning stunts they come up with.

I think there may be something in your theory there, Beagle, about the bond issue possibly putting this meaty platter under the big dogs noses. Either that or enough of the right people got a good vibe from yesterday's presso.

Either which way, I only see big upside from here, especially when one compares it to SUM others.

[winner69]

Telling the world they’ve got $125m extra lending facilities from their bankers would be so ho hum boring news

But getting $125m in a bond issue is a lot more exciting eh ....and something punters notice.






Hope they put it to good use ...too much cash burns holes in one pockets

[Maverick]

From yesterday. I just want to add that I believe that is a very conservative price target and it won't surprise me in the slightest if we surpass that target well before mid 2021.
I am almost too scared to post what I really think its worth, (for fear some will call me a ramper) but the sector average PE is 18 and I think they can do 11.5 cents...I leave you good folks to do the maths. I don't see any compelling reason in the medium term why this should trade below the sector average PE.

In the due course of time when all the overseas based negative sentiment about Covid and rest homes passes we will see a substantial rerating in my opinion.
After a couple of sleeps now to mull over the ASM a little more I'm gonna follow Beagles FY upgrade and do the same to mine.
There were a couple of things I didn't initially consider when updating the sheets;
-Those extra 26% of "new sales " Earl mentions for the first 3 months would translate into meaningful increased DMFs for this FY as they happened early in the period.
-The built up empty "resale " stock at 2020 FY end (due to the timing of the ist lockdown) will have also been unwound now given the hot market.


Beagles estimate of underlying FY 75m is about where I got to as well,it's even a little light. So this year we are in close agreement.
These extra Cashflows will keep Winner happy and the Fridays buy/sell chart will keep Baabaa happy.
In fact whether you look at this stock through the lense of; underlying earnings, asset backing, yield, growth , buy/sell spread….. everyone must be happy.:t_up:


It's going to be a very good week and an even better 4 months ahead.
Time to dust off the old OCA saying…..can't have too many!:lol:

[Beagle]

After a couple of sleeps now to mull over the ASM a little more I'm gonna follow Beagles FY upgrade and do the same to mine.
There were a couple of things I didn't initially consider when updating the sheets;
-Those extra 26% of "new sales " Earl mentions for the first 3 months would translate into meaningful increased DMFs for this FY as they happened early in the period.
-The built up empty "resale " stock at 2020 FY end (due to the timing of the ist lockdown) will have also been unwound now given the hot market.


Beagles estimate of underlying FY 75m is about where I got to as well,it's even a little light. So this year we are in close agreement.
These extra Cashflows will keep Winner happy and the Fridays buy/sell chart will keep Baabaa happy.
In fact whether you look at this stock through the lense of; underlying earnings, asset backing, yield, growth , buy/sell spread….. everyone must be happy.:t_up:


It's going to be a very good week and an even better 4 months ahead.
Time to dust off the old OCA saying…..can't have too many!:lol:

LOL I love it. We should be kind on ourselves and say we were always right...just got the timing a bit wrong ;)

Yeah we're very close this year in the low to mid $70m range on an annualized basis, around ~ $60m reported underlying profit for the 10 months to 31 March 2021.

Bargain to be had here...one of only a tiny number left on the NZX.

One wonders where people are going to allocate their MET funds when that gets taken over. Hmmm

[Baa_Baa]

To be honest OCA has been a poor 'long term' investment thus far since IPO in terms of capital gains, it would have been better 'short term' to have traded it, with hindsight.

But for those who genuinely are in for the long term and do believe the business strategy and the recurring encouraging signs of good execution now passing the inflection point, OCA has presented outstanding accumulation opportunities. Not everyone can throw huge $ into a share in one go, hoping to have 'timed' their entry well. Then who would've seen Covid coming and the opportunity to buy below IPO, well below NTA and smash ones holding average price, which in effect has substituted for lack of capital gains.

The simple line closing price chart (https://invst.ly/s9mit) shows the long term 'resistance band' that the SP is working through now in a 6 month uptrend from the Covid low. A recent 'golden cross' (50MA crosses up through the 200MA) is encouraging, the SP has performed well in the past when this happens, only to be dealt to by some unexpected event later. The Macquarie sell down for example was prescient for its exit price, but also damn lucky preceding Covid. Friday was an encouraging breakout of the closing price line resistance $1.03-$1.05, now support.

Maybe people are waking up to the potential of OCA now that it's through the inflection point of its business strategy, the sector laggard presents a rare value investment in the current market, imho.

GLTAH

[winner69]

What we need now is a rave review of Oceania by Oliver in the NZ Herald.

Oliver was a bit down on the sector a few months ago but seeing it’s all bright for Oceania I’m sure he could come up with a good positive article explaining how the Oceania model is coming right and that’s past it’s inflexion point.


Maybe drunken monkeys read the Herald ;)

[Bjauck]

What we need now is a rave review of Oceania by Oliver in the NZ Herald.

Oliver was a bit down on the sector a few months ago but seeing it’s all bright for Oceania I’m sure he could come up with a good positive article explaining how the Oceania model is coming right and that’s past it’s inflexion point.


Maybe drunken monkeys read the Herald ;) Cold brass monkeys too. I got a free month of the print edition in August so that I could have some paper to light the kindling for the log burner! Another small TD is maturing this week - after using some of it to replace some whiteware, I have narrowed the options to either adding to my OCA holding or adding to my KiwiSaver.

[thegreatestben]

Maybe the drunk monkey's have sobered up

If so 115 here we come

$1.10 is here, keep it coming :)

[winner69]

$1.10 is here, keep it coming :)

Amazing what a bit of hype can do eh

[Greekwatchdog]

The Drunken Monkeys are sober...Hope they stay out of AA this time.

[Beagle]

What we need now is a rave review of Oceania by Oliver in the NZ Herald.

Oliver was a bit down on the sector a few months ago but seeing it’s all bright for Oceania I’m sure he could come up with a good positive article explaining how the Oceania model is coming right and that’s past it’s inflexion point.


Maybe drunken monkeys read the Herald ;)

That would be nice...and our resident cat is of course most welcome to consult with Maverick, you, others and myself.

I bought even more this morning at $1.09.

Maverick would be proud of me :t_up:

[Baa_Baa]

The depth chart/table tells a sobering story, tons of buyer demand facing disappointment as they sit 1-10 cents behind the bid, while the sell side has thinned out considerably with a wide price spread. This is a setup for a re-rate upwards as buyers realise they have to meet the market or miss out.

[bull....]

clean air up to 1.20 when breaks above 1.1 i reckon

[Beagle]

The depth chart/table tells a sobering story, tons of buyer demand facing disappointment as they sit 1-10 cents behind the ask, while the sell side has thinned out considerably with a wide price spread. This is a setup for a re-rate upwards as buyers realise they have to meet the market or miss out.

Very sobering except for those who are well positioned already :t_up: :t_up:

[winner69]

Jeez, bull and beagle ...or is beagle and bull ... both in live with Oceania and buying and egging the share price along ....and helped by a sheep

Always knew bull and beagle had respect for each other and were mates

With that force behind it what possibly could go wrong

[peat]

yeh I had decided last week to re-enter OCA in a moderate sort of fashion but I deliberately chose not to buy on Fri based due to concerns about US over the weekend. (Probably fall tonight now but oh well)
So I had a market bid filled this morning at $1.09. A bit of momentum showing so always looking for opportunities. Need to make more money now I am only half the man I used to be. lol j/k.

[bull....]

Jeez, bull and beagle ...or is beagle and bull ... both in live with Oceania and buying and egging the share price along ....and helped by a sheep

Always knew bull and beagle had respect for each other and were mates

With that force behind it what possibly could go wrong

beagles in on fundamentals im in on technicals so yes the planets have aligned at the moment and for the record i respect all views from all posters even if i dont necesscary agree sometimes

[Beagle]

beagles in on fundamentals im in on technicals so yes the planets have aligned at the moment and for the record i respect all views from all posters even if i dont necesscary agree sometimes

The dog is a student of TA as well. Only has rudimentary TA skills so generally follows his fundamental thinking and nose for a feed which seems to be working very well :t_up:

[Cyclical]

The depth chart/table tells a sobering story, tons of buyer demand facing disappointment as they sit 1-10 cents behind the bid, while the sell side has thinned out considerably with a wide price spread. This is a setup for a re-rate upwards as buyers realise they have to meet the market or miss out.


clean air up to 1.20 when breaks above 1.1 i reckon

Yeah, may be bouncing off $1.20 before we know it. Was overdue a rerate I reckon...here's hoping most of us boarded the train prior.

[winner69]

Bit of a worry when Mav says this - Meadow bank” sales on track but not as strong as “Sands”. (there were actually 49 apartment deliveries of stage 4 . Earl`s number of 64 is incorrect so the fact they have only sold 34 so far is as per expectations)

Whose right ....Earl or our Mav

Big difference between 34 and 64

Still hoping this Oceania story is not a bull **** story .....be carnage if it is

[bull....]

Yeah, may be bouncing off $1.20 before we know it. Was overdue a rerate I reckon...here's hoping most of us boarded the train prior.

oca poor relative performance in the sector offers potential for it to close the gap on its peers im thinking and the bond issue subscriptions will be a big indicator.
if it is well over subscribed would mean investors have faith in the company looking ahead if its a poor subscription i be running for the hills lol

[Beagle]

oca poor relative performance in the sector offers potential for it to close the gap on its peers im thinking and the bond issue subscriptions will be a big indicator.
if it is well over subscribed would mean investors have faith in the company looking ahead if its a poor subscription i be running for the hills lol

Its a bookbuild on the rate so the issue will be filled and likely all $50m in oversubscriptions, (total $125m) subscribed at close to 2%.

[bull....]

Its a bookbuild on the rate so the issue will be filled and likely all $50m in oversubscriptions, (total $125m) subscribed at close to 2%.

be the commentary around it im interested in

[winner69]

On a price/book basis OCA priced about the same as ARV

No longer the sector laggard

Seems about right

[Waltzing]

"be carnage if it is"

toes only at the Mo .... dont see the sweds coming over the horizon just yet...westerly gales will blow them back out to sea unless they came round cape hope.

[Beagle]

On a price/book basis OCA priced about the same as ARV

No longer the sector laggard

Seems about right

MET - Who cares...that dog is about to be sold.
ARV $1.68 /$1.27 = 32% premium to NTA
SUM $8.70 / $4.91 = 77% premium to NTA
RYM $13.85 / $4.52 = just over three times NTA
OCA $1.11 / 95 = 16.8% premium to NTA but OCA talk a lot about NAV which includes developments in progress which was $1.10 as at 31 May inclusive of valuers steep write-down's caused by Covid which have turned out to be baseless assumptions. so the share price is trading right in line with the heavily and inappropriately written down NZV as at 31/5/20.

PLENTY more room for OCA to run in my opinion.

[winner69]

Always a worry when companies promote a made up metric...esp one based on guesses

[thegreatestben]

Good size parcel at 1.12 just now

[Beagle]

Always a worry when companies promote a made up metric...esp one based on guesses

Not hard to guess better than the valuers as at 30 April 2020 lol

I reckon Mav and all might get $1.50 next year....thought I'd have a guess too ;)

[Maverick]

Whose right ....Earl or our Mav

Big difference between 34 and 64

Still hoping this Oceania story is not a bull **** story .....be carnage if it is

Check out this link Winner on page 4 of the 2019 annual meeting presentation. Stage 4 is one big standalone block so there cant be a few cheeky other deliveries tucked around the corner somewhere. Earl`s just mistyped using the Sands deliveries number I reckon.
No biggy, sh*t happens.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/340053/306617.pdf

ps-If they had delivered 64 apartments and only sold 34 by now that would be a concern to me, whereas delivering 49 makes the sales rate about where it should be. If anyone has any reason to think Earls number of 64 is in fact correct please let me know, that would be important.

[winner69]

Oliver better get that rave article out quick or else readers will conclude that's he just jumping on the band wagon and telling everybody what's happened

More kudos to him if readers hear about it before it happens.

[Waltzing]

another metric - LTA

long term anticipation.... of profits to come....looks LUVTM... looks under valued to me....

[bull....]

another metric - LTA

long term anticipation.... of profits to come....looks LUVTM... looks under valued to me....

from reading some people on here those ltaptc are due next report

[winner69]

It’s a bit like who won the Jacinda / Judith debate on here at the moment ...stupid asking avid supporters of both who one eh because you’ll know what the answer will be.

Is Oceania great ...of course it is ...no doubt ..no ifs and buts

[Beagle]

It’s a bit like who won the Jacinda / Judith debate on here at the moment ...stupid asking avid supporters of both who one eh because you’ll know what the answer will be.

Is Oceania great ...of course it is ...no doubt ..no ifs and buts

No fate but what you make. (Terminator) All predictions about the future are best estimates and not certain until they're past tense and have happened.
Plenty of breadcrumb trails to follow though...

[arekaywhy]

No fate but what you make...

Nice, except the machines have a better time...

Makes me wonder if there are machines trading our market, given people set them up to trade larger ones.

[allfromacell]

The shares will never trade under $1 again :t_up:.

Sorry to jinx it but I wouldn't mind getting a few more for a buck each anyway :)

[bull....]

brought some more today

[winner69]

brought some more today

Good that OCA being dragged up by positiveness in the sector

Rising tide lifts all boats they say ...even the more doggy ones

[Beagle]

Bond issue - product disclosure statement http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360397/331561.pdf
Minimum interest rate is not set until 5 October.

[bull....]

Bond issue - product disclosure statement http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360397/331561.pdf
Minimum interest rate is not set until 5 October.

thats a important thing in the commentary afterwards what rate they set , the better the rate they get the bigger the demand was and means the more people wanted a slice of the company. good result should mean something to stock price

[winner69]

Not many pictures ...but that Liz will sell $50m on her own

[Beagle]

thats a important thing in the commentary afterwards what rate they set , the better the rate they get the bigger the demand was and means the more people wanted a slice of the company. good result should mean something to stock price

It's very good timing for a long 7 year bond issue with interest rates at unprecedented lows.
We can get a heads-up on the likely rate by looking at where similar bonds are trading on the NZDX secondary market.
SUM030 2027 bond last traded 1.95%
MET010 2026 bond bid at 2.05%, no offer.

How good is the timing ? Well it might be useful to compare to SUM's first issue of $100m bonds, SUM010 which were issued with a yield of 4.78% !
If OCA can get the issue away at say 2% that's 2.78% less than SUM's first issue and a quite considerable saving of $2.78 million per annum in interest costs (on a $100m OCA issue) compared to what SUM are paying on their first debt issue. Pretty handy annual saving compared to what SUM is paying !

[winner69]

It's very good timing for a long 7 year bond issue with interest rates at unprecedented lows.
We can get a heads-up on the likely rate by looking at where similar bonds are trading on the NZDX secondary market.
SUM030 2027 bond last traded 1.95%
MET010 2026 bond bid at 2.05%, no offer.

How good is the timing ? Well it might be useful to compare to SUM's first issue of $100m bonds, SUM010 which were issued with a yield of 4.78% !
If OCA can get the issue away at say 2% that's 2.78% less than SUM's first issue and a quite considerable saving of $2.78 million per annum in interest costs (on a $100m OCA issue) compared to what SUM are paying on their first debt issue. Pretty handy annual saving compared to what SUM is paying !

Bit outrageous comments isn’t it mate ...might be factual but rather irrelevant don’t you agree (comparing the time differences and what’s happened to rates since 2017)


OK - I get it ..Oceania is the greatest thing on earth since slice bread and Summerset is a load of the old proverbial.

[Beagle]

Bit outrageous comments isn’t it mate ...might be factual but rather irrelevant don’t you agree (comparing the time differences and what’s happened to rates since 2017)
Absolutely its factual and relevant. Nearly $3m in annual cost savings compared to where another company issued debt confers a material advantage, especially when the other company has 3 debt issues in the market to fund an unusually large land bank. We all know interest rates have dropped since 2017, however nonetheless the advantage is still relevant. SUM did well at the time to get the 4.78% issue done...there... do we feel better now ?

OK - I get it ..Oceania is the greatest thing on earth since slice bread and Summerset is a load of the old proverbial.
Now you're just being argumentative. You seem super sensitive about comparisons between companies in this sector, especially anything to do with SUM.
People have been comparing companies in this sector for many many years and its not going to stop because you're getting all bitter and twisted.

[Cyclical]

Bit outrageous comments isn’t it mate ...might be factual but rather irrelevant don’t you agree (comparing the time differences and what’s happened to rates since 2017)


OK - I get it ..Oceania is the greatest thing on earth since slice bread and Summerset is a load of the old proverbial.

Out of interest, I looked back on my spreadsheet to the 21st of May and see that on that day I sold all of may SUM @ $6.12 and loaded up with OCA @ .78.

Roll forward 4 and a bit months (where did that time go??) and at time of writing we have:

SUM $8.95 (46% gain)
OCA $1.11 (42% gain)

Not a hell of a lot in it and if we look at today's high for both, it would probably be even Stevens. Pretty handy results for both, no matter which way you look at it.

The moral of the story, don't get too caught up in opinions and stories and stay diversified.

[winner69]

One good thing at getting $125m from the bond issue at say 2.1%/2.2% is that it will in the short term replace debt that's costing them 3%-4%. That'll save a few bob.

They say funds for paying down debt and funding growth in due course.

[WAIKEN]

Most real estate analysts are predicting 5-10% gains in residential real estate over the next 12 months
Is it too simplistic to say that there is a one to one correlation between the value of retirement village property assets and the value of residential property
If the residential market increases by say 10% then do our 1.5bill approx property assets increase by 150m
and other associated liabilities remain constant. Thus assuming 610mill shares do we add 0.25 to our NTA

[Cyclical]

Most real estate analysts are predicting 5-10% gains in residential real estate over the next 12 months
Is it too simplistic to say that there is a one to one correlation between the value of retirement village property assets and the value of residential property
If the residential market increases by say 10% then do our 1.5bill approx property assets increase by 150m
and other associated liabilities remain constant. Thus assuming 610mill shares do we add 0.25 to our NTA

Where are you getting 1.5bill from? Are you thinking of MET?

[WAIKEN]

From May 20 report
Sorry the copy and paste has jumbled the bal sheet Ive highlighted the 2 amounts about 64k shy of 1.5bill



Consolidated Balance SheetAs at 31 May 2020$NZ000’s Notes May 2020 May 2019AssetsCash and cash equivalents 17,624 22,762Trade and other receivables 5.3 41,630 43,541Investment property 3.1 947,800 881,674Property, plant and equipment 3.2 489,990 442,709Right of use assets 3.4 40,822 -Intangible assets 5.2 10,830 8,668Total assets 1,548,696 1,399,354LiabilitiesTrade and other payables 5.4 34,831 38,565Derivative financial instruments 5.6 10,484 2,443Deferred management fee 3.3 34,344 27,002Refundable occupation right agreements 3.3 535,370 436,481Right of use liabilities 3.4 13,001 -Borrowings 4.4 325,454 270,159Deferred tax liabilities 5.1 - 14,825Total liabilities 953,484 789,475Net assets 595,212 609,879EquityContributed equity 4.1 588,389 580,794Retained deficit (155,907) (110,060)Reserves 162,730 139,145Total equity 595,212 609,879

[dubya]

From Friday:


...................I am almost too scared to post what I really think its worth, (for fear some will call me a ramper) but the sector average PE is 18 and I think they can do 11.5 cents...I leave you good folks to do the maths.....................................

From yesterday:

https://nz.finance.yahoo.com/news/investors-undervaluing-oceania-healthcare-limited-203231231.html

I think its got a ways to run yet. But being my biggest holding 'by a country mile'..... I guess I'm a bit biased. 😂😂😂😂 But I hope I'm right $1.96 Mmmmmmm???? !!!!

[Baa_Baa]

From Friday:



From yesterday:

https://nz.finance.yahoo.com/news/investors-undervaluing-oceania-healthcare-limited-203231231.html

I think its got a ways to run yet. But being my biggest holding 'by a country mile'..... I guess I'm a bit biased. 😂😂😂😂 But I hope I'm right $1.96 Mmmmmmm???? !!!!

Very exciting prospects ahead, I’m also completely biased as it’s my biggest holdings by at least two country miles! Go large or go home I reckon.

Despite beagles reluctance to fess up on his future projections, I think he should. Wouldn’t be the first time he was accused of ramping lol 😂 the hard part will, as usual, be forecasting the property market, the cost of capital and the sales performance.

Good move imo to put out the bond issue, very clever to take advantage of reducing cost of debt. These companies rely on large capital availability, so the less it costs the better.

Personally I think my chart will be useless shortly as all time highs are taken out and this blue sky rerates to new highs, in the medium term $2 is just a step on the long term outlook.

Told you I am biased. 🤩

[Leftfield]

https://nz.finance.yahoo.com/news/investors-undervaluing-oceania-healthcare-limited-203231231.html

I think its got a ways to run yet. But being my biggest holding 'by a country mile'..... I guess I'm a bit biased.  But I hope I'm right $1.96 Mmmmmmm???? !!!!

Crikey my estimates of fair value were much more conservative! Thanks for posting the link.

Glad I topped up a few more today, now 5% of my portfolio at an av sp of just under 90c.

[Waltzing]

Those models arnt real world and are static in nature and are data templates. That being said please dont put model up here that show its undervalued...for at least another 2 years...gives everyone who believes it true, time there entry as funds become available.

[Beagle]

Very exciting prospects ahead, I’m also completely biased as it’s my biggest holdings by at least two country miles! Go large or go home I reckon.

Despite beagles reluctance to fess up on his future projections, I think he should. Wouldn’t be the first time he was accused of ramping lol �� the hard part will, as usual, be forecasting the property market, the cost of capital and the sales performance.

Good move imo to put out the bond issue, very clever to take advantage of reducing cost of debt. These companies rely on large capital availability, so the less it costs the better.

Personally I think my chart will be useless shortly as all time highs are taken out and this blue sky rerates to new highs, in the medium term $2 is just a step on the long term outlook.

Told you I am biased. ��

I've already said what I think its really worth mate, just over $2 :) In my opinion its not going to go there quickly though. Covid sentiment is holding it back, overseas investors are seeing widespread deaths in old folks homes and the placement by Macquarie back in February at $1.20...those shares will be still churning back onto the market especially from disgruntled Australian investors who have seen the carnage in Victoria.

I remain of the view the bond issue will give this a significant shot in the arm, (played out over 5-6 weeks with MET last year with their bond issue), then there's the probable reinvestment of some of the funds from the likely MET takeover going back into this sector, (with settlement subject to the approval vote and high court approval scheduled for the end of October), and then we have what I think will be a stellar first half result in late January 21.

I still think OCA's business model is not understood well by larger institutional players. Once their growth becomes obvious however and with no further overhang from Macquarie this should get rerated up towards the sector average PE.

They just need to show the market their business model transformational program is working...still a bit of skepticism out there I reckon.
FA looks great and so does TA. My biggest investment position too :)

[Waltzing]

It used to be our biggest holding on the NZX also but now a tiny one.. If MR B is correct there is still time and prehaps thats the beauty of this stock , it wont move until the numbers line up, perfect.

We would have gone US but exchange rates were not in our favour and we thought with trump in charge the US was a gonna...

".those shares will be still churning back onto the market especially from disgruntled Australian investors who have seen the carnage in Victoria"

very insightful... if so a lot more to come when it reaches 1.10 - 1.15.

[Beagle]

Its been 7 months now since that Macquarie placement. My gut feel, (and that's all it is), is we're coming towards the end of the disgruntled selling by those that took a stake off Macquarie. Melbourne starting to improve from its Covid problems quite a bit too. Tick tock mate, I wouldn't leave it too long if I was you.

[Waltzing]

"Tick tock mate" unfortunately we have to wait since we did not unload all positions in jan when we started tracking the virus from Hong Kong. We have another trade starting soon covering exchange rates and this will tie us up for a while. OCA this time may be one we miss except for a small position, and it wont be the last we miss.

[Beagle]

I accumulated more this morning. I think they are very conservative.

At first glance the standout for me is the way they have highlighted the strongly growing yield in the years ahead. Investors are going to be increasingly well paid as they enjoy ongoing strong growth in the years ahead. I'll share some more thoughts when I've digested the full report.

[Cyclical]

From May 20 report
Sorry the copy and paste has jumbled the bal sheet Ive highlighted the 2 amounts about 64k shy of 1.5bill

Consolidated Balance SheetAs at 31 May 2020$NZ000’s Notes May 2020 May 2019AssetsCash and cash equivalents 17,624 22,762Trade and other receivables 5.3 41,630 43,541Investment property 3.1 947,800 881,674Property, plant and equipment 3.2 489,990 442,709Right of use assets 3.4 40,822 -Intangible assets 5.2 10,830 8,668Total assets 1,548,696 1,399,354LiabilitiesTrade and other payables 5.4 34,831 38,565Derivative financial instruments 5.6 10,484 2,443Deferred management fee 3.3 34,344 27,002Refundable occupation right agreements 3.3 535,370 436,481Right of use liabilities 3.4 13,001 -Borrowings 4.4 325,454 270,159Deferred tax liabilities 5.1 - 14,825Total liabilities 953,484 789,475Net assets 595,212 609,879EquityContributed equity 4.1 588,389 580,794Retained deficit (155,907) (110,060)Reserves 162,730 139,145Total equity 595,212 609,879

Righto, finally had a proper look at this one...struggled to see the wood through the trees, have reformatted below. You're right though, in my small mindedness, I was thinking NTA, not actual assets, so there is merit in what you are saying, such is the beauty of leverage...when it works in your favour. Quite what the property component of property, plant and equipment is, I don't know (Mav or Beagle probably know that off the top of their heads), but certainly the next results should see a nice bump up off the back of revaluations.

Consolidated Balance Sheet
As at 31 May 2020
$NZ000’s Notes May 2020 May 2019


Assets
Cash and cash equivalents 17,624 22,762
Trade and other receivables 5.3 41,630 43,541
Investment property 3.1 947,800 881,674
Property, plant and equipment 3.2 489,990 442,709
Right of use assets 3.4 40,822 -Intangible assets 5.2 10,830 8,668
Total assets 1,548,696 1,399,354


Liabilities
Trade and other payables 5.4 34,831 38,565
Derivative financial instruments 5.6 10,484 2,443
Deferred management fee 3.3 34,344 27,002
Refundable occupation right agreements 3.3 535,370 436,481
Right of use liabilities 3.4 13,001 -Borrowings 4.4 325,454 270,159
Deferred tax liabilities 5.1 - 14,825
Total liabilities 953,484 789,475


Net assets 595,212 609,879
EquityContributed equity 4.1 588,389 580,794
Retained deficit (155,907) (110,060)
Reserves 162,730 139,145
Total equity 595,212 609,879

[bull....]

looking good looking good

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf

I believe CBRE valuation assumptions for their values taken as at 30 April 2020 were extremely conservative, (taken in the middle of the Covid crisis lockdown) and have proved to be grossly inaccurate. Their NAV at that time was $1.10 and I believe this figure materially misstates the likely NAV as at the current date. I believe subsequent real estate data and highly profitable trading since then is likely to mean the NAV is currently ~ $1.20 perhaps even more and I note all other sector companies (excluding MET) are trading at a substantial premium to their asset backing.

I also note OCA has the highest development margins in the industry and has a focus on very high value apartments in the next few years, has the highest dividend yield, the cheapest forward PE and has an excellent outlook for earnings and dividend growth in the years ahead.

My #1 investment position.

[bull....]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf

I believe CBRE valuation assumptions for their values taken as at 30 April 2020 were extremely conservative, (taken in the middle of the Covid crisis lockdown) and have proved to be grossly inaccurate. Their NAV at that time was $1.10 and I believe this figure materially misstates the likely NAV as at the current date. I believe subsequent real estate data and highly profitable trading since then is likely to mean the NAV is currently ~ $1.20 perhaps even more and I note all other sector companies (excluding MET) are trading at a substantial premium to their asset backing.

I also note OCA has the highest development margins in the industry and has a focus on very high value apartments in the next few years. I also note OCA has the highest dividend yield in the industry, the cheapest forward PE in the industry and has an excellent outlook for earning sand dividend growth in the year ahead.

technicals looking strong at the moment too

[Maverick]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/356710/326865.pdf

I believe CBRE valuation assumptions for their values taken as at 30 April 2020 were extremely conservative, (taken in the middle of the Covid crisis lockdown) and have proved to be grossly inaccurate. Their NAV at that time was $1.10 and I believe this figure materially misstates the likely NAV as at the current date. I believe subsequent real estate data and highly profitable trading since then is likely to mean the NAV is currently ~ $1.20 perhaps even more and I note all other sector companies (excluding MET) are trading at a substantial premium to their asset backing.

I also note OCA has the highest development margins in the industry and has a focus on very high value apartments in the next few years, has the highest dividend yield, the cheapest forward PE and has an excellent outlook for earnings and dividend growth in the years ahead.

My #1 investment position.
Just a wee note of caution there Beagle, while they currently have the highest margin they have been clear that the 30%+ new sales margin they have been achieving has all been Auckland based. As they sell down this year and the next, a good portion will be in Nelson and Christchurch where they are expecting only a 15% margin (so an average overall of about 25% looking ahead)
While I use the numbers they provide I`ve got a sneaky feeling with property NZ wide going like it is at the moment they will surprise us to the upside.
but as far as the other positives you point out....100% agree.

[Beagle]

Thanks Mav. That research highlights the high value of apartment developments over the next 2-3 years though so I am taking a medium / long term outlook.
Iceman tells me Nelson real estate has been going gangbusters...and why not, its such a beautiful part of the country.

[WAIKEN]

Thanks Cyclical for reformatting that balance sheet.
If we get residential property inflation of 10 % say by 31.12.21 then I am surmising we will get around a 0.25 lift in NTA.
I have spoken to someone involved in the retirement Village industry who said as older residential property owners home values inflate they are willing to pay more for a villa or apartment in a village. I assume there isn't such a direct correlation with care beds.

[dubya]

I posted this link the other day but it was only commented on by one person.
I don't really understand all the jargon (except the then 45% discount and $1.96 valuation ;)) so thought I would re-post it for any other comments.

https://nz.finance.yahoo.com/news/investors-undervaluing-oceania-healthcare-limited-203231231.html (https://nz.finance.yahoo.com/news/investors-undervaluing-oceania-healthcare-limited-203231231.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuc2hhcmV0cmFkZXIuY28u bnovc2hvd3RocmVhZC5waHA_OTg1Ni1PY2VhbmlhLUdyb3VwLX JldGlyZW1lbnQtdmlsbGFnZXMmcD04NDcxMDQ&guce_referrer_sig=AQAAAECQgtXtlUJGTY6jnCp9TUkNoqpO yladYHg45bOBbg3kdOoAdlAWjyCv3EA99Vunvpffr1ivjj_nIi ik13qc5ndqtxhVqQ3CORkoQFEwDu55cpmi5u_T5NKrUWSRhc-2aDE0byhl9Cvh7DP8GE_hpPLl9EjL5rSKeETUtfZRuZMG)

[Waltzing]

Has the market been reading the remarks here of Mr B and that expert on OCA Mav and we are not going to get our chance in 12 to 24 months time to load up.

LTA - long term anticipation has arrived?

glad we got a few, but far to little for the tide of money coming soon from term deposits prehaps.. ARG climbing , GMT ect. Its all property after all.

a 2 to 3 dollars stock in 5 years time? or it that very conservative after all the GFC left a 5 year gap world wide for markets to get back on there feet. I cant remember the global numbers after all i thought apart from a war that we had had our once in a 50 year global melt down... apparently not!

If the person known as MAV is correct on this stock prehaps the board should invite that shareholder all expenses paid to the AGM each year as the share price reflects his professional presentations on this forum promotes the stock better than the board.

[Beagle]

There's a very real chance this is north of $2.00 sometime in 2022 in my opinion...but like all things about the future, time will tell.

[macduffy]

There's a very real chance this is north of $2.00 sometime in 2022 in my opinion...but like all things about the future, time will tell.

I wouldn't attempt to forecast a 2022 shareprice, Beagle, but I reckon you're right in calling OCA a Buy at today's prices.

I hold.
:cool:

[forest]

[QUOTE=dubya;847118]I posted this link the other day but it was only commented on by one person.
I don't really understand all the jargon (except the then 45% discount and $1.96 valuation ;)) so thought I would re-post it for any other comments.

Hi dubya, I think that the chance of the growth rate to be higher for longer is far more likely than not. Ryman for instance expect to grow double digits for the foreseeable future.
If OCA grow rate reduces as per yahoo finance forecast I would expect that OCA will have very little need for investment capital.
In case of greatly reduced investment needs the company should have lots of extra cash available for dividend increases.
So I see some uncertainties, either more growth or faster increasing dividends.
OCA looks to me undervalued the question is by how much?

[Waltzing]

the "you who" finance report looked like an auto generated data template not an actual in depth model of a company.

If Mr B is wrong im sure someone with a complex model will let us know prehaps; else i think we can take it as a high probability.

[iceman]

Thanks Mav. That research highlights the high value of apartment developments over the next 2-3 years though so I am taking a medium / long term outlook.
Iceman tells me Nelson real estate has been going gangbusters...and why not, its such a beautiful part of the country.

And that includes retirement villages and senior living. My local sources tell me they’re seeing spectacular price rises and I expect OCA’s margin forecasts for Nelson to be very conservative

[Waltzing]

Yes its looking like a rerun of the GFC but accelerated in time and space , I mean location...

https://www.cnbc.com/2020/09/30/these-cities-are-at-risk-of-a-housing-bubble-as-home-prices-inflate-worldwide.html

gosh too much science whatching...

[winner69]

Property prices might be going gung ho in most places but it appears as if prices in Auckland are down over the last 3 months

However, the SuperCity was the weakest performing of the main centres over the three months to September 2020 (down by 0.4%).


https://www.goodreturns.co.nz/article/976517577/values-on-the-rise-again-corelogic.html

[macduffy]

But Barfoot and Thompson sales hitting new records.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12369746

[Beagle]

But Barfoot and Thompson sales hitting new records.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12369746

"and recorded the highest number of sales in a month since the peak of the last property cycle in 2017". Thanks, volume is very important too as well as price.

[Beagle]

MET takeover a done deal now subject to final takeover panel clearance and high court approval of the scheme implementation agreement. Assuming those approvals are obtained which I think is pretty close to just being formalities I suspect a fair percentage of the takeover proceeds scheduled for late October will find their way back into other companies in the retirement sector including OCA.

[winner69]

MET takeover a done deal now subject to final takeover panel clearance and high court approval of the scheme implementation agreement. Assuming those approvals are obtained which I think is pretty close to just being formalities I suspect a fair percentage of the takeover proceeds scheduled for late October will find their way back into other companies in the retirement sector including OCA.

Yes, sector should do well if punters stay in sector but probably more will go to RYM and SUM and even ARV than OCA seeing they are more loved by market.

[Beagle]

Yes, sector should do well if punters stay in sector but probably more will go to RYM and SUM and even ARV than OCA seeing they are more loved by market.

Yeah...NAH...the value will shine through...MET was a diamond in the rough....shareholders will be looking for something similar on similar compelling fundmental's.
A lot of that money will flow OCA's way in my opinion (not just words...backed by action, I bought even more today). Strong eps growth coming in the years ahead and dirt cheap already on covid adjusted fundamental's. TA looks great too !

You can't have too many :t_up: My #1 investment position :t_up:

[bull....]

im out now i had 1.20 as resistance and its overbrought on the daily at over 80 so good luck everyone. i brought on technicals only have stated on here im not big on the fundamentals of the company overall think sum others are better

[winner69]

Harbour Asset selling SUM ....probably seen the light of day and buying into the bargain that is OCA

They heard the cries of ‘you can’t have too many Oceania’ echoing around the market

[Beagle]

Harbour Asset selling SUM ....probably seen the light of day and buying into the bargain that is OCA

They heard the cries of ‘you can’t have too many Oceania’ echoing around the market

Pretty good judge of fair value are Harbour. I sold out at $9 earlier this year too and I reckon that's top dollar until they can prove they can sell HEAPS more per annum than they have been in recent years. One good quarters sales results that come out next week is not proof, they need to consistently sell higher numbers per annum and that's been the real Achilles heel of the company in recent years.

Difference between you and I bull is I believe in the fundamental's, the business model and the technical's also look good which confirms my thesis.

[Waltzing]

Stay down... down boy ... down... cries to no avail...sorry ... i remember reading the "Passionless people" only to find the younger generation around me speaking of their passions... shock ... has ZEALANDIA changed and now all the passionless people are to found in ? rest homes!!!

and my point is? nothing really good to be alive on a lovely spring day.. suffering from to much sun shine and some very nice property and retail stock values on the NZX.

[Beagle]

The truth is the market needs to see some evidence that their strategy is working.
I think the market is going to get a large dose of that evidence when they report their half year results in late January 2021 and the present share price is a real opportunity but may not do much until closer to the report date so that leads us to consider what other support might be forthcoming before then ?
Where are the funds going to go when the takeover of MET is settled in late October ?
What about the billions coming up on term deposit maturity where people are being offered 1% to reinvest ?

I got the dog bone for being closest to the mark for FY20 underlying profit...so wait for it folks...drum roll please.... after applying my super sniffer long range food sensing nose to this I get underlying profit for the six months ended 30/11/20 of ~ $35m up 46% on the previous corresponding period and I am picking ~ $25m for the 4 months ended 31/03/21 for a ten month total of $60m (annualized $72m or 11.5 cps).
Even applying a no growth (because the market will still be a doubting Thomas), PE of 11.5 to this my target share price is thus 11.5 cps x 11.5 = $1.32 by mid 2021.
The risk to this with negative interest rates is to the upside in my opinion as the market starts to wake up.




So I'm expecting an underlying profit (annualised) of about 57-60m FY2021 PLUS this $6m one off. I just cannot see for the life of me how a huge jump in profit cannot happen (without another massive disruptive event). We know enough history and numbers now to just add it all up with very few assumptions left.[/FONT]

As far as the share price appreciation goes , I'm very surprised with so much mounting evidence of the model's success that this company hasn't been seriously rerated by now. I do concede one does still need to dig a little bit still to see it but surely analysts out there must have bothered by now. With 3 years of history behind it, in my view, it has now been substantially de risked. Pretty soon it will be so clear that a drunk monkey will see “the story”.

[FONT=Arial]There were no surprises from the meeting and nor should there be. OCA has a clear plan and executes it in a very pragmatic way. It was basically all good news and I see it as only a short time now before the market finally agrees.



Maverick and his wingman Beagle dog do it again.
From Thursday last week when the share price was $1.05. Research out this week by a major broker picking a share price of $1.30 looked like half drunk monkey stuff to me but at least the drunk monkey's generally seem to be starting to sober up so I might have a beverage or two to celebrate.

[Waltzing]

"beverage or two to celebrate."

do we all want this stock to go up? do we? do we what.....

the smart money follows the smart money ... till its not..

[Beagle]

Long term story this one mate...the recent rerating of 14 cents in the last 6 trading days is just the first few drunk monkey's starting to sober up. Once Credit Suisse see the first half results in Jan 2021 they're going to have to update and upgrade their research dramatically. Could easily be over $1.30 well before then because its really worth $2.07 in my opinion...sometime in 2022 or most likely quite a bit earlier.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12369966

Dan Stratful, investment adviser with Forsyth Barr, said: "When the Metlifecare shareholders get their money back, a billion dollars of it, you generally find they will rotate it back into the retirement sector. And that sector is being helped at the moment by a buoyant housing market, with the September figures looking so good."

[Waltzing]

"Could easily be over $1.30 well before then because its really worth $2.07 in my opinion...sometime in 2022 or most likely quite a bit earlier."

well... we might buy a little more next week... just a little more... temping.. temping... i was a bit concerned about being stuck in this little paradise till 2022... not so much now.. not so much... perfect spring day..i do wish holders the very best on this one. Oh that us too... im not following the blood hound on every stock... its coincidence ...

down futures recovering.. pity..

well i hear a voice calling me to dinner...

[Snow Leopard]

And to think that back in January Beagle could not run this very same company down enough :p

But it is good that he has seen the light, been blinded by it even :p :p

[Beagle]

Lot of money to be made when the point of the development transformation inflection occurs. I always said 3 years in and half way through the development transformation program would be a great time to invest. You appear to have not much to do so go back and have a look if you like :p

[Beagle]

Purr-sonally I still regard it as early days on this one, and have factored in a conservative overall growth rate for the next few years.

Based on that I have a current value of $1.23 and a one year forward value of $1.30.
The dividends at about 4% make it slightly better than a term deposit but with the added bonus of, hopefully, a long term appreciation in underlying value.

I own as many of these as I am comfortable with at present and I am not looking to add any more.

I also have a similar size holding in ARV, but nothing of the rest.

DYOR
From 16/11/2018.
Purr-sonally I'm thinking you think it must be worth quite a bit more than $1.30 by now :p
I could repost plenty of my own favorable posts from 2018 too if you like :p

[Curly]

Yes I do recall Snow, MET was getting all the pumping when it was clear back then that there was a far greater prospect of doubling your money in OCA than MET.

[winner69]

And to think that back in January Beagle could not run this very same company down enough :p

But it is good that he has seen the light, been blinded by it even :p :p

Blinded by the Light was a cool movie

Even shed a tear

[Beagle]

Yes I do recall Snow, MET was getting all the pumping when it was clear back then that there was a far greater prospect of doubling your money in OCA than MET.

Smart Beagles know you can hunt more than one rabbit at a time. :p
11989

[Waltzing]

Not blinded by the light , "Seen the light", "walked into the light", " walked too the light", "shined a light upon", "lighted upon" ,"i (mr B) am the light"...." Mr B is the light", "Follow the lighted way", "walk the path unto the light"... "the good lord has shown us a path to the light".. "take us to the light"... if the light dim's we shall of course sell, else we will walk to the promise land... and one day may book in .....

[Bjauck]

Yes I do recall Snow, MET was getting all the pumping when it was clear back then that there was a far greater prospect of doubling your money in OCA than MET. There was also the very real possibility that rest homes (and retirement villages too) could have been as badly affected by corona virus as in Victoria or even as bad as in the USA or UK. By good managements and comparatively swift reaction by the government that did not happen*. The resilience and strength of real estate has also taken many by surprise too.

* To date.

[Baa_Baa]

There was also the very real possibility that rest homes (and retirement villages too) could have been as badly affected by corona virus as in Victoria or even as bad as in the USA or UK. By good managements and comparatively swift reaction by the government that did not happen*. The resilience and strength of real estate has also taken many by surprise too.

* To date.

You might know that rest homes have strict protocols around infectious diseases and don’t need the government to tell them when to lock down, in fact they don’t follow the government, when the country was in level 2, the rest homes I know of were effectively in level 4 with very strict protocols

[Beagle]

Rate set day tomorrow for the bonds http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360397/331562.pdf
Could we see a new all time low for 7 year bonds issued in N.Z. of under 2% ?

[herbert240]

Rate set day tomorrow for the bonds http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360397/331562.pdf
Could we see a new all time low for 7 year bonds issued in N.Z. of under 2% ?

Chris Lee is saying around 2.30%...will be interesting.

[winner69]

Chris Lee is saying around 2.30%...will be interesting.

Summerset get 2.3% pa a few weeks ago but rates outlook lower now

Ark et might see Oceania slightlier riskier and price accordingly

One thing about these low rates is that the expected overall long term investment returns (bonds and equities) are now much lower than in the past ...punters happy to make any sort of return over the long term. To make excessive returns one will need to do a bit of good stock picking and trade those accordingly.

[Greekwatchdog]

New development starting. Paywall. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12368826

[winner69]

In an old file found sector price / book ratios as at 2018

Updated them for current situation .., two and half years on

P/B ratios March 2018 v Oct 2920

SUM —— was 2.0 / now 1.8
ARV -—— was 1.3 / now 1.3
RYM —— was 3.0 / now 3.1
OCA —— was 1.2 / now 1.2

Amazing eh ...in spite of all the ups and downs of each and how punters feel the relativity has hardly changed in those two and a half years....RYM rerated slightly up and SUM slightly rerated down and ARV and OCA unchanged.

Not unexpected ....just the natural order of things ....or in crude terms the pecking order.

Because the four will never ever trade at the same multiple I’d say the pecking order (price relativity) is unlikely to change for a long time (if ever)

Pretty amazing eh

[Beagle]

New development starting. Paywall. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12368826

I think they did exceptionally well to get consent to build on that site. As one of my most successful clients has found out, its exceptionally hard to get consent to build on any site that has volcanic origins and an outstanding natural feature overlay under the Auckland District Unitary plan. I note the high independent living apartment to care suite ratio and I would think the premium north facing units with commanding harbour views will be priced accordingly ($3m+ ?) for the St Heliers area but still be in very high demand from elderly people looking for a luxury care free lifestyle and for whom money is no object, (of which there are many in that area).

"Oceania's head contractor is now preparing the 1.3ha block of St Heliers land for a $130 million six-level retirement village with rest home suites bigger and with more facilities than traditional smaller hospital rooms in other retirement villages....The site also has extensive views across the inner harbour to Rangitoto Island.
Gasparich said: "Oceania won consent to build 79 independent living apartments and 31 care suites on the site with completion expected by March 2023".

[Bjauck]

I think they did exceptionally well to get consent to build on that site. As one of my most successful clients has found out, its exceptionally hard to get consent to build on any site that has volcanic origins and an outstanding natural feature overlay under the Auckland District Unitary plan. I note the high independent living apartment to care suite ratio and I would think the premium north facing units with commanding harbour views will be priced accordingly ($3m+ ?) for the St Heliers area but still be in very high demand from elderly people looking for a luxury care free lifestyle and for whom money is no object, (of which there are many in that area) The street has great views. Incredible that they got consent for such a high density development in a sensitive geological location in one of the most expensive parts of Auckland.

Watch out Aucklanders. Do you like the ambience of your neighbourhood? Multi-level density is coming to a place near you!

Those ORA units, when available, will have to be the most expensive in the country.

[Beagle]

Yeah agreed, incredible ! I think the development follows the natural contour of the site...something that I am aware is critical to the success of any application to build on sensitive volcanic sites with the outstanding natural feature overlay. Minimizing earthworks is also of upmost importance. I probably haven't really given enough thought to the value of this consent and OCA's overall consent approval status which is a bit of a slip up on my part given my first hand knowledge of the difficulties involved.

Page 9 of the annual report...OCA got a remarkable 603 units, (inclusive of this very challenging site), consented during FY20 and that in a year impacted heavily by Covid !
That's a remarkable accomplishment in the circumstances ! 85.7% of their development pipeline is now consented. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360346/331468.pdf

I sometimes wonder if the CEO coming across as a really nice person of upmost integrity in these consent hearings makes a difference, remember how well Simon Challis has done with consenting for Ryman over the years ! I've only had the pleasure of meeting Earl Gasparich once but he made quite an impression on me and many others I know that attended the NZSA presentation he spoke at. Maybe being a really nice affable person comes across to others and is the X factor that makes the difference ? (as well as good consultants, planners and architects of course).

[Maverick]

Nelsons Green Gables had their official opening party last Friday. In their blurb I see they make a point of advertising their weekly fees as fixed for life (RYM do ,SUM dont, ARV I don`t know).
I`m very pleased OCA take this view as I know a good friend of mine at RYM really values the " illusion of security" this gives him.

[Beagle]

I'm curious why you think fixed fees for life gives an "illusion" of security mate ?
My research on this subject is much more extensive than I can go into on this forum and I can assure you that old folks really put a very high value on the security this gives them.

Elderly vulnerable people face so many uncertainties in their lives. How long will I live, how will I be cared for, will I fit into this village, will I make friends, will my family come and see me, will I be happy here e.t.c.e.t.c. One of their biggest fears is can I afford to live comfortably AND well ? Apart from food, their weekly fees are their biggest expense so its impossible to overstate the importance to many people of locking this cost down permanently for the rest of their life.

Many people from this generation have grown up budgeting every last cent, (something that's completely lost on most people today) and put a tremendous value on the financial certainty that locking down their weekly fees gives them.

[Baa_Baa]

The weekly chart log scale is a thing of beauty, so good I’m not going to post it in case I jinx the rerate. Honestly, as I’ve said before you take your eye off this and it just creeps away and you wonder wtf happened! Still can’t believe it went under .40 during covid, what a gift, I didn’t get it that low but went oversized on the way up. Still a gift imo.

[Maverick]

I'm curious why you think fixed fees for life gives an "illusion" of security mate ?
My research on this subject is much more extensive than I can go into on this forum and I can assure you that old folks really put a very high value on the security this gives them.

Elderly vulnerable people face so many uncertainties in their lives. How long will I live, how will I be cared for, will I fit into this village, will I make friends, will my family come and see me, will I be happy here e.t.c.e.t.c. One of their biggest fears is can I afford to live comfortably AND well ? Apart from food, their weekly fees are their biggest expense so its impossible to overstate the importance to many people of locking this cost down permanently for the rest of their life.

Many people from this generation have grown up budgeting every last cent, (something that's completely lost on most people today) and put a tremendous value on the financial certainty that locking down their weekly fees gives them.
Maybe my choice of words isn`t quite right . What I meant is that the "illusion of security " encapsulates their desire to have that "feeling " of security while they certainly don`t need it. My friend at Ryman really values the certainty of fixed fees, he keeps mentioning it, but it is completely a misplaced concern that he will ever not be able to afford staying on there. He will not be able to spend his wealth no matter how he might try, so in reality a couple of extra bucks each week in fees is of total insignificance , I would presume everyone there is in the same boat...so that`s why I called it an "illusion".
I do agree solidly with your points which is why I think OCAs policy on it is a no brainer ( and yet others in the sector don`t seem to agree)

And yes BaaBaa.....all getting a tad exciting at the moment, go us all for having the patience.

[Bjauck]

…
Page 9 of the annual report...OCA got a remarkable 603 units, (inclusive of this very challenging site), consented during FY20 and that in a year impacted heavily by Covid !
That's a remarkable accomplishment in the circumstances ! 85.7% of their development pipeline is now consented. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360346/331468.pdf
…. Fixed fees definitely provide certainty.

A good achievement and hopefully the development near Glover Park will blend in with the surroundings (maybe even more so than the housing it replaces...) They have done well to obtain this consent and they seem to have a skilful team. I am not unhappy that OCA is now my largest holding.

[Beagle]

Maybe my choice of words isn`t quite right . What I meant is that the "illusion of security " encapsulates their desire to have that "feeling " of security while they certainly don`t need it. My friend at Ryman really values the certainty of fixed fees, he keeps mentioning it, but it is completely a misplaced concern that he will ever not be able to afford staying on there. He will not be able to spend his wealth no matter how he might try, so in reality a couple of extra bucks each week in fees is of total insignificance , I would presume everyone there is in the same boat...so that`s why I called it an "illusion".
I do agree solidly with your points which is why I think OCAs policy on it is a no brainer ( and yet others in the sector don`t seem to agree)

And yes BaaBaa.....all getting a tad exciting at the moment, go us all for having the patience.

Thanks for that mate, I see where you are coming from now and you are absolutely right...there are some very powerful psychological forces at work here both at a conscious and subconscious / subliminal level.

Fixed fees for life taps directly into the psychology of our instinct for survival. Maslow's hierarchy of needs https://www.simplypsychology.org/maslow.html shows at a foundational level our deep need for food, water, warmth, rest, safety and security. These needs must be met for a baseline of satisfactory living. By offering to lock in the cost forever, (at today's prices), of meeting some of those foundational needs you have a tremendously powerful marketing tool.

My thoughts are that as we move up that pyramid towards self actualization there can be nagging instinctive doubts that at some stage the foundations of our life might collapse and we are unable to meet our basic needs. Locking in the price of those foundational needs forever at today's prices gives people much more certainty and security and is far more likely to mean they are more comfortable operating further up the pyramid of needs and generally being more secure and happy people. That's worth a lot to a lot of people and is why fixed fees for life has become the gold standard in the industry.
SUM hasn't understood this and I think their sales results in recent years reflect their poor understanding in this area.

Actually...speaking of basic needs...rest comes to mind :)

[Arthur]

The fixed fee guarantee is only as good as the quality of the contract and the solvency of the underlying company. There are many people that have bought "investment" apartments with a "rental guarantee" only to see it fall over when the parent company liquidates. I'm not saying that this will happen in these rest homes, but with all of the money printing if/when inflation takes off costs could escalate rapidly. Average tenancy time is unlikely to be too long, so it is more likely that the contracts would just be left to run rather than generate bad-will. It is more likely that if inflation returns the fixed price option will slowly be withdrawn.

[nevchev]

https://www.nzx.com/announcements/360896

[winner69]

So they going to get $125m at 2.3% pa (maybe a fraction more)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360896/332218.pdf

[bull....]

So they going to get $125m at 2.3% pa (maybe a fraction more)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/360896/332218.pdf

range is 2.28 - 2.48 % not quite as good as summerset got

[winner69]

Bonds in great demand I’m told

[Bjauck]

The fixed fee guarantee is only as good as the quality of the contract and the solvency of the underlying company. There are many people that have bought "investment" apartments with a "rental guarantee" only to see it fall over when the parent company liquidates. I'm not saying that this will happen in these rest homes, but with all of the money printing if/when inflation takes off costs could escalate rapidly. Average tenancy time is unlikely to be too long, so it is more likely that the contracts would just be left to run rather than generate bad-will. It is more likely that if inflation returns the fixed price option will slowly be withdrawn.

For retired people not necessarily super-wealthy then having a fixed fee is reassuring. Choosing the company with which to take out an ORA is important too.

Of course there are many risks with everything - on both an individual and environmental level. I don't imagine that many of those people who occupied leaky buildings had taken that risk into account. Auckland has a tremendous population growth rate, every new public work/ new road involves people who face compulsory acquisition of their property or homes.

[peat]

lol @ Maslow getting thrown around in an OCA thread.... Big in Psych 101
I thought you did a commerce degree Beagle. ;+)


PS so as to add some value to my post, NB the bonds are redeemable after 3 years so there is not necessarily so much upside as one might hope in the long run.

Oceania Healthcare may elect (at its discretion) to redeem all, but not some only, of the Bonds on any Interest Payment Date after the third anniversary of the Issue Date by giving not less than 20 Business Days’ notice of the redemption date.
If the Bonds are redeemed early in this manner, they will be redeemed for the greater of:– their Principal Amount; and– their market price (excluding interest), calculated as the arithmetic average of thedaily volume weighted average price (excluding interest) of Bonds traded through theNZX Debt Market over the 10 Business Days immediately prior to the date on whichOceania Healthcare gave the redemption notice

So if interest rates keep going down then after 3 years OCA might take you out at market rates and erode any further potential. Redeemable bonds are a bit one sided if you ask me

[winner69]

I wish Earl would conveniently forget to put this chart in his presentations ......and just use their preferred UnderlyinG EBITDA instead.

this chart is far from inspiring ....quite depressing really

[Beagle]

lol @ Maslow getting thrown around in an OCA thread.... Big in Psych 101
I thought you did a commerce degree Beagle. ;+)


PS so as to add some value to my post, NB the bonds are redeemable after 3 years so there is not necessarily so much upside as one might hope in the long run.

Oceania Healthcare may elect (at its discretion) to redeem all, but not some only, of the Bonds on any Interest Payment Date after the third anniversary of the Issue Date by giving not less than 20 Business Days’ notice of the redemption date.
If the Bonds are redeemed early in this manner, they will be redeemed for the greater of:– their Principal Amount; and– their market price (excluding interest), calculated as the arithmetic average of thedaily volume weighted average price (excluding interest) of Bonds traded through theNZX Debt Market over the 10 Business Days immediately prior to the date on whichOceania Healthcare gave the redemption notice

So if interest rates keep going down then after 3 years OCA might take you out at market rates and erode any further potential. Redeemable bonds are a bit one sided if you ask me

Back in the 1980's you got up to 3 optional papers out of 20 so the dog got his snout into other interest area's including psychology and investment analysis, both just "slightly" more interesting than all the super boring bean counter stuff lol

My read on the early redemption thing is they would have to pay people out at market value so if the bond was trading at (just say for argument sake) 1.5% yield to maturity at the three year point they'd have to pay you out the difference between 2.3% and 1.5% (0.8% per annum for the remaining 4 years. ~ about a 3% capital gain). Does that sound right to you mate ?

2.3% is super low BUT that's exactly double the rate the BNZ (1.15%) will pay you on a 5 year term deposit and with the open banking resolution I know where I'd rather have my money.

[peat]

thats great to hear that you voluntarily rounded yourself out Beagle. I personally highly value my arts and science papers but always spent my first part of the day reading the business section of the Herald at the UG reading room.

Yes you would get all existing capital gain if forcibly redeemed at market when they paid you out but... DURATION . You're not necessarily getting a 7 year bond which is what you bought. Maybe this only really matters to portfolio construction nerds. I just think that if you go for these extended length bonds (by that I mean 7 instead of the usual 5) then part of the reason you do this is to lock in these low rates for as long as possible because you think the world is going to hell in a handcart.
Or you may be going for the immediate capital gain quite likely if it goes at anything over 2% but many people hold bonds until maturity and they count on that being the full stated length of the prospectus. SO NB
Enough said.

[BlackPeter]

I wish Earl would conveniently forget to put this chart in his presentations ......and just use their preferred UnderlyinG EBITDA instead.

this chart is far from inspiring ....quite depressing really

Winner, the magic word is "inflection point". Just allow your phantasy to imagine how this curve will work out from here (hint - top right corner ... ). Very inspiring ... just close your eyes and dream ....

[winner69]

Saw this about inflection points ...cool stuff

Realising the simple power of fundamental inflection points started me on a journey toward a new (and successful) investment approach.


https://mattjoass.com/2018/11/10/inflection-point-investing/

[Maverick]

Saw this about infection points ...cool stuff

Realising the simple power of fundamental inflection points started me on a journey toward a new (and successful) investment approach.


https://mattjoass.com/2018/11/10/inflection-point-investing/
Awesome article Winner, loved this part...
Most value investors arrive for the party two hours early and make awkward chit-chat with the hosts over a bowl of dip. We arrive a half-hour late, a couple of other guests have already arrived and the conversation is flowing. Soon the party will be in full-swing. Later on, when Mr Market has gotten drunk and starts making a scene, we’ll make a polite exit.

[peat]

Saw this about infection points ...cool stuff

Realising the simple power of fundamental inflection points started me on a journey toward a new (and successful) investment approach.


https://mattjoass.com/2018/11/10/inflection-point-investing/

. .. thanks
Beagles proposed waiting for 30 day moving averages to turn looks a similar kind of approach after identifying the inflection point.
Not sure that he obeyed this strategy though - things tend to move very fast when they do as that article outlines

[bull....]

clean air up to 1.20 when breaks above 1.1 i reckon

1.20 proved a good call as resistance , tied in nicely with the bond rate announcement. buy the rumour sell the fact as they say

[Beagle]

Nice call as a trader bull...for investors though, the next five years are going to be very exciting with strongly growing profits and dividends.

Inflection points are almost always rewarding in more than one way. My theory is that reputation and trust is always earned and never given freely by the investment community. As profit steadily grows in the years ahead I think its highly likely OCA will earn the trust, reputation and respect of investors and we will see not only strong growth in earnings and dividends but a rerating towards a market medium PE for this sector of about 18.

I can foresee eps of 18-20 cents earnings per share in 4-5 years time and a market medium PE of 18...Hmmm that's $3.24 - $3.60.

[bull....]

breaking out on summerset update 1.20 resistance broken next test might be 1.32 pivot from last time , im back in just had to mossy over to the power stocks for some gains as well recently lol

[Beagle]

Welcome back bull. Smart move riding the breakout higher again...although it could easily be argued it was even smarter to simply hold and be patient and save on the brokerage of selling and buying back ;)

[bull....]

Welcome back bull. Smart move riding the breakout higher again...although it could easily be argued it was even smarter to simply hold and be patient and save on the brokerage of selling and buying back ;)

there was quicker money to be made else where , well worth it even after brokerage. but yea for most better to stay put like you say

[Waltzing]

OCA - someone is bullish,,, price up and up.. MR B was right... we are to late but thankfully we got a few at 1.09..

[Alpha]

Waltz still has a bit more to run I feel. :)

[Cyclical]

Welcome back bull. Smart move riding the breakout higher again...although it could easily be argued it was even smarter to simply hold and be patient and save on the brokerage of selling and buying back ;)

Not to mention the tax, especially is your average cost is way down.

[bull....]

Not to mention the tax, especially is your average cost is way down.

lol if the greens hold the balance of power you might be paying tax on your oca bundle as a wealth tax anyway. wonder how many people will have to downsize there retirement apartments so they can pay there wealth tax

[Waltzing]

no plans to sell this unless the PL looks very poor.... assets look to good.

[Bjauck]

lol if the greens hold the balance of power you might be paying tax on your oca bundle as a wealth tax anyway. wonder how many people will have to downsize there retirement apartments so they can pay there wealth tax Depending on the mix of other policies, With a comprehensive wealth tax You may end up paying less in GST and income tax - plus real estate may become cheaper and affordable in line with the average of the OECD. Plus fiscal stimulus from increased minimum incomes may stimulate some commerce improving profitability and dividend payments? Environmental policies may mean long term environmental sustainability for future generations reducing weather extremes, bush fires and diseases and pestilence? Gosh I am sounding like a greenie now! So I would say swings and roundabouts for the target market for OCA ORA's with minimal effect on Oceania's business.

[BlackPeter]

lol if the greens hold the balance of power you might be paying tax on your oca bundle as a wealth tax anyway. wonder how many people will have to downsize there retirement apartments so they can pay there wealth tax

They would not need to. The Green proposal allows for any wealth-tax debts to be accumulated until the object is sold.

It is only the heirs who might need to budget with a smaller windfall from their parents departure.

[dabsman]

Depending on the mix of other policies, With a comprehensive wealth tax You may end up paying less in GST and income tax - plus real estate may become cheaper and affordable in line with the average of the OECD. Plus fiscal stimulus from increased minimum incomes may stimulate some commerce improving profitability and dividend payments? Environmental policies may mean long term environmental sustainability for future generations reducing weather extremes, bush fires and diseases and pestilence? Gosh I am sounding like a greenie now! So I would say swings and roundabouts for the target market for OCA ORA's with minimal effect on Oceania's business.

You seriously think they will drop other taxes? That isnt how socialism works. They need more money to give away and it never is enough.

[bull....]

They would not need to. The Green proposal allows for any wealth-tax debts to be accumulated until the object is sold.

It is only the heirs who might need to budget with a smaller windfall from their parents departure.

raises some points as the exception is only for your own home so an Occupation lease maybe not ?

[BlackPeter]

raises some points as the exception is only for your own home so an Occupation lease maybe not ?

Given that it won't come anyway, even if we have a Labor / Green government after the election probably not worthwhile to check out the fine print.

However - given the the first million dollars per person is free anyway and - if any - only the repayment would be taxable ... how many of these retirement apartments are more than 3 million dollars or so (1 million per spouse minus DMF)?

So - even for a top luxury apartment no wealth tax to pay which would force you to downgrade ... take a deep breath and sleep easy :):

[dibble]

Given that it won't come anyway, even if we have a Labor / Green government after the election...:

Boy, I sure hope not, bonkers scheme, given the Auckland median is about $1m, its a peculiar definition of "wealth". Spare a thought for any care home nurses who are unlucky in love and bought a little Auckland house ages ago. Even their term deposits earning 1.1% before tax will get taxed.

[Bjauck]

You seriously think they will drop other taxes*? That isnt how socialism works. They need more money to give away and it never is enough.
I am not sure if that is socialism or welfarism to which you refer...however of course it depends on the actual tax rates and any threshold before the tax applies. But true left of centre tend to have higher rates with transfers to public services and the poorer whereas right of centre tend to reduce rates with cuts especially for the wealthier. However the effect on net income after gst and income tax depends in the effect of any fiscal stimulus from their policies.

However as BP referred the chance of their policy on this point being implemented is next to nil even in a coalition.

I am not sure why Wealth should not be taxed (with a threshold), it makes as much sense as taxing income and more sense than taxing the income needed merely for an individual to subsist.

[Beagle]

Its nice to see the market starting to show some appreciation for OCA's outstanding long term growth prospects.
Maybe the drunk Monkey's are just starting to wake / sober up and catching the whiff of a feed ahead ;)

I'm committed for the long haul.

[Leftfield]

Not to mention the tax, especially is your average cost is way down.

Had to smile at how Bull avoided the Q re paying tax on his huge short term OCA trading gains by shifting attention to irrelevant possible future wealth taxes. Worked a treat!
(just saying) ;)

[Waltzing]

" They need more money to give away and it never is enough."

... adjusted ... it may well be some truth in that...the true followers may not see it that way but.....

OCA will certainly be starting to provide some nice capital gains at last esp for those who bought and held from the 50 o 70's...

DISC: we banked some but now only holding a small allotment. not selling.

[dibble]

I am not sure why Wealth should not be taxed (with a threshold), it makes as much sense as taxing income and more sense than taxing the income needed merely for an individual to subsist.

Well for a start there's a good chance its already been taxed if it's savings. And if not there are more precise, fairer tools like inheritance and capital gains taxes. Anyway I guess Im heading off topic.

[Cyclical]

Had to smile at how Bull avoided the Q re paying tax on his huge short term OCA trading gains by shifting attention to irrelevant possible future wealth taxes. Worked a treat!
(just saying) ;)

OMG, what have I done?? Tax seems to be the trigger word to derail a thread...not the first time I've done it around here...I better go hide back under a rock :scared:

[Onion]

Well for a start there's a good chance its already been taxed if it's savings. And if not there are more precise, fairer tools like inheritance and capital gains taxes. Anyway I guess Im heading off topic.

Personally, as a salary earner, dividend and interest earner, that income is all taxed. On that account I am privileged to pay a good chunk of tax every year.

As an owner of a house and investment assets, the capital appreciation on those is wholly untaxed. In a good year I can earn well above the average wage with no tax deducted, and it is legal. Perhaps on that account I might accept there is a contribution to society that owning those assets might allow me to afford.

[Blue Skies]

Just to be clear, Labour Party tax policy for at least this next term is, NO NEW taxes (so that rules out a wealth tax)
& only a new 39% tax rate on (an individual's) income over $180,000. (so a couple bringing in $300,000 with each earning $150,000 would not be affected).

Like many, concerned about a wealth tax on assets so thought better check it out.
With Labour on track for a very comfortable win, better they govern alone without the Greens in terms of tax.

[Baa_Baa]

How about you all take your politics and tax discussion to the appropriate off market threads.

[bull....]

Just to be clear, Labour Party tax policy for at least this next term is, NO NEW taxes (so that rules out a wealth tax)
& only a new 39% tax rate on (an individual's) income over $180,000. (so a couple bringing in $300,000 with each earning $150,000 would not be affected).

Like many, concerned about a wealth tax on assets so thought better check it out.
With Labour on track for a very comfortable win, better they govern alone without the Greens in terms of tax.

yes that would be the better outcome in terms of whats best for your OCA investment , ie the greens dont get into govt.

[mike2020]

They will maintain a relationship with the greens, they may need them for a third term even if they don't need them this time around.

Moved from FSF ex div (till recently was a supplier) to OCA and I want to tell everyone. Now my biggest holding and this time around I feel I timed OCA well. Been a very good few weeks. I like the information I find here. Thanks

[Maverick]

They will maintain a relationship with the greens, they may need them for a third term even if they don't need them this time around.

Moved from FSF ex div (till recently was a supplier) to OCA and I want to tell everyone. Now my biggest holding and this time around I feel I timed OCA well. Been a very good few weeks. I like the information I find here. Thanks

Welcome on the train Mike
There are some excellent and long suffering posters who have contributed some really good stuff on this thread. I agree that you think you have timed your entry right. Without another major disruption ahead I personally believe the story gets easier and easier to see from here on.
Guys here who have done awesome and difficult analysis over the years are about to become redundant when the bottom line is now poised to take over the talking.

[Bjauck]

Well for a start there's a good chance its already been taxed if it's savings..... It is already (re)taxed if it earns income, not if it earns capital gains. Hence why Kiwis tend to invest in land for capital appreciation, and not into capital that boosts the productivity of labour. However the current system is unlikely to be changed by any likely government, so Oceania's ORAs prices are likely to continue to increase at rates faster than the increase in incomes...imo (DYOR)

[Beagle]

How about you all take your politics and tax discussion to the appropriate off market threads.
Hear Hear ! I've had more than enough of it too.

Welcome on the train Mike
There are some excellent and long suffering posters who have contributed some really good stuff on this thread. I agree that you think you have timed your entry right. Without another major disruption ahead I personally believe the story gets easier and easier to see from here on.
Guys here who have done awesome and difficult analysis over the years are about to become redundant when the bottom line is now poised to take over the talking.

Even the drunk monkeys will be able to start seeing the wood for the trees when OCA's announces its shockingly good half year results in late January and that Credit Swiss analyst who has a $1.30 price target will get a major wake up call too and have to upgrade substantially to avoid egg on his face.

[Blue Skies]

How about you all take your politics and tax discussion to the appropriate off market threads.


Just want to reassure you, this was a clarification regarding a tax policy which just like rising or falling real estate values would generally affect sales of Retirement units, i.e. if retirees are faced with a brand new large tax bill on selling the family home, this will affect both their thoughts around & purchase of Retirement units.

Definitely not being political, just a neutral clarification.
Potential political policies have flow on affects which should not be ignored.
Like sailing, we're all looking upwind to see what (or potentially) we're sailing into.

[bull....]

Just want to reassure you, this was a clarification regarding a tax policy which just like rising or falling real estate values would generally affect sales of Retirement units, i.e. if retirees are faced with a brand new large tax bill on selling the family home, this will affect both their thoughts around & purchase of Retirement units.

Definitely not being political, just a neutral clarification.
Potential political policies have flow on affects which should not be ignored.
Like sailing, we're all looking upwind to see what (or potentially) we're sailing into.

agree some people tend to be a bit narrow in there overview of things which can effect investments , tax does and always will effect peoples behaviour in regards to investments and as i pointed out the greens policy would mean the occupational rights in retirement villages would be taxable and could not be deferred

[BlackPeter]

agree some people tend to be a bit narrow in there overview of things which can effect investments , tax does and always will effect peoples behaviour in regards to investments and as i pointed out the greens policy would mean the occupational rights in retirement villages would be taxable and could not be deferred

B/S, it does not as pointed out before, but - if you really want to discuss tax or Green policy, could you please do that on some appropriate thread?

[Beagle]

I have started a new thread regarding what tax changes the various political parties are proposing to implement after the election here and there's a good press article about it, to help continue the conversation for those interested. https://www.sharetrader.co.nz/showthread.php?11907-What-changes-are-the-political-parties-proposing-to-implement-after-the-election&p=848690#post848690

[bull....]

Had to smile at how Bull avoided the Q re paying tax on his huge short term OCA trading gains by shifting attention to irrelevant possible future wealth taxes. Worked a treat!
(just saying) ;)

apparently its not the right place to comment on such matters

[winner69]

Oceania got their $125m at 2.3% pa

Easy peasy ....spend it wisely guys

[Beagle]

Oceania got their $125m at 2.3% pa

Easy peasy ....spend it wisely guys

Very nice. Many thanks to bondholders for your support.

[Waltzing]

not to be a glass half full trustee but i expect the next DIV to be paid from cash flow please..

DISC; dont hold much at the moment. But if they pay from cashflow we will buy some more in a portfolio.

There is still plenty here of development and share price reval for the next 10 years.. No point holding or any time frame less unless it all turns to sour puddings. Unless your dutch of course in which case sour yoghurt on the bosbaan rowing course sunday afternoon is yummy...

[Beagle]

Agree 100% that we are on for a very exciting and prosperous decade of growth ahead.
Just a quick note. Operating cash flow was up 11.3% last year to $99.4m. I am expecting strong growth in underlying profit and operating cash flow this year.
Their dividend policy is to pay out 50-60% of underlying profit so I expect strong growth in dividends in the years ahead too.

[jimdog31]

And weve arrived at $1.30! geez that was quick! thanks to the hound for barking at this one for so long. I must admit dropping the falling knife that was ATM and catching this one before it shot up was a lesson in Blind faith vs undervalued fundamentals.

[Baa_Baa]

........ duplicate

[Baa_Baa]

And weve arrived at $1.30! geez that was quick! thanks to the hound for barking at this one for so long. I must admit dropping the falling knife that was ATM and catching this one before it shot up was a lesson in Blind faith vs undervalued fundamentals.

Patience is a bearch, but when this gets more exciting than the last two weeks, I’ll be looking for new meds! 🤩

[jimdog31]

Patience is a bearch, but when this gets more exciting than the last two weeks, I’ll be looking for new meds! 朗

Ive already cut back my daily B vitamins, I haven't needed the extra energy boost, all I do all day is hit refresh on market depth :t_up:

[Old mate]

What are the thoughts on getting to 1.40 next week? Or are we going to pause at 1.30 for a while?

[Waltzing]

TA on ATM showed a possible step down unless FA showed some upward trends which could still happen. OCA TA showed a solid base and you can continue to whatch and invest in for a long time to come if the FA shows an incremental trend up and they start to pay dividends from cash flow. If there model works then you could still buy in under 1.50 or more and hold for 5 to 10 years.

[Beagle]

https://www.nzherald.co.nz/business/oceania-starts-on-130m-st-heliers-neverland-site-earthworks-in-precious-volcanic-crater-rim/MK6QNAFVGUES6PUTOHONKQ6AFU/ Paywalled article about St Heliers OCA development site from the Herald last weekend.

I was out St Heliers way today so stopped by to see the Waimarie site. Earthworks are well and truly underway and security fencing was up so nosy dogs could not get a sneak peak other than from the road. Its about 1 Km to the east of the main St Heliers café and shops area, mostly a flat easy walk or drive by motorised cart. From the road I looked to the northwest and the views of the Waitemata harbor and cityscape are breathtaking.

It will be a breathtaking development with stunning panoramic views of the city, inner harbour and the Hauraki gulf. A nice park in front of it means those views will be unimpeded in the future and there's even a nice area for off the leash walking of one's dog. St Heliers, (for those that don't know Auckland) is one of the oldest most established eastern suburbs full of very upmarket homes. I am sure this development will meet strong demand from locals of the right age. Two other cars with older folks stopped to look just in the few minutes we were there. Mrs B also thought it was a stunning site.

I'll leave the really short term share price movement thing to others if you don't mind Old mate as I'm in for the long run. Very short term share price predictions are a crapshoot, might as well toss a coin. That said, over the next few months there will be a huge amount of money coming out of term deposits so it wouldn't surprise me to see this somewhere around $1.50, (possibly even higher), before the interim report in late January 2021. Once that report comes out and the analysts and professional investors do their revised calculations, that's when the fun will really start....but who knows, often momentum creates momentum and it could be $2 by Christmas. Time will tell.

Fundamentally, I still think its very, very cheap at $1.30...by my own estimates only on a forward PE of 11, (which is a no growth PE in this market) which makes no sense whatsoever for a company that's reached the point of inflection and about to start on years of solid growth. The sector average PE is 18 and I think this is where OCA will rerate too, over time. Over what period of time I do not know and that will depend upon OCA garnering the respect and trust of the investment community as a growth company. This respect and trust needs to be earned and is never given freely. The future is very promising but like all things about the future, time will tell.

P.S. I note this development creates 76 independent living apartments and just 31 care suites, (a very high proportion of independent living units for an OCA development). Its quite probably well worth noting for the potential of how good this development could be for shareholders that the upmarket luxury apartment market in Auckland is white hot at present. https://www.oneroof.co.nz/news/38510

[Baa_Baa]

Quick update on the chart, weekly log scale (https://invst.ly/sf4dz), 17MA & 43MA (approximates 50/200 day MA's) golden cross follow through nicely with a big bolt up from low $1 range. Solid close on weekly high SP speaks to strong demand. RSI toppy but can absorb more upside. Resistance above including ATH could slow things down a bit, leading to some consolidation around the mid/high $1.30. That said, a breakout and close above ATH $1.39 could see a run up into blue sky (ref SUM chart this week). Possible channel forming, upper line currently at ~$1.60, lower $1.15.

GLTAH

[Beagle]

https://www.nzherald.co.nz/nz/politics/election-2020-last-roll-of-the-misinformation-dice-jacinda-ardern-slams-national-on-wealth-tax/BUXJPGX5HNOY6Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ?

[winner69]

https://www.nzherald.co.nz/nz/politics/election-2020-last-roll-of-the-misinformation-dice-jacinda-ardern-slams-national-on-wealth-tax/BUXJPGX5HNOY6Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ?

Just as well we have Ardern on our side

Hope she has a clear cut victory next week.

PS ..might need to take time out to coach the ABs

[Blue Skies]

https://www.nzherald.co.nz/nz/politics/election-2020-last-roll-of-the-misinformation-dice-jacinda-ardern-slams-national-on-wealth-tax/BUXJPGX5HNOY6Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ?




Ahhhm, didn't I get a bit of pointed criticism for mentioning this (with relevance to OCA) here on Friday ?
With someone, can't remember who, started a new thread!
:)

[Bjauck]

https://www.nzherald.co.nz/nz/politics/election-2020-last-roll-of-the-misinformation-dice-jacinda-ardern-slams-national-on-wealth-tax/BUXJPGX5HNOY6Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ? Certainly the golden age for real estate investors looks like it will continue - covid level one (while Europe and the USA spikes), low interest rates, no stamp duties, no CGT.

When travel restrictions ease further, will returning kiwis and safe haven seekers flood into Aotearoa demanding a little patch of land to call haven? Has the property investment environment been sweeter?

[Bjauck]

https://www.nzherald.co.nz/business/oceania-starts-on-130m-st-heliers-neverland-site-earthworks-in-precious-volcanic-crater-rim/MK6QNAFVGUES6PUTOHONKQ6AFU/ Paywalled article about St Heliers OCA development site from the Herald last weekend.

I was out St Heliers way today so stopped by to see the Waimarie site. Earthworks are well and truly underway and security fencing was up so nosy dogs could not get a sneak peak other than from the road. Its about 1 Km to the east of the main St Heliers café and shops area, mostly a flat easy walk or drive by motorised cart. From the road I looked to the northwest and the views of the Waitemata harbor and cityscape are breathtaking. ... Definitely a golden circle location in a top suburb. Still cannot believe they got planning permission. I used to occasionally jog along the waterfront as a student and had my snack and drink at Cliff Road/Glover Park. A nice little shopping area at St Heliers, it used have that coastal village vibe.

A Jewel of a spot and probably the units will be out of my price range when I become eligible to live there. I will press my nose against the fence and have whine from outside sometime too!

[RTM]

Definitely a golden circle location in a top suburb. Still cannot believe they got planning permission. I used to occasionally jog along the waterfront as a student and had my snack and drink at Cliff Road/Glover Park. A nice little shopping area at St Heliers, it used have that coastal village vibe.

A Jewel of a spot and probably the units will be out of my price range when I become eligible to live there. I will press my nose against the fence and have whine from outside sometime too!

Not to mention Ladies Bay down the stair case......