OCA - Oceania Group - retirement villages

[winner69]

Probably no more real news about financial performance until November

Hope Forbar had a bit of wink wink nudge nudge and increase their target this week

[Maverick]

Righto….. back in Wangas and it's raining cats and dogs, what better time to wrap up the meeting notes. Beagle did such a good report on the SUM agm a few years back , it's only fair to offer the same.

Here are some of the key takeaways that I'm happy to share that may be of interest. Some of the points, details and numbers have been left out.

Overall there were no real surprises, just a whole bunch of confirmations on assumptions I had already made.here goes….

A.OCA is now geared and keen to acquire stuff. They are far more growth driven than I expected with more acquisitions to come. This seems evident already anyway given their capital restructure, recent purchases and the fact they've got a guy on the payroll prowling around.

B.Care suite sales are going very strongly .There are now some waiting lists on earlier C/S deliveries. Prices are stronger than anticipated. They are not worried at all about getting best dollar first time around as they can re-evaluate prices on turn over no2. We are seeing this anyway with resale CS margins a whopping 19% after only 2-3 years.
Analysts have been historically shy of the CS model as it has been unknown and untested but now have satisfactory evidence it's not only working but surpassing expectations of market acceptance and original price points.
Care suites now are derisked.

C.Oca has its own warehouse with pre-ordered stuff so supply issues aren't a problem.
Contractor costs are currently not a problem.

D.OCA models no HPI growth before committing to a project so all HPI rises are considered a bonus .

G. All the directors seemed very sharp, knowledgeable and impressive. They answered everyone's simple and tricky questions with ease and accuracy.
Four of them were up for re-election and had to give their pedigree. Kerry Pendergrass for example is a midwife and ex local politician so is strong at getting consents through councils.

H.Overall there was not a single concern I could detect and things are going very well. I smelt no fudging or inaccuracies. All directors I spoke to (4) exuded a very positive ( but not frothy) vibe on progress. This shouldn't be surprising given their personal share purchases.

I.Brent (CEO) is within the group working on the retirement housing reform with politicians etc. Generally reporting here ,without details of the conversation, indicates this process should not put fear into investors. This will be a long process with a fair outcome.

Overall, the fact there were no new facts was also a takeaway. Things are progressing well or slightly better in some areas ( particularly C/suites) . I was particularly impressed with the high caliber of all our directors. There is enough in the numbers now to see proof of what is going on. I have walked away with no concerns and assumptions now confirmed as correct. This company has enough evidence now, even before meeting, that things are all go.

My expectations for this company financially are now slightly higher and growth will continue much longer than the current 7 year pipeline. The overall takeaway for me of the afternoon is that this company is now de-risked and doing just what it said it would with results likely to be better than hoped. Any analysts changes after this meeting , if any, will be slightly up , not down.

To conclude IMO nothing has changed, as said here many times on ST;
A.You can't have too many,
B.The drunk monkeys are sobering up
Last and most importantly...
C.This is a stock you put in your bottom drawer and just leave alone. (Baa Baa)

Hope that's helpful folks.

[Greekwatchdog]

Thanks Mav for taking time out to report on your thoughts. Much appreciated.

[Leftfield]

Great post thanks Maverick..... good to be on this ride. Onwards and upwards.

[Ggcc]

Righto….. back in Wangas and it's raining cats and dogs, what better time to wrap up the meeting notes. Beagle did such a good report on the SUM agm a few years back , it's only fair to offer the same.

Here are some of the key takeaways that I'm happy to share that may be of interest. Some of the points, details and numbers have been left out.

Overall there were no real surprises, just a whole bunch of confirmations on assumptions I had already made.here goes….

A.OCA is now geared and keen to acquire stuff. They are far more growth driven than I expected with more acquisitions to come. This seems evident already anyway given their capital restructure, recent purchases and the fact they've got a guy on the payroll prowling around.

B.Care suite sales are going very strongly .There are now some waiting lists on earlier C/S deliveries. Prices are stronger than anticipated. They are not worried at all about getting best dollar first time around as they can re-evaluate prices on turn over no2. We are seeing this anyway with resale CS margins a whopping 19% after only 2-3 years.
Analysts have been historically shy of the CS model as it has been unknown and untested but now have satisfactory evidence it's not only working but surpassing expectations of market acceptance and original price points.
Care suites now are derisked.

C.Oca has its own warehouse with pre-ordered stuff so supply issues aren't a problem.
Contractor costs are currently not a problem.

D.OCA models no HPI growth before committing to a project so all HPI rises are considered a bonus .

G. All the directors seemed very sharp, knowledgeable and impressive. They answered everyone's simple and tricky questions with ease and accuracy.
Four of them were up for re-election and had to give their pedigree. Kerry Pendergrass for example is a midwife and ex local politician so is strong at getting consents through councils.

H.Overall there was not a single concern I could detect and things are going very well. I smelt no fudging or inaccuracies. All directors I spoke to (4) exuded a very positive ( but not frothy) vibe on progress. This shouldn't be surprising given their personal share purchases.

I.Brent (CEO) is within the group working on the retirement housing reform with politicians etc. Generally reporting here ,without details of the conversation, indicates this process should not put fear into investors. This will be a long process with a fair outcome.

Overall, the fact there were no new facts was also a takeaway. Things are progressing well or slightly better in some areas ( particularly C/suites) . I was particularly impressed with the high caliber of all our directors. There is enough in the numbers now to see proof of what is going on. I have walked away with no concerns and assumptions now confirmed as correct. This company has enough evidence now, even before meeting, that things are all go.

My expectations for this company financially are now slightly higher and growth will continue much longer than the current 7 year pipeline. The overall takeaway for me of the afternoon is that this company is now de-risked and doing just what it said it would with results likely to be better than hoped. Any analysts changes after this meeting , if any, will be slightly up , not down.

To conclude IMO nothing has changed, as said here many times on ST;
A.You can't have too many,
B.The drunk monkeys are sobering up
Last and most importantly...
C.This is a stock you put in your bottom drawer and just leave alone. (Baa Baa)

Hope that's helpful folks.


Thanks for your post

[The Punter]

Great post Maverick, thank you for that....all seems well, but I'm very curious about this warehouse-whats it holding?...appliances or plain old building hardware?...maybe they could expand it and buy SkyTV s Mt Wellington building...

[thegreatestben]

I’ve got a couple of houses being built currently and my builder said there’s no shortage of materials just a long lead time. OCA probably being smart and getting everything ordered well ahead of time. This normally is not efficient but probably the best/safest way to ensure costs and progress remain on track.

[Greekwatchdog]

Not too mention your paying sweet FA interest costs. Not much point having lots of dollars in the bank earning next to nothing. I have been doing this since Oct 2020 and having Head Office question me on it. My answer is simple our lead times are still 4/5 weeks whilst everyone else's increase to 8/10 weeks. Shuts them up pretty quick as we are gaining business.

[Beau]

Thanks very much again Maverick for putting in the time and sharing great to hear everything still on track.

[Beagle]

Good work Mav. Don't want to rain on your parade but...

B.Care suite sales are going very strongly .There are now some waiting lists on earlier C/S deliveries. Prices are stronger than anticipated. They are not worried at all about getting best dollar first time around as they can re-evaluate prices on turn over no2. We are seeing this anyway with resale CS margins a whopping 19% after only 2-3 years.
Analysts have been historically shy of the CS model as it has been unknown and untested but now have satisfactory evidence it's not only working but surpassing expectations of market acceptance and original price points.
Care suites now are derisked.
All that sounds great until one ponders that the median hours price in N.Z. over the last 3 years is up about 43%. On a rainy afternoon I spent a bit of time pondering this.
Such a modest increase relative to the median increase, actually a decrease in relative terms compared to the market average performance of 24%.
On one hand I can certainly appreciate that when they initially build a whole block of care suites on one site at one time they have to price them very attractively to fill them up as quickly as possible...I can certainly appreciate the commercial wisdom behind that and yet on the other hand I can't help pondering why (if the care suites were so attractively priced in the first release) the prices on resale are not at least keeping up with the movement in the average price of real estate ?

As you would expect...I have a couple of working theories to explain this...but its quite probably not one you folks want to hear so I won't unpack it unless people really want me to.
I hope over time the concept and market acceptance of care suites matures to the point where people see them as a lifestyle choice more than shopping around for the best deal on meeting late stage care needs.

[Beagle]

Good work Mav. Don't want to rain on your parade but...

B.Care suite sales are going very strongly .There are now some waiting lists on earlier C/S deliveries. Prices are stronger than anticipated. They are not worried at all about getting best dollar first time around as they can re-evaluate prices on turn over no2. We are seeing this anyway with resale CS margins a whopping 19% after only 2-3 years.
Analysts have been historically shy of the CS model as it has been unknown and untested but now have satisfactory evidence it's not only working but surpassing expectations of market acceptance and original price points.
Care suites now are derisked.
All that sounds great until one ponders that the median house price in N.Z. over the last 3 years is up about 43%. On a rainy afternoon I spent a bit of time pondering this.
Such a modest increase relative in care suite prices to the median house price increase, (actually a decrease in relative terms compared to the real estate market average performance of 24%).
On one hand I can certainly appreciate that when they initially build a whole block of care suites on one site at one time they have to price them very attractively to fill them up as quickly as possible...I can certainly appreciate the commercial wisdom behind that and yet on the other hand I can't help pondering why (if the care suites were so attractively priced in the first release) the prices on resale are not at least keeping up with the movement in the average price of real estate ?

As you would expect...I have a couple of working theories to explain this...but its quite probably not one you folks want to hear so I won't unpack it unless people really want me to.
I hope over time the concept and market acceptance of care suites matures to the point where people see them as a lifestyle choice more than shopping around for the best deal on meeting late stage care needs.

[justakiwi]

Don't underestimate the importance of "shopping around for the best deal." Or the potential business this can/will generate.





I hope over time the concept and market acceptance of care suites matures to the point where people see them as a lifestyle choice more than shopping around for the best deal on meeting late stage care needs.

[peat]

Righto….. back in Wangas and it's raining cats and dogs,

I.Brent (CEO) is within the group working on the retirement housing reform with politicians etc. Generally reporting here ,without details of the conversation, indicates this process should not put fear into investors. This will be a long process with a fair outcome.



Thanks Mav.

Just sayin... I would suggest there remains political risk here
Labour is not always consulting interested parties before making significant decisions. We have seen this time and time again now.
and while I agree it is a low risk of something very bad happening I think Labour will become increasingly obnoxious to business because that is their trendline at present.

However it is good to be there at the table.

[Dotbond]

Start unpacking it Mr B

[Maverick]

Good work Mav. Don't want to rain on your parade but...

All that sounds great until one ponders that the median house price in N.Z. over the last 3 years is up about 43%. On a rainy afternoon I spent a bit of time pondering this.
Such a modest increase relative in care suite prices to the median house price increase, (actually a decrease in relative terms compared to the real estate market average performance of 24%).
On one hand I can certainly appreciate that when they initially build a whole block of care suites on one site at one time they have to price them very attractively to fill them up as quickly as possible...I can certainly appreciate the commercial wisdom behind that and yet on the other hand I can't help pondering why (if the care suites were so attractively priced in the first release) the prices on resale are not at least keeping up with the movement in the average price of real estate ?

As you would expect...I have a couple of working theories to explain this...but its quite probably not one you folks want to hear so I won't unpack it unless people really want me to.
I hope over time the concept and market acceptance of care suites matures to the point where people see them as a lifestyle choice more than shopping around for the best deal on meeting late stage care needs.
Nice work Beagle, I think that's a very fair point you raise that their c/s resale margins being up 18.7% which is nicely ahead of 11.5% the prior 2 years but is in fact not even keeping up with National HPI.

My understanding ( which I'm clear on) is that OCA price their C/S based on an arbitrary “gap” between the apartment prices and the C/S. In other words C/S prices are tied to apartment prices NOT houses.
You will see in their report their apartment prices are actually lower now than from 4 years ago.
2018-$998k 2019-$1131k 2020-$1134 2021-$952
So clearly while HPI has rocketed away , OCA apartments have actually retarded. We all will know this is all location based fluctuations so is therefore a false indicator of any individual apartment price.

What I'm saying is apartment prices changes are not the same as house price changes. I can definitely say that the arbitrary “gap” OCA has used between the apartment prices and C/S has recently closed considerably when determining the new resale price of the C/S.

There are more important factors to consider regarding care suites rather than pricing optimisation in the big OCA scheme of things;
1. The second biggest influence of a client selecting their final home ( i.e apartment/villa) is “does the village have continuum care”? - so apartment sales benefit
2. OCA have said that when they have added a C/S offering in their older homes that village occupancy goes up.- so apartment/villa sales benefit.
4. Demand is proving healthy to the point of waiting lists within a few years of delivery, -therefore improving occupancy rates plus underscoring potential price rises.
5. OCA has changed its DMF capture from 10-10-10 to 15-10-5. That's a hang of a slice of the pie if the client churn is faster than first modelled. ( which it is, churn is faster than the 3 years originally modelled. )

OCA`s significant future profits will come from apartments. As I've said before the actual profit focus on care suites , although nicely positive, is actually a kind of a red herring. It's all about the apartments that are being built on the freed up land.
I would recommend any serious shareholder drive by any of the half done projects in Auckland , Hamilton, Tauranga to get a real feel for what their game is.

I have been closely watching Hamilton- “Awatere '' for over 3 years now. To the absolute delight of my wife (Tui please) I called past again when heading south from the ASM and even I was staggered how huge and impressive the shell of the apartments now are. It completely dwarfs the new C/S block to the point of barely noticing them. That picture really tells a thousand words.

[Dotbond]

Thanks Maverick

[Beagle]

Thank you Mav for unpacking it some more, much appreciated, puts my mind more at ease.

Good to know Brent and the team are "on the hunt" for more acquisitions, (would expect nothing less from the former head of investment banking at Jarden) and I think they are well capable of debt funding the next one leveraging the balance sheet so the next debt funded acquisition should be strongly eps accretive.


Don't underestimate the importance of "shopping around for the best deal." Or the potential business this can/will generate.
Mav's made a great point that the team are focusing on care suites providing the full continuum of care and thereby boosting villa and apartment sales.
Unpacking this a bit more...I was thinking about this from another perspective and that the pure late stage care thing, what is the best deal for people ? For example with my Mum we knew she only had about 6 months to live with her terminal cancer diagnosis and while I would have liked her to have had a sea view room at the Sands, stumping up with say $500K and losing 15% occupation right agreement fee = $75,000 cost to her estate is far more expensive than another really good option we found, (which was much closer for her friends to visit), and still really good care and cost us just $45 a day for a premium room with a sea view, albeit a distant one. Over the 6 month this cost her estate just over $8,000 in premium room charges. My sense is this fast growing charity https://www.eldernet.co.nz/Facilities/Rest_Home_Care/CHT_Halldene_Home__Hospital/Service/DisplayService/FaStID/365
provides strong competition to care suites on a strict comparing apples to apple's stand alone basis and that's my concern on a pure is the care suite model really that attractive to people ?

Mav makes a good point that care suites are there to provide a total end to end health care solution for people's needs and this drives apartment and villa sales which is where the real money is made for OCA.

On another subject I think the caliber of the directors is really awesome at OCA and Brent must be a very bright chap to have made it to the very top of Jarden as the former director of investment banking, N.Z.'s leading brokerage house and investment bank.

I will slowly accumulate some more from time to time on any untoward share price weakness. Long term, and that is the key, LONG TERM, (while I would never say never), its difficult to see how you can go too far wrong with this one.

[winner69]

Another month passes and had to update this

In spite of the excitement of Oceania ASM and rave broker reports the OCA shareprice to SUM's is unchanged and the the long term market sentiment in saying SUM is better than OCA remains

Suppose I do this just to remind myself not to put more into OCA at the expense of SUM

SUM quarterly sales soon - could be interesting

[Beagle]

Nice chart Winner and I can certainly appreciate your enthusiasm for SUM and the key differences between their business models we've discussed at length.

To be objective though one should note that the declining trend in their share price relativity coincides for the most part with the period of time when OCA have been in the early stages of their business transformation program and now that we are past the point of inflection I expect gains from that transformation to steadily build momentum over the years ahead.

Whether momentum builds at a faster rate that with SUM with its vast land bank (which with the passage of time has proven to be a very good are far sighted approach), is anyone's guess.

Having a bob or two each way and a few quid on ARV too looks like a sound strategy to me. (I continue to believe RYM's is significantly overpriced relative to its peers).

[BlackPeter]

Pity the government takes 33% of it

I’d prefer Oceania retained the earnings and turned it even more gold.


Another month passes and had to update this

In spite of the excitement of Oceania ASM and rave broker reports the OCA shareprice to SUM's is unchanged and the the long term market sentiment in saying SUM is better than OCA remains

Suppose I do this just to remind myself not to put more into OCA at the expense of SUM

SUM quarterly sales soon - could be interesting

I remember similar discussion some years ago about the relativity RYM to SUM. Ryman did (SP-wise) so much better than SUM and one members even created a theorem saying that SUM will always be just a fraction of RYM. Well, he was wrong, wasn't he?

I remember that at that stage both beagle and I said that holding SUM might be more sensible than holding RYM, given that SUM had so much more growth potential than RYM. We both have been right :):

Just wondering whether this is again one of these opportunities to purchase into the undervalued share (OCA instead of into the now fully priced SUM) and just wait for the markets to catch up? It certainly did pay for me some years ago to keep my SUM shares despite the Couta theorem, and I recon in some years I can as well look with pride on the growth of my OCA shares.

They say buy low, sell dear, don't they?

Discl: hold OCA (and INA.ASX), but no SUM anymore;

[BlackPeter]

Another month passes and had to update this

In spite of the excitement of Oceania ASM and rave broker reports the OCA shareprice to SUM's is unchanged and the the long term market sentiment in saying SUM is better than OCA remains

Suppose I do this just to remind myself not to put more into OCA at the expense of SUM

SUM quarterly sales soon - could be interesting

I remember similar discussion some years ago about the relativity RYM to SUM. Ryman did (SP-wise) so much better than SUM and one member even created a theorem saying that SUM will always be just a fraction of RYM. Well, he was wrong, wasn't he?

I remember that at that stage both beagle and I said that holding SUM might be more sensible than holding RYM, given that SUM had so much more growth potential than RYM. We both have been right :):

Just wondering whether this is again one of these opportunities to purchase into the undervalued share (OCA instead of into the now fully priced SUM) and just wait for the markets to catch up? It certainly did pay for me some years ago to keep my SUM shares despite the Couta theorem, and I recon in some years I can as well look with pride on the growth of my OCA shares.

They say buy low, sell dear, don't they?

Discl: hold OCA (and INA.ASX), but no SUM anymore;

[Maverick]

I was going to give the community on ST a rest for awhile after a flurry of my recent long posts but today a few things happened which deserve comment.

The DHB rest home annual bed rate increases were published today. I have been working off a 2% rise in my s/ sheets, to be conservative, but it came out as 5.1%! (to get this I always blend 70% of Auckland DHB increases with 30% Nelson to reflect OCAs locations). I maintain my expected overall increased staff costs of 6% , which also includes extra staff needed to run new deliveries, in my s/sheets so basically it's a $3.8m boost added to my own bottom line forecast expectations which now are at the very top end of the analysts range . Very pleasing to get this news and should hopefully send a message that the Govt isn't out to screw the providers after all.

The next news is a quote from "Stuff" today which is timely given Beagle`s and my recent discussion on C/S price rises, in that despite being very healthy they still not quite keeping up with the HPI. As I have stated C/S prices are tied to apartment prices NOT houses, this quote today is perfectly timed.

“But between 2017 and 2021, Auckland apartments increased in value by 18 per cent compared to 28 per cent for houses, and Wellington’s by 21 per cent compared to 52 per cent for houses.”

So this should also help explain why operators aren't jacking their prices up as fast as they should to match rising HPI.

The other bit of short term fluff news is ARV share price recent surge ….once again. OCAs SP seems fairly tied to ARV as a pair , when one goes the other doesn't seem far behind.(Any chance you can bang up a SP comparison graph over the least year like you do Winner?) So once some volume returns to OCAs turnover it's easy to see a nice uptick not far away.


Might be a nice end to the week , but if not, the really important part is the 5.1% DHB rate rise.

[Waltzing]

ANZ has modelled future immigration and came up with increased house prices.

and as stated below will demand exceed supply in this sector.

https://www.stuff.co.nz/business/125621015/housing-shortage-creating-lack-of-retirement-accommodation

[Sideshow Bob]

From Business Desk free edition:

NZ will need 26,000 more retirement units within next 12 years - report (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=6dc00f322f&e=3b6f9185d3)The retirement village sector will struggle to keep up with demand to house the ageing population, placing more pressure on the housing market, according to a new report.
The latest whitepaper report on retirement villages and aged care by real estate multinational Jones Lang LaSalle said there will need to be another 26,000 new units by 2033 on top of the 36,000 already built.

Read on » (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=7ef1357e8c&e=3b6f9185d3)

[Bjauck]

...
The other bit of short term fluff news is ARV share price recent surge ….once again. OCAs SP seems fairly tied to ARV as a pair , when one goes the other doesn't seem far behind.(Any chance you can bang up a SP comparison graph over the least year like you do Winner?) So once some volume returns to OCAs turnover it's easy to see a nice uptick not far away.

Might be a nice end to the week , but if not, the really important part is the 5.1% DHB rate rise. Thanks for your posts. Not one of Winner's fancy graphs, but I have created a price change comparison from Yahoo's figures for Rym, Oca, Sum and Arv over various periods. I prefer to use a two year performance period these days so that the price comparison start point is before the Covid and lockdown roller coasters.

Over Past Three Months:

Rym -14%
Sum 12%
Oca 17%
Arv 24%

Over Past Year:

Rym 0%
Sum 109%
Oca 63%
Arv 38%

Over Past Two Years:

Rym 6%
Sum 134%
Oca 41%
Arv 50%

[dobby41]

Thanks for your posts. Not one of Winner's fancy graphs, but I have created a price change comparison from Yahoo's figures for Rym, Oca, Sum and Arv over various periods. I prefer to use a two year performance period these days so that the price comparison start point is before the Covid and lockdown roller coasters.

Over Past Three Months:

Rym -14%
Sum 12%
Oca 17%
Arv 24%

Over Past Year:

Rym 0%
Sum 109%
Oca 63%
Arv 38%

Over Past Two Years:

Rym 6%
Sum 134%
Oca 41%
Arv 50%

Does this show that SUM has caught up and increases are less likely - appears to be slowing in the 3 month?

[dobby41]

Thanks for your posts. Not one of Winner's fancy graphs, but I have created a price change comparison from Yahoo's figures for Rym, Oca, Sum and Arv over various periods. I prefer to use a two year performance period these days so that the price comparison start point is before the Covid and lockdown roller coasters.

Over Past Three Months:

Rym -14%
Sum 12%
Oca 17%
Arv 24%

Over Past Year:

Rym 0%
Sum 109%
Oca 63%
Arv 38%

Over Past Two Years:

Rym 6%
Sum 134%
Oca 41%
Arv 50%

Does this show that SUM has caught up and increases are less likely - appears to be slowing in the 3 month?

[peat]

The other bit of short term fluff news is ARV share price recent surge ….once again. OCAs SP seems fairly tied to ARV as a pair , when one goes the other doesn't seem far behind.(Any chance you can bang up a SP comparison graph over the least year like you do Winner?) So once some volume returns to OCAs turnover it's easy to see a nice uptick not far away.


It would depend on what time frame you use as to what conclusion you might draw.
Here is the one year cf as requested
12700
This would appear to suggest that ARV has some catching up to do !

Whereas the three year period (including almost all of OCA's life) shows the reverse indicating OCA has catch up to do.
12701

So! ? Take your pick .

[Snow Leopard]

It is all about where you are going,
and not where you have been.

[ I feel a poem coming on ]

[justakiwi]

Exactly! (would have given you a rep vote if I could have)


It is all about where you are going,
and not where you have been.

[ I feel a poem coming on ]

[winner69]

If I take one more step, I'll be the farthest away from home I've ever been.

[Curly]

Based on ARVs recent surge it can only be a matter of time before OCA is rerated upwards.

[Beagle]

A comparison between the current share price and NTA in this sector is interesting.
RYM $13.58 / $5.57 = 2.44 times NTA
SUM $13.48 / $5.94 = 2.27 times NTA
ARV $2.09 / $1.46 = 1.43 times NTA
OCA $1.49 / $1.29 = 1.24 times NTA

Share prices as of this morning. One could make the case fairly easily that its difficult to know which business model of these 4 will work the best going forward but an investment in any is ostensibly an investment in a company that uses property to generate revenue with varying degrees of mix with care and independent living facilities.

I believe we all know there is very little money in care per se, and the real money is made from property. If one assumes that one cannot pretend to know which business model of which company will work the best going forward then its clear with OCA you get a lot more bang for your buck.

That said 5.1% MOH funding increase compared to an 8% increase in OCA's human resource cost confers an ongoing headwind with their high care business model and I for one think MOH funding will continue to lag the true cost of providing late stage care so that in my opinion is an ongoing headwind felt most keenly by OCA because of its business model. To a large extent the care suite model will help with this but price accretion of care suites is very slow.

[Beagle]

..................

[winner69]

Some talk about Oceania selling prices are not keeping up property prices…. Sometimes not even keeping up like new care suites and new villas are on average cheaper now than in 2018.

Mav pointed out that growth in apartment prices hasn’t been as great as houses. And there’s been discussion about Oceania ensuring relativity’s between villa and care prices.

Whatever I’m still frustrated that Oceania sell heaps more things but don’t make much (or any) more.

If their selling prices had kept up with overall property price growth Oceania would have made $25m to $30m more last year. That’s quite a lot.

Some say OCA are undervalued (which is a rather subjective term). Beagle showed the premium over NTA of the four in the sector. OCA is the lowest. I say that means it’s ‘cheap’ rather than ‘undervalued’ and would add OCA is ‘cheap’ for good reasons.

Oceania tell a great story …..but delivering outcomes has been poor ….which begs the question can delivering outcomes get better? ….I for one are not convinced …..and the market per see seems to agree

[winner69]

Based on ARVs recent surge it can only be a matter of time before OCA is rerated upwards.

Do they deserve to be rerated?

[850man]

Based on ARVs recent surge it can only be a matter of time before OCA is rerated upwards.

I think they are going to have to "show us the money" before a re-rate. As others have said, their pricing seems to lag behind market increases. Time to start closing that gap OCA

[Beagle]

Chewed Earl's ear a couple of times about pricing in general. He simply wasn't interested. All about selling them down he said. Heck of a nice guy...real people person, maybe too nice ?
Maybe Brent with his vast experience as an investment banker will bring a new slightly more commercial focus and see the bigger picture ?
Having a former investment banker in charge of SUM sure didn't do them any harm over the years !

I like investment bankers...Brent already talking my language...nothing cheers a dog's heart more than the words eps accretive acquisitions....the thought of more dog food is irresistible. Next acquisition will be debt funded with cheap debt and will be strongly eps accretive that's my prediction, mark my words.

So many arguments and theories about this one...I sometimes feel like this https://www.youtube.com/watch?v=EUV1LJKYAUc
But I think I'll just play possum in the headlights for a year or three and see how we go. https://www.bing.com/images/search?view=detailV2&ccid=19DWOex3&id=882382EC245D0C69B0D11345602A5FE3EA5ACC81&thid=OIP.19DWOex3ww11rO14fymD4QHaFj&mediaurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.d 7d0d639ec77c30d75aced787f2983e1%3frik%3dgcxa6uNfKm BFEw%26riu%3dhttp%253a%252f%252ffarm3.static.flick r.com%252f2101%252f1576951969_10b3d45805_o.jpg%26e hk%3d3RkM0ayuj9JDdT3YDxUT5c%252b93BW81HFynszCEgajP q4%253d%26risl%3d%26pid%3dImgRaw&exph=600&expw=800&q=picture+of+possum+in+the+headlights&simid=608018565791568588&ck=A3DA753AB2D13D37166094837E1D5230&selectedIndex=5&qpvt=picture+of+possum+in+the+headlights&FORM=IRPRST&ajaxhist=0&ajaxserp=0

[winner69]

A few shareholders (at question time) thanked the Board and management for doing a fine job

I understand no standing ovation and not even a decent round of applause in appreciation

[BlackPeter]

...

That said 5.1% MOH funding increase compared to an 8% increase in OCA's human resource cost confers an ongoing headwind with their high care business model and I for one think MOH funding will continue to lag the true cost of providing late stage care so that in my opinion is an ongoing headwind felt most keenly by OCA because of its business model. To a large extent the care suite model will help with this but price accretion of care suites is very slow.

You obviously realise that not all of these 8% are increased salaries, but paying for inevitable inefficiencies while they implemented their strategy of turning cheap dusty and smelly old peoples homes into flash and modern premium apartments? Starting a new apartment complex inevitably requires a lot of staff, even if there are not a lot of residents in the beginning...

One other thing we never seem to mention - OCA has due to their higher care component compared to the other retirement villages a shorter turnaround time (means a higher frequency of the retained management fees) and on top of that are their management fees relative at the high end of the spectrum (30% in a spectrum from 20 to 30%).

So - maybe their higher staff costs kept creeping up while they completed the change over? As well- more care does require more (and potentially better paid staff). However - given that customers are as well happy to pay a bit more (as they do if you look at the total package of higher deferred management fee and shorter stay times) for their outstanding service and care - what is the issue?

I just think that we maybe need to take the constant repetition of the higher staff cost increases out of isolation - don't you think so?

[Beagle]

They would have incurred higher wages costs with Covid in both FY21 and FY20, I'll grant you that. Construction of buildings is using fixed price contracts with external construction firms but they do project manage them so I guess there is some extra cost with that. One year soon we will hopefully see a return for some of the higher wages connected with project managing these new builds...my guess is FY23 or more likely FY24 as in theory the momentum from the business transformation program will generate a decent return on capital, (including human resource cost expended). In the meantime, $301K, $254K, $234K (Average prices of new care suites sold in the last 3 years...not a typo, they are declining in a strongly rising real estate market...yes I know its a thing with them being sold in different regions over the years but all the same that trend is a bit of a worry).

Does that declining price trend not concern you ? You say stop looking at it in isolation but there's actually an argument to say it looks not much better in context, (Covid excepted)

Disc: 6% portfolio position...if others are more excitedly enamored about their future prospects and have a higher portfolio allocation, good for them I reckon and I really hope they are right.

I think one is prudent to hedge their bets in this sector.

[BlackPeter]

They would have incurred higher wages costs with Covid in both FY21 and FY20, I'll grant you that. Construction of buildings is using fixed price contracts with external construction firms but they do project manage them so I guess there is some extra cost with that. One year soon we will hopefully see a return for some of the higher wages connected with project managing these new builds...my guess is FY23 or more likely FY24 as in theory the momentum from the business transformation program will generate a decent return on capital, (including human resource cost expended). In the meantime, $301K, $254K, $234K (Average prices of new care suites sold in the last 3 years...not a typo, they are declining in a strongly rising real estate market...yes I know its a thing with them being sold in different regions over the years but all the same that trend is a bit of a worry).

Does that declining price trend not concern you ? You say stop looking at it in isolation but there's actually an argument to say it looks not much better in context, (Covid excepted)

Disc: 6% portfolio position...if others are more excitedly enamored about their future prospects and have a higher portfolio allocation, good for them I reckon and I really hope they are right.

I think one is prudent to hedge their bets in this sector.

Absolutely agree with your last sentence - and not just in this sector :):

I give you as well that you look probably much more into the detail with OCA than I do ... I am not a bookie and admittedly the OCA books are one example for the most user unfriendly presentation of data I can imagine :): However - being an engineer by trade - one of the things I learned already at university is that you don't necessarily better understand a system by getting closer to it.

I am quite happy with looking at the big picture view at OCA (development of earnings, ROE, cashflow, NTA and debt ratio) over the years, particularly considering that I think the money printing machine just started.

But again - diversification is always a good idea, though admittedly - OCA is my largest holding in my NZX portfolio (currently roughly 12%) ... despite me reducing it already a bit (was at 15%). I didn't buy such a high percentage, it just kept growing ... such a shame if one needs to sell a star performer because they just performed too well to agree with your diversification policy, isn't it? :);

Anyway - I think you have a point, but (at least what you are presenting) feels not like the whole picture.

[Beagle]

Accounts are an absolute dog's breakfast so its really hard to define the whole picture in any other terms than the level of asset accretion in the last 10 months, which has been very good, I'll certainly grant you that, albeit aided and abetted by the valuers Covid asset provisioning reversal.

An engineer might say it doesn't matter how the job is done, as long as its effective whilst us poor bean counters are cursed with trying to reconcile all the sum of the parts to various accounting standards all with varying degrees of veracity. Its almost enough to do any accountants head in...which is probably reflected in my posts.

Anyway...NZX50 is down 5% in the last 6 months and OCA is up 5% so a 10% market outperformance at the half way point of the year is not too shabby and its at the lowest premium to NTA of any in this sector so playing possum (which doesn't come naturally for me), for a few years seems like a reasonable strategy.

[winner69]

OCA has been through the three years of its business transition to get it to the point of inflection.

Maybe there has to be multiple inflection points before Oceania makes us all rich …when will the next one occur?

[Beagle]

Gains will steadily build over time. First full year after the point of inflection, FY22 gains will be something like X, FY23 2X, FY24 3X, FY25 4X, FY26 5X. Like a snowball gaining momentum over time. That's how I foresee it.
X is probably about $2 million in my opinion.

[winner69]

Gains will steadily build over time. First full year after the point of inflection, FY22 gains will be something like X, FY23 2X, FY24 3X, FY25 4X, FY26 5X. Like a snowball gaining momentum over time. That's how I foresee it.
X is probably about $2 million in my opinion.

Maybe X will be 0

[winner69]

Good news for sector …although it doesn’t affect Oceania that much as I’m told their selling prices aren’t linked to market prices

Real estate agency Barfoot and Thompson reports big spike in Auckland house prices in June, says new regulations not dampening cost

https://www.newshub.co.nz/home/money/2021/07/real-estate-agency-barfoot-and-thompson-reports-big-spike-in-auckland-house-prices-in-june-says-new-regulations-not-dampening-cost.html

[justakiwi]

It's taken me a while, but I now understand that you really enjoy stirring the pot ;)


Maybe X will be 0

[Waltzing]

NZ retirement sector not likely to get the treatment RYM just got in AUS with their 200 M project stopped in its tracks..

Cant see anything stopping this sector even capital gain sharing.

Even if as Winner suggests in this case profits disappearing in the profit and loss from increasing costs.

[Maverick]

Thanks Peat and Bjauck for your response with your graphs and numbers comparing ARV to OCA share prices. I'm a bit late replying as I've been out of coverage chasing deer around.....IT WAS COLD!

Looks to me from the graphs like they do move in unison to a large degree over months but short time frames not so at all. So the idea that the recent ARV sharp rise will soon rub off onto OCA seems a fail.
Oh well, nice thought while it lasted, back to the fundamentals....

[Bjauck]

Thanks Peat and Bjauck for your response with your graphs and numbers comparing ARV to OCA share prices. I'm a bit late replying as I've been out of coverage chasing deer around.....IT WAS COLD!
... I am impressed. It must have been like chasing Caribou in the arctic. Your macho street cred is off the top of the graph!

[Beagle]

I have a great tip for you Mav, much warmer and easier to sit by the fire with your laptop and order it here https://gourmetdirect.co.nz/venison/?utm_term=buy%20venison%20online&utm_campaign=Venison&utm_source=bing&utm_medium=ppc&hsa_acc=7638967892&hsa_cam=12814707839&hsa_grp=1300722551288149&hsa_ad=&hsa_src=o&hsa_tgt=kwd-81295317285377:loc-2495&hsa_kw=buy%20venison%20online&hsa_mt=e&hsa_net=adwords&hsa_ver=3&msclkid=e9466227925c1a55740c02c4ee371e7f More certain result too :p

[pierre]

http://www.stuff.co.nz/business/opinion-analysis/300348016/why-i-love-living-in-a-retirement-village?cid=app-android

[artemis]

http://www.stuff.co.nz/business/opinion-analysis/300348016/why-i-love-living-in-a-retirement-village?cid=app-android
Thanks for posting the link. For those that didn't click through, it is an opinion piece from a resident about his own experience and also as author of a recent book on retirement villages. Well written piece and very positive.

[winner69]

He’s some guy our Brett

Golden Kiwi win money well spent …..good on his parents

Business Hub: New Oceania Healthcare CEO Brent Pattison, a 'defiant' accountant
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12452002

Prob paywalled

[Beagle]

"The company is rapidly expanding and Pattison says it has the sector's lowest gearing at around 27 per cent following a $100m capital raising. It has 221 units and care suites scheduled for completion in the 2022 financial year".

There's your free heads-up that the next acquisition will be debt funded and be very eps accretive. Looks like a good man to lead the company. I like bean counters / investment bankers with lots of experience. Certainly did SUM no harm when Julian ran it.

Disc: Bought a few more yesterday.

[blackie]

it would be nice to see OCA break thru the $1.52 mark tomorrow and gallop on up the hill

[Maverick]

it would be nice to see OCA break thru the $1.52 mark tomorrow and gallop on up the hill

We've all got different objectives Blackie. In my ideal world, I'm looking for 1c about every 1.5 weeks.
If you get your "gallop on up" it just means the inevitable " then steps sleep-walking back again" ( thats a bit of Pink Floyd for you millenials - best band ever!)

On a more serious note, the SUM sales result today was fabulous, good on them, excellent result!
That's a great underscore for the whole sector.
Seems the boom in the well anticpated blue-rinse tsunami is underway.

[blackie]

a hop, step and jump, and that's my final offer :)

[Snow Leopard]

the inevitable " 2 steps sleep-walking back again" ( thats a bit of Pink Floyd for you millenials - best band ever!)

On a more serious note....


https://www.youtube.com/watch?v=lku1fP-LszI

Whilst the position of Pink Floyd amongst the greatest bands of all time is not open for debate.

I do prefer their earlier music.

[Beagle]

https://www.youtube.com/watch?v=nVhNCTH8pDs

[winner69]

Property prices still on the rise …lady said defying expectations and refusing to cool

June report ex NZIER

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Residential/June/REINZ%20Monthly%20Property%20Report%20-%20June%202021.pdf

[Beagle]

Interesting new term I hadn't heard before FONFA, (fear of not finding anything).

I think we're in for a very, very long journey with Covid and all the variants. This is highly likely to drive very strong demand right across this sector for many, many years to come with elderly residents attracted by not only all the usual excellent reasons to move to a retirement village but also the safety and security accorded them from Covid by living in a village.

[Baa_Baa]

Interesting new term I hadn't heard before FONFA, (fear of not finding anything).

I think we're in for a very, very long journey with Covid and all the variants. This is highly likely to drive very strong demand right across this sector for many, many years to come with elderly residents attracted by not only all the usual excellent reasons to move to a retirement village but also the safety and security accorded them from Covid by living in a village.

Whether by good luck or good management (hopefully the later), the overwhelming majority of rest homes and all of the listed RV's avoided a Covid infection cluster, but for the one rest home that didn't, 12 elderly vulnerable people died, being around 50% of the total number of Covid deaths in New Zealand.

[Maverick]

Interesting new term I hadn't heard before FONFA, (fear of not finding anything).

Try this one Beagle....FOMOCA

[Waltzing]

REINZ figures: House sale volumes fall, prices hold steady - NZ Herald (https://www.nzherald.co.nz/business/reinz-figures-house-sale-volumes-fall-prices-hold-steady/EFVDD7YN6DTX24BMR3FRQDKN2I/)

[Beagle]

Try this one Beagle....FOMOCA

Can't quite make it fit but it could be something to do with this
Fear of missing out on massive gains as OCA heads to $2 next year ?
Maybe expressing my own fears lol

[Beagle]

Looks like someone let the cat out of the bag that this one is the cheapest in the sector by far and the whole sector will benefit massively from years of strong tailwinds as risk averse old folks seek the sanctuary of a safe place to ride out the years of covid risks ahead of us.

Just as well I have rerated this to BBB (Beagle been busy buying), opps that's 4 B's :D

[winner69]

Looks like someone let the cat out of the bag that this one is the cheapest in the sector by far and the whole sector will benefit massively from years of strong tailwinds as risk averse old folks seek the sanctuary of a safe place to ride out the years of covid risks ahead of us.

Just as well I have rerated this to BBB (Beagle been busy buying), opps that's 4 B's :D

Time to make the call 'we will never see $1.50 again'

[winner69]

Looks like someone let the cat out of the bag that this one is the cheapest in the sector by far and the whole sector will benefit massively from years of strong tailwinds as risk averse old folks seek the sanctuary of a safe place to ride out the years of covid risks ahead of us.

Just as well I have rerated this to BBB (Beagle been busy buying), opps that's 4 B's :D

Cheap it is …if market saw them as favourable as SUM share price would be about $2.50 (now)

[aquaman]

Looks like someone let the cat out of the bag that this one is the cheapest in the sector by far and the whole sector will benefit massively from years of strong tailwinds as risk averse old folks seek the sanctuary of a safe place to ride out the years of covid risks ahead of us.

Just as well I have rerated this to BBB (Beagle been busy buying), opps that's 4 B's :D

4 Bs

Last time I heard that was when i was a kid and a strap leather hung on the kitchen wall with four big Bs stamped into it, this was known as the "Boisterous Boys Bum Buster" It worked and my brother and i deserved it!

I hope your 4Bs amend this behavior of not rating OCA high enough

[winner69]

Annual increases in property's prices impressive but growth is slowing ….from a gallop to a canter

Latest month 0.9% x 12 = 10.8% annualized. Up 2.4% past 3 months x 4 = 9.6% annualized.

[winner69]

Could be heading to highest close for 5 months ……that’s good recovering that well

Maybe even a new all time high this week

As market wakes up best not to miss out …..get in today

[Beagle]

Arvida currently trading at 1.45 times NTA...seems perfectly reasonable to me and I hold some. Same 1.45 times NTA of $1.20 for OCA would give a share price of $1.74.

[mike2020]

Arvida currently trading at 1.45 times NTA...seems perfectly reasonable to me and I hold some. Same 1.45 times NTA of $1.20 for OCA would give a share price of $1.74.

I did that comparison with SUM and came up with $3.10 (someone said NTA is closer to $1.36 now)

[winner69]

IPO just over 4 years ago at 79 cents …..so about 18% pa return (plus divies)

Consensus view it’s undervalued but past point of inflection and with eps accretive acquisitions and a rerate imminent we should expect at least 30% pa over next 2 years …that’s a share price over 260 as a minimum in 2 years

But if Brett tells a good enough story and delivers on it and the market actually sees OCA is as good as if not better than SUM then 4 bucks it will be.

[Beagle]

All the analysts covering it rate it a BUY. https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

[Ferg]

winner & Beagle - I haven't been around long enough to make this assessment, but with the collective brain power and analysis that occurs here, does ST tend to lead price changes for individual stocks? Or is commentary more a reflection of momentum? In other words, do you find ST comments are able to predict movements, or do they confirm existing trends? Or something else?
Cheers

[Biscuit]

winner & Beagle - I haven't been around long enough to make this assessment, but with the collective brain power and analysis that occurs here, does ST tend to lead price changes for individual stocks? Or is commentary more a reflection of momentum? In other words, do you find ST comments are able to predict movements, or do they confirm existing trends? Or something else?
Cheers

Stick around long enough and you will see there is little correlation. You're better to stick with your shorter-than-average MA plan Ferg.

[Ferg]

Stick around long enough and you will see there is little correlation. You're better to stick with your shorter-than-average MA plan Ferg.
Thanks Biscuit. I was starting to get that sense but I generally don't use TA other than very simplistically to time my buying during what I think are temporary dips.

I have tracked my purchases based on following ST buy recommendations (i.e. "Follow", n = 5), doing the opposite of the ST sell recommendations i.e. buying against the trend ("Contrarian", n = 5) and also those that are unloved by ST and not regularly commented upon where I did my own research ("Independent", n = 10) where n is the number of stock purchases. Neutral is no gain or loss as measured by -2% < x < 2%. Anything over 2% is a win, and anything under -2% is classified as a loss.

The Win/Loss/Neutral results to date are:
Follow = 60%/20%/20% (includes OCA win)
Contrarian = 60%/40%/0%
Independent =80%/10%/10%

The losses are unrealised. I see nothing to convince me these shares are over-valued so I'm willing to see how they play out and they may yet turn to gains.

What I can conclude is that it is a bit of a crap shoot following ST, and I get the best results doing my own research. Although I am happy to admit I have a very small sample of 20. I'm curious to hear others opinions on this, hence the question.

Cheers

[mike2020]

Thanks Biscuit. I was starting to get that sense but I generally don't use TA other than very simplistically to time my buying during what I think are temporary dips.

I have tracked my purchases based on following ST buy recommendations (i.e. "Follow", n = 5), doing the opposite of the ST sell recommendations i.e. buying against the trend ("Contrarian", n = 5) and also those that are unloved by ST and not regularly commented upon where I did my own research ("Independent", n = 10) where n is the number of stock purchases. Neutral is no gain or loss as measured by -2% < x < 2%. Anything over 2% is a win, and anything under -2% is classified as a loss.

The Win/Loss/Neutral results to date are:
Follow = 60%/20%/20% (includes OCA win)
Contrarian = 60%/40%/0%
Independent =80%/10%/10%

The losses are unrealised. I see nothing to convince me these shares are over-valued so I'm willing to see how they play out and they may yet turn to gains.

What I can conclude is that it is a bit of a crap shoot following ST, and I get the best results doing my own research. Although I am happy to admit I have a very small sample of 20. I'm curious to hear others opinions on this, hence the question.

Cheers

I don't see ST as a place to get buy/sell orders, it's just a place to get opinions, information and ideas I may not have come across on my own. The final decision is still independent. Not everyone agrees and that is healthy.

[BlackPeter]

winner & Beagle - I haven't been around long enough to make this assessment, but with the collective brain power and analysis that occurs here, does ST tend to lead price changes for individual stocks? Or is commentary more a reflection of momentum? In other words, do you find ST comments are able to predict movements, or do they confirm existing trends? Or something else?
Cheers

Share price = underlying value + hype (t).

I find that share trader comments are a good gauge for the hype about a stock at a certain point in time (t).

Hard to say, whether share trader comments make (or lead) the hype or just reflect it ... I suppose it will be a bit of both.

[winner69]

Share price = underlying value + hype (t). (BP)

If underlying value is consensus analysts that number than it is 1.68

So with share price is 154 the hype around OCA is negative

Better fix that quick …..a call to action

We need 168 (underlying) plus hype of 30 cents to get close to 2 bucks

So c’mon all ….a bit of hype …and OCA needs to do its bit as well

[850man]

I think the next step is for OCA to make, take their favourable pricing and turn it into sales. SUM did it in the current market inspite of any prevalent doom and gloom housing market messages, OCA your turn now. To quote one of my favorite movie lines "the foreplay is over, it's time to f***"

[BlackPeter]

Share price = underlying value + hype (t). (BP)

If underlying value is consensus analysts that number than it is 1.68

...



I think it is a bit more complicated to get to the fundamentals ... and I must admit that I didn't yet manage to identify what analyst consensus predictions are supposed to represent, other than a medium value of some random numbers :):

Agree however - increasing (positive) hype always helps to push the SP up. Only thing to consider is that hype is always a function of time, i.e. not that useful for long term investors (unless it is currently negative and you want to buy).

Oops - didn't you just show us that hype for OCA is currently negative? So - what am I talking ... should be buying more instead :);

Discl: hold already a (for my portfolio) materially sized parcel;

[winner69]

I think it is a bit more complicated to get to the fundamentals ... and I must admit that I didn't yet manage to identify what analyst consensus predictions are supposed to represent, other than a medium value of some random numbers :):

Agree however - increasing (positive) hype always helps to push the SP up. Only thing to consider is that hype is always a function of time, i.e. not that useful for long term investors (unless it is currently negative and you want to buy).

Oops - didn't you just show us that hype for OCA is currently negative? So - what am I talking ... should be buying more instead :);

Discl: hold already a (for my portfolio) materially sized parcel;

Underlying / fundamental / intrinsic values are very subjective aren’t they BP ….pity it’s not an ‘exact’ science

So in Treasury lingo your formula is thus - Price = best guess as to value +/- hype (t)

[BlackPeter]

Underlying / fundamental / intrinsic values are very subjective aren’t they BP ….pity it’s not an ‘exact’ science

...



Not sure they are subjective, there is just a high level of uncertainty around any attempt to value a security without knowing the future.

Not sure either whether it is a pity its not an exact science. If it would be an exact science, then there would be no point in having markets and there would be nothing for us to banter about ...

Life would be so boring if we would know the future (which would be a requirement for valuations being certain).

Long live the uncertainty ;) !

[Beagle]

winner & Beagle - I haven't been around long enough to make this assessment, but with the collective brain power and analysis that occurs here, does ST tend to lead price changes for individual stocks? Or is commentary more a reflection of momentum? In other words, do you find ST comments are able to predict movements, or do they confirm existing trends? Or something else?
Cheers

In past years the ST "top 5", (the 5 most favored shares by the collective intelligence on here) has well and truly outperformed the NZX50 and done very well indeed compared to the average professional analyst's picks in the annual share picking competitions. This year is the exception, unfortunatly.

You can see how "well" the collective wisdom is doing here at post #107 and 108 and the ones who are spanking the market at post #111
https://www.sharetrader.co.nz/showthread.php?11949-2021-NZX-Stock-Picking-Comp/page6

Based on many years of evidence my conclusion is that the collective wisdom on here is far more often worth listening too than not but definitely DYOR.

[Curly]

Time to make the call 'we will never see $1.50 again'
Maybe tomorrow do you think?

[850man]

Time to make the call 'we will never see $1.50 again'

Well that statement was the kiss of death wasn't it :eek2:

[Bjauck]

I don't see ST as a place to get buy/sell orders, it's just a place to get opinions, information and ideas I may not have come across on my own. The final decision is still independent. Not everyone agrees and that is healthy.
Spot on. Every post should be read with an implied disclaimer DYOR. Circumstances can change right after a post has been made too. I have read information on ST I would never have seen otherwise.

[winner69]

Well that statement was the kiss of death wasn't it :eek2:

Didn’t get to 150

Short term 150 is strong support level…..when punters pack a sad it won’t go below 150

Once it breaks through 160 and goes to new all time highs we’ll be saying ‘we will never see 160 again’

[dompf]

Didn’t get to 150

Short term 150 is strong support level…..when punters pack a sad it won’t go below 150

Once it breaks through 160 and goes to new all time highs we’ll be saying ‘we will never see 160 again’


I like the cut of your jib

[Waltzing]

https://www.stuff.co.nz/business/125796416/tax-on-all-housing-needed-to-fix-distortion-of-social-fabric

[winner69]

https://www.stuff.co.nz/business/125796416/tax-on-all-housing-needed-to-fix-distortion-of-social-fabric

What a load of crap in that article .....our home is a basic human necessity and nothing else

Extract-
"Housing is viewed as a tradeable commodity and store of wealth, rather than a human right or a basic human necessity."

[Beagle]

Idiotic nonsense in my opinion.

[winner69]

Idiotic nonsense in my opinion.


No doubt those academics see you as one of the 'landed gentry'

[Waltzing]

Now i did wonder was the ball that was pounced on a soft core or a hard core ... makes a lot of difference for compression ... the beagle squash's the ball or it shoots off causing the beagle to miss out on pouncing on his target...

[Beagle]

Now i did wonder was the ball that was pounced on a soft core or a hard core ... makes a lot of difference for compression ... the beagle squash's the ball or it shoots off causing the beagle to miss out on pouncing on his target...

Decided not to pounce for now...wait for a possible pullback in HLG. School holidays so Mrs B and I have been spending a bit of time with the grand-puppies. https://www.youtube.com/watch?v=MloZ4ukjAU0

[RTM]

https://www.stuff.co.nz/business/125796416/tax-on-all-housing-needed-to-fix-distortion-of-social-fabric

Thanks for posting the link. She has to sort out the housing mess....even if its not of her making. Its probably the biggest problem facing NZ, especially our youngsters.
She has said No to CGT....will she walk that back ? Probably not.
I guess she could sell this as a not a CGT....?
Measures to date have not significantly affected the market, not long enough yet ? Rising interest rates might i guess.

This is similar (the same? ) as what was proposed by TOP Party I think.
Maybe it might have more legs that we like to think....another question to ask is.....would it in fact work ?
Maybe !

[Dlownz]

That article is actually right on the money.
Its the only way to truly tax people fairly as there are too many loopholes in housing. Tax everyone regardless if its in a trust or not and suddenly its a equal playing field. How many houses sit empty in Aucklsnd due to just landbanking. It would bring houses prices down that would be a fact

[winner69]

https://www.stuff.co.nz/business/125796416/tax-on-all-housing-needed-to-fix-distortion-of-social-fabric

Now you ruined this thread for a few days

[RTM]

That article is actually right on the money.
Its the only way to truly tax people fairly as there are too many loopholes in housing. Tax everyone regardless if its in a trust or not and suddenly its a equal playing field. How many houses sit empty in Aucklsnd due to just landbanking. It would bring houses prices down that would be a fact

Be a boost for the share market I suspect !

[Beagle]

Thanks for posting the link. She has to sort out the housing mess....even if its not of her making. Its probably the biggest problem facing NZ, especially our youngsters.
She has said No to CGT....will she walk that back ? Probably not.
I guess she could sell this as a not a CGT....?
Measures to date have not significantly affected the market, not long enough yet ? Rising interest rates might i guess.

This is similar (the same? ) as what was proposed by TOP Party I think.
Maybe it might have more legs that we like to think....another question to ask is.....would it in fact work ?
Maybe !

Just sit back and watch rising interest rates and a big increase in housing supply have the intended effect in the years ahead.

[Bjauck]

What a load of crap in that article .....our home is a basic human necessity and nothing else

Extract-
"Housing is viewed as a tradeable commodity and store of wealth, rather than a human right or a basic human necessity."
Poor Oceania, again used as the forum to discuss general housing issues…

For those who own multiple properties it may have become an investment commodity. In theory this proposed policy is fair. However in practice, it would be unfair to expect owner-occupied homeowners, who just own their home to house their family, to come up with the readies to pay a tax on annual imputed income when they would not have received any actual income from their home.

If the aim is to prevent the establishment of a landed gentry, It would be more effective to levy estate duties or inheritance tax.

[Beagle]

Now you ruined this thread for a few days

LOL Yeah he has.

[winner69]

Any wealth / death tax fails to address the actual causes of rising inequality: specifically the shortage of housing etc etc

[Greekwatchdog]

They have never fully looked at the "root cause" Supply vs Demand. So few properties on market now especially in Chch. Its all new builds. You have to pay premium price for something that's way over valued or build. Add to that we simply can't build fast enough. This situation hasn't been helped by the low interest rates caused by Covid. My work place is on track to beat biggest Job Acceptances by 30% this month. New Builds everywhere and still can't get enough land consented fast enough..

[Waltzing]

"Decided not to pounce for now..."

what about MHJ ???? stoned dog collars?

90 cents, cheaps a chips?

"stoned" now before anyone mentions drugs its a technical term for putting small glittering jewels on ballroom gowns..very serious business..

"loopholes in housing"

You thought you had seen a lot of tractors on friday...all land , all land bar none..and a full blown inheritance tax.

you can bet your town house and country estate that retirement villages are up for CGT now.

All these tax loop holes are related to OCA and more to SUM as im sure even some labour PM's have shares in their portfolios with retirement shares in them.

[850man]

Any wealth / death tax fails to address the actual causes of rising inequality: specifically the shortage of housing etc etc

Piling on tax won't solve what is essentially a lack of supply situation however the socilaists are unable to do anything else, certainly unable to build more no matter how many smiling promises are made.

[Beagle]

MHJ - Definitely not. I have a very strong preference for HLG and WHS.

[RTM]

Just sit back and watch rising interest rates and a big increase in housing supply have the intended effect in the years ahead.

I am hoping you are right....but there will be significant pain going along this path.
The pace of interest rate rise,,,as a depositor...seems glacial. But maybe even the threat of them going up might do the job.

[James108]

Piling on tax won't solve what is essentially a lack of supply situation however the socilaists are unable to do anything else, certainly unable to build more no matter how many smiling promises are made.

And yet houses are now being built at the fastest rate since the 70’s.

Not saying that is intentional by either labour or national (the Auckland unitary plan is the biggest facilitator in my view) but certainly supply has been increasing at a faster rate under the “socialists”.

house prices up 30% p.a with record building and very low migration. “Essentially a lack of supply problem” grab me a tui. The main “supply” issue here is one of money supply I.e too much of it from rbnz.

Agree with beagle, interest rates tightening, migration near 0, record house building, tax on investors. Outlook: certainly not bullish for house prices inflation (who is bold enough to call a decline? Not me).

[tommy_d]

https://www.stuff.co.nz/business/125796416/tax-on-all-housing-needed-to-fix-distortion-of-social-fabric

isn't that a TOP policy^
sounds good to me, suspect will be be reasonably unpopular here. If someone has over a million in equity on property owned and doesn't want to pay tax on that equity, mortgage it to bring it under a million and invest elsewhere at greater than mortgage interest rates and you're fine

edit: i remember telling a mate not that long ago that i was hammering my mortgage with voluntary repayments - he looked at me like i was stupid and said something like "are you really so useless that you can't make 3% returns somewhere?"

[Zaphod]

The article states "Housing is viewed as a tradeable commodity and store of wealth, rather than a human right or a basic human necessity."

Housing, presumably ownership thereof given the context, is a human right? Really?

Anyway, I know that is going to get this thread off topic very quickly, so I'll scurry back to my rock.

[Beagle]

Suggest we get back to discussing OCA in this thread tomorrow. Some extremist socialist conceptual ideology deserves its own thread or better still, to be ignored.

[winner69]

Decided not to pounce for now...wait for a possible pullback in HLG. School holidays so Mrs B and I have been spending a bit of time with the grand-puppies. https://www.youtube.com/watch?v=MloZ4ukjAU0

You should look at Michael Hill ….better to use your HLG top up cash there …higher returns

[winner69]

Head of Property and Development gone …..left immediately

Looking for somebody with a ‘broader set of skills’. …hmmm

No thank you or anything Nice said …prob gone to join Earl

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/376301/351081.pdf

[850man]

Head of Property and Development gone …..left immediately

Looking for somebody with a ‘broader set of skills’. …hmmm

No thank you or anything Nice said …prob gone to join Earl

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/376301/351081.pdf

Defo going to a competitor with the "leaving immediately" inclusion

[winner69]

Stockton been in that role for 7 years …..and getting on in years as well

Probably past his use by date so good for Oceania to get some young blood with a ‘broader range of skills’ to progress things

Maybe another couple of management to go?

[Beagle]

Stockton been in that role for 7 years …..and getting on in years as well

Probably past his use by date so good for Oceania to get some young blood with a ‘broader range of skills’ to progress things

Maybe another couple of management to go?

Maybe Brent stamping his mark on the company and getting rid of some dead wood ? The tone of the NZX release was pretty scathing of his "abilities". Not very common to see an NZX release that terse.
Maybe going to join Earl as you suggested earlier. Must admit I am a little bit underwhelmed with their targeted build rate this year. Hope the bottleneck is planning issues and we can look forward to 250+ units next year. Now we're past the point of inflection the key is to get real momentum going and I think that's the overriding tone of the NZX release so its all good, no worries.

[winner69]

Maybe Brent stamping his mark on the company and getting rid of some dead wood ? The tone of the NZX release was pretty scathing of his "abilities". Not very common to see an NZX release that terse.

More than terse …..cruel

Think Mav once said he felt he was good guy ….might be mistaken

[Beagle]

Must admit it did look pretty "harsh", perhaps even "bitter" which perhaps adds weight to your earlier theory he went to MET.

[artemis]

Must admit it did look pretty "harsh", perhaps even "bitter" which perhaps adds weight to your earlier theory he went to MET.

Sounds like gone to a competitor, but whatever the reason the tone of the announcement was quite unnecessary.

[justakiwi]

Any chance he wasn't performing and was asked to resign?


Sounds like gone to a competitor, but whatever the reason the tone of the announcement was quite unnecessary.

[850man]

Market reaction to the news seems a bit adverse - down 2% with 600K plus shares traded

[Beagle]

Sounds like gone to a competitor, but whatever the reason the tone of the announcement was quite unnecessary.
Don't disagree but somewhat interestingly the NZX announcement directs any enquiries to Kelly Bennett of the One Plus One Group, an external communications company. https://www.oneplusonegroup.co.nz/
Shows management don't want to talk about this which adds weight to the theory of a bitter acrimonious exit, possibly to MET.


Any chance he wasn't performing and was asked to resign?
Real chance of that I would say based on the tone of the announcement. Must admit I can't ever recall an announcement from another company critiquing a former managers capabilities in that way before. In a nutshell a thinly disguised, "you're incompetent" compared to what we are looking for. Very abrasive stuff. Deliberately so or mishandled by the external communications company ?

Market reaction and volume is interesting.

Any theories on this Maverick ?

[biker]

Quite an unusual notice - no spin.
Sounds like he’s transgressed and been sacked.

[bottomfeeder]

Quite an unusual notice - no spin.
Sounds like he’s transgressed and been sacked.

Must be going to a competitor.

[allfromacell]

Must be going to a competitor.

Going to a the competition doesn’t justify such an announcement, it’s in his rights and pair play if the competition is offering a better package. This definitely reads of bad blood and I suspect him and Brent didn’t get on, perhaps a messy departure. 

Some spin is almost always justified, Brent should know this as an ex-investment banker and hopefully he learns for next time. The market doesn’t want to see this type of vibe coming from companies.

[winner69]

Mark had 35 years of industry experience And been with Oceania for 7 years. Apparently been involved in care sector since 2006.

Pretty cruel announcement from Oceania. An old bugger may feel gutted but if joining Earl probably having a good laugh.

Out the door, veiled comment too old and stuck in his ways etc etc etc

AND HIS PHOTO ALREADY TAKEN DOWN FROM “OUR TEAM” ON OCEANIA WEBSITE

[dobby41]

AND HIS PHOTO ALREADY TAKEN DOWN FROM “OUR TEAM” ON OCEANIA WEBSITE

As it should have been no matter the circumstances.

[Curly]

Blimp in the radar. Good opportunity to buy sub $1.50. Expect price to rebound quickly

[Greekwatchdog]

I have no issue with how this message was delivered. Its obvious whats happened so lets move on. The share price reaction is quite funny. Must be some drunk monkies still running around in the trees. Good riddance to them too.

[BlackPeter]

I have no issue with how this message was delivered. Its obvious whats happened so lets move on. The share price reaction is quite funny. Must be some drunk monkies still running around in the trees. Good riddance to them too.

Not sure I would see it that way.

I guess either Mark was inept (as they seem to say), but then it is a worry that they put him into this job in the first place and left him there for 7 years ... or alternatively Mark is capable - and then it is a problem how they treat good people.

Neither of these scenarios make board and (in the second case) CEO look good - and no matter which scenario it was, the way the communication came across is highly inappropriate and not helpful at all.

Board and CEO with poor communication skills do reduce the share price - this is all the market is telling us.

But maybe the new CEO knows that and just wants to buy some more cheap shares :);?

[winner69]

Hope they don’t sack the Head Nurse next …that would be a bad sign

Whatever a refreshed younger team might actually get Oceania financial performance up ….remember EPS is still less than at IPO

[alokdhir]

All this has helped me get in @ 1.46 ...small start ...As want to participate in the consensus stocks of the forum ...:D

[Beagle]

Hope they don’t sack the Head Nurse next …that would be a bad sign

Whatever a refreshed younger team might actually get Oceania financial performance up ….remember EPS is still less than at IPO

Depends how you measure eps. Accounts are such a dog's breakfast compared to any other company in this sector there's a fair argument for saying earnings are closing nav - opening nav plus dividends paid i.e. comprehensive income. PE is dirt cheap when one uses creative accounting to measure the earnings ;)

[winner69]

Depends how you measure eps. Accounts are such a dog's breakfast compared to any other company in this sector there's a fair argument for saying earnings are closing nav - opening nav plus dividends paid i.e. comprehensive income. PE is dirt cheap when one uses creative accounting to measure the earnings ;)

I think this is what you mean -- Book Value (almost NTA) per share growth 12% pa

And they've just past the inflection point

All good going forward --- dead wood removed and fresh new younger management team will see to that

[Beagle]

Pretty good looking graph considering most of the time they we're working their way up to the point of inflection.

Definitely bad blood in that NZX release today. Probably was invited to have lunch with Earl and decided to jump ship.

[Leftfield]

Gotta love the old 'point of inflection.'

Almost as good as 'Game Changer.'

Thanks for the chart Winner. Good to note my av holding SP below your BV. Welcome to the party alokdhir.

[Bjauck]

Mark had 35 years of industry experience And been with Oceania for 7 years. Apparently been involved in care sector since 2006.

Pretty cruel announcement from Oceania. An old bugger may feel gutted but if joining Earl probably having a good laugh.

Out the door, veiled comment too old and stuck in his ways etc etc etc

AND HIS PHOTO ALREADY TAKEN DOWN FROM “OUR TEAM” ON OCEANIA WEBSITE

Was he the codger responsible for getting Oceania to buy the Waimarie St Heliers site? Arguably that is the jewel of all retirement village locations.

[850man]

2% drop and 2.3M shares traded - yep today's news of Stockton's departure didn't go down well at all with OCA holders :(

[winner69]

2% drop and 2.3M shares traded - yep today's news of Stockton's departure didn't go down well at all with OCA holders :(

Those who sold out will regret it I reckon

[Curly]

With next result not due till late Jan 2022, what likely event can occur to drive SP up to and through the $1.60s. Perhaps a new acquisition for the new CEO to cut his teeth on? Otherwise it seems rather “ho hum” running up to next result.

[winner69]

With next result not due till late Jan 2022, what likely event can occur to drive SP up to and through the $1.60s. Perhaps a new acquisition for the new CEO to cut his teeth on? Otherwise it seems rather “ho hum” running up to next result.

Half year ends September ….interim due late November

[Joh13]

Just had a look at how many shares Mark Stockton has/had as of the 6th of April 2021... 1,988,959 shares. Cant see any other transactions after then. So I assume he will be dumping them for a while, maybe thats why there is a bit of selling pressure on the SP at the moment and some largish sell orders. Or maybe he'll hold???

[winner69]

Ben Graham pretty clever guy and much revered. Random thought from his book he wrote with Mr Dodd -

“……..making money in the stock market is now the easiest thing in the world. It was only necessary to buy ‘good’ stocks, regardless of price, and then to let nature take her upward course. The results of such a doctrine could not fail to be tragic.”

[percy]

Ben Graham pretty clever guy and much revered. Random thought from his book he wrote with Mr Dodd -

“……..making money in the stock market is now the easiest thing in the world. It was only necessary to buy ‘good’ stocks, regardless of price, and then to let nature take her upward course. The results of such a doctrine could not fail to be tragic.”

The More Things Change, the More They Remain the Same,

[winner69]

The More Things Change, the More They Remain the Same,


I think Ben would agree with Jean-Baptiste

[Bjauck]

The More Things Change, the More They Remain the Same, Interest rates fall: average asset prices increase. That is courtesy of government and macro circumstances. Kiwi households have been making far more money (untaxed) from their houses than from employment/self-employment (taxed). Of course this falling interest rate windfall money from the houses accrues to landlords in many cases.

[Maverick]

I've recently taken a deliberate step away from reading any ST in order to do some personal thinking and focus about OCA, other NZX companies , inflation, housing and drivers of the massive NZSX bull run and basically where I think things may go from here. All done without the distractions (usually of an immediate nature) of daily forum chat. It has been a healthy exercise.

In particular I wanted to re-evaluate OCA to see if any “rose coloured glasses” stuff has crept in. Certainly for my portfolio, as I'm ridiculously overweight from a conventional view point. As part of that exercise I've made a list of what has actually changed in 3 years which some will find of interest.

Good stuff.
-MAQ has long sold out and the long tail of loose shares squared away.
-NAV had risen from $1.04 to $1.28
-Embedded value increased from $170m to $259m
-Proven desire to expand already demonstrated by 2 large/quality acquisitions.
-A bedded down capital raise of circa $100m partially for future acquisition purposes.
-NZ has proven an increasing appetite for these villages from observing all sector participants' results. Demand seems even stronger than anticipated.
-NZ HPI has risen dramatically over 3 years, $$$ tons yet to wash through to the bottom line.
-Covid risk has arrived, been well controlled and now fading rapidly.
-OCA Cares suite model has been proven now with waiting lists after a few years of operation per delivery and is now de-risked. Resale prices are now increasing disproportionately faster.
-Rates and prices of high end apartment new sales are now well established and proven.
-Deconstruction of existing sites where revenue is lost to build new care suite wings at the loss of existing business are now all complete. All future caresuite builds will be non-disruptive.
-Waimarie, arguably NZs most stunning site, has been consented and construction is well underway.
-All deliveries have been on time and on budget, without missing a single deadline.
-All 4 Analysts now have a good handle on the company and all projecting circa 20% YOY underlying growth from FY21.
-All 4 analysts are recommending a “buy”. It is rare that all 4 agree simultaneously on a stock, I do not currently know of any others.
-We have 4 years of historical data now which paints a clearer picture and patterns are becoming quite visible.
-Directors continue to buy up truck loads of shares whenever they are permitted..

Bad stuff.
Underlying profit has gone nowhere for 4 years in a row.
Build rates have only averaged 222 units p/a.

Neutral.
-Change of balance date
-lost Earl but offset by gaining Brent as CEO (Actually slightly positive for this chapter IMO).
-Staff costs are increasing but are offset with increased occupancy rates and DHB pay rises.
-Staff are getting harder to find but this is temporary.

In summary;
From this list we have a long and fabulous list of achievements offset by one minor issue …..NO UNDERLYING PROFIT GROWTH IN 4 YEARS !(despite growth in assets and future payments).
The issue of only 222 annual new builds is likely to ramp up IMO as land has been cleared for potential ramped up development. Its no real biggie anyway if they don't.

The value one chooses to place on the company comes squarely down to growth expectations of the company, at this point it is subjective as it is beyond most people's available time to calculate accurately.
Historical evidence says there is no growth on the bottom line. I say from my exhaustive spreadsheets that I can clearly see very solid growth within the numbers coming,( my numbers for FY2021 were finally proven accurate after some previous mistakes always resulting in more lessons learned over the 3 years) the 4 current analysts say it's coming too. We all agree between us that the underlying profit growth rate of circa 20% p/a starting this FY, already underway, but at this point it's all just theory.

I have concluded that I'm not mad, nor is Greg T, to hold on to such much of this stock. For me it remains a very safe and high conviction stock and as a result will not be selling down any. I maintain my early SP target of about $1.85-$1.90 in 10 months , just after the FY22 result.

With only 3.5 months to go for the next HY result it's not long for one to wait if they just want proof of these foretold profit rises first as I and the analysts are saying they will. The downside will possibly only be an extra 10-15 cent purchase cost to the share price.

[forest]

Great post Maverick, thanks for sharing.

[thegreatestben]

Excellent summary, I also feel there is more good than bad with OCA. Sticking with it.

[Waltzing]

Property prices for land appear to be going sky high near beaches in population centres. Those luxury suites could start going for even bigger dollars and who ever has got the land bank will benefit.

SUM took off and maybe they have locations else these retirement companies will be buying on the fringes and no views of those blue waves.

Does OCA have any sand to sea locations in the bank because a section in point chev just went sky high.

Everyone will have seen this even if your following the 10 year early but most NZ will be looking at this.

https://www.nzherald.co.nz/nz/auckland-house-prices-two-bedroom-point-chevalier-home-sells-for-double-its-cv/CT7ABBU7AHYJK32T6LEIHNPJZ4/

[Bjauck]

Thanks maverick. I guess patience is needed with underlying profit - the Covid effect may have impacted Oceania more than some others?

[percy]

Great post Maverick, thanks for sharing.

And thanks from me too.Excellent post.

[Beau]

Thanks for putting in your time and sharing Maverick

[Greekwatchdog]

Thanks Maverick for your extensive time spent reviewing OCA and sharing your thoughts.

[Curly]

Ditto Mav man. Most helpful post.

[peat]

re-evaluate OCA
ridiculously overweight


certainly wise to take good care of the basket

[Curly]

Meanwhile director continuing to buy shares. Got to be a good sign.
SP been sub $1.50 for to long. Some upward movement in near future one hopes.

[winner69]

Meanwhile director continuing to buy shares. Got to be a good sign.
SP been sub $1.50 for to long. Some upward movement in near future one hopes.

Must have been his turn to prop the share price up

[alokdhir]

Must have been his turn to prop the share price up

U really have a great sense of humour buddy ...:t_up:

[winner69]

U really have a great sense of humour buddy ...:t_up:

Didn’t exactly break the bank in buying a few more did he,

Whatever Alan is a good guy …..hold him in high regard.

[winner69]

Thanks for thoughts Mav

You say they lost Earl but offset by gaining Brent as CEO (Actually slightly positive for this chapter IMO).

What you think if a Senior Management Team who except for the Head Nurse have only been in their roles for a few months.

Some have been in the organisation for a while but is their a ‘risk’ with an inexperienced senior team?

[Beagle]

Good post Mav and good to see you doing some soul searching and reporting back.
Any thoughts on Mark Stockton going / being pushed ?

I have come around to thinking that the "Total Comprehensive Earnings" best measures the value accretion to this company from one year to the next and I see OCA making steady progress in the years ahead and its trading at the lowest premium to NTA of any in this industry so is the value pick of this sector.

I'm a value investor so this will do me for most of my stake in this sector.

I'm not going to get too hung up on underlying earnings in the future with this one.

[850man]

Meanwhile director continuing to buy shares. Got to be a good sign.
SP been sub $1.50 for to long. Some upward movement in near future one hopes.

Stockton had 3.6M shares back in April. With what seems like an unaimiable exit, I wonder what he's going to do with them?

If he's gone to a competing company keeping a ton of them would be very odd but then selling if he's aware OCA have a good result on it's way would be shooting oneself in the foot.

I'm guessing it's as much of a worry to OCA exec as it is to us mere investors - any thoughts on how this would normally be handled?

[Maverick]

[QUOTE=Beagle;897831]Good post Mav and good to see you doing some soul searching and reporting back.
Any thoughts on Mark Stockton going / being pushed ?[/I QUOTE]

Hey Beagle and Winner,
im not to in the slightest bit concernerend about any potential lack of experience amongst the top brass, frankly , I think they have plenty of experience and specific skills to keep the momentum. In small business I do know that an amount of customer and staff churn is better for the company overall than the same old same old. Don't see why big business is any different.

I rate them all as first class. I was sad to see Earl go especially as he was on the cusp of good results at last but everybody leaves at some point. I'm sure working off the public radar is a better place for anyone to be.

That takes us to Mark, he obviously left without a goodbye party. The market notice was very much of the " march to the front door with your box of family photos" variety.

This is generally only done when someone goes to the opposition in the same industry.

On LinkedIn he is mates with Earl ( and only Earl). He notes an exciting new opportunity he will fill us in on later.

I worked out his OCA holding around 1.3 milllion, he had reduced about .5m earlier this year. This coincidentally ( ?) is about what was sold extra last Tuesday in an apparent hurry (IMO).

After watching him get grilled multiple times about where he gets his steel from (NZ or china)at the ASM was painful, I felt for him . If I was mates with Earl and had the chance to not be hassled by Joe public then jumping ships would have some appeal. Crickey , I bet he got a pay rise too!

He was and continues to be held in high regard which eliminates anything dodgy or incompetent.

Joining the dots it seems pretty clear where he's shifted to and I'm sure we will hear in due course. I also suspect he is no longer a share holder.

I have no concern about his departure nor OCA s ability to replace him with someone of at least the same calibre.

It did seem like OCA went out of their way though not to say anything nice about him but I suspect that's how the new "private equity " CEO has been trained.( that bit is just my opinion though and not meant as disrespect to Brent)

[Beagle]

"On LinkedIn he is mates with Earl ( and only Earl). He notes an exciting new opportunity he will fill us in on later" Maverick.

You did well to sniff that out. Good work. Earl's a very likeable chap and I am sure he'd make an excellent work colleague and / or friend so i think its clear where Mark has gone or will be going.

As I've mentioned several times I have a real liking for ex investment bankers running retirement companies. Witness how well SUM have done under Julian's leadership, certainly a lot better than when Norah was running the show.

I think to be a really successful CEO you do need to have a "hard commercial" side to you so I have no qualms about Brent now being CEO, (you have to be extremely bright to make it to being a director of investment banking at Jarden, arguably N.Z.'s preeminent investment banking firm) but I also wish Earl well for the future...a very nice guy.

[Maverick]

Now we have the official number of shares Mark owns.
He had almost 2million and has sold down 13% over the last week.

Wonder if he`ll sell the lot?

[850man]

Now we have the official number of shares Mark owns.
He had almost 2million and has sold down 13% over the last week.

Wonder if he`ll sell the lot?

Will be an odd situation if he's working for the competition but is still retaining a sizeable holding in OCA

[Mudfish]

Will be an odd situation if he's working for the competition but is still retaining a sizeable holding in OCA

If Mark does retain a descent amount I would take that as, though he's followed Earl to the dark side, he still really believes in where OCA is heading. That's good news for us. If Mark sells, and this this seems a logical move, nothing really can be read into it all. It will be interesting to keep an eye on how this develops.

[bottomfeeder]

Will be an odd situation if he's working for the competition but is still retaining a sizeable holding in OCA

Perhaps he is waiting for the takeover at $2-00.

[850man]

Perhaps he is waiting for the takeover at $2-00.

He obviously has a whole lot of inside information that will be guiding his next move and he won't be shooting himself in the foot on a principle

[bottomfeeder]

He obviously has a whole lot of inside information that will be guiding his next move and he won't be shooting himself in the foot on a principle

There must be restrictions on how many he can bring to market over a period of time.

[Beagle]

Now we have the official number of shares Mark owns.
He had almost 2million and has sold down 13% over the last week.

Wonder if he`ll sell the lot?

I think you know the answer to that.

[Ggcc]

I guess we will see some downward pressure in the short term while Mark Stockton might continue his selling. Plus others might follow his lead

[winner69]

Time to make the call 'we will never see $1.50 again'

Shouldn't said that less than a month ago

Hope $1.40 holds

[Curly]

Cheers winner, not unusual for Mr Mkt to move in opposite direction than one had expected. Some good news come Sept maybe to push through the $1.50s again.

[dompf]

Shouldn't said that less than a month ago

Hope $1.40 holds

Slipping back a lot from last month from almost ATH - market consensus still has this @buy 1.68$ average on 4 ratings per market screener. But you wouldnt think that watching SP action over the last month slip back.

[davflaws]

Slipping back a lot from last month from almost ATH - market consensus still has this @buy 1.68$ average on 4 ratings per market screener. But you wouldnt think that watching SP action over the last month slip back.

I am consoling myself with the hope that the current depression in the SP is caused by Mark Stockton's big parcel hanging about. I don't have the knowledge or skills to research that. I hope someone else does.

[daveypnz]

Just above both the 100 & 200 day moving average, I'm in.

[bottomfeeder]

I am consoling myself with the hope that the current depression in the SP is caused by Mark Stockton's big parcel hanging about. I don't have the knowledge or skills to research that. I hope someone else does.

Have to be, hurry up mark put them all on. Maybe his move is doing what they want, bring the price down when the exec sells his shares.

[winner69]

Just above both the 100 & 200 day moving average, I'm in.

Hopefully they bounce off both

Not good if they don’t the TA people would say

[Maverick]

I am consoling myself with the hope that the current depression in the SP is caused by Mark Stockton's big parcel hanging about. I don't have the knowledge or skills to research that. I hope someone else does.

I guess DavF that's what we are all wondering.
I'm not sure if he has to even notify the NZSX of holding shifts anymore now he's left his position and not a substantial holder.

The biggest short term threat to the whole sector right now has shifted to now be a combo of Covid and construction costs and supplies. These issues should affect all the players equally.

So looking at others, let's just check how they are faring from their recent months of SP highs (or in RYM case , new base level.)
RYM +2.2%
SUM -2.3%
ARV -2.8%
OCA -6.5%

Looking at the tiny buy parcels lined up it seems to me someone/s has placed a big sell order off market with the brokers soaking up the buyers before they get to our public market. Then they are all periodically processed in off market lump sums, usually in the later afternoon just as it is doing today. Just looks like the buyers aren't making it to market to me creating a buyers imbalance.

So logically for me , yes, Mark is highly likely to be continuing the pattern of selling as he has already started, (Earl hasn't to my knowledge but , as with Mark, I don't even know if he has to notify the nzsx anymore).

OCA is currently the SP biggest loser and I don't see any logical reason why it should stay in the dog box once the selling has been satisfied.

[winner69]

Mav … Some companies say officers etc who leave have to disclose buys/sells up to six months after leaving.

Maybe a NZX requirement as well

[Beagle]

I guess DavF that's what we are all wondering.
I'm not sure if he has to even notify the NZSX of holding shifts anymore now he's left his position and not a substantial holder.

The biggest short term threat to the whole sector right now has shifted to now be a combo of Covid and construction costs and supplies. These issues should affect all the players equally.

So looking at others, let's just check how they are faring from their recent months of SP highs (or in RYM case , new base level.)
RYM +2.2%
SUM -2.3%
ARV -2.8%
OCA -6.5%

Looking at the tiny buy parcels lined up it seems to me someone/s has placed a big sell order off market with the brokers soaking up the buyers before they get to our public market. Then they are all periodically processed in off market lump sums, usually in the later afternoon just as it is doing today. Just looks like the buyers aren't making it to market to me creating a buyers imbalance.

So logically for me , yes, Mark is highly likely to be continuing the pattern of selling as he has already started, (Earl hasn't to my knowledge but , as with Mark, I don't even know if he has to notify the nzsx anymore).

OCA is currently the SP biggest loser and I don't see any logical reason why it should stay in the dog box once the selling has been satisfied.



I believe OCA use fixed price construction contracts with well respected external parties so I would think they are least affected by the rising costs of raw materials.
To me, the biggest apparent risk is that OCA do not price their units appropriately. We are in a VERY VERY serious housing crisis and OCA management should have the upmost confidence that what they are suppling is for filling a GREAT NEED.

I think OCA need to take a much more "commercial" approach to pricing their units that fully encapsulates the real value of what they are supplying being ever mindful that those selling their homes are getting record prices for them and are therefore extremely well positioned to pay a proper price for their new unit.

[winner69]

Fixed price construction contracts often lead to the demise of the contractor …..esp in times of fast rising costs

Maybe Oceania are showing some leniency in this regard

[Beau]

NZX you must disclose the fact within 5 trading days and required for six months after a person ceases to be a director or officer.

[Baa_Baa]

So logically for me , yes, Mark is highly likely to be continuing the pattern of selling as he has already started, (Earl hasn't to my knowledge but , as with Mark, I don't even know if he has to notify the nzsx anymore).



Although it is not known to all and sundry whether Mark is indeed selling down his shareholding, his position falls under 'Restricted Persons" definition within their policy 'Trading in Company Securities'.

There appears to be no specific restriction on departed employees or Directors - except - where they "remain in possession of Material Information".

I would think that Mark certainly does "remain in possession of Material Information", in which case technically he would be restricted from selling under the policy, though for how long is also unknown.

Notwithstanding other Insider Trading laws, it is possible that Mark 'applied' to the Board / CEO via the 'Request for consent to Trade in Relevant Securities' and was deemed Ok to sell his shareholding, despite possessing 'Material Information'.

So now that's clear, it's all still very unclear, whether it's Mark dropping in the 4-500k shares trades (two today so far). If it was though, at that rate he would be gone from the register fairly soon.

[Maverick]

Thanks for the replies guys, appreciate it.

So what I make of your info; because Mark has sold shares lately and notified the NZX then he must have permission to do so but must also notify us all within 5 days.
Todays parcels are rather large so if it is our man then we should know by the weekend eh? (see how I used your word there Winner..."gee I crack myself up")

Either way , whoever is selling seems to have created a decent dip in the SP and once he abates then the fresh buy orders making it to market will cut through those tiny sellers lined up like "a knife through hot butter."

All good fun to watch the weekly games with absolutely no intention of playing.

[Valiant]

OCA are only protected from market and material escalation from the signing date of their construction contracts. They've got a substantial pipeline of building works over many years and no Contractor is out there to make a loss, you best believe they are passing on material price increases to OCA.

[Ggcc]

OCA are only protected from market and material escalation from the signing date of their construction contracts. They've got a substantial pipeline of building works over many years and no Contractor is out there to make a loss, you best believe they are passing on material price increases to OCA.
And OCA should pass onto end user. That makes business sense

[Baa_Baa]

So now that's clear, it's all still very unclear, whether it's Mark dropping in the 4-500k shares trades (two today so far). If it was though, at that rate he would be gone from the register fairly soon.

Plus the 1 million shares at 4:35pm. Don't recall seeing them in the depth either.

[Beagle]

Very good volume today. Makes you wonder if Stockdon's stock is gone and its onward and upward again from here. Might give that upward trend a bit of a help along tomorrow. Shares look pretty cheap to me relative to OCA's peer group.

[Valiant]

And OCA should pass onto end user. That makes business sense

Yes I agree, to the extent that it makes good business sense

[Baa_Baa]

Very good volume today. Makes you wonder if Stockdon's stock is gone and its onward and upward again from here. Might give that upward trend a bit of a help along tomorrow. Shares look pretty cheap to me relative to OCA's peer group.

Yes, almost 2.5m traded today, as far as I can tell almost 2m of that wasn't 'on market', well above ~700k average, and a classic 100 EMA look-through support, and close above. Nice. If it continues a bounce tomorrow it will still be within a reasonably long /medium term channel up-trend, just.

[Beagle]

Yes, almost 2.5m traded today, as far as I can tell almost 2m of that wasn't 'on market', well above ~700k average, and a classic 100 EMA look-through support, and close above. Nice. If it continues a bounce tomorrow it will still be within a reasonably long /medium term channel up-trend, just.

Nice observations, thanks. Another 245,000 crossed @ $1.46 after market close for total volume of 2,732,702 shares. (About 3 times the average volume I think). Feels like we're at a good juncture for a top-up.

[Baa_Baa]

Nice observations, thanks. Another 245,000 crossed @ $1.46 after market close for total volume of 2,732,702 shares. (About 3 times the average volume I think). Feels like we're at a good juncture for a top-up.

No worries, I was thinking the same. Might do the amateur hour thing and sit in the bid tomorrow at open, see how that goes. Better not check the portfolio weighting, might chicken out.

[Beagle]

https://www.nzherald.co.nz/business/nzs-highest-priced-retirement-village-licences-3m-4munit-sales-at-new-project/DVNEZFAY3ARH3NR7ZVPSDSZXAM/ Paywalled
Retirement village apartment licences set $3m-$4m price records.

I really hope Brent is taking notes.

[dobby41]

https://www.nzherald.co.nz/business/nzs-highest-priced-retirement-village-licences-3m-4munit-sales-at-new-project/DVNEZFAY3ARH3NR7ZVPSDSZXAM/ Paywalled
Retirement village apartment licences set $3m-$4m price records.

I really hope Brent is taking notes.

With a 30% deferred maintenance fee.
A bit out of my range.

[winner69]

Property market still robust

Prices still going up

Good for this sector …more so for the likes of SUM and RYM than OCA

July report

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Residential/July/REINZ%20Monthly%20Property%20Report%20-%20July%202021.pdf

[Beagle]

Property market still robust

Prices still going up

Good for this sector …more so for the likes of SUM and RYM than OCA

July report

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Residential/July/REINZ%20Monthly%20Property%20Report%20-%20July%202021.pdf

Thanks. Looks very strong to me. Consumer confidence waning in Australia though https://thebull.com.au/lockdowns-hit-consumer-confidence-and-home-sales/?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+12 +August+2021 so maybe SUM and RYM will feel it a bit with their Australian operations ?
Hold OCA and a modest stake in ARV. (Wouldn't mind some SUM back in my portfolio at some stage soon).

[dabsman]

You waiting for SUM to report Beagle?

[Beagle]

You waiting for SUM to report Beagle?

Not sure what I am waiting for to be completely honest about it. My own SUM journey is part of the answer. Selling pre- covid very early in 2020 at $9 wasn't a bad move at the time. She's up 46% since then and I'm "sort of" okay with that on some grounds but certainly earnings are not up 46%. I should have bought back in when it dipped under NTA in the middle of the Covid crisis last year but ...alas....its easy with hindsight !!

I suppose I shouldn't be too hard on myself, I did lay into OCA good and proper in the low 70 cent range last year and its more than doubled since then.

SUM = Good company, good prospects, well managed, forward PE in the early 20's which is okay, great land bank...new CEO is a bright guy....

I just feel OCA has better capital appreciation prospects but maybe I am wrong and SUM's very lite level care model is better. Hard to say....time will tell I guess.

P.S. A smart man hedges his bets. Finally got a few SUM back in the fold this afternoon. (Thanks for your question).

[winner69]

Wonder if our Brent is an empathetic leader …..because leading with empathy boosts the bottom line.

I understand Earl lead with empathy

https://businessdesk.co.nz/article/the-life/power-of-good-how-empathetic-leadership-boosts-the-bottom-line
Might be paywalled

[winner69]

Beagle put all this another thread. Deserves to be here.


Good work Winner, many thanks. If we adjust returns for the premiums to NTA though....

ARV 9% / 1.2 = 7.5% per annum + 4% estimated dividend yield = adjusted gains as a percentage of the share price paid plus dividend yield = 11.5% per annum value accretion on capital invested
RYM 16% / 2.5 = 6.4% per annum + 2% estimated dividend yield = adjusted gains as a percentage of the share price paid plus dividend yield = 8.4% per annum value accretion on capital invested
SUM 26% / 2.2 = 11.8% per annum + 2% estimated dividend yield = adjusted gains as a percentage of the share price paid plus dividend yield = 13.8% per annum value accretion on capital invested
OCA 13% / 1.2 = 10.83% per annum + 4% estimated dividend yield = adjusted gains as a percentage of the share price paid plus dividend yield = 14.83% per annum value accretion on capital invested

If one is measuring total comprehensive income and using total NTA gains, realized (AKA underlying profit) and unrealized plus dividends paid as their yardstick of how much value accretion a company provides then the premium one pays relative to NTA is a vital factor in determining total value accretion as a percentage of the share price paid for each company

I would argue SUM's premium is therefore worth it, whereas RYM's premium to NTA means people are paying over the odds for this sector for the value accretion they receive.

I think OCA have done extremely well considering for most of that time they have been behind the curve with overhauling their business model.

Feels good to have some SUM back in my portfolio. Might add sum more.



Yes it certainly does shine the spotlight on them, especially considering they were carrying a lot of extra cost while they demolished old facilities and rebuilt. In my opinion this highlights the lack of understanding of their financial statements. Past the point of inflection is one thing but the big gains from their redevelopment program start 2-3 years down the track and continue to build from there. I suspect Maverick is onto something with his huge stake and will do incredibly well in the long term.

SUM have done very well too, especially for those that bought at cheaper prices. Vast land bank and well proven business model.

[850man]

Stockton continues to sell http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/377420/352367.pdf

[Joh13]

It’s going to be a while yet before he is able to fully sell down, if that’s his plan. That coupled with a few regional lockdowns may provide an opportunity to buy closer to NAV of $1.28

[RTM]

It’s going to be a while yet before he is able to fully sell down, if that’s his plan. That coupled with a few regional lockdowns may provide an opportunity to buy closer to NAV of $1.28

i wonder what % of people in retirement villages / rest homes have been vaccinated ?
Anyone have a perspective on this ? Has the potential to be pretty high I think,

[justakiwi]

Ours is only a small rest home, but out of 30 residents, all but 3 have been fully vaccinated. The other three had health related reasons for choosing not to have it. One thing to remember though, is that some rest home residents will have an activated POA, so the decision will be made for them (and not necessarily in consultation with). My own mother falls into this category sadly. In a rest home with Alzheimers, but my sister refuses to let her have it. I 100% disagree with her decision, but there is literally nothing I can do. She has POA.


i wonder what % of people in retirement villages / rest homes have been vaccinated ?
Anyone have a perspective on this ? Has the potential to be pretty high I think,

[davflaws]

My own mother falls into this category sadly. In a rest home with Alzheimers, but my sister refuses to let her have it. I 100% disagree with her decision, but there is literally nothing I can do. She has POA.

That must be truly awful for you. It is bad enough when a loved one makes life threatening choices on their own behalf, but when someone else ignores the science and makes irrational choices for them it is tragic.

[GAR]

i wonder what % of people in retirement villages / rest homes have been vaccinated ?
Anyone have a perspective on this ? Has the potential to be pretty high I think,

Another listed RV operator's annual report lists 6100 team members and 12,500 residents. The following is from a recent email from their COO 'The good news is that we have had an overwhelmingly positive response to our vaccination programme, and more than 28,000 vaccinations have been administered to our residents and team members'.

[justakiwi]

Thank you. The worst part is, that Mum was actually given the first dose by mistake (shouldn't have happened but that's a whole different story). She was fine and had no reaction at all, but my sister still refused to let her have the second dose. I tried very, very hard to help her understand that giving the second dose would have been the right thing to do, and a way to turn the vaccination "mistake" into something positive. But no way in hell would she hear me.

I am hoping that the one dose might afford Mum some protection. Fingers crossed we never have to find out.


That must be truly awful for you. It is bad enough when a loved one makes life threatening choices on their own behalf, but when someone else ignores the science and makes irrational choices for them it is tragic.

[winner69]

Metlife firing on all cylinders

Reported profit $304m

Revaluations positive $336m

NTA $8,64 -- what did it sell for a year ago?

Gives an indication of how OCA could be heading

and this -

Mr Gasparich noted that during the year, Metlifecare had repaid the $6.8 million COVID-19 wage
subsidy received late in the previous financial year. The company believed this was the
appropriate action given Metlifecare’s financial position and reflected the spirit of the scheme.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/377602/352623.pdf

[dobby41]

Metlife firing on all cylinders

Wrong thread?

[winner69]

Wrong thread?

Thought I'd post here as apparently a lot of the MET cash ended up in OCA and they might be interested how their old company was doing

[RTM]

Thought I'd post here as apparently a lot of the MET cash ended up in OCA and they might be interested how their old company was doing

Thanks...I wouldn't have seen this otherwise.

[Bjauck]

Thought I'd post here as apparently a lot of the MET cash ended up in OCA and they might be interested how their old company was doing There is a sad roll call of companies delisted from the NZX. I wonder how much of the released capital in the hands of individual investors ended up reinvested into remaining listed companies and how much got sunk into residential land/housing.

[Poet]

Metlife firing on all cylinders

Reported profit $304m

Revaluations positive $336m

NTA $8,64 -- what did it sell for a year ago?

Gives an indication of how OCA could be heading

and this -

Mr Gasparich noted that during the year, Metlifecare had repaid the $6.8 million COVID-19 wage
subsidy received late in the previous financial year. The company believed this was the
appropriate action given Metlifecare’s financial position and reflected the spirit of the scheme.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/377602/352623.pdf

Could be a bit out of context, the new owners may have injected equity from other sources to reduce debt (and hence NTA increased)

[davflaws]

There is a sad roll call of companies delisted from the NZX. I wonder how much of the released capital in the hands of individual investors ended up reinvested into remaining listed companies and how much got sunk into residential land/housing.

"Sunk" may not be the best word. Floated? Launched?

[Beagle]

Mr Gasparich noted that during the year, Metlifecare had repaid the $6.8 million COVID-19 wage
subsidy received late in the previous financial year. The company believed this was the
appropriate action given Metlifecare’s financial position and reflected the spirit of the scheme.

The Swedes made this call before he came on board as CEO. I think they felt guilty for the way they went about coercing and manipulating the board and shareholders for many tens of millions of dollars and decided to donate a very small portion of it back.

[davflaws]

The Swedes made this call before he came on board as CEO. I think they felt guilty for the way they went about coercing and manipulating the board and shareholders for many tens of millions of dollars and decided to donate a very small portion of it back.

Strong social consciences - those Vikings!

[RTM]

Strong social consciences - those Vikings!

Yes....I've watched Vikings to !

[Joh13]

Mark Stockton continues to sell down, maybe 2-3 months longer before he has fully sold down.

Bond offer coming up on the 30th August… Better than bank debt in my opinion, far less constraints etc and if it’s over subscribed shows that Bond holders have confidence in the company. Must be for an acquisition(s) that they have lined up already.

I’d rather OCA didn’t pay a dividend and built up a solid cash position for acquisitions… then if they didn’t have acquisitions, or none that returned a higher ROE than the cost of equity, return the cash via buy backs or a special dividend. I think this would add a lot more value to the company.

[dompf]

Mark Stockton continues to sell down, maybe 2-3 months longer before he has fully sold down.

Bond offer coming up on the 30th August… Better than bank debt in my opinion, far less constraints etc and if it’s over subscribed shows that Bond holders have confidence in the company. Must be for an acquisition(s) that they have lined up already.

I’d rather OCA didn’t pay a dividend and built up a solid cash position for acquisitions… then if they didn’t have acquisitions, or none that returned a higher ROE than the cost of equity, return the cash via buy backs or a special dividend. I think this would add a lot more value to the company.

It didn’t look like Stockton sold much anyway for now; which is probably a good sign.

Can’t believe PEB close to overtaking OCA - will be really interested to see what they buy with another bond. Would be great to see new results actually cement the point of inflection for profitability. I don’t see much difference in dividend vs retained capital; I want company to move forward and be profitable and to take its gains to give its shares a green arrow instead of meandering.

[850man]

It didn’t look like Stockton sold much anyway for now; which is probably a good sign.

He seems to have been moving them through in small volumes compared to the number he holds, which is good because he'd tank the price if he dumped them too fast. Anyway, I'll be happier once he stops doing that.

[Beagle]

I think its clear the sell down of his stake is being professionally managed for him.

[850man]

Outstanding result the other day for SUM, similar for MET and RYM. Have to wait until Dec to find out if similar good news for OCA in their half year to 30 Sept. Fingers crossed holders

[Beagle]

OCA should report for the 6 months ended 30 September in late November.

[Ggcc]

Still busy selling

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378016/353280.pdf

It would show a positive light if Greg just snapped up his remaining shares off market for this price.

[mike2020]

Last year September was the last good month to be buying.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378021/353288.pdf

Company is buying back 3,164,556 shares on or after 1 September.

[dompf]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378021/353288.pdf

Company is buying back 3,164,556 shares on or after 1 September.

I like this.

[winner69]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378021/353288.pdf

Company is buying back 3,164,556 shares on or after 1 September.

Ha ha ….they the shares the exec didn’t get for not growing underlying earnings by 35% pa from 2017

They fell well short of the $87m (or there abouts) target


Execs didn’t deserve them eh ….ha ha

[winner69]

They got a new LTI scheme now ….1.9m shares

I have asked twice now but they refuse to disclose the targets that have to be achieved for the top brass to collect the goodies ….buts it ‘aligned to shareholders interests’ they say

Secret squirrel stuff …might get Oliver’s organisation to ask

[Beagle]

New bond issue coming in September too. When a company does a bond issue its invariably a good time to buy the shares instead.
People lending truckloads of money to OCA at ~3% locked in for 7 years is an excellent deal for OCA shareholders !

[bottomfeeder]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378021/353288.pdf

Company is buying back 3,164,556 shares on or after 1 September.

Do they say what they were issued at, and how much loan balance is outstanding.

[winner69]

Do they say what they were issued at, and how much loan balance is outstanding.

Issued at $0.79 ...loans ??????

[Beagle]

Do they say what they were issued at, and how much loan balance is outstanding.

Just what's in the link I posted mate. Maybe there could be something in the annual report about it if you really wanted to fossick around and find more info.

[winner69]

Do they say what they were issued at, and how much loan balance is outstanding.

Doesn't really matter - main thing they going to buy 3 mill shares an if you believe that buying that buying that money will boost the share price its good news .....and it'll increase NTA and EPS as well ...double good

[Poet]

Post deleted

[Beagle]

Any increase in eps is always most welcome. For example the fairly recent village acquisition in Hobsonville was said to be low single digit eps accretive.
Wonder what they raising another bond issue for, maybe another eps accretive village acquisition ?

[winner69]

At 3.2% these bonds will go like hotcakes - even if they are 7 year ones

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378141/353459.pdf

[Beagle]

I'm inclined to agree. There's lots of folks with term deposits who are starved for yield and 3.2% is the minimum rate.

Presentation that accompanies this bond issue (there might be something in here that updates us on their progress in FY22)
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378141/353461.pdf

[winner69]

I'm inclined to agree. There's lots of folks with term deposits who are starved for yield and 3.2% is the minimum rate.

Presentation that accompanies this bond issue (there might be something in here that updates us on their progress in FY22)
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378141/353461.pdf

Disappointed they didn't go down the GREEN BOND route

[winner69]

I'm inclined to agree. There's lots of folks with term deposits who are starved for yield and 3.2% is the minimum rate.

Presentation that accompanies this bond issue (there might be something in here that updates us on their progress in FY22)
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/378141/353461.pdf

Reading between lines Underlying earnings close to $80m

[Beagle]

Reading between lines Underlying earnings close to $80m

There's an old saying, (not sure who came up with it), whenever a company does a bond issue, buy their shares instead.

Good example was last year. Have a look at their share price performance in the month after they issued the cleansing notice on 25 September 2020 in preparation for the previous bond issue. The shares jumped 35% in less than a month !! Today they issued the cleansing notice for this bond issue. History set to repeat ?


12903

As an aside, from a TA perspective notice how the shares recently bounced off the 100 day moving average support line and have just broken up through the 30 day support line.

Not sure how you came up with $80m underlying but what I have come around to realising with OCA its all about their total comprehensive income.

[winner69]

Thweree's an old saying, (not sure who came up with it), whenever a company does a bond issue, but their shares instead.

They probably envious of Rymans debt to equity ratio and trying to fix it

More leverage tends to lead to higher multiples in this sector

Good strategy