OCA - Oceania Group - retirement villages

[Ggcc]

well this little puppy seems to be losing its appeal quickly......

[winner69]

RYM currently $10.30 with OCA at $1.03

OCA about right at this price

And Ggcc OCA isn’t a dog .....

[JoeGrogan]

Seems like a good opportunity to top up if one thinks next weeks results are going to be smashing :)

[Ggcc]

RYM currently $10.30 with OCA at $1.03


OCA about right at this price

And Ggcc OCA isn’t a dog .....

Definitely not a dog haha. I own some but hope they go lower so I may just top up

[warren]

well this little puppy seems to be losing its appeal quickly......

Benjamin Graham's greatest advice
"is that the investor should not regard the whims of Mr. Market as a determining factor in the value of the shares the investor owns. He should profit from market folly rather than participate in it. The investor is advised to concentrate on the real life performance of his companies and receiving dividends, rather than be too concerned with Mr. Market's often irrational behavior."
$1.03 is irrational ----super assets, super staff, super outlook, super managers (so far), the prospect of a very super profit and a bank of golden income stream called Aged Care!! Buy Buy Buy for all your worth said Mr Graham when and only when you have determined the value !.

[couta1]

Looking forward to the result, expecting good things, I now rate OCA as having the most potential in the sector for SP appreciation over the next few years. Just felt I needed to repeat this post again.

[winner69]

Benjamin Graham's greatest advice
"is that the investor should not regard the whims of Mr. Market as a determining factor in the value of the shares the investor owns. He should profit from market folly rather than participate in it. The investor is advised to concentrate on the real life performance of his companies and receiving dividends, rather than be too concerned with Mr. Market's often irrational behavior."
$1.03 is irrational ----super assets, super staff, super outlook, super managers (so far), the prospect of a very super profit and a bank of golden income stream called Aged Care!! Buy Buy Buy for all your worth said Mr Graham when and only when you have determined the value !.

Good advice

Why did you tag your enthusiasm with the phrase ‘so far’

[warren]

Good advice

Why did you tag your enthusiasm with the phrase ‘so far’

Hello Winner69. I was not actually being enthusiastic, rather just trying to apply Ben Graham logic although he did use intricate mathematical models whereas I look at fundamentals. (quality assets, quality cash flow, quality good name, top quality staff, quality dividends and growth. (The Tidal wave is coming and that cannot be argued)
Now to answer you --when the OCA mangers have built their business to such an extent that that building is reflected by Mr Market placing a $10 value on each share and there has been no evidence of thieving or payment excesses and( as Mr Maersk famously said "every step has been taken to avoid any disaster befalling our company") then I will remove the "so far"
Kind regards Warren b.

[huxley]

Hello Winner69. I was not actually being enthusiastic, rather just trying to apply Ben Graham logic although he did use intricate mathematical models whereas I look at fundamentals. (quality assets, quality cash flow, quality good name, top quality staff, quality dividends and growth. (The Tidal wave is coming and that cannot be argued)
Now to answer you --when the OCA mangers have built their business to such an extent that that building is reflected by Mr Market placing a $10 value on each share and there has been no evidence of thieving or payment excesses and( as Mr Maersk famously said "every step has been taken to avoid any disaster befalling our company") then I will remove the "so far"
Kind regards Warren b.


I look forward to the day they trade for $10 each!

[percy]

I look forward to the day they trade for $10 each!

I am "well positioned."

[Onion]

I am "well positioned."

I hope the confident views pan out -- I doubled my OCA "position" today.

[King1212]

Oceania has a pipeline of 1,708 units and care suites of which 63 percent or 1,072 are currently consented, he said. It has a portfolio of 50 sites and while Gasparich said that it had sufficient land for the next seven years of development in New Zealand "Australia would certainly be on our horizon in the longer term."

from thier last announcement..

[Beagle]

Managed to hoover up some more at $1.02 today, happy with that.

[BobbyMorocco]

Looking forward to the result, expecting good things, I now rate OCA as having the most potential in the sector for SP appreciation over the next few years.

Hey mate, after reading through this thread I noticed that around the period when OCA listed you were reasonably critical of Oceania's management saying that they needed to cut back on how much money was being spent at the top end on the bigwigs' salaries etc. I also noticed that you seemed to think that it would be difficult for OCA to perform as well as some of the other retirement village operators due to their care focused model. You said it would be difficult for them to get their wages to revenue ratio in order because of this model and that achieving 40% growth in FY18 was unlikely to happen because of this.

I see you are now invested and expecting OCA to do well, so I'm just trying to get some insight into the changes that may have occurred within the company for you to change your view. I realise you have industry knowledge so any info you could share could be pretty helpful :)

[trader_jackson]

Hey mate, after reading through this thread I noticed that around the period when OCA listed you were reasonably critical of Oceania's management saying that they needed to cut back on how much money was being spent at the top end on the bigwigs' salaries etc. I also noticed that you seemed to think that it would be difficult for OCA to perform as well as some of the other retirement village operators due to their care focused model. You said it would be difficult for them to get their wages to revenue ratio in order because of this model and that achieving 40% growth in FY18 was unlikely to happen because of this.

I see you are now invested and expecting OCA to do well, so I'm just trying to get some insight into the changes that may have occurred within the company for you to change your view. I realise you have industry knowledge so any info you could share could be pretty helpful :)

Maybe there was a magnificent turn around in OCA in the past year and a half?!?! Lol
He was far from the only one on here 'against' OCA who have subsequently (and ironically) became shareholders.
Funny how things change

[BobbyMorocco]

I'd prefer to see the full financials before commenting in detail mate but those sort of numbers don't normally go together unless the company has been trading at massive losses over many years. Those debt level's appear to be an extremely serious concern. If a company has net liabilities of $132.9m how are they still a going concern ? How debt and shareholders advances could have ever got that high is what I'm especially interested in and most especially what this says about managements ability.
I'd speculate a recapitalisation is desperately needed and Macquarie's could be in for quite a haircut on their shareholders advances.
Caveat Emptor on this one, definitely one to watch for some creative revaluation of assets. :eek2:

Hey Beagle, as I was going back through this thread I read many comments from you stating that you were not interested in investing in OCA until management had proven themselves. Obviously you were concerned because at some point OCA got themselves into a large amount of debt. A lot of this debt has since been wiped off the table but I'm aware that the current CFO has been in that role since 2009, therefore I'm wondering if the risk of OCA getting a large amount of debt is still there. Over the past few months you've purchased OCA a number of times, so you obviously feel the potential rewards outweigh the risks. I'm interested know how you feel management has proven themselves since listing and what has been done to minimise the risk of them getting into financial trouble again?

[BobbyMorocco]

Maybe there was a magnificent turn around in OCA in the past year and a half?!?! Lol
He was far from the only one on here 'against' OCA who have subsequently (and ironically) became shareholders.
Funny how things change

Yeah mate, perhaps OCA has turned it around. As you can see above I've also posted a question for Beagle, as he has also changed his view over the past few months. He's completely entitled to do so, but I'm wondering if he or Couta can share what has caused them to change their views. This info could possibly be valuable to holders or potential holders.

[percy]

Yeah mate, perhaps OCA has turned it around. As you can see above I've also posted a question for Beagle, as he has also changed his view over the past few months. He's completely entitled to do so, but I'm wondering if he or Couta can share what has caused them to change their views. This info could possibly be valuable to holders or potential holders.

Google; "Stock market profits with moon phases.".................................................. ......................
AIR,HBL,OCA,PGW,PPH,RBD,SUM,TRA.?
lol.

[winner69]

Too many Super Moons of late and even a Blue Moon coming up

[winner69]

Give the likes of Beagle and others it was them who decided OCA wasn’t a dog after all and drove the price up from the 85 cents it was languishing at to about $1.10 odd.

Without them changing their minds the share price might still be about 90 cents

But due credit to the early adopters / foundation shareholders who reckoned this was the goods at the IPO. They saw through the glossy magazines and nice words.

[whome]

Hey BoobyM, you seem to be calling out a number of posters who have volunteered their considered thoughts and valuable information to this forum over quite a long time period now. How about some facts and figures from your good self instead of the clicky fingers routine. Remember OCA was floated by a private equity firm and we don't have to go too far back in history to be aware of PE floats, so I for one think the various cautions were warranted. No problem changing that opinion when the facts stack up.

[percy]

Give the likes of Beagle and others it was them who decided OCA wasn’t a dog after all and drove the price up from the 85 cents it was languishing at to about $1.10 odd.

Without them changing their minds the share price might still be about 90 cents

But due credit to the early adopters / foundation shareholders who reckoned this was the goods at the IPO. They saw through the glossy magazines and nice words.

Interesting.85 cents to $1.10,= 25cents,and with 622,459,626 OCA shares on issue ,Beagle and others, increased the market cap of OCA by over $155mil.?
Whatch out Chris Lee you have competition.!...lol.

[Harley]

Too many Super Moons of late and even a Blue Moon coming up
31 January - super blue blood moon eclipse – For the first time since 31 March 1866, three separate celestial events will occur simultaneously in one night. Better be cashed up to take full advantage of the lunacy.

[percy]

31 January - super blue blood moon eclipse – For the first time since 31 March 1866, three separate celestial events will occur simultaneously in one night. Better be cashed up to take full advantage of the lunacy.

Will it affect humans more than cats and dogs?

[Harley]

Will it affect humans more than cats and dogs?
Depends on the breed.

[BobbyMorocco]

Hey BoobyM, you seem to be calling out a number of posters who have volunteered their considered thoughts and valuable information to this forum over quite a long time period now. How about some facts and figures from your good self instead of the clicky fingers routine. Remember OCA was floated by a private equity firm and we don't have to go too far back in history to be aware of PE floats, so I for one think the various cautions were warranted. No problem changing that opinion when the facts stack up.

I'm not calling these posters out at all. I agree Couta's and Beagle's knowledge and insights are valuable, hence the reason why I'm asking them. If they want to share the information I've asked about with us then that's great and if they would prefer to keep it to themselves that's fine too. I thought this forum was a place where we can share and discuss information that might be helpful to others. Thanks for sharing your thoughts on the matter though.

[JoeGrogan]

31 January - super blue blood moon eclipse – For the first time since 31 March 1866, three separate celestial events will occur simultaneously in one night. Better be cashed up to take full advantage of the lunacy.

LOL, at least there was a new moon on the 17th, giving investors ample opportunity to cash out before the 31st :t_up:.

[trader_jackson]

Hey BoobyM, you seem to be calling out a number of posters who have volunteered their considered thoughts and valuable information to this forum over quite a long time period now. How about some facts and figures from your good self instead of the clicky fingers routine. Remember OCA was floated by a private equity firm and we don't have to go too far back in history to be aware of PE floats, so I for one think the various cautions were warranted. No problem changing that opinion when the facts stack up.

I would strongly argue the facts haven't changed, but the opinions have.
Pure magic

[winner69]

Interesting.85 cents to $1.10,= 25cents,and with 622,459,626 OCA shares on issue ,Beagle and others, increased the market cap of OCA by over $155mil.?
Whatch out Chris Lee you have competition.!...lol.

Of course Beagle and others didn't buy $155m of shares percy - just the market cap went up by that much during that time

If I recall they were disappointed the momentum didn't continue to make the share price go to 120 plus ....that would have created another $60m of market cap or shareholder wealth

There were a lot of others no doubt but they were an enthusiastic lot and keep reminding us that OCA could do no wrong. t_j did a good job in convincing them

[winner69]

I would strongly argue the facts haven't changed, but the opinions have.
Pure magic

Yes mate - you did a good job ramping this at the time

I think it just took many to actually have faith in 'facts' post IPO and the company did a few actual good things as well didn't they

[Beagle]

Maybe there was a magnificent turn around in OCA in the past year and a half?!?! Lol
He was far from the only one on here 'against' OCA who have subsequently (and ironically) became shareholders.
Funny how things change


Hey Beagle, as I was going back through this thread I read many comments from you stating that you were not interested in investing in OCA until management had proven themselves. Obviously you were concerned because at some point OCA got themselves into a large amount of debt. A lot of this debt has since been wiped off the table but I'm aware that the current CFO has been in that role since 2009, therefore I'm wondering if the risk of OCA getting a large amount of debt is still there. Over the past few months you've purchased OCA a number of times, so you obviously feel the potential rewards outweigh the risks. I'm interested know how you feel management has proven themselves since listing and what has been done to minimise the risk of them getting into financial trouble again?

Please if you're going to quote really old posts please mention the date, (which was October 2014) LONG before the company listed. The balance sheet was a mess, in fact OCA was a new listing in 2017 that was a VERY VERY long time in the making. The company with its new directors realized they HAD to present a clean and restructured balance sheet and used the IPO proceeds to effect that. To the best of my knowledge this was the only share listing, (there were debt issues last year) in 2017.
Some of the board have a good track record and they'll be the ones approving decisions about gearing level's.
I'm not a big fan of IPO's but this one was listed cheap and the forward PE was and remains well below the sector average. 8.43 cps underlying from memory is the official forecast for FY18 so the forward underlying PE at 12.0 is the cheapest of the sector by quite some margin. I think you'll also find even at $1.02 the company is trading quite close to its NTA if all properties were revalued as at 31 December 2017. I hear whispers that their care standards are second to none, even not second to Ryman ! Further, they've made on or two good looking acquisitions since listing but this is very much still a case of, lets see how they go.
There's an element of risk here for sure, no question whatsoever as they're a relatively new listing but the real estate market has been sound this last year, they are converting a LOT of care rooms into the ORA model and as mentioned they have a superb reputation with their care services. The market per se is pretty stretched and its very hard to find value. The value of this share at present has to be measured in that context. I started buying just after the IPO in the low 80 cent range, (as a way of eliminating IPO price risk). To be perfectly honest there is an element of this being a bit of a punt, nobody really knows how they're going to go as compared to forecast but in my view given market dynamics since they listed there's probably just as much chance of beating FY18's forecast as missing it. Beating the FY17 forecast doesn't count for much given the very close proximity of the listing date to the FY17 report date but a beat is a beat nonetheless so must count for a little bit. My base case assumption for 2017 at the start of the year was for nil increase in house prices for Auckland, (about right) and 3% throughout the rest of the country, was about 6.5% if I remember correctly the article containing REINZ data the other day. This augers well for FY18's results.

T.J. if you're going to pour scorn on others posts at least have respect to get your timeframe and facts correct. I looked at their 2014 balance sheet as represented on the companies office website and it was an absolute mess in 2014.

[trader_jackson]

Thank you couta1 for your response, and yes winner69 I am interested... but possibly not 'boots and all'... the IPO documents will be of great interest, should the IPO go ahead.
I don't think it would be fit to compare it to SUM (this did surprise me when AFR mentioned this), at least when comparing on a build rate and land bank, but they do have a strong development ahead, in the short term. On a breif look, Operating cash flows are very strong, and ORA's have experienced good growth, with growth likely to increase in the coming years. Balance sheet heavy with debt, which is nothing new, although I am sure a significant proportion of this will disappear when listing.
Interesting you have mentioned your reference to 2014 documents, which I think was made after this above post, and possibly even after the IPO prospectus (But I could be wrong with this second part).

I did mention ( back in March 2017) that it was likely this 'messy' balance sheet would magically improve, And the IPO documents following these page 3 comments showed this.

You failed to mention that you actually continued to 'dog' oca after the prospectus was issued (showing debt being cleaned up) such as claiming a 40% uplift was doubtful (or something along these lines).

Anyhow, rather than dwelling on the past (which has certainly come back to bite some people on this thread big time), let us all look forward to the future.
Although it helps to 'get it right' and tell the full story when setting the past straight

[couta1]

Yeah mate, perhaps OCA has turned it around. As you can see above I've also posted a question for Beagle, as he has also changed his view over the past few months. He's completely entitled to do so, but I'm wondering if he or Couta can share what has caused them to change their views. This info could possibly be valuable to holders or potential holders. We all tend to comment on things as we see them at any given point of time, there is of course nothing wrong with doing this whether others agree or not. Sometimes being on the inside of the industry, you get info which can influence your opinion of a company in ways other than simply looking at balance sheet items. OCA since my initial comments have cleaned up their balance sheet, reviewed and changed their management structure, increased their development pipeline and focus, as well as being inovative by offering care suites with a licence to occupy etc. These changes have convinced me that OCA is a good value share to buy with plenty of upside over the next few years.

[Beagle]

We all tend to comment on things as we see them at any given point of time, there is of course nothing wrong with doing this whether others agree or not. Sometimes being on the inside of the industry, you get info which can influence your opinion of a company in ways other than simply looking at balance sheet items. OCA since my initial comments have cleaned up their balance sheet, reviewed and changed their management structure, increased their development pipeline and focus, as well as being inovative by offering care suites with a licence to occupy etc. These changes have convinced me that OCA is a good value share to buy with plenty of upside over the next few years.

Good post. I am sure we can all agree that as time passes with new IPO's we can all improve our understanding of a freshly listed company and its prospects. For what its worth T.J. I take a deeply skeptical view of all IPO's prospectus forecasts. Its held me in very good stead with avoiding losses on listings in recent years like MPG and Tegal.

Anyone can forecast anything they like...I once attended a function where a senior business banking manager of 40 years experience with SME's told me he'd never seen a set of forecasts that was worth the paper it was printed on...how that's for skepticism, even more deeply cynical and wary that this old hound !
I think he'd "had a few" so was probably exaggerating for effect but nonetheless his point is well made. A very healthy dose of skepticism is warranted for any company without a long track record to assure investors otherwise.

[macduffy]

Yes, a lot of truth in that observation, Beagle, and we certainly need to treat IPO's "birthed" by private equity with a good deal of caution. But OCA came to market with some proven people on the board - I couldn't see Elizabeth Coutts or Alan Isaac risking their reputations on a dud listing - and OCA was well past the "Small and Medium Enterprise" stage at this point.

Disc: Holding since the IPO.

:)

[Beagle]

Agreed. Directors bought on market fairly aggressively after the IPO listing right up to and including about the current level if I remember correctly which is something I value as a good indication of future prospects. Nothing like a healthy amount of your own skin in the game to motivate one :)

[winner69]

Weren't Macquarie keen to get $1.04 for the IPO but had to settle for 79 cents

Be interesting what the share price would be today if it had floated at $1.04

Macquarie can hock their shares after the full year announcement sometime in July ....but things going so well and the world looking so rosy they wouldn't even be contemplating that wuld they

[trader_jackson]

Weren't Macquarie keen to get $1.04 for the IPO but had to settle for 79 cents

Be interesting what the share price would be today if it had floated at $1.04

Macquarie can hock their shares after the full year announcement sometime in July ....but things going so well and the world looking so rosy they wouldn't even be contemplating that wuld they

Mr Market has already priced this in I reckon (aka the "dumping" factor), otherwise share price would be well above $1.10 by now I'm sure. Macquarie have been involved in OCA for nearly a decade I think (unlike many PE listings which are usually a few years tops), what is another 2,3 or 4 years of steady, solid share price growth and dividend? Probably in no rush to sell, or will do what Forsyth did with MET prior to OCA listing - sell it (Some or all of their holding) at a small, if any, discount to market price in a block trade.

[winner69]

Oceania F18 guidance is Underlying EBITDA of $62.2m (confirmed at ASM) and Underlying NPAT of $51.4m

Talk on the street (loud Koru Lounge conversation actually) is that come the half year announcement (if not before) they will raise the Underlying NPAT guidance to just under $60m, but fully expecting it be more by year end.

If you can’t buy shares in Rocket Lab then OCA is the next best thing

[peat]

Talk on the street (loud Koru Lounge conversation actually)...
are you kidding me !?? lol
9429

[King1212]

2 days trading till the result. Wonder what the sp would be this wed?....anyone?

[winner69]

are you kidding me !?? lol
9429

Yep that’s how it works. Many who should know better let their guard down in such places and talk too loudly

Read what the CEO said about embedded value at the AGM ....those words were uttered a few times

Watch this space

[huxley]

Now that’s some proper ramping :)

[winner69]

2 days trading till the result. Wonder what the sp would be this wed?....anyone?

Full year guidance is the thing to look out for.

If they just reconfirm the $52.4m underlying profit the share price might tank

But they won’t be doing that will they?

[Beagle]

Oceania F18 guidance is Underlying EBITDA of $62.2m (confirmed at ASM) and Underlying NPAT of $51.4m

Talk on the street (loud Koru Lounge conversation actually) is that come the half year announcement (if not before) they will raise the Underlying NPAT guidance to just under $60m, but fully expecting it be more by year end.

If you can’t buy shares in Rocket Lab then OCA is the next best thing

You're like the salt of this forum, it wouldn't be nearly as tasty without you mate :)

[trader_jackson]

Oceania F18 guidance is Underlying EBITDA of $62.2m (confirmed at ASM) and Underlying NPAT of $51.4m

Talk on the street (loud Koru Lounge conversation actually) is that come the half year announcement (if not before) they will raise the Underlying NPAT guidance to just under $60m, but fully expecting it be more by year end.

If you can’t buy shares in Rocket Lab then OCA is the next best thing

Have been saying for a while now these times (aka prior to interim results announcement) could be the last times we see under $1.10

[peat]

Now that’s some proper ramping :)

w69 is better than that.

[BobbyMorocco]

Sorry for not responding earlier, I'm currently working 70 hours a week but thank you to Beagle and Couta for your responses outlining why you've had a change of heart over the past six months or so.

I agree that the market is pretty stretched so finding value is not exactly easy, although OCA might be one that has some upside if they meet or exceed their goals. Without years behind them of doing what they see they will do, it's always going to be a bit of a punt. Time will tell but so far they give the impression that they're on target. I feel that there's still some uncertainty about whether OCA can deliver and the market has priced it at a PE much lower than its peers because it hasn't earned the trust the likes of Ryman obviously has with its lofty PE. Also Macquarie still owns the majority and they've got the green light to selldown after the full year results come out in July. I'm not sure but perhaps this has capped the share price a bit as well. Not to mention the general uncertainty in the retirement sector with the change of government and the news of slowing house prices.

Anyway the picture will get a bit clearer on Thursday. Good luck to those that hold. I think you'll probably do quite well, certainly if the directors buying all the way up to 98 cents is anything to go by :)

[winner69]

Over $1.10 today in the rush to get in before the exciting news tomorrow

Better top upbig time tj ...never be this cheap again

[Beagle]

Sorry for not responding earlier, I'm currently working 70 hours a week but thank you to Beagle and Couta for your responses outlining why you've had a change of heart over the past six months or so.

I agree that the market is pretty stretched so finding value is not exactly easy, although OCA might be one that has some upside if they meet or exceed their goals. Without years behind them of doing what they see they will do, it's always going to be a bit of a punt. Time will tell but so far they give the impression that they're on target. I feel that there's still some uncertainty about whether OCA can deliver and the market has priced it at a PE much lower than its peers because it hasn't earned the trust the likes of Ryman obviously has with its lofty PE. Also Macquarie still owns the majority and they've got the green light to selldown after the full year results come out in July. I'm not sure but perhaps this has capped the share price a bit as well. Not to mention the general uncertainty in the retirement sector with the change of government and the news of slowing house prices.

Anyway the picture will get a bit clearer on Thursday. Good luck to those that hold. I think you'll probably do quite well, certainly if the directors buying all the way up to 98 cents is anything to go by :)

Good post. Probably worth noting that the NZX50 is up 8% since directors were buying hundreds of thousands back in August 2017 at 98 cents so on a market adjusted basis several directors were buying in significant volume at what's amounts to effectively about the current level. They would of course be unable to buy at present due to restricted persons trading policy immediately before an announcement.

[Lawstudent05]

Getting close to the $1.10! Perhaps a new all-time high today?

Dis: Since IPO launch

[winner69]

Getting close to the $1.10! Perhaps a new all-time high today?

Dis: Since IPO launch

Yep $1.12 a new high would be good

This wont be a case of 'buy the rumour sell the fact' tomorrow .....more like WOW what a result and must buy more ....and then $1.20 soon after

Word on the street must have some substance

[trader_jackson]

Yep $1.12 would be good

This wont be a case of 'buy the rumour sell the fact' tomorrow .....more like WOW what a result and must buy more ....and then $1.20 soon after

Word on the street must have some substance

Some do say today is the last day we see OCA under $1.10...
maybe even the last few hours/minutes/seconds since this post.

[winner69]

Absolutely beautiful morning in Wellington - sitting on the beach watching the sun come up. The sky was amazing before the sun rise.

All a good omen for OCA today ... today could be the day that it will dawn on the market that OCA is great company ....and the share price will rise like the sun and reach 150 by the end of summer

Exciting eh

[Benny1]

Let's all hope so!
Good luck to all holders.. Although somehow I get the feeling not much luck is required at all with this one.. 😄

[winner69]

Let's all hope so!
Good luck to all holders.. Although somehow I get the feeling not much luck is required at all with this one.. 😄

Definitely not a case of 'buy the rumour sell the facts'

The facts will bring a new dawn to the life of the OCA share price

[pierre]

Definitely not a case of 'buy the rumour sell the facts'

The facts will bring a new dawn to the life of the OCA share price


Underlying NPAT for six months to 30 November UP 121%.
And a divvie of 2.1 cps.

Seems like a pretty good result!
Probably see some SP action today.

[winner69]

Pretty disappointing but not a complete disaster

Just as well the property market continues to boom

Need a boomer H2 to meet the the ‘we expect to achieve prospectus full year underlying orofit’ Which oresumeably is $54m — might be wrong here as what they mean by proforma seems to change.

So it’s all back to hoping ....but hope not a strategy is it

[couta1]

Good solid result with plenty in the pipeline going forward, care model continues to excel.

[Ggcc]

Let’s see what the market expects........

— Pro forma Underlying EBITDA is forecast to increase to $62.2 million in FY2018F (representing a CAGR of 15.0% from FY2016PF to FY2018F).

Operating cash flow of aged care business helps support a gross dividend yield in FY2018F of 5.0% to 6.0% based on the Indicative Price Range.

Just a couple of things I like from their product disclosure statement.....

[couta1]

Total assets increased by 160 mill to 1 billion, 360 units and care suites under construction, what's not to like here.

[winner69]

At least morphing into a development company ....that’s good for the share price over time

Making less money from looking after (caring for) people by the looks of it ....that’s not so good for the share price

No profit upgrade ....maybe still to come

Fingers crossed share price will surge ahead today and tomorrow

[couta1]

At least morphing into a development company ....that’s good for the share price over time

Making less money from looking after (caring for) people by the looks of it ....that’s not so good for the share price

No profit upgrade ....maybe still to come

Fingers crossed share price will surge ahead today and tomorrow Care revenue down mainly due to developement of care suites which lowers occupancy rates temporarily, but has a far greater payback down the track.

[percy]

At least morphing into a development company ....that’s good for the share price over time

Making less money from looking after (caring for) people by the looks of it ....that’s not so good for the share price

No profit upgrade ....maybe still to come

Fingers crossed share price will surge ahead today and tomorrow

As they develop older villages,occupancy and care beds rates will be lower, as the older buildings are pulled down to make room for the new.
As you point out, morphing into a development company will drive the share price over time.

[hardt]

Last year financing costs were 20m vs 2-3m likely this year so growth seen in earnings is not reflective of underlying operations growth.

Good result, in line with expectations.

TTM PE = 27x
FY18 PE = 14-17?

Anyone have any numbers on how 2H is supposed to go this year?

[winner69]

Total assets increased by 160 mill to 1 billion, 360 units and care suites under construction, what's not to like here.

Yes indeed

Book Value now $494m so on yesterday’s close trading at 1.3 times Book Value

SUM at about 1.8 times

Hope OCA catches up ..be worth $1.50 then

[Ggcc]

Yes indeed

Book Value now $494m so on yesterday’s close trading at 1.3 times Book Value

Not much different from SUM if that means anything

But which one is growing faster relative to size?

[BobbyMorocco]

Total assets increased by 160 mill to 1 billion, 360 units and care suites under construction, what's not to like here.

Pro forma underlying EBITDA only increased 8.6% to $25.3m from $23.3m. Pro forma underlying NPAT only increased 10.55% to $19.9m from $18.0m. Were we not expecting 40% increases in 2018?

Oceania will need a massive second half of year to meet the forecast Pro forma underlying EBITDA OF $62.2m and Pro forma underlying NPAT of $51.4m.

I'm not impressed by the result and it would seem the market is not overly impressed either. Plenty of shares traded hands at $1.05 this morning. I can see this falling to under $1 once again.

[JoeGrogan]

Pro forma underlying EBITDA only increased 8.6% to $25.3m from $23.3m. Pro forma underlying NPAT only increased 10.55% to $19.9m from $18.0m. Were we not expecting 40% increases in 2018?

Oceania will need a massive second half of year to meet the forecast Pro forma underlying EBITDA OF $62.2m and Pro forma underlying NPAT of $51.4m.

I'm not impressed by the result and it would seem the market is not overly impressed either. Plenty of shares traded hands at $1.05 this morning. I can see this falling to under $1 once again.

Underlying NPAT increased from 9m to 19.9m? wheres this 18m from?

[winner69]

Pro forma underlying EBITDA only increased 8.6% to $25.3m from $23.3m. Pro forma underlying NPAT only increased 10.55% to $19.9m from $18.0m. Were we not expecting 40% increases in 2018?

Oceania will need a massive second half of year to meet the forecast Pro forma underlying EBITDA OF $62.2m and Pro forma underlying NPAT of $51.4m.

I'm not impressed by the result and it would seem the market is not overly impressed either. Plenty of shares traded hands at $1.05 this morning. I can see this falling to under $1 once again.

They going to sell many more units in H2 than H1 Bobby ...that’ll boost profits

[winner69]

Underlying NPAT increased from 9m to 19.9m? wheres this 18m from?

Slide 21 of the presentation

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/313390/273470.pdf

[warren]

Pro forma underlying EBITDA only increased 8.6% to $25.3m from $23.3m. Pro forma underlying NPAT only increased 10.55% to $19.9m from $18.0m. Were we not expecting 40% increases in 2018?

Oceania will need a massive second half of year to meet the forecast Pro forma underlying EBITDA OF $62.2m and Pro forma underlying NPAT of $51.4m.

I'm not impressed by the result and it would seem the market is not overly impressed either. Plenty of shares traded hands at $1.05 this morning. I can see this falling to under $1 once again.

Hello Bobby. Gee wizz, You are not impressed but I am very impressed. Lets see who is right in 12 months from now? New company paying a dividend!!!!! Has done exactly what it said it would do. A large % of income coming from my beloved aged care which is the hardest job on earth but hey, government paid, in cash, every 2 weeks!!..... and a tidal wave of it to keep coming. 4.2 cents per 79 cent share dividend p.a. --- geeeeez I cant get enough of this 80c, 1.11c, 1.05c, who cares!

[JoeGrogan]

Slide 21 of the presentation

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/313390/273470.pdf

Cheers Winner seem to be confusing pro forma underlying with just ordinary underlying... Lol. So is ordinary underlying the same as the underlying profit measurement used by the rest of the sector, or is it this pro forma one?

[winner69]

Cheers Winner seem to be confusing pro forma underlying with just ordinary underlying... Lol. So is ordinary underlying the same as the underlying profit measurement used by the rest of the sector, or is it this pro forma one?

...but proforma and ‘ordinary’ seem to have different meanings from presentation to presentation

Basically comes down to how you view this thing called called ‘capital structure’ and there’s a big difference in the deferred tax adjustment as well

They don’t make things easy

Suppose we have to believe their numbers

[winner69]

So maybe it was ‘buy the rumour sell the fact’ after all.

Where’s t_j — not as quick of the mark as usual. Only took him 10 minutes to comment on the last SUM announcement ha ha

I’ll forgive him for being quiet — probably still trying to make sense of the numbers but I look forward to see how he views this result.

[BobbyMorocco]

...but proforma and ‘ordinary’ seem to have different meanings from presentation to presentation

Basically comes down to how you view this thing called called ‘capital structure’

They don’t make things easy

Suppose we have to believe their numbers

Yeah, they don't make things easy and I don't like when they chop and change figures using one here and a different one there. Of course they just choose to give us the figures that make them appear to be performing the best.

In the product disclosure statement Pro forma underlying EBITDA and Pro forma underlying NPAT were highlighted in bold. Plus the Pro forma underlying NPAT forecast of $51.4m has been thrown around a lot. This would give an EPS of 8.42c. They have stated that they will pay dividends of 50% - 60% underlying NPAT. 55% of this figure gives 4.6c and that's what I believe the dividends will be for the full year. So I expect a dividend of 2.5c after the full year results. But I also think that to achieve this they need to have a much better second half to the year or pay out more than 55% underlying NPAT.

As you can tell I don't trust these guys yet and so I remain skeptical about whether or not they can perform as they say they will.

[winner69]

Yeah, they don't make things easy and I don't like when they chop and change figures using one here and a different one there. Of course they just choose to give us the figures that make them appear to be performing the best.

In the product disclosure statement Pro forma underlying EBITDA and Pro forma underlying NPAT were highlighted in bold. Plus the Pro forma underlying NPAT forecast of $51.4m has been thrown around a lot. This would give an EPS of 8.42c. They have stated that they will pay dividends of 50% - 60% underlying NPAT. 55% of this figure gives 4.6c and that's what I believe the dividends will be for the full year. So I expect a dividend of 2.5c after the full year results. But I also think that to achieve this they need to have a much better second half to the year or pay out more than 55% underlying NPAT.

As you can tell I don't trust these guys yet and so I remain skeptical about whether or not they can perform as they say they will.

It’s got me stuffed and I’m pretty clever

But a 112% profit increase is good no matter what .....should give share price a decent boost

[Beagle]

First impressions. Solid result investing for the future. Developments on track and on budget, (no easy feat in today's market)
Underlying profit on track for 8.42 cps as per IPO forecast. Most future developments already consented removes risk compared to other sector participants.
Seems obvious to me 2H realized profit from new developments will be a lot higher than 1H.
Looking forward into 2019 and beyond they have a credible development pipeline and are slowly building a credible track record of completing developments on time and on budget. Care standards second to none. NTA is up to $1.01 per share. Good embedded value of $145k per unit. Development margin in 2H looking to be mid 30% mark which is impressive.

This looks to be a shaping up as a good core portfolio stock going forward. $1.01 / 0.842 = forward PE of just under 12. Very cheap for a sector with strong tailwinds and their stellar care reputation will hold them in good stead in terms of market demand. (Note I have used the theoretical ex divvy price in PE analysis as they're going ex very shortly)

[BobbyMorocco]

Hello Bobby. Gee wizz, You are not impressed but I am very impressed. Lets see who is right in 12 months from now? New company paying a dividend!!!!! Has done exactly what it said it would do. A large % of income coming from my beloved aged care which is the hardest job on earth but hey, government paid, in cash, every 2 weeks!!..... and a tidal wave of it to keep coming. 4.2 cents per 79 cent share dividend p.a. --- geeeeez I cant get enough of this 80c, 1.11c, 1.05c, who cares!

Hey Warren. It's not those of you that bought in at around 80c that need to worry at the moment. The dividend yield for you guys is fine and the share price will probably remain above 80c for the next 12 months so you probably won't lose capital either. Not a bad result for you lot. Those that got in on the open this morning for $1.09 I'm not so sure about.

I'll have to crunch the numbers later but my initial impression is that Oceania will have to build new units at a faster rate than what they're currently in order to keep up with Summerset who are basically just following Ryman's lead.

[warren]

It’s got me stuffed and I’m pretty clever

But a 112% profit increase is go no matter what .....should give share price a decent boost




OCA (https://www.nzx.com/instruments/OCA)
Oceania Healthcare Limited (https://www.nzx.com/companies/OCA)
$1.050
-$0.030 / -2.78%

967,850

$1,031,287.07




Now, a question for someone more knowledgeable than me re on-market turnover trends etc.
Why would OCA today, have this huge turnover of shares?. It is by far the biggest no. of shares sold so far today on the market.

[macduffy]

Fairly normal for stocks to trade more heavily following an announcement. The fact that price has dropped would indicate that there were a lot of holders disappointed by the numbers.

Disc: Happy and holding.

[winner69]

I think we need to forget doing comparisons to last year and think just what maybe in the future.

As beagle says should sell more units in H2 and the way the property market is going they should easily exceed the $52m underlying profit ‘target.’

A lot has happened since they came up with that number (esp property prices) so maybe that word on the street $60m plus is still a give.

[warren]

Fairly normal for stocks to trade more heavily following an announcement. The fact that price has dropped would indicate that there were a lot of holders disappointed by the numbers.

Disc: Happy and holding.

Many thanks for that

Disc: Happy and adding

[Ggcc]

Earl Gasparich, Chief Executive Officer, commented:
We have delivered a strong result for the first half of the year and expect to achieve our forecasts for the year ending 31 May 2018 set out in our Product Disclosure Statement.

I really don’t know what people expected other than a miracle lol. I am still a happy holder and when more funds become available I will be investing at these prices. Great long term company

[dabsman]

Pretty happy. Just doubled up. Third biggest holding now.

[BobbyMorocco]

First impressions. Solid result investing for the future. Developments on track and on budget, (no easy feat in today's market)
Underlying profit on track for 8.42 cps as per IPO forecast. Most future developments already consented removes risk compared to other sector participants.
Seems obvious to me 2H realized profit from new developments will be a lot higher than 1H.
Looking forward into 2019 and beyond they have a credible development pipeline and are slowly building a credible track record of completing developments on time and on budget. Care standards second to none. NTA is up to $1.01 per share. Good embedded value of $145k per unit. Development margin in 2H looking to be mid 30% mark which is impressive.

This looks to be a shaping up as a good core portfolio stock going forward. $1.01 / 0.842 = forward PE of just under 12. Very cheap for a sector with strong tailwinds and their stellar care reputation will hold them in good stead in terms of market demand. (Note I have used the theoretical ex divvy price in PE analysis as they're going ex very shortly)

Yeah, I admit there are some good things to come out of the announcement (for those of you who think I'm just being a Negative Nancy) but OCA's trailing twelve month PE is just shy of 18. This is using earnings from the second half of FY17 and HY18. Using SUM as a comparison, SUM's trailing twelve month PE at the current share price is just shy of 16. This is using full year earnings of $78m that will be announced next month.

This morning I was considering buying into OCA with some of the funds I've allocated for the retirement sector, but after the announcement this morning I don't think I will. I think SUM, as a proven performer and on a lower PE is better value and am happy to stick with that for now. I will reconsider OCA after the full year results if they meet their forecasts. I expect OCA's share price to stay around $1.00 - $1.05 until then. Happy to be proven wrong and wish the holders luck.

[hardt]

It’s got me stuffed and I’m pretty clever

But a 112% profit increase is good no matter what .....should give share price a decent boost

Almost all of that profit increase was a reduction in debt load ex IPO leading to a 90% reduction in interest and finance costs.

Closer to 10-15% growth if we are looking on a like for like basis.

Still solid growth and will soon be trading on the lower end of the sectors valuations and paying a fair dividend.

[Beagle]

Yeah, I admit there are some good things to come out of the announcement (for those of you who think I'm just being a Negative Nancy) but OCA's trailing twelve month PE is just shy of 18. This is using earnings from the second half of FY17 and HY18. Using SUM as a comparison, SUM's trailing twelve month PE at the current share price is just shy of 16. This is using full year earnings of $78m that will be announced next month.

This morning I was considering buying into OCA with some of the funds I've allocated for the retirement sector, but after the announcement this morning I don't think I will. I think SUM, as a proven performer and on a lower PE is better value and am happy to stick with that for now. I will reconsider OCA after the full year results if they meet their forecasts. I expect OCA's share price to stay around $1.00 - $1.05 until then. Happy to be proven wrong and wish the holders luck.

Hi mate,
I hold both with a bias in terms of capital allocation to the proven performer. The market is always a forward looking animal so tailing PE's are of little relevance.
I'm happy to take them at their word that OCA is on track to meet IPO forecasts and believe a forward PE of 12 is very sound value for a stock in this sector with their stellar reputation for care.
Look at it this way. If you're moving into a retirement village in the mid 80's you're going to probably pick one with the stellar care reputation, kind of like if you want really good inflight service you'll fly Singapore Airlines or Emirates business class. A PE of this level is possible still appropriate until they prove themselves further but there is definitely potential for a rerating over time.

SUM's strengths are their independent living units which are very spacious on average for the sector. Too early to make the call on their underlying profit for 31/12/18 but my best guess at this stage is $90-95m, about 40 cps. Dec 18 forward PE is about 13.8 times.

[winner69]

Quite often when a decent divie is declared the share price goes up by about the size of the divie

So the 5 cent fall in the share price today is pretty dramatic in this context - not up 3cents but down 5cents

Even more of a bargain I hear some of you say .....but leave some for tj

[Onion]

So the 5 cent fall in the share price today is pretty dramatic in this context - not up 3cents but down 5cents

To all the posters that were all promising me a share price jump -- I want a refund! :mad ;:

On other other hand Percy - hopefully I am "well positioned". :t_up:

[BlackPeter]

First impressions. Solid result investing for the future. Developments on track and on budget, (no easy feat in today's market)
Underlying profit on track for 8.42 cps as per IPO forecast. Most future developments already consented removes risk compared to other sector participants.
Seems obvious to me 2H realized profit from new developments will be a lot higher than 1H.
Looking forward into 2019 and beyond they have a credible development pipeline and are slowly building a credible track record of completing developments on time and on budget. Care standards second to none. NTA is up to $1.01 per share. Good embedded value of $145k per unit. Development margin in 2H looking to be mid 30% mark which is impressive.

This looks to be a shaping up as a good core portfolio stock going forward. $1.01 / 0.842 = forward PE of just under 12. Very cheap for a sector with strong tailwinds and their stellar care reputation will hold them in good stead in terms of market demand. (Note I have used the theoretical ex divvy price in PE analysis as they're going ex very shortly)

Great summary. Yes, it looks like Mr Market expected extraordinary results. Personally I am quite content with them "just" delivering on their promises. The significant increase in units to sell for H2 is already a bonus :).

I tend to feed my models with IFRS NPAT (vs underlying) and even if they deliver in H2 not more than in H1 (highly unlikely - they have many more units to sell), they would already deliver a 13% EPS increase. I can live with that ... but if people are unhappy - just push the price further down and I might be unable to resist buying some more ;);

Discl: hold (L) and currently sort of overexposed to retirement stocks - otherwise I would have bought already some more at current discount rates;

[BobbyMorocco]

Hi mate,
I hold both with a bias in terms of capital allocation to the proven performer. The market is always a forward looking animal so tailing PE's are of little relevance.
I'm happy to take them at their word that OCA is on track to meet IPO forecasts and believe a forward PE of 12 is very sound value for a stock in this sector with their stellar reputation for care.
Look at it this way. If you're moving into a retirement village in the mid 80's you're going to probably pick one with the stellar care reputation, kind of like if you want really good inflight service you'll fly Singapore Airlines or Emirates business class. A PE of this level is possible still appropriate until they prove themselves further but there is definitely potential for a rerating over time.

SUM's strengths are their independent living units which are very spacious on average for the sector. Too early to make the call on their underlying profit for 31/12/18 but my best guess at this stage is $90-95m, about 40 cps. Dec 18 forward PE is about 13.8 times.

True, the market is a forward looking animal but when a company has been listed less than twelve months it's incredibly difficult to forecast what their forward earnings are going to be. Anyone can forecast earnings of X amount but with companies like Ryman who have grown at the rate they've said they're going to grow at year after year you can calculate with a certain degree of accuracy what their forward earnings are going to be. You can do this to a lesser degree of accuracy with SUM and I don't believe you can do this with much accuracy at all with OCA. This makes OCA a speculative play at this point. I don't mind the odd speculative play but in my opinion there's no reason to play that card in the retirement sector when there's some other incredibly good performers that offer good growth and good value as well.

That's why right now I hold SUM because it has proven itself as a solid performer and it also offers good value. Why it would be on a comparable PE to OCA is beyond me. I think both will grow at about the same rate but I can trust SUM to do it, OCA I can't. It's also why I'm going to back the truck up on RYM like there's no tomorrow at the end of the next bear market. I can trust that they're going to perform very well for a long long time. I'm still a bit sad that I haven't taken the opportunity to invest in RYM again after selling out in mid 2014 when I felt it didn't represent good value any more, but I'm hoping the funds that came from that sale will continue do well being invested in SUM and hope that at some point in the not too distant future I'll be able to pour funds into RYM again.

In saying all this I think OCA is good value if they can do what they say they're going to do but until they've proven to me that they can do that I'm happy to have my funds elsewhere :)

[Beagle]

Fair enough mate I hear what you're saying and don't disagree. Its a little like comparing an apple and an orange though because one has a predominant focus on care and the other a predominant focus on independent living which is potentially more vulnerable to swings in the property market.
Like you I have a bias towards proven performance but OCA reckon they're going to lift care earnings in FY19 https://www.nbr.co.nz/subscribe/211931I think they will both do well and RYM is still overpriced.

[percy]

I remain "well positioned" holding OCA,RYM and SUM.

[trader_jackson]

So maybe it was ‘buy the rumour sell the fact’ after all.

Where’s t_j — not as quick of the mark as usual. Only took him 10 minutes to comment on the last SUM announcement ha ha

I’ll forgive him for being quiet — probably still trying to make sense of the numbers but I look forward to see how he views this result.

My apologies for not being able to respond sooner.
Long story short, it was a solid result, although not a stunner with no explicit noticeable upgrade, just reaffirmation of the prospectus forecasts. When I was reading through the presentation and interim report, and although most of the graphs and development margins and resale numbers were very nice to look at, the 1st half just didn't quite have the 'wow' factor Mr Market must(?) have been expecting, such as an upgrade to Pro forma Underlying EBITDA what ever that is to the famed 60m. However, although only 23 net units were delivered in the whole of the first half (am I reading that right? - sounds a bit weak), and 69 resales looked a bit weak, it sounds like 102 were 'delivered' in Dec and Jan and that resales are taking off so it looks like we could be in for a big and exciting 2nd half. bit like arvida, in fact OCA's presentation made Arvida's recent ish results look even better

Ironically, if they do no better (ie the same) in the 2nd half vs the first half, on underlying profit basis, OCA is currently cheaper than sum if not most others in the sector, yet still has the same attractive fundamentals + many hundreds of units/beds under construction, without anywhere near the debt exposure and the risks this brings in this rising interest rate environment.

A good, but not a great result... OCA is certainly well positioned with a long term solid development pipeline, good continuum of care, and great fundamentals.
Just not sure why the share price is treating it like a bad result.

[winner69]

Wonder if all the bigger trades was one seller (probably was)

Whoever they were pretty keen sellers, generally taking the market down a cent at a time

Must have pretty disappointed with how things are going and the guidance.....wonder if they or more instos going to sell heaps more.

Must admit a pretty major reaction today

[huxley]

Wonder if all the bigger trades was one seller (probably was)

Whoever they were pretty keen sellers, generally taking the market down a cent at a time

Must have pretty disappointed with how things are going and the guidance.....wonder if they or more instos going to sell heaps more.

Must admit a pretty major reaction today

The sun will soon be setting over the hills of Wellington.. “between the idea and the reality falls the shadow..” :)

[Beagle]

Closed below NTA. $1.01 NTA already has the divvy accrued into it as a liability as at 30/11/17. Theoretical ex divvy price currently $1. Sound long term value and hold for anyone than can see past the end of their snout, in my opinion. Those that can't sniff value here in an otherwise stretched market...I feel sorry for them...
Ready to pounce if this goes under $1.

[macduffy]

Don't confuse sharetraders with investors, t j. I'm in the latter camp on this one.

:cool:

[value_investor]

I've been watching from a distance at this one, while the result is less than glittering, the company isn't poorly run and management know what they are doing.

A lot of people were probably expecting this one to go to the moon today but there is enough here to like what I see. A lot of development in the pipeline, and looks like they are savvy enough to keep it on time. Be patient, this is not a flier but a potentially profitable long term hold.

Disc: Keen observer, potential holder.

[warren]

I've been watching from a distance at this one, while the result is less than glittering, the company isn't poorly run and management know what they are doing.

A lot of people were probably expecting this one to go to the moon today but there is enough here to like what I see. A lot of development in the pipeline, and looks like they are savvy enough to keep it on time. Be patient, this is not a flier but a potentially profitable long term hold.

Disc: Keen observer, potential holder.

Hello Value. Agreed. Indeed Aged Care is never gonna be a Hanover (wasn't that principally a Development Company--- Yes for sure) !! But Aged Care, paid by the NZ Government every 2 weeks ,and in tidal wave proportions guaranteed, is gonna deliver to a top operator 5.5% + unlimited growth every single year. Beautiful, simply beautiful. Beat that in the Bank!

[Baa_Baa]

Wonder if all the bigger trades was one seller (probably was)

Whoever they were pretty keen sellers, generally taking the market down a cent at a time

Must have pretty disappointed with how things are going and the guidance.....wonder if they or more instos going to sell heaps more.

Must admit a pretty major reaction today

A few cents here or there, to take a substantial position is nothing in the scheme of things. Or to get out on a large holding, albeit a few cents on the SP for a nice profit. Probably best for us minnows to not worry too much about what the big volume does, unless it moves the SP significantly, which it hasn't in this case.

[winner69]

The comments on this thread (almost from day one but more recently) seem to be echos from the Metro Glass thread

And Oceania presentations tend to read like the early Metro ones as well.

Hope history not repeating itself

[winner69]

Expect a recovery in the share price today after yesterday’s collapse.

The awesome cool cat won’t say a dead cat bounce because that implies the bounce will be short lived

The recovery will be the first step back towards 110 and onwards to 129 etc

[Beagle]

A forward PE of 13 on IPO forecast is 13 x 8.42 cps = $1.0946. Taken in light of the strong tailwinds prevailing in the sector for the next 25 years, comparative sector PE's, their stellar reputation for care, land acquisitions since the IPO, and their excellent consented, (which removes considerable development risk) development pipeline and the average market PE of just over 20 I would be surprised if the market didn't at least price them at 13 times historical earnings by the time they report their annual result in 6 months time.
Depending upon the outlook commentary that goes with the FY18 result we could be looking at 14 times FY19's results later this year as the company slowly but steadily earns the trust of the market. If they're looking at 20-25% growth in underlying earnings for FY19 we could be looking at say 14 x (8.42 x 1.25) = $1.47 this time next year.
Plenty of (I would argue realistic) potential here for a 50% total shareholder return inclusive of divdends in the next 12 months.

Great to see Directors buying more on market yesterday. Liz Coutts now holding 425,000 and Alan Isaac buying at $1.09.
https://www.nzx.com/announcements/313448
It should be noted that they would have been unable to buy in the period immediately before the result.
No worries paying up to $1.09...what's good for the directors is good for shareholders...no worries.

http://www.sharechat.co.nz/article/4b37da2c/oceania-health-targets-wider-margins-with-high-end-aged-care-strategy.html?utm_medium=email&utm_campaign=Oceania%20Health%20targets%20wider%20 margins%20with%20high-end%20aged%20care%20strategy&utm_content=Oceania%20Health%20targets%20wider%20m argins%20with%20high-end%20aged%20care%20strategy+CID_0e27df006c7ac2980 da0f2ea6f722994&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle4b37da2coceani a-health-targets-wider-margins-with-high-end-aged-care-strategyhtml Very good article that should help people understand the company a little better. Well worth the time reading it.

[King1212]

Will we see the sp bounce back to $1.09 today?

[winner69]

Will we see the sp bounce back to $1.09 today?

Maybe only get to $1.08

[stoploss]

A forward PE of 13 on IPO forecast is 13 x 8.42 cps = $1.0946. Taken in light of the strong tailwinds prevailing in the sector for the next 25 years, comparative sector PE's, their stellar reputation for care, land acquisitions since the IPO, and their excellent consented, (which removes considerable development risk) development pipeline and the average market PE of just over 20 I would be surprised if the market didn't at least price them at 13 times historical earnings by the time they report their annual result in 6 months time.
Depending upon the outlook commentary that goes with the FY18 result we could be looking at 14 times FY19's results later this year as the company slowly but steadily earns the trust of the market. If they're looking at 20-25% growth in underlying earnings for FY19 we could be looking at say 14 x (8.42 x 1.25) = $1.47 this time next year.
Plenty of (I would argue realistic) potential here for a 50% total shareholder return inclusive of divdends in the next 12 months.

Great to see Directors buying more on market yesterday. Liz Coutts now holding 425,000 and Alan Isaac buying at $1.09.
https://www.nzx.com/announcements/313448
It should be noted that they would have been unable to buy in the period immediately before the result.
No worries paying up to $1.09...what's good for the directors is good for shareholders...no worries.

http://www.sharechat.co.nz/article/4b37da2c/oceania-health-targets-wider-margins-with-high-end-aged-care-strategy.html?utm_medium=email&utm_campaign=Oceania%20Health%20targets%20wider%20 margins%20with%20high-end%20aged%20care%20strategy&utm_content=Oceania%20Health%20targets%20wider%20m argins%20with%20high-end%20aged%20care%20strategy+CID_0e27df006c7ac2980 da0f2ea6f722994&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle4b37da2coceani a-health-targets-wider-margins-with-high-end-aged-care-strategyhtml Very good article that should help people understand the company a little better. Well worth the time reading it.

That's very positive the directors buying on market @ 1.09. If they didn't think it was a good result and sustainable surely they would have been waiting for a better level . So reading between the lines good things to come .
DISC: Holding

[JoeGrogan]

Maybe only get to $1.08

LOL :p:t_up:. As beagle said above directors buying up more, maybe that adds to the narrative of a big H2.

[warren]

http://www.sharechat.co.nz/article/4b37da2c/oceania-health-targets-wider-margins-with-high-end-aged-care-strategy.html?utm_medium=email& (http://www.sharechat.co.nz/article/4b37da2c/oceania-health-targets-wider-margins-with-high-end-aged-care-strategy.html?utm_medium=email&utm_campaign=Oceania%20Health%20targets%20wider%20 margins%20with%20high-end%20aged%20care%20strategy&utm_content=Oceania%20Health%20targets%20wider%20m argins%20with%20high-end%20aged%20care%20strategy+CID_0e27df006c7ac2980 da0f2ea6f722994&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle4b37da2coceani a-health-targets-wider-margins-with-high-end-aged-care-strategyhtml)

Mr Beagle Many thanks for the above , very good indeed. So far the CEO impresses--well done CEO, so far!!

With housing in Auckland about to absolutely tank this coming winter I love the smaller exposure OCA has to it.
Hallelujah Aged Care and a stable NZ government that pays it and an underway Tax Review (widening and fairer Tax paying base) to keep my OCA investment flying. Fly she will with the Aged Care tidal wave as the Directors know only too well.

[King1212]

Good article...top up a bit this morning....

[King1212]

One seller is keeping at this level. Maybe fundie release their shares

[winner69]

So Mr Gasparich said about the fall in the share price lyesterday ‘...was volume related with investors crystalising profits on the stock, which listed last May at 79 cents’

Obviously not astute Sharetraders who remain loyal to the cause

But a decent 25% odd return in less than a year for those who took their profits. Good on them

But Mr Gasparich I ask you why weren’t your releases and commentarys convincing enough for these investors to hang in there and make another 25% return. Must do better next time

[Beagle]

Needs lessons from Jascinda about relentless positivity. Lets do this...she can lead an entire country while carrying baby...what's clobbering a few bits of 4 x 2 wood together to build a new village by comparison :)

[winner69]

Will we see the sp bounce back to $1.09 today?

No not today

But at least today was an UP day ...that’s good end to week

[winner69]

Seems like $1.00/$1.05 is about its mark

Until the next announcement, whatever that may be, this is going to be a bit boring

But they say boring is very often good

[JoeGrogan]

Seems like $100/$1.05 is about its mark

Until the next announcement, whatever that may be, this is going to be a bit boring

But they say boring is very often good

Maybe get to 1.05 again leading to the ex divi date

[BobbyMorocco]

Ok, so I'm going to put my hand up and say that my analysis of OCA after the results announcement may have been a little harsh.

I've looked into it further and by my rough calculations (which could be off the mark) I have gathered that OCA will have 137 +/- new units and care suites to sell in FY19 and 187 +/- new units and care suites to sell in FY20.

If we believe they are on target to sell 84 new units and 11 new care suites in FY18 then this would represent 44% growth in new sales in FY19 and a further 36% growth in FY20. Not bad.

Now looking back at the FY17 Annual Report it included a nice little graphic that outlined the number of new units and care suites that were sold and resold. I couldn't find anything like that in the half year report that just came out. Did I miss something? If they outlined how many units and suites they have sold so far this year we could calculate how many more they have left to sell out of the units that have been completed. I think this would go some way to help figuring out if they are on track to meet forecasts. Can somebody please help find these figures since OCA didn't make it easy to find in their report?

[flyer]

Visited my mother today who is in one, hence why I got shares in OCA. But today, the place is like an oven, there is no air conditioning units in there, have to open all doors and windows etc for air flow. All the occupants are dehydrating, they got mum on a drip. Im not very happy about it, I was sweating after 10 mins being there. Think they need do some upgrades on their older places if they are all like this.

[couta1]

Visited my mother today who is in one, hence why I got shares in OCA. But today, the place is like an oven, there is no air conditioning units in there, have to open all doors and windows etc for air flow. All the occupants are dehydrating, they got mum on a drip. Im not very happy about it, I was sweating after 10 mins being there. Think they need do some upgrades on their older places if they are all like this. This is definitely a problem, I was working in an Oceania facility on Saturday and it was sweltering, especially upstairs (Had a major extension about 10years ago but no air con added) For residents who are imobile and/or with more pressing health issues, it's even more of a concern. PS-Not a problem confined just to Oceania, I might add.

[BlackPeter]

Ok, so I'm going to put my hand up and say that my analysis of OCA after the results announcement may have been a little harsh.

I've looked into it further and by my rough calculations (which could be off the mark) I have gathered that OCA will have 137 +/- new units and care suites to sell in FY19 and 187 +/- new units and care suites to sell in FY20.

If we believe they are on target to sell 84 new units and 11 new care suites in FY18 then this would represent 44% growth in new sales in FY19 and a further 36% growth in FY20. Not bad.

Now looking back at the FY17 Annual Report it included a nice little graphic that outlined the number of new units and care suites that were sold and resold. I couldn't find anything like that in the half year report that just came out. Did I miss something? If they outlined how many units and suites they have sold so far this year we could calculate how many more they have left to sell out of the units that have been completed. I think this would go some way to help figuring out if they are on track to meet forecasts. Can somebody please help find these figures since OCA didn't make it easy to find in their report?

According to their "highlights" they completed in November and December 2017 a total of 35 units. Given that it takes time to sell them (At SUM they assume an average of 3 to 4 months between "completed" and "sold") would I imagine that they sold at least at record date hardly any of them - though meaningful numbers are probably going under the hammer right now ;).

I'd expect for H2 that they sell the 35 units as above plus half of the remaining units (67) they plan to complete in the second half of FY2018.

Make that a total of 69 units to sell (and hopefully sold) this year (obviously - just a stab in the dark, my guess is as good as yours ...). The years to come should look much better, indeed.

[BobbyMorocco]

According to their "highlights" they completed in November and December 2017 a total of 35 units. Given that it takes time to sell them (At SUM they assume an average of 3 to 4 months between "completed" and "sold") would I imagine that they sold at least at record date hardly any of them - though meaningful numbers are probably going under the hammer right now ;).

I'd expect for H2 that they sell the 35 units as above plus half of the remaining units (67) they plan to complete in the second half of FY2018.

Make that a total of 69 units to sell (and hopefully sold) this year (obviously - just a stab in the dark, my guess is as good as yours ...). The years to come should look much better, indeed.

OK, so what I'm disappointed about now is that there's still a lot of guesswork going on with OCA. I think they could have taken some of the guesswork out of it by providing clear details about where things are at in terms of sales in the half year report. Hopefully they do this in the full year report and take some of the guesswork out of it.

Reading the 2017 Annual report I got the impression they had sold 20 out of 44 units at Lady Allum Village up until that point. They've now sold 30, so that's 10 in the bank for this year. That leaves another 14 of those to sell in the second half of this year plus they will hopefully sell a fair number of the 127 units and suites completed between November 2017 and January 2018.

I am now starting to see why you guys (and Earl Gasparich) think they're still on target to meet this year's forecasts.

[winner69]

Analysts not that bullish on OCA

With those targets (presumably for a year out) OCA is more than fairy priced at the moment.

http://www.sharechat.co.nz/article/093b3da9/fnzc-lifts-target-price-for-oceania-healthcare-despite-mixed-interim-result.html

[winner69]

So Taerget prices of 106, 109 and 100

Average of 105

Target remember - one year out with a 15% return(?)

Implies these gurus reckon shareprice should be about 91 cents now (if 10% return about 95 cents)

Trouble is if FNZC and Macquaries have those sort of expectations that sort of becomes embedded in the market psyche

Hard to see much movement (upwards of course) over the next few months

Just saying

[couta1]

So Taerget prices of 106, 109 and 100

Average of 105

Target remember - one year out with a 15% return(?)

Implies these gurus reckon shareprice should be about 91 cents now (if 10% return about 95 cents)

Trouble is if FNZC and Macquaries have those sort of expectations that sort of becomes embedded in the market psyche

Hard to see much movement (upwards of course) over the next few months

Just saying Not exactly inspiring aye, boring to hold, just like SML.

[Beagle]

So Taerget prices of 106, 109 and 100

Average of 105

Target remember - one year out with a 15% return(?)

Implies these gurus reckon shareprice should be about 91 cents now (if 10% return about 95 cents)

Trouble is if FNZC and Macquaries have those sort of expectations that sort of becomes embedded in the market psyche

Hard to see much movement (upwards of course) over the next few months

Just saying

There's a LOT of companies trading well north of analysts price targets though, to be fair.

[couta1]

There's a LOT of companies trading well north of analysts price targets though, to be fair. Down to $1, holding a 2.1c divvy, cough,cough. Punters listening to them analysts aye.

[Beagle]

Trading below net tangible asset backing which as at 30 November 2017 was $1.01. All that intellectual property and care reputation for free and a 2.1 cent dividend coming soon, record date 13 February 2018.

[winner69]

Trading below net tangible asset backing which as at 30 November 2017 was $1.01. All that intellectual property and care reputation for free and a 2.1 cent dividend coming soon, record date 13 February 2018.

Reported NTA was 81 cents

The $1.01 is a thing Oceania invented called ‘net adjusted value per share’

[winner69]

There's a LOT of companies trading well north of analysts price targets though, to be fair.

Maybe the gist of the discussion on the Are NZ equities too expensive thread points to a yes.

Analyst DCF valuations probably give a better idea of ‘value’ rather than some random ‘multiple’ of profit or something.....even with perceived dodgy assumptions.

Three different analysts come up with much the same answer as to what the present value of future cash flows is. Maybe they are about right and the market is a bit ahead of itself.

[hardt]

Maybe the gist of the discussion on the Are NZ equities too expensive thread points to a yes.

Analyst DCF valuations probably give a better idea of ‘value’ rather than some random ‘multiple’ of profit or something.....even with perceived dodgy assumptions.

Three different analysts come up with much the same answer as to what the present value of future cash flows is. Maybe they are about right and the market is a bit ahead of itself.

It has been said before, this one is currently trading more or less in line with the sectors ( excl RYM ) multiples.

[trader_jackson]

It has been said before, this one is currently trading more or less in line with the sectors ( excl RYM ) multiples.

I don't think so... I believe it is actually trading lower than all the others... at least on a forward underlying profit to earnings ratio at least
Yes, even cheaper than the already cheap Arvidia

[winner69]

I don't think so... I believe it is actually trading lower than all the others... at least on a forward underlying profit to earnings ratio at least
Yes, even cheaper than the already cheap Arvidia

SUM at about 12 and OCA about 11 (on forward underlying earnings ...which have to be guessed eh.....so not much in it is there

Whose that Arvida you talk about

[hardt]

I don't think so... I believe it is actually trading lower than all the others... at least on a forward underlying profit to earnings ratio at least
Yes, even cheaper than the already cheap Arvidia

As winner stated above... more or less the same for FY18.

Looking at FY19 - Lower stock and fewer developments have it almost flat at 10-11x earnings again there.

As the sector is mostly trading at 9-12x FY19 earnings... OCA is no different in the range of 90-120.

That FY20 looks like the year to be really excited about OCA.

[Beagle]

Reported NTA was 81 cents

The $1.01 is a thing Oceania invented called ‘net adjusted value per share’

Page 27 I will leave this as something for people to judge for themselves. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/313390/273470.pdf

[winner69]

Page 27 I will leave this as something for people to judge for themselves. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/313390/273470.pdf

Was just pointing out the difference between NTA as reported and this net adjusted value thing.

Just thought that most on here know about and understand NTA (and you quoted the wrong number).

Doubt if most on here would understand what this net adjusted value means anyway. For those interested in learning the right hand chart on Slide 24 sort of explains where the extra $60m adjustmentscome from.

Question - Why do you think they exclude the present value of net development cashflows and earnings at both current and future developments (including The Sands and Meadowbank Stage 4 which are under construction) when calculate this net adjusted value — would make the $1.01 higher eh

[Beagle]

Was just pointing out the difference between NTA as reported and this net adjusted value thing.

Just thought that most on here know about and understand NTA (and you quoted the wrong number).

Doubt if most on here would understand what this net adjusted value means anyway. For those interested in learning the right hand chart on Slide 24 sort of explains where the extra $60m adjustmentscome from.

Question - Why do you think they exclude the present value of net development cashflows and earnings at both current and future developments (including The Sands and Meadowbank Stage 4 which are under construction) when calculate this net adjusted value — would make the $1.01 higher eh

Fair enough mate. To be honest there's whole books been written on accounting for development and construction contracts and valuation thereof so its far from a simple subject. To opine with any clarity on the subject I'd have to wrap my head around the whole process of what they're doing which is more than likely to make my head hurt so I'm not sure I want to go there to be perfectly honest about it. I think my preference is to simply accept that they have probably used generally accepted accounting methodologies to arrive at that value, their accountants probably exceed my pay grade and probably far more current with the latest accounting standards for construction contracts.

For what its worth, (which I freely admit isn't much as I haven't studied their methodology in any real detail) I think its clearly right that they exclude future developments as they're not currently in progress and the gain from that future development should be recognized in the period of its completion. One should not overlook the number of developments they have consented however as this is a key business risk that's been removed from future cash flows...(ask Julian about the business risk of getting consents at the next SUM annual meeting regarding the Boulcott site).
Its probably worth noting at this point that the cost of getting a consented development can run well into seven figures and I would imagine those costs have been capitalized and included as part of their land valuation.
Regarding current projects in process. From memory the generally accepted process is to use a "percentage of completion assessment process" to determine carrying value and one can't account for gains on the cost of construction until a practical completion certificate of the units has been obtained and an unconditional sale contract has been executed. They might however account for gains on completed units held but unsold at balance date based on independent valuation. Probably throw this into the embedded value formula somewhere or other.

Worth noting that the intangible asset carrying value in the balance sheet is very low and the company is starting to build a credible track record of completing developments on time and on budget, let me assure you this is no easy feat in the Auckland construction market in particular. There's also no value in the balance sheet recorded for their excellent reputation in the care sector, a reputation that nobody builds easily or quickly.

At $1.00 cum a 2.1 cent dividend, a theoretical ex divvy price of 97.9 cps and a forecast underlying profit of 8.42 cps, (directors confirmed guidance as you know) that's a current year PE of just 11.6.
Seems very reasonable indeed to me, all things considered. I think the analysts are being pretty tough on OCA...how good are they really when they were saying on average AIR was only worth $2.10 this time last year ? Analysts have been known to revise valuations dramatically and just try ever getting an apology from one for being wrong lol.

If the market gets a "little silly" to the downside in the days and weeks ahead I might open my shoulders a fair bit more with this one as people are always going to get old and need care aren't they !

[warren]

Was just pointing out the difference between NTA as reported and this net adjusted value thing.

Just thought that most on here know about and understand NTA (and you quoted the wrong number).

Doubt if most on here would understand what this net adjusted value means anyway. For those interested in learning the right hand chart on Slide 24 sort of explains where the extra $60m adjustmentscome from.

Question - Why do you think they exclude the present value of net development cashflows and earnings at both current and future developments (including The Sands and Meadowbank Stage 4 which are under construction) when calculate this net adjusted value — would make the $1.01 higher eh

Hello chaps
I'm 100% with Mr Beagle on this one (OCA being an amazing start up venture having exceeded every projection in their IPO)
Do I read it right --42 million profit far exceeding IPO projections?
Big % of income (Aged Care) streaming in from a stable NZ Government every 2 weeks (geeeeez I've waited 6 months for big public companies to pay).
Some really nice building projects coming along. I have visited 2 of them.
A wonderful reputation (goodwill).
And an approaching tidal wave of customers
Mr Winner69 just sell and I'll add to my considerable holding as I am very very confident here on this 1.

[Beagle]

I don't think he's thinking of selling mate. Knowing Winner a little I think he likes to play devil's advocate and debate both sides of the argument.

[Antipodean]

Director continues to buy on market, a good sign of confidence.

[winner69]

Director continues to buy on market, a good sign of confidence.

Sure is and gives one the warm fuzzies eh and reassurance that maybe I haven't bought a dog of a stock afterall

[couta1]

Hey winner, OCA only worth 1/11 of Ryman SP by the looks not 1/10.

[winner69]

Hey winner, OCA only worth 1/11 of Ryman SP by the looks not 1/10.

...as t_j says OCA is grossly undervalued .....but 10x or 1/10 is easier to work out

Rough day today eh ....watched QF161 from SYD do 2 aborted landings before heading to CHC, AIR SYD flight aborted one landing but was OK second time around and Virgin BNE flight landed beautifully first time in ....and in between a little Sounds Air plane had a decent of landing as well.

[Beagle]

Hey winner, OCA only worth 1/11 of Ryman SP by the looks not 1/10.

For some strange reason :) I think you get first dibs on making the price relativity call. I reckon one tenth is about right but the market thinks one eleventh, your call on this ?

[winner69]

Hey winner, OCA only worth 1/11 of Ryman SP by the looks not 1/10.

Its averaged a tick over 10% since lsiting

Interesting on the day it listed it was 9.2% of RYM and today it is about 9.2% ...spooky eh possums

When it was ramped up to 110 in Augst or thereabouts the % got to over 11% but reversion to the mean kicked in ...as it was overvalued at that time

[Beagle]

Who me ?...ramp a stock, surely not !!!!...wash your mouth out with soap and water :D

[winner69]

Bit of a bummer of a week for OCA share price in that it closed at 102 being the same as last Friday

No recovery this week which doesn't bode well for the next few months

[Beagle]

Bit of a bummer of a week for OCA share price in that it closed at 102 being the same as last Friday

No recovery this week which doesn't bode well for the next few months

Their business model is sound going forward and as discussed the PE is very reasonable for this sector and compared to the market overall. Its a needs based business with very strong long term demographic tailwinds. Early days but this looks like a good long term growth stock to me. Short term doesn't concern me.

[trader_jackson]

Bit of a bummer of a week for OCA share price in that it closed at 102 being the same as last Friday

No recovery this week which doesn't bode well for the next few months

Doesn't sound to bad when you put it that way, no gain no loss on last week I suppose... (with a 2.1c dividend on the way)
Arvida - the origonal dog (and best comparable) - also finished at the same price it was a week ago

[winner69]

Doesn't sound to bad when you put it that way, no gain no loss on last week I suppose... (with a 2.1c dividend on the way)
Arvida - the origonal dog (and best comparable) - also finished at the same price it was a week ago

That just proves that both OCA and ARV are fairly/correctly valued at the moment with most of the next years performance priced in (punters are bullish)

On the other hand SUM was up more than 3% over the week ....with the marketing starting to price in F18 expectations .....with a fair bit to go, making SUM the best bet of the three by a long way.

[warren]

That just proves that both OCA and ARV are fairly/correctly valued at the moment with most of the next years performance priced in (punters are bullish)

On the other hand SUM was up more than 3% over the week ....with the marketing starting to price in F18 expectations .....with a fair bit to go, making SUM the best bet of the three by a long way.


Well lets have a look cause I think your last point is totally barking --------

OCA Profit doubled to $42.5 million (that is up 121% Old chap)
OCA Cash flow (in my experience the KEY issue of all ) up 34% to over $17 M.
OCA Assets up to $1.0 Billion
360 units to be completed in the best areas of NZ (Milford and Brownsbay and I have visited both --they are utterly outstanding)

SUM profit up 45%
no mention of cash flow increases of which there will be.
Total Assets up to $1.9 billion

Both are looking like good attractive well run companies but to partake in SUM will cost you $5.62 (Geeeeez)
and to partake in OCA will cost you $1.02

Are you a serious Investor Old Chap ???????????????????/

[winner69]

Hey warren — please note that awesome cats don’t BARK

But then you probably meant to infer I was mad ......definitely not mad but I’ll forgive you for saying so this time

[Beagle]

Underlying EPS and the future growth of same is what counts. SUM companies have a very good record of growing same, others less so and therefore will command a lower PE multiple until they can prove themselves.

[warren]

Underlying EPS and the future growth of same is what counts. SUM companies have a very good record of growing same, others less so and therefore will command a lower PE multiple until they can prove themselves.

Hello Mr Beagle. Yes Agreed but hey you gonna pay $5.55 (down 2.8%) for that privilege and are you telling me OCA is not growing? I will tell you OCA is growing and fast and whats more earns most of its income from Aged Care which is backbreaking labor intensive and a sad business but as houses are gonna absolutely tank this winter I am delighted to have my $$ slanted to boring old unfashionable Aged Care (rather like W B's slanting towards boring old Insurance).
Geeez what a bargin I got today at $1.00 $ 42 Million Dollars profit --up 121%, bloody hell what a bargin.

[Hectorplains]

Hello Mr Beagle. Yes Agreed but hey you gonna pay $5.55 (down 2.8%) for that privilege and are you telling me OCA is not growing? I will tell you OCA is growing and fast and whats more earns most of its income from Aged Care which is backbreaking labor intensive and a sad business but as houses are gonna absolutely tank this winter I am delighted to have my $$ slanted to boring old unfashionable Aged Care (rather like W B's slanting towards boring old Insurance).
Geeez what a bargin I got today at $1.00 $ 42 Million Dollars profit --up 121%, bloody hell what a bargin.

SUM vs OCA debate

Pensioner 1: Who was the 1974 F1 drivers' champion?
Pensioner 2: Lauda.
Pensioner 1: WHO WAS THE 1974 F1 DRIVER'S CHAMPION?
Pensioner 2: LAUDA!
Pensioner 1: WHO WAS THE 1974 F1 DRIVER'S CHAMPION?
Pensioner 2: LAUDA!!!

etc etc

[warren]

SUM vs OCA debate

Pensioner 1: Who was the 1974 F1 drivers' champion?
Pensioner 2: Lauda.
Pensioner 1: WHO WAS THE 1974 F1 DRIVER'S CHAMPION?
Pensioner 2: LAUDA!
Pensioner 1: WHO WAS THE 1974 F1 DRIVER'S CHAMPION?
Pensioner 2: LAUDA!!!

etc etc

Hello Hector
What is your point? How have you enriched this forum? I will say most contributors here add value to the forum and add analytical value-----that makes this a most enjoyable forum to read.

[steveb]

Hey Warren have you ever been accused of ramping?

OCA is a hold at the mo certainly not a bargain(not bargin) but hey I bought some last week as well just to tuck away for when I retire

[Baa_Baa]

Hello Hector
What is your point? How have you enriched this forum? I will say most contributors here add value to the forum and add analytical value-----that makes this a most enjoyable forum to read.

I thought it was very funny. Lauda! Lol :)

Warren you make a good point but no need to labour it, there won't be a sudden 'eureka moment' where everyone agrees and sells their SUM (or other) to buy 5 or 10x more OCA. The rest home / care sector is and has been an eternal debate from the beginning of the second listing, it will go on ad infinitum, indeed it is almost a sport on this board. The people who don't engage in the debate very often typically own all of the listed companies in the sector. No need then to pick a winner because they're all winners and should be for many years to come. All the best.

BAA

[warren]

Hey Warren have you ever been accused of ramping?

OCA is a hold at the mo certainly not a bargain but hey I bought some last week as well just to tuck away for when I retire

Ramping ??. I had to look the meaning up in Benjamin Graham's textbook on real value in the market. Ah ha got it --It's what Sir Bob Jones used to assist in making his $600 million fortune.

No way----- not me old Chaps--that's a Scurrilous claim-----I just look for value such as $42 mill profit and 1 $ billion of assets all for a buck and an IPO (more risky than a moon shot) that delivers more than it says it will. (and that is the rarest investment pearl of them all)

[winner69]

Ramping ??. I had to look the meaning up in Benjamin Graham's textbook on real value in the market. Ah ha got it --Its what Sir Bob Jones used to assist in making his 600 million fortune.

No way----- not me old Chaps--that's a scurrilousness claim -----I just look for value such as $42 mill profit and 1 billion of assets all for a buck and an IPO (more risky than a moon shot) that does more than it says it will.


C'mon mate - at least do it properly. You need to shout Lauda

No way----- not me old Chaps--that's a scurrilousness claim -----I just look for value such as $42 mill profit and 1 billion of assets all for a buck and an IPO (more risky than a moon shot) that does more than it says it will.

[tim23]

Share price is irrelevant its EPS that matters so don't follow the $1.02 v $5.62 arguement?

[winner69]

Share price is irrelevant its EPS that matters so don't follow the $1.02 v $5.62 arguement?

....but Warren's getting a good bang for his buck

[warren]

Share price is irrelevant its EPS that matters so don't follow the $1.02 v $5.62 arguement?

Yep agreed!---- so lets have a look? SUM has paid (approx) cps 2015 4 cents, 2016 6 cents, 2017 9 cents . I consider that very worthwhile. OCA looks likely to pay 2.1 cps for the 1st half of its financial year.
So as I see it share cost is indeed somewhat relevant.

[huxley]

warren, would you like to purchase my OCA shares? I will accept $5.55 NZD each.. Please private message me.

[huxley]

warren, thank you. I will instruct the Share Registry to arrange the appropriate paper work immediately. All the best.

[warren]

warren, thank you. I will instruct the Share Registry to arrange the appropriate paper work immediately. All the best.

What a weird and unhelpful post. However all the best in your unusual attempts to sell stock.

[Joshuatree]

Hey guys the emoticons are really useful to let people know your sentiment behind your post. For example quite often a post is meant to be humourous but its not interpreted without an aid like:):D:t_up:

[warren]

Hey guys the emoticons are really useful to let people know your sentiment behind your post. For example quite often a post is meant to be humourous but its not interpreted without an aid like:):D:t_up:

:):) Since joining I have found this forum delightfully informative and very helpful.

[winner69]

Ramping ??. I had to look the meaning up in Benjamin Graham's textbook on real value in the market. Ah ha got it --It's what Sir Bob Jones used to assist in making his $600 million fortune.

No way----- not me old Chaps--that's a Scurrilous claim-----I just look for value such as $42 mill profit and 1 $ billion of assets all for a buck and an IPO (more risky than a moon shot) that delivers more than it says it will. (and that is the rarest investment pearl of them all)

What’s this $42mill profit you talk about ....last years ot this year’s forecast?

[warren]

Hello winner. Warren is my name. Well I'm not really talking about anything but I did go to the NZSX website and visit OCA and clicked on "Performance" then "Analysis" and this was the 1st line I saw

"Highlights"
- Reported net profit after tax increased by $20.5m (93%) compared with the prior corresponding period (pcp) to $42.5m due to strong uplift in valuation of investment properties, higher resale margins and sale of new retirement village units

Kind regards.

[winner69]

Hello winner. Warren is my name. Well I'm not really talking about anything but I did go to the NZSX website and visit OCA and clicked on "Performance" then "Analysis" and this was the 1st line I saw

"Highlights"
- Reported net profit after tax increased by $20.5m (93%) compared with the prior corresponding period (pcp) to $42.5m due to strong uplift in valuation of investment properties, higher resale margins and sale of new retirement village units

Kind regards.

Thanks for clarifying what I thought you were referrig to )bit confusing Oceania numbers because they several different versions with different profits)

I'll give you a bit of help with your ramping

That $42.5m NPAT is only for a half year - wow - double that and a bit more for growth and lets say full year NPAT will be $100m

Summerset will probably only make $200m NPAT this year (we'll know next month). Chances are it will less but lets stick to round numbers eh. They'll be making twice what OCA will be making

So the story is even better than you make out

Your OCA at $1 gives you $100m profit (as well as that $1 billion assets)

My SUM at $5 odd gives me $200m profit

Yes old chap - I have obviously backed the wrong horse and you mate are on the winner with this cheap as share

[Beagle]

LOL Winner.
I think SUM people need to have a look at the concept of underlying profit. Read SUM annual reports Warren and do some more homework.
Try and get a handle on what underlying profit is and what embedded value is
https://www.summerset.co.nz/investor-centre/reports-and-presentations/

[winner69]

LOL Winner.

No laughing matter - seems winner is a loser

[Beagle]

No laughing matter - seems winner is a loser

I know you're on too a winner. I suppose at some stage I might have no other alternative but to explain yet again for the umpteenth time the different profit measurement bases and what they mean and how to interpret the data. I tried to do this the other day and got half way through a very lengthy post and to be perfectly honest I nearly lost the will to live so just deleted it and moved on. Much, much easier to simply let people believe what they want to believe isn't it mate.

Its all been explained before at enormous length in the SUM and RYM threads so I think rather than impose any sort of implied moral obligation upon this bean counter to explain it all yet again its incumbent upon newbies around here to do the background reading for themselves. I suggest SUM people read the entire contents of the SUM and RYM thread back to early 2014 and all will become perfectly plain and clear who made the right calls on which retirement stocks and what the really important profit basis is.

I think this company is slowly building the basis for a good future in its market niche and its a defensible and resilient business model in a downturn. On a forward underlying PE of about 12 for a recent listing which is showing some promise it seems good value but without a proven track record of growth is somewhat more risky than the proven performers. I hold a pretty reasonable sized holding.

On the other hand SUM has built a proven six year track record of growing underlying earnings at a CAGR of in excess of 45% and is trading on a forward PE of about 14. I have a larger holding in SUM than OCA.

[scottwalshnz]

I know you're on too a winner. I suppose at some stage I might have no other alternative but to explain yet again for the umpteenth time the different profit measurement bases and what they mean and how to interpret the data. I tried to do this the other day and got half way through a very lengthy post and to be perfectly honest I nearly lost the will to live so just deleted it and moved on. Much, much easier to simply let people believe what they want to believe isn't it mate.

Its all been explained before at enormous length in the SUM and RYM threads so I think rather than impose any sort of implied moral obligation upon this bean counter to explain it all yet again its incumbent upon newbies around here to do the background reading for themselves. I suggest SUM people read the entire contents of the SUM and RYM thread back to early 2014 and all will become perfectly plain and clear who made the right calls on which retirement stocks and what the really important profit basis is.

I was going to say, if you ever feel like rewriting that post, I'd be keen to read it.

I'll do my homework instead and read the threads as per your edit. :)

[couta1]

All the newbies need to know is that SUM is worth roughly half of the RYM share price and OCA is worth about one tenth of the RYM price, the rest is academic.:cool:

[Beagle]

I was going to say, if you ever feel like rewriting that post, I'd be keen to read it.

I'll do my homework instead and read the threads as per your edit. :)

Okay seeing as you put it nicely I'll try and find some enthusiasm to explain it again seeing as there's more than just one new poster interested. Sometime in the next week when I have the time but those thread s are well worth a read in the meantime :)

[Beagle]

All the newbies need to know is that SUM is worth roughly half of the RYM share price and OCA is worth about one tenth of the RYM price, the rest is academic.:cool:

:lol: :lol: :lol: You crack me up mate. Underlying earnings don't matter folks, the Couta1 reversion theory that's stood the test of time trumps all other considerations.

[winner69]

All the newbies need to know is that SUM is worth roughly half of the RYM share price and OCA is worth about one tenth of the RYM price, the rest is academic.:cool:



You're onto it couta

Will stand the test of time I reckon that 'rule' ...might be small variances up and down over time but at the end of the day that 10.5.1 ratio will win outr

[trader_jackson]

Forsyth reckon in 12 months or less OCA will be $1.07 (aka their target price)... PE wise it is the cheapest, by a fair way, at just 12.1 for FY18 estimated PE for fy18 that is

[King1212]

Is today ex dividend? So if sold today got no dividend?

[couta1]

Is today ex dividend? So if sold today got no dividend? Ex on Monday, if you sold today, you won't get the dividend.

[fish]

Ex on Monday, if you sold today, you won't get the dividend.

I bought another pile today.
Too many buyers at 98 cents so paid 99 to make sure i got the divi
Now I have rounded off the number I hold will remind myself not to look at the price for at least 4 weeks-I did not even look at the closing price as didnt want to spoil the week-end
Its one of the stocks for my pension fund- I have no intention of trading

[winner69]

Hey Warren .....that 93% increase in half year NPAT truely impressive

A few things aren’t that comparative and a more realistic comparison would be that Operating Profit was only up 9% on last year. That excludes things like interest and the huge change in tax.

You also rave on about how ‘OCA is growing and fast and whats more earns most of its income from Aged Care’ and these government cheques each two weeks.

So I had a look up and noted only about 50% of earnings came from ‘Aged Care’ but also noted that Aged Care profits were down about 11% on last year ....maybe the two weekly government cheques weren’t big enough

Just as well Oceania is a property development company because that’s where all there increased profits are coming from. Hope that your prediction that the property market is going to collapse this year does come to fruition.

[Yoda]

Okay seeing as you put it nicely I'll try and find some enthusiasm to explain it again seeing as there's more than just one new poster interested. Sometime in the next week when I have the time but those thread s are well worth a read in the meantime :)
Always happy to read your posts ...please."...

[Beagle]

International Financial Reporting Standards
(IFRS) require all property companies to revalue their land and buildings to independent market value each balance date.
This includes brownfield developments sites, (some of which may not be developed for many many years) and the value of the buildings used as communal area's within each village. The underlying profit, (actual realized profit from running their business) plus full revaluation gives you the headline profit figure known as IFRS profit they have to report.

Issues presenting.
1. Land and buildings can move in both directions and therefore IFRS profit can vary widely from one year to the next.
2. Revaluation of common areas (land and buildings) will never be realized unless the whole village is sold or there's a takeover.
3. Revaluation gains may not be realized on existing occupied units subject to existing ORA (Occupation right agreement) for a number of years.

Embedded Value
This is the right time to grasp the concept of embedded value. Embedded value is the difference between the current value as measured by the valuers each year and what the existing residents originally paid. This value is usually expressed somewhere in the analysis that goes with annual results as a per unit value. The higher this value the better as its gives a heads-up as to future real cash profits that will be earned in due course as residents vacate their units and they're resold.

Underlying Profit
This is the measurement used by most professional analysts and many experienced investors and measures the real profit on an underlying basis the company made for the year by operating its business in the normal manner and resale of units vacated by tenants and resold, profits made from development activities and profits from care and other services (excluding the revaluation of all buildings as required under IFRS above)

Its important to understand that some IFRS profits will never be realized and the bulk of them will not be realized in the near future. The rate of realization depends upon the churn rate which will generally be higher with late stage care units like OCA are developing with their care suite model.

OCA could have done a lot better by highlighting in their interim report exactly what underlying profit was made. Its not an easy read even for an accountant and experienced investor.

Embedded values with OCA are very good per unit, their care reputation is also very good and they have a range of consented developments which reduces their business risk going forward. I think their business model is robust and defensible, their underlying PE based on first years underlying profit forecast at 8.42 cps is just 11.5 based on today's 97 cent price and even if we are heading into a market where PE contraction is the name of the game, and I think we are, I think their SP should, (at least in theory), hold up better than most.

P.S. I still prefer Summerset as their six year track record of growing underlying EPS at circa 45% per annum average which is a superb growth rate no matter how you slice and dice it and this is proven performance over a sufficient timeframe to have confidence in the board and management going forward. Their PEG ratio (Price earnings to growth) on a forward basis 14 / 45 = 0.31 means fundamentally they're very very cheap for a proven performer. I see my holding in OCA as a worthwhile diversification from an all SUM position, (quite different business models within this sector)

[winner69]

Good post beagle

Agree that Oceania could have presented their financials in a clearer fashion. Some numbers and comparatives were rather confusing.

Agree Underlying Profit measures operational performance from period to period ....but not always the best measure of company value.

Broker analysts etc like using Underlying Profit to do their valuations but many Investment Managers (real investors rather than wheeler dealers) put a fair bit of consideration to How Book Value is increasing (along with their cash flow forecasts) when assessing what a company in this sector is really worth.

As you know I prefer the Reported NPAT and Book Value numbers rather than than Underlying Profit. One day I’ll convince you.

But good on you explaining some of the intricacies of accounting / reporting in this sector. I’m sure some will be all the wiser for you doing so

[Beagle]

Good post beagle

Agree that Oceania could have presented their financials in a clearer fashion. Some numbers and comparatives were rather confusing.

Agree Underlying Profit measures operational performance from period to period ....but not always the best measure of company value.

Broker analysts etc like using Underlying Profit to do their valuations but many Investment Managers (real investors rather than wheeler dealers) put a fair bit of consideration to How Book Value is increasing (along with their cash flow forecasts) when assessing what a company in this sector is really worth.

As you know I prefer the Reported NPAT and Book Value numbers rather than than Underlying Profit. One day I’ll convince you.

But good on you explaining some of the intricacies of accounting / reporting in this sector. I’m sure some will be all the wiser for you doing so

Thanks. Good luck with that mate. A profit is not a profit until its realised is ingrained deep into any good bean counters psyche BUT any consideration of future underlying profit (which is really what its all about in my opinion), must absolutely be based on expectations surrounding the current embedded value which is a direct function of the revaluation so the current net tangible asset backing is absolutely a key consideration when considering future underlying profit expectations. Fortunately as OCA are moving to an ORA model with their care suites the churn rate with this sort of facility will be pretty quick in comparison to other industry participants.

[peat]

so lets just say you two actually agree because you both emphasize NTA as where the future profit lies.

"future underlying profit (which is really what its all about)" is based on embedded value - net tangible asset backing is absolutely key

[warren]

so lets just say you two actually agree because you both emphasize NTA as where the future profit lies.

"future underlying profit (which is really what its all about)" is based on embedded value - net tangible asset backing is absolutely key



Yes I concur 100% with Mr Beagle and others with their most knowledgeable comments. I am aware of these strong measures of fiscal potential and future well-being but I come back to personal experience. I have been in business with good tangible assets and embedded value and not a cent to pay anyone hence my preoccupation/insistence on cash flow. However I am even more of a supporter of Brian Gaynor's view's on values, discipline, honesty and ethics being possibly the most important "assets' a firm/management team has.
quote "This columnist held onto his 1026 Richina Pacific shares (a re-brand of Mainzeal (1968) to see if the directors would meet their 2008 promises.

The simple answer is that they haven't. No annual report, notice of meeting, dividend or any other correspondence has been received since 2009".

A sharp correction in housing prices in AK would see all of us investors relying on Brian's values in our management teams to maintain our nest eggs and I'm confident.

[Jay]

Is this how Oceania, SUM, RYM etc work in general
Example only - Joe buys a unit for $100K, Joe pays his monthly fixed fee, time goes by and sadly Joe passes away. Joe's estate gets $100K back less the "manage fee" (20% or whatever it may be) if that is what they call it.
The retirement village now sells the unit to Jane for $125K as property prices have increased and so on and so on.

[couta1]

Is this how Oceania, SUM, RYM etc work in general
Example only - Joe buys a unit for $100K, Joe pays his monthly fixed fee, time goes by and sadly Joe passes away. Joe's estate gets $100K back less the "manage fee" (20% or whatever it may be) if that is what they call it.
The retirement village now sells the unit to Jane for $125K as property prices have increased and so on and so on. That's the one.

[777]

Is this how Oceania, SUM, RYM etc work in general
Example only - Joe buys a unit for $100K, Joe pays his monthly fixed fee, time goes by and sadly Joe passes away. Joe's estate gets $100K back less the "manage fee" (20% or whatever it may be) if that is what they call it.
The retirement village now sells the unit to Jane for $125K as property prices have increased and so on and so on.

Remember that Joe is buying the "right to occupy", not the unit itself.

[dobby41]

Is this how Oceania, SUM, RYM etc work in general
Example only - Joe buys a unit for $100K, Joe pays his monthly fixed fee, time goes by and sadly Joe passes away. Joe's estate gets $100K back less the "manage fee" (20% or whatever it may be) if that is what they call it.
The retirement village now sells the unit to Jane for $125K as property prices have increased and so on and so on.

That's about the sum of it.
In between Joe and Jane the unit gets a refurbishment depending on how out-of-date it has become so that would cost a little bit.
The 'manage fee' is actually the deferred maintenance fee.

[Beagle]

Had a good read through the half year report hard copy I received today titled Bright from the start. Seems like a pretty fair name to put on the report all things considered.
Certainly in stark contrast to other listings in recent years like Metro Glass and Tegal. Early days but the signs are starting to emerge this could be a good long term hold. Cash flow looks sound and the standard of service delivery is stellar. Agree with Warren these are very important factors when assessing any company.

[Food4Thought]

Have had a look over OCA website and OCA in ASB share platform. Can't find a DRP option. If anyone has any info would appreciate your help. Keen for my divi to be DRP allocated asap. I enjoy reading the knowledge shared here, insight and opinions. Thanks in advance for any help.

[dabsman]

I looked too and I dont think one is offered at this point. All my holdings are DRP if available

[trader_jackson]

https://www.stuff.co.nz/business/101265814/oceania-to-spend-85m-on-trevellyn-redevelopment

[Beagle]

Thanks t.j. looks good. Very solid pipeline of consented developments. The way they have been completing projects on time and on budget in Auckland is something of a miracle really if FBU's performance is anything to judge by ! Augers well for future projects like the one you've referenced. Early signs provide good encouragement to those contemplating holding for the long term.

[JoeGrogan]

Had a good read through the half year report hard copy I received today titled Bright from the start. Seems like a pretty fair name to put on the report all things considered.
Certainly in stark contrast to other listings in recent years like Metro Glass and Tegal. Early days but the signs are starting to emerge this could be a good long term hold. Cash flow looks sound and the standard of service delivery is stellar. Agree with Warren these are very important factors when assessing any company.

Did you have to ask for the HY report in hardcopy?

[Beagle]

Did you have to ask for the HY report in hardcopy?
I didn't ask, it simply arrived. Not sure where you're going with that question but possibly worth a debate. (I guess it depends if you've previously elected with the registry concerned to receive all future shareholder communications electronically). My view and a place to debate that issue if you wish. https://www.sharetrader.co.nz/showthread.php?11236-Electronic-v-Hard-copy-Shareholder-communication&p=703804#post703804

[Food4Thought]

I looked too and I dont think one is offered at this point. All my holdings are DRP if available

> I have been informed that they do not have a DRP option yet. In future if it was to happen shareholders will be notified. I am crossing my fingers they do a DRP option soon. Very big fan of reinvesting into the company for growth, resilience, research and development. Having the option in my opinion is better for attracting a variety of shareholder types. Will just have to buy on market to reinvest the divi coming my way.

[winner69]

Over $1 again

What a star is OCA - one of the unheralded stocks on the bourse

Even so it will be over $1.10 soon and $1.20 odd by Easter

[Beagle]

Over $1 again

What a star is OCA - one of the unheralded stocks on the bourse

Even so it will be over $1.10 soon and $1.20 odd by Easter

I'm starting to feel a little better about the general markets prospects, especially needs based business's trading on very realistic PE multiples. This and SUM are as cheap as chips.

[BlackPeter]

I'm starting to feel a little better about the general markets prospects, especially needs based business's trading on very realistic PE multiples. This and SUM are as cheap as chips.

Agree. One of my problems is - how many of these "cheap as" chips can I afford to eat before my portfolio is seriously overweight towards retirement stocks? Already on the borderline to obesity and it is so tempting to buy SUM more OCA ...

[winner69]

Still ‘undervalued’ relative to RYM

‘Fair value’ being $1.05

BP - SUM overvalued on that basis so if topping up in sector definitely go the OCA way

[Beagle]

Agree. One of my problems is - how many of these "cheap as" chips can I afford to eat before my portfolio is seriously overweight towards retirement stocks? Already on the borderline to obesity and it is so tempting to buy SUM more OCA ...

I checked with my therapist for you mate and he said as long as we don't get OCD we're all good :) He did say I might be a borderline case though :lol:

[couta1]

General Property Manager does a wee top up to take his holding to over 1.5 mill shares, read between the lines.

[winner69]

Jeez back to 98 cents

Becoming bit of a dog is this OCA

Maybe SUMs boomer result tomorrow might lift OCA out of the doldrums

That be funny in some ways — Warren wouldn’t believe that OCA needs a bit of help from SUM

[warren]

Jeez back to 98 cents

Becoming bit of a dog is this OCA

Maybe SUMs boomer result tomorrow might lift OCA out of the doldrums

That be funny in some ways — Warren wouldn’t believe that OCA needs a bit of help from SUM

Well hello Mr Winner. Business is tough any help is a godsend:Any honest, sustainable, transparent, outstanding result should indeed be celebrated by all. OCA is in a tough game looking after aged and often unwell folks of usually limited means. That's why OCA needs 3250 staff and has to be very very good to make me 5% net and that's the way I like it. To date OCA has met/surpassed every single promise. Big, proven, ethical caregivers with top standards and Directors from within the shop, backed by the best cash flow business in NZ. Lets catch up in 10 years time to see who the puppy is. I'm picking OCA will be busier than ever with 35000 staff. I don't worry about share price. In a lifetime of experiences in business I have found demand, standards, service, ethics, honesty, transparency and managerial energy to be omnipotent

[Beagle]

I topped up a few more yesterday at 98 cents. Good long term opportunity at that price as has been demonstrated by Directors putting their money where their mouth is at that level.

[percy]

I topped up a few more yesterday at 98 cents. Good long term opportunity at that price as has been demonstrated by Directors putting their money where their mouth is at that level.

Very modest ratios for a company with such a strong development path in this growth sector.

[Beagle]

Very modest ratios for a company with such a strong development path in this growth sector.

Yes I think the market is waiting to see how their track record plays out. If they beat guidance and the outlook is sound there's a genuine opportunity for sector outperformance over the next year or two as they re-rate to a multiple more towards the middle of the sector. Needs based business, very strong reputation and cheap multiple makes this a highly defensive investment with the main risk being development execution. You'd have to say in that regard that getting projects this year to date completed on time and on budget is a very encouraging sign in this construction market and augers very well for the future.

[Exodia]

Yes I think the market is waiting to see how their track record plays out. If they beat guidance and the outlook is sound there's a genuine opportunity for sector outperformance over the next year or two as they re-rate to a multiple more towards the middle of the sector. Needs based business, very strong reputation and cheap multiple makes this a highly defensive investment with the main risk being development execution. You'd have to say in that regard that getting projects this year to date completed on time and on budget is a very encouraging sign in this construction market and augers very well for the future.

As per your comments I consider this a low risk long term investment and am happy to have bought in at $1 last week

[fish]

I topped up a few more yesterday at 98 cents. Good long term opportunity at that price as has been demonstrated by Directors putting their money where their mouth is at that level.

To me,this is one of the most reassuring signs that it is a safe investment.
What is the highest price a director has bought?

[Beagle]

Right on $1 from memory.

[BobbyMorocco]

To me,this is one of the most reassuring signs that it is a safe investment.
What is the highest price a director has bought?

Alan Isaac bought some immediately after the results came out at $1.09. Liz Coutts picked up parcels at $1.04 and $1.02 not long after.

[iceman]

To me,this is one of the most reassuring signs that it is a safe investment.
What is the highest price a director has bought?

This quote taken from Black Peter´s good post on the CBL thread. A worthy reminder for DYOR: " If the directors of a company have lots of skin in the game it might just mean that they have been so far lucky (to make or inherit this money), not that they know what they are doing;"

[macduffy]

This quote taken from Black Peter´s good post on the CBL thread. A worthy reminder for DYOR: " If the directors of a company have lots of skin in the game it might just mean that they have been so far lucky (to make or inherit this money), not that they know what they are doing;"

True, but in OCA's case we have several experienced directors who have proven records elsewhere, not just with "their" company.

[percy]

This quote taken from Black Peter´s good post on the CBL thread. A worthy reminder for DYOR: " If the directors of a company have lots of skin in the game it might just mean that they have been so far lucky (to make or inherit this money), not that they know what they are doing;"

I remember talking to a very knowledgeable investor about a certain gentleman who became Chairman of EBO, a number of years ago.
When I pointed out to him the guy was very wealthy and already a successful businessman ,he told me "anyone who marries a Lord Mayor of London's daughter will be wealthy." He did not last long as Chairman.The fact he was an ex MP should have been warning enough.!
So yes whether they are self made or not is very important.
Then again Sir Doug Myers certainly turned the family wealth into a fortune,as did Kerry Packer.

[Beagle]

True, but in OCA's case we have several experienced directors who have proven records elsewhere, not just with "their" company.
Agreed.

Alan Isaac bought some immediately after the results came out at $1.09. Liz Coutts picked up parcels at $1.04 and $1.02 not long after.
Yes thanks for the reminder, you're quite right. Food for thought if you can hoover some up at about $1 ?

[Xerof]

I switched out of sum SUM for OCA on Friday. Spreading the love for the retirement sector. There's sumthing satisfying with obtaining 6 for 1 and sum change. I know it's a silly concept, so no criticism please

[percy]

I switched out of sum SUM for OCA on Friday. Spreading the love for the retirement sector. There's sumthing satisfying with obtaining 6 for 1 and sum change. I know it's a silly concept, so no criticism please

Big mistake.
You should of switch from RYM to OCA.................10.68 for 1...................?!.lol.

[Xerof]

yeah nah, don't own any RYM, but that was actually another reason for the switch - the couta1 ratio is out of kilter (although no doubt RYM holders will say it'll revert to mean by RYM appreciating).

There's no RYM or reason to SUM of these OCAsional relativities:eek2:

[percy]

yeah nah, don't own any RYM, but that was actually another reason for the switch - the couta1 ratio is out of kilter (although no doubt RYM holders will say it'll revert to mean by RYM appreciating).

There's no RYM or reason to SUM of these OCAsional relativities:eek2:

What a great reply....
Yes the Couta1 ratio remains the benchmark.....................lol.

[warren]

"A knock-on effect of the slowing property market has been an end to the "spectacular growth" in asset values at retirement village Metlifecare. The company, which has 24 villages, has posted an interim net profit of $56.4 million for the six months to December 31, down 65 per cent from $165m the year before"

The above news report is why I love my OCA ----- 3250 staff with well over 50% income flowing from HM NZ Government..Cash is king esp in tough times .I accept the tremendous profit from exceptionally attractive and well positioned apartment sales but its steady year after year growth I want and the OCA formula is attractive to me. The example above (asset values) is not, but I will say $112.8 Mil net profit is still staggering and beyond ANY businesses experience I have even thought about so well done Metlife.

[Bjauck]

"A knock-on effect of the slowing property market has been an end to the "spectacular growth" in asset values at retirement village Metlifecare. The company, which has 24 villages, has posted an interim net profit of $56.4 million for the six months to December 31, down 65 per cent from $165m the year before"

The above news report is why I love my OCA ----- 3250 staff with well over 50% income flowing from HM NZ Government..Cash is king esp in tough times .I accept the tremendous profit from exceptionally attractive and well positioned apartment sales but its steady year after year growth I want and the OCA formula is attractive to me. The example above (asset values) is not, but I will say $112.8 Mil net profit is still staggering and beyond ANY businesses experience I have even thought about so well done Metlife.
There was a major factor in the knock to METs interim NP - accounting for remedial measures for leaky buldings.

Imo I think even in a consolidating housing market (unless prices are in severe long term correction fall) it is the churn in ORAs that will add more to profitability than any profits from long-term care contracts.

If the government does not increase its funding sufficiently (which would probably mean increasing taxes), The increase in pay relativities for carers will have to be met by "wealthy" residents. So either the "wealthy" long-term rest home or hospital residents themselves would need to pay more or there would need to be a cross-subsidy from those who enter into ORAs. Those villages that have a higher proportion of ORAs could be at an advantage.

[warren]

Hello Bjauck. Ah ha I didn't know that re leaky building provision. Yes I agree 100% with you but for me, as an ethical investor, the 3250 staff, the very good care of the frail, the ill and elderly, makes me feel good. And I have never ever forgotten what Sir James Fletcher 2nd said to me "I'm delighted when my company makes 5% net earned (as against asset revaluation) because its so tough out there " .

[Bjauck]

...as an ethical investor, the 3250 staff, the very good care of the frail, the ill and elderly, makes me feel good... In an ideal society, staff should always be appropriately paid and the vulnerable should always receive the best available care. However judgment and these aspects vary according to time and place! Who should pay for it?

[warren]

Umm Who indeed??? Excellent thinking man's question. But a company with high managerial energy, high skill and high ethics, honed by competition will do it's business more efficiently than one without. That I do know.

[Ggcc]

At these prices of what I hear what people have typed. This share is cheap..... or is it? In comparison to Ryman, hell yeah for the short term. Summerset is getting up there right now, but it has been a long time coming........... When is the right time to invest as everything heads south for the day?

[value_investor]

At these prices of what I hear what people have typed. This share is cheap..... or is it? In comparison to Ryman, hell yeah for the short term. Summerset is getting up there right now, but it has been a long time coming........... When is the right time to invest as everything heads south for the day?

Track record and reputation is important in this sector (any sector really but for a new company its hard to pinpoint). What history do we have of OCA delivering projects on time? On hitting unit numbers? Not letting projects balloon cost wise hugely out of control?

OCA have done mostly what they said they would do up to this point but hey, its not as though they have over promised and over delivered. The price movements reflect the cautious nature of a new company doing what they said they would and nothing more.

[Beagle]

Just be patient with this one folks. Directors have a significant stake and have been increasing their shareholding lately at up to $1.09. Disc: Holder

[percy]

Always remember to take your own advice.!...lol.

[Beagle]

lol...trying to learn to be a more patient hound...not always easy as Beagle's love to eat their food quickly !

[RTM]

Just be patient with this one folks. Directors have a significant stake and have been increasing their shareholding lately at up to $1.09. Disc: Holder

Don't the Turners directors also have a significant stake in their company Mr Beagle ?

[Beagle]

Don't the Turners directors also have a significant stake in their company Mr Beagle ?

Apples and oranges are two completely different types of fruit.

[Ggcc]

Someone is very keen to see this share stay under a dollar. If they grow like all the other retirement sectors this price is a steal

[warren]

Someone is very keen to see this share stay under a dollar. If they grow like all the other retirement sectors this price is a steal

Umm. OK. I don't disagree. Then the answer is to buy and buy and buy so that at $2 one has made 101% plus the dividend which one could confidently calculate at 4.5% on the original $1. Go for it :D

[Ggcc]

Umm. OK. I don't disagree. Then the answer is to buy and buy and buy so that at $2 one has made 101% plus the dividend which one could confidently calculate at 4.5% on the original $1. Go for it :D
I have this share at lower than these prices and am looking at getting more when money is available. But I do need to know they are on the correct pathway before I purchase more. No point in throwing money at it in the hope they will do well. Lost money in the past on hope and hype

[winner69]

Someone is very keen to see this share stay under a dollar. If they grow like all the other retirement sectors this price is a steal

what makes you think that ggcc ....the keeping the price under a dollar bit that is

[Ggcc]

what makes you think that ggcc ....the keeping the price under a dollar bit that is

Just a gut instinct.

Guess for those who don't think short term it is ok, but those who think short term, they seeing a loss of their trading balance and get out. Again only a gut instinct and people need to do their own research.

[macduffy]

The way to keep the price under $1 is to sell into any demand for the stock. So, what's the strategy here? Seeking to drown the opponent in your own blood? Or is there some other cunning plan?

[Ggcc]

The way to keep the price under $1 is to sell into any demand for the stock. So, what's the strategy here? Seeking to drown the opponent in your own blood? Or is there some other cunning plan?

Buying at the cheaper price by forcing the price down (Large investors) sometimes it is like dominos (not the Pizza). As people say the trend is your friend

[777]

Buying at the cheaper price by forcing the price down (Large investors) sometimes it is like dominos (not the Pizza). As people say the trend is your friend

The only people that can force the price down is the sellers accepting a lower price. Buyers can only stand on the sidelines waiting for the price to come down to what they are prepared to pay.

[Ggcc]

The only people that can force the price down is the sellers accepting a lower price. Buyers can only stand on the sidelines waiting for the price to come down to what they are prepared to pay.

Cant the seller also be the buyer driving the price down??? Maybe my head is thinking too hard.

[winner69]

Cant the seller also be the buyer driving the price down??? Maybe my head is thinking too hard.

Maybe the head is thinking too hard

Probably because you don’t like to see the price falling ...it should be going up eh

Maybe the market per se just thinks it’s not really worth a buck anyway and settling on some lower price

[Brain]

Cant the seller also be the buyer driving the price down??? Maybe my head is thinking too hard.

I am sure manipulating the market to that extent ie the seller and the buyer being the same would be illegal. At least I hope it would be.

[Beagle]

Who gives a "buck" whether its a buck or one or two cents either side ? Retirement company investing is all about holding for the long term and enjoying the strong demographic tailwinds this sector enjoys. We know the directors have a decent amount of skin in the game and this is a needs based business trading on very undemanding fundamental's. I think this is one share you can relax with and settle in for the long haul.

[couta1]

Who gives a "buck" whether its a buck or one or two cents either side ? Retirement company investing is all about holding for the long term and enjoying the strong demographic tailwinds this sector enjoys. We know the directors have a decent amount of skin in the game and this is a needs based business trading on very undemanding fundamental's. I think this is one share you can relax with and settle in for the long haul. Now you couldn't get a better summary than that.