OCA - Oceania Group - retirement villages

[Beagle]

I think your $1.5m is prior year .... Sept21 the difference is $16m

They've also told me in the past that sales/construction people costs are usually capitalised.

All very complicated isn't it ....that's why I tend to follow the money ..... through the cash flow statement

From memory they said they're in dispute with the Govt regarding underfunding the care sector by just on 5% so maybe that's not a permanent situation. Overall however, I think its always been accepted that there's an element of cross subsidization of healthcare costs from the property operations. My hope is this will reduce over time as they continue the premiumization of their care product offer. 70% premium care compared to 30% basic is the official goal, (about 5 years away), but I expect over time they will look to move the goal posts even further towards premium care.

[Ferg]

I think your $1.5m is prior year .... Sept21 the difference is $16m

They've also told me in the past that sales/construction people costs are usually capitalised.

All very complicated isn't it ....that's why I tend to follow the money ..... through the cash flow statement

Nice catch and fair call re following the cash. But I think the waters are being muddied for care operations vs village operations/sales with that view. I expect construction costs would be capitalised but not sales - that sounds very strange.

Re-running the numbers (for the correct year) shows employee costs have grown to 71% of total costs, up from 68%. Implied "care operations" employee costs have gone from $52m -> $60m. The absolute numbers need to be in the context of revenues, whereas the relative numbers suggest things are a-changing. I believe there was a $1.8m subsidy in the last fiscal year which explains a portion of the overall increased employee costs (i.e. not just care) - see my quick rec at the bottom of this post.

Unfortunately we don't get the reconciliation of operating cash flows to NPAT with the half year report but I do note that:

trade payables were down $10.5m (= operating cash outflow)
trade receivable were up $9.5m (= operating cash outflow, but was some non-care?)
total impact of these 2 Balance Sheet items is -$20m operating cash outflow
total cash shortfall per the top 3 lines of the cashflow statement is -$18m but IMO employee costs of the unit sales team would fall under village operations and that revenue is shown further down the CF statement, hence the raw comparison IMO is misleading


Quick rec of care operations wages:



Care Operations








1H21
subsidy
growth
other
1H22










Revenues
$87

+$6

$93










est. Wages
$52
+$1
+$3
+$4
$60



Wages is estimated as previously posted, then adding back say half the subsidy (some would be non-care), adjusting for increased sales activity (staff costs would be variable / semi variable) leaves an unexplained $4m increase for 1H22. On an adjusted base of $53m, this implies inflationary and/or COVID requirements growth in "care operations" employee costs of 7-8%.

[Beagle]

this implies inflationary and/or COVID requirements growth in "care operations" employee costs of 7-8%. About the average rate of increase since they listed more than four and a half years ago. This appears to be a systemic issue and something I have talked about extensively before and by FAR the biggest reason why I only run with a modest stake.

[Joshuatree]

Good post Forest. From memory late last year Gregory Tomlinson, (who is nobody's fool and a very astute and wealthy businessman) bought a couple of million at about $1.40. Caregiver and nurses wages have increased a LOT in the last few years and this is something I have commented about extensively already. Vastly more than the inflation rate. I believe experienced registered nurses now command very close to $40 per hour.

That said, from a TA point of view none of the charts of stocks in this sector look any good so at this point I am happy to run with a pretty modest ~ 7.5% allocation to this sector, most of which is OCA and the rest ARV and am reluctant to add other than at genuine rock bottom bargain prices.

The nurses do the medications and wound dressing but it's the caregivers mostly on $23 or less do all the real hard stuff,changing naps,feeding ,showering etc who look after our loved ones for peanuts.No wonder moral is so bad,the nurses have it so easy in comparison and earn so much more.

[Waltzing]

Surely that wage structure cant be sustainable in the future.

[winner69]

From memory they said they're in dispute with the Govt regarding underfunding the care sector by just on 5% so maybe that's not a permanent situation. Overall however, I think its always been accepted that there's an element of cross subsidization of healthcare costs from the property operations. My hope is this will reduce over time as they continue the premiumization of their care product offer. 70% premium care compared to 30% basic is the official goal, (about 5 years away), but I expect over time they will look to move the goal posts even further towards premium care.

Element of cross subsidisation .... cant continue for ever ...says beagle

My simplistic view of the cash flow mentioned earlier is that nearly 30% of the proceeds from selling things (units/licenses) went on 'subsidising' day to day operations

Only the last six month period but inflicting pain on shareholders and not past the point of inflection (sorry BP)

[Joshuatree]

Surely that wage structure cant be sustainable in the future.

Its endemic NZ wide in many industries.Import cheap labour because many kiwis are not prepared to be exploited or subsist.

[artemis]

The nurses do the medications and wound dressing but it's the caregivers mostly on $23 or less do all the real hard stuff,changing naps,feeding ,showering etc who look after our loved ones for peanuts.No wonder moral is so bad,the nurses have it so easy in comparison and earn so much more.

Common to hear frequently that different sectors deserve higher pay. Look a bit closer, bearing in mind that half of the working population is below average intelligence. Maybe the job they do is suited to their level of education or choice. If not, there's upskilling and building experience, and employers do often support that.

Meantime, for those on lower incomes there can be significant government support available.

There was some discussion a while back about some companies in the retirement sector that moved staff to roles that did not attract higher rates. Business decision, and unlikely those moved into different roles were the most versatile staff.

[Ggcc]

Its endemic NZ wide in many industries.Import cheap labour because many kiwis are not prepared to be exploited or subsist.
Or most residents don’t or can’t pay the true cost that would require staff to be “paid adequately” and so companies need to source elsewhere.

Most kiwis I speak to feel plain entitlement and don’t know how lucky they have it. As Artemis mentioned low skills means low pay. No one to blame but themselves. Sure we are in a different market nowadays and maybe rest homes could do slightly better. I would also like nurses and caregivers to earn way more, but how much more should they get?

Your thoughts sound like these guys make multi millions for caring for their patients, which we know they really don’t.

[Bjauck]

Or most residents don’t or can’t pay the true cost that would require staff to be “paid adequately” and so companies need to source elsewhere.

Most kiwis I speak to feel plain entitlement and don’t know how lucky they have it. Sure we are in a different market nowadays and maybe rest homes could do slightly better. I would also like nurses and caregivers to earn way more, but how much more should they get?

Your thoughts sound like these guys make multi millions for caring for their patients, which we know they really don’t. Not really an Oceania specific issue, but surely it is the government that sets the maximum contribution for residential care, which is also the amount that residents, ineligible for a residential care government subsidy pay for the basic care package. This is set whether or not individual residents feel entitled. So is it the government that is squeezing the sector to avoid raising taxes to pay more adequately/generously for rest home services? Residents can still opt to pay for additional "premium" services.

Supply (whether from overseas or NZ) and demand may determine labour rates. So immigration policies do help to determine pay rates. Similarly, emigration affects supply - for example if NZ workers are enticed overseas by higher salaries and cheaper housing/accommodation.

[Panda-NZ-]

It's also working conditions I think. Who wants to do this sort of thing when you can get a job in retail, a supermarket or some other laid back position.

[iceman]

It's also working conditions I think. Who wants to do this sort of thing when you can get a job in retail, a supermarket or some other laid back position.

Lots of people like to work as caregivers and get an enormous satisfaction from it. The ones I have met a generally wonderful and very kind people that like to do what they do. Of course they deserve a fair remuneration and conditions for what they do. Everybody does. But what is fair ?

[Ggcc]

Not really an Oceania specific issue, but surely it is the government that sets the maximum contribution for residential care, which is also the amount that residents, ineligible for a residential care government subsidy pay for the basic care package. This is set whether or not individual residents feel entitled. So is it the government that is squeezing the sector to avoid raising taxes to pay more adequately/generously for rest home services? Residents can still opt to pay for additional "premium" services.

Supply (whether from overseas or NZ) and demand may determine labour rates. So immigration policies do help to determine pay rates. Similarly, emigration affects supply - for example if NZ workers are enticed overseas by higher salaries and cheaper housing/accommodation.
I understand what you are saying, but the “greedy company” gets the blame not the government.

Some of these residents also work as kitchen hands, cleaners, gardeners and when they are not caring for residents get lower wages than caring for residents. The company can chose voluntarily to pay more, but in reality can’t.

Oceania mentioned they are negotiating with the government with a shortfall in funding, as wage costs increased faster than the governments increase in funding.

[bull....]

some cheap slaves from a far will keep them all happy

[Panda-NZ-]

Lots of people like to work as caregivers and get an enormous satisfaction from it. The ones I have met a generally wonderful and very kind people that like to do what they do. Of course they deserve a fair remuneration and conditions for what they do. Everybody does. But what is fair ?

Maybe something above the absolute minimum post-inflation (which has been 4-5% this year).

[Ggcc]

some cheap slaves from a far will keep them all happy
Are you blaming the company or the government? Labour always looks after the worker………..

[mike2020]

Depending on what you consider a worker I'd have to wonder if I'm missing the sarcasm? Never has an nz government overseen such a massive rise in inequality. I still think labour only won the last election the one previous should have been bill English's and there was a man with a long term social plan. All this Eastside westside stuff isn't really about oca. Yes the company needs more funding.

[Bjauck]

Are you blaming the company or the government? Labour always looks after the worker………..
Not this Labour government or PM, apart from just lip service!

[mike2020]

Exactly. If the retirement industry needs to make money out of property to subsidize care what does that say about any govt. How can a company be accused of greed in that scenario?

[Beagle]

I understand what you are saying, but the “greedy company” gets the blame not the government.

Some of these residents also work as kitchen hands, cleaners, gardeners and when they are not caring for residents get lower wages than caring for residents. The company can chose voluntarily to pay more, but in reality can’t.

Oceania mentioned they are negotiating with the government with a shortfall in funding, as wage costs increased faster than the governments increase in funding.

That hits the nail directly on the head !

Government deliberately underfunding this sector and OCA in formal dispute with them for 4.8% underfunding of basic care services.
Government choosing to not even be interested in discussing the extra Covid costs this sector has had to bear.
Property profits have been subsidising the true cost of care services ever since OCA was floated to the tune of many, many millions per annum.

If people are going to apportion blame for the low wages for low skilled workers in this sector please blame the Government and not the company.

As an aside, I do believe that many people choose this line of work because they find it richly rewarding in ways other than financially. Only natural some of them would get burnout. Anyone not looking to upskill and climbing the ranks to become level 4 caregiver and earning circa $27-28 per hour maybe should look in the mirror and ask why they're not putting in the effort ? Better still, with the desperate shortage of trained nurses why not train to be a registered nurse and earn $40 an hour ? I suppose its easier for people to sit on their backsides and blame others...

Since Adam was a boy if you're prepared to put in some effort with training and education you'll earn a lot more than if you don't.

[winner69]

REINZ December data ……median price down 1.6% on November (some would annualised this and conclude down 20% ha ha) …but overall they say a pretty strong month. Hope Oceania getting good prices.

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




However Westpac full of gloom and doom for rest of year

https://westpaciq.westpac.com.au/Article/50829/53404/

[Beagle]

Bank economists have called more than 20 of the last 2 downturns in the market.

[davflaws]

Not this Labour government or PM, apart from just lip service!

And if they actually did develop and implement policies to reduce inequality and raise the real incomes of those anywhere near the bottom of the heap - most of the posters on this site would be screaming blue murder!

[ralph]

The reason a lot practically all these care givers do not go forward with the training to become Nurses is again economics ,and the ridiculous state of affairs that in this day an age a trainee nurse has to take time off & go to university .
Match this to the fact Builders do not and just do on the job training ,so we can churn out builders with a steady stream of fully paid working apprentices/trainees this has moved on from the apprenticeship 4-5 years of college training.
So nursing training needs to move on to be not a huge financial burden and impossible for someone with commitments to take that time off .

[Bjauck]

That hits the nail directly on the head !

Government deliberately underfunding this sector and OCA in formal dispute with them for 4.8% underfunding of basic care services.
Government choosing to not even be interested in discussing the extra Covid costs this sector has had to bear.
Property profits have been subsidising the true cost of care services ever since OCA was floated to the tune of many, many millions per annum.

If people are going to apportion blame for the low wages for low skilled workers in this sector please blame the Government and not the company.

As an aside, I do believe that many people choose this line of work because they find it richly rewarding in ways other than financially. Only natural some of them would get burnout. Anyone not looking to upskill and climbing the ranks to become level 4 caregiver and earning circa $27-28 per hour maybe should look in the mirror and ask why they're not putting in the effort ? Better still, with the desperate shortage of trained nurses why not train to be a registered nurse and earn $40 an hour ? I suppose its easier for people to sit on their backsides and blame others...

Since Adam was a boy if you're prepared to put in some effort with training and education you'll earn a lot more than if you don't. I agree many have chosen their career for all sorts of reasons. With my family member in care, I met some really caring carers. However at the end of the day, they do still want to establish a home and be able to afford a comfortable lifestyle. If Australia offers the same job satisfaction but with a higher standard of living too for the same qualification or skill level, I can understand that both new and well established NZ residents would be tempted to go there.

[Bjauck]

And if they actually did develop and implement policies to reduce inequality and raise the real incomes of those anywhere near the bottom of the heap - most of the posters on this site would be screaming blue murder! True.

*edited - off-topic*

[artemis]

And if they actually did develop and implement policies to reduce inequality and raise the real incomes of those anywhere near the bottom of the heap - most of the posters on this site would be screaming blue murder!

I have followed a few companies in the sector for a while. Most if not all have referred to staff development opportunities. I expect completions will come with pay rises. Sounds like a plan to 'reduce inequality' and 'raise the real incomes'. Just needs effort, personal responsibility and some level of ability. As always.

[Beagle]

I have followed a few companies in the sector for a while. Most if not all have referred to staff development opportunities. I expect completions will come with pay rises. Sounds like a plan to 'reduce inequality' and 'raise the real incomes'. Just needs effort, personal responsibility and some level of ability. As always.

Bingo !! I have read and heard the same from multiple employers in this sector.

The issue for huge numbers of people is the same as its always been that its much easier to bleat like lambs lost from their mother that life isn't fair and expect someone else to fix their problem rather than take personal responsibility for doing something about it themselves.

I can see it in my kids, one who has my bloodline takes life by the horns and gets on with it and builds something for herself, my stepdaughter on the other hand, (whose father was a drifter), bleats endlessly that life isn't fair and sucks off the taxpayer teat as a solo mother. Both raised in the same household and taught the same but totally different outcomes. Maybe its genetic...you either have what it takes in you or you don't ?

[Panda-NZ-]

I have followed a few companies in the sector for a while. Most if not all have referred to staff development opportunities. I expect completions will come with pay rises. Sounds like a plan to 'reduce inequality' and 'raise the real incomes'. Just needs effort, personal responsibility and some level of ability. As always.

Artemis is impressed by the glossy brochure.

One could follow the australian path and give real bargaining power and leverage to employees.

[Eden]

Bingo !! I have read and heard the same from multiple employers in this sector.

The issue for huge numbers of people is the same as its always been that its much easier to bleat like lambs lost from their mother that life isn't fair and expect someone else to fix their problem rather than take personal responsibility for doing something about it themselves.

I can see it in my kids, one who has my bloodline takes life by the horns and gets on with it and builds something for herself, my stepdaughter on the other hand, (whose father was a drifter), bleats endlessly that life isn't fair and sucks off the taxpayer teat as a solo mother. Both raised in the same household and taught the same but totally different outcomes. Maybe its genetic...you either have what it takes in you or you don't ?

At the risk of being snarled at, I feel like you're straying into dubious territory here Beagle. Is it necessary to make generalisations of this sort?

[Beagle]

Warren says it more eloquently than I did. https://www.youtube.com/watch?v=h89uOvUDVO4

[James108]

Is it capitalism to want government to subsidise companies but not the poor?

[Habits]

Warren says it more eloquently than I did. https://www.youtube.com/watch?v=h89uOvUDVO4

Excellent stuff cheers

[Panda-NZ-]

Is it capitalism to want government to subsidise companies but not the poor?

Govt provided subsidies going straight to shareholders.

[artemis]

Govt provided subsidies going straight to shareholders.

Maybe the government should phase out the taxpayer subsidies to the private sector and build the capability to provide services itself. Cut out the middleperson, leave the private sector to look after the well off. Good idea?

Bear in mind a lot of care providers are small and local, and some have already closed or have been sold on.

[alokdhir]

Where is that person who said it will never go below 130 ...Never ever ...Never ...:p

[850man]

Maybe the government should phase out the taxpayer subsidies to the private sector and build the capability to provide services itself. Cut out the middleperson, leave the private sector to look after the well off. Good idea?

Bear in mind a lot of care providers are small and local, and some have already closed or have been sold on.

You mean like building 100,000 houses - yep that's gonna work

[thegreatestben]

Adding political exposure/reputational risk to anything will undermine it completely. I work for KiwiBuild :bored:

[bull....]

1.20 still on

[dreamcatcher]

1.20 still on

One of the most pumped stocks so not surprised .......

Disc:hold buy $1 still plenty of unknown headwinds

[bull....]

One of the most pumped stocks so not surprised .......

Disc:hold buy $1 still plenty of unknown headwinds

lol pumped like it was the messiah arrival , yet the market remains unconvinced and the disciples have gone all quiet ?

[Waltzing]

the markets is now counting the Dog days of summer...

[Bjauck]

the markets is now counting the Dog days of summer... The markets - and many people - are jittery with the Omicron hordes knocking at the gates of Aotearoa. How will Omicron affect retirement villages and rest homes? NZ was comparatively successful at keeping the previous Covid variants out of retirement villages and rest homes. However can Omicron be kept out of the Hermit Kingdom forever?

[Maverick]

lol pumped like it was the messiah arrival , yet the market remains unconvinced and the disciples have gone all quiet ?
Ill respond to that Bull, although I know I shouldn't.

Sure I get it that unresearched investors and traders will be well concerned ( or happy ) about the share price movements of the last few months . But as a long term holder what is there to really talk about of value or even just kicking a ball around since their 1HY report?

As someone primarily interested in the business rather than SP, the only tit bits that are of note to me since HY report to bother commenting on are;
-SUM sales for the recent 3rd quarter are strong.
-HPI is still increasing , although significantly slowing and median house prices remain at very elevated levels,
-NZ vaccination rates have since increased further to have reached very healthy levels for the inevitable.
-RYMAN have this week had this said about them..."Ryman Healthcare is ably coping amid the flood of omicron cases in Australia" ..."we believe Ryman had strong sales in December."...and ..."We believe much of the cost inflation is temporary and can be partly passed on, so we haven't changed our earnings assumptions"
-The building/supply shortage is obviously not affecting OCA as many feared as it brought its next large delivery forward at Hamilton.
-Our target clients just got richer and two months older since HY1.

Understandably the share price itself will be upsetting for many but fundamentally OCA is in great shape. As far as Omicrons effect on the business goes IMO I think the Share price has very much overreacted. As Rob Muldoon once said..." it`ll only be half as bad as you think".

(I do not intend to be ramping , I don't care if you buy, hold or sell )

[percy]

Ill respond to that Bull, although I know I shouldn't.

Sure I get it that unresearched investors and traders will be well concerned ( or happy ) about the share price movements of the last few months . But as a long term holder what is there to really talk about of value or even just kicking a ball around since their 1HY report?

As someone primarily interested in the business rather than SP, the only tit bits that are of note to me since HY report to bother commenting on are;
-SUM sales for the recent 3rd quarter are strong.
-HPI is still increasing , although significantly slowing and median house prices remain at very elevated levels,
-NZ vaccination rates have since increased further to have reached very healthy levels for the inevitable.
-RYMAN have this week had this said about them..."Ryman Healthcare is ably coping amid the flood of omicron cases in Australia" ..."we believe Ryman had strong sales in December."...and ..."We believe much of the cost inflation is temporary and can be partly passed on, so we haven't changed our earnings assumptions"
-The building/supply shortage is obviously not affecting OCA as many feared as it brought its next large delivery forward at Hamilton.
-Our target clients just got richer and two months older since HY1.

Understandably the share price itself will be upsetting for many but fundamentally OCA is in great shape. As far as Omicrons effect on the business goes IMO I think the Share price has very much overreacted. As Rob Muldoon once said..." it`ll only be half as bad as you think".

(I do not intend to be ramping , I don't care if you buy, hold or sell )

Thanks for your excellent post.

[bull....]

Ill respond to that Bull, although I know I shouldn't.

Sure I get it that unresearched investors and traders will be well concerned ( or happy ) about the share price movements of the last few months . But as a long term holder what is there to really talk about of value or even just kicking a ball around since their 1HY report?

As someone primarily interested in the business rather than SP, the only tit bits that are of note to me since HY report to bother commenting on are;
-SUM sales for the recent 3rd quarter are strong.
-HPI is still increasing , although significantly slowing and median house prices remain at very elevated levels,
-NZ vaccination rates have since increased further to have reached very healthy levels for the inevitable.
-RYMAN have this week had this said about them..."Ryman Healthcare is ably coping amid the flood of omicron cases in Australia" ..."we believe Ryman had strong sales in December."...and ..."We believe much of the cost inflation is temporary and can be partly passed on, so we haven't changed our earnings assumptions"
-The building/supply shortage is obviously not affecting OCA as many feared as it brought its next large delivery forward at Hamilton.
-Our target clients just got richer and two months older since HY1.

Understandably the share price itself will be upsetting for many but fundamentally OCA is in great shape. As far as Omicrons effect on the business goes IMO I think the Share price has very much overreacted. As Rob Muldoon once said..." it`ll only be half as bad as you think".

(I do not intend to be ramping , I don't care if you buy, hold or sell )

to your credit you are a true believer there is no doubt about that. looks like aedern put the sh..ts up all the retirement stocks today

[Waltzing]

Next Audited report to be studied like WHS and others. Everything else is speculation.

The market does look like it wants to lighten on some sectors AT PT. (At this point in time).

MR M has done a lot of hard work and hopefully is duly rewarded.

[Mudfish]

Ill respond to that Bull, although I know I shouldn't.

Sure I get it that unresearched investors and traders will be well concerned ( or happy ) about the share price movements of the last few months . But as a long term holder what is there to really talk about of value or even just kicking a ball around since their 1HY report?

As someone primarily interested in the business rather than SP, the only tit bits that are of note to me since HY report to bother commenting on are;
-SUM sales for the recent 3rd quarter are strong.
-HPI is still increasing , although significantly slowing and median house prices remain at very elevated levels,
-NZ vaccination rates have since increased further to have reached very healthy levels for the inevitable.
-RYMAN have this week had this said about them..."Ryman Healthcare is ably coping amid the flood of omicron cases in Australia" ..."we believe Ryman had strong sales in December."...and ..."We believe much of the cost inflation is temporary and can be partly passed on, so we haven't changed our earnings assumptions"
-The building/supply shortage is obviously not affecting OCA as many feared as it brought its next large delivery forward at Hamilton.
-Our target clients just got richer and two months older since HY1.

Understandably the share price itself will be upsetting for many but fundamentally OCA is in great shape. As far as Omicrons effect on the business goes IMO I think the Share price has very much overreacted. As Rob Muldoon once said..." it`ll only be half as bad as you think".

(I do not intend to be ramping , I don't care if you buy, hold or sell )

Thanks for your well thought out post Maverick. I'm a long term holder and have managed to free up a couple of lazy sliders for use once this, hopefully, overreaction passes. Once the fear moves through, and this may take awhile, there will be a magical moment where real value can be bought for a song. It's great value now but could become even better. I'm watching closely.

[Waltzing]

With everyone on whatch by the time the notification is made if value is reported by either market update or audited results it wont last a morning.

[dabsman]

With everyone on whatch by the time the notification is made if value is reported by either market update or audited results it wont last a morning.

Does anyone else struggle to interpret anything he says?

[Greekwatchdog]

Yep Dabsman, its almost borders on mind reading skills required and I gave up on that a long time ago. I just sort of laugh and shrug...

[cymonger]

Does anyone else struggle to interpret anything he says?

it's the constant use of "we' that throws me. It reminds me of Gollum having a conversation with himself in Lord of the Rings.

[Muse]

Yep Dabsman, its almost borders on mind reading skills required and I gave up on that a long time ago. I just sort of laugh and shrug...

I enjoy his irreverent style. But I admit I dont understand over half of what he says. Who is this we you are always talking about & Waltzing has Vince shortened ur name&taken away ur reps ???

[Waltzing]

"We" means its not my personal account. Im just being told what to do on behalf of others...

If your just a director and share holder your a we or wee person..

Like a scottish wee.

Now its obvious if a market update or financial report state that profits after tax have doubled then MR M will have his much sort after value.

[Beau]

QUOTE=Waltzing;937012]"We" means its not my personal account. Im just being told what to do on behalf of others...

If your just a director and share holder your a we or wee person..

Like a scottish wee.

Now its obvious if a market update or financial report state that profits after tax have doubled then MR M will have his much sort after value.[/QUOTE]

Those comments certainly put things in perspective. Sums it all up :confused:

[Baa_Baa]

Now its obvious if a market update or financial report state that profits after tax have doubled then MR M will have his much sort after value.

Profits don't have to "have doubled" to define value, that's short term view and also unrealistic

Value by your definition seems that your "we" are traders and not interested in accumulating value companies over long periods of time for long returns in a long term industry with long term tailwinds? Moreso flicking a profit short to medium term.

Long term and especially patience in some companies, like this one, versus trading short term or momentum, maybe is the thing primarily that defines some of us, differently in our investment goals.

It's interesting to read the traders, even those momentum traders or the in-denial traders, about OCA. I've found that the day-to-day really is irrelevant except for accumulation opportunities, but I do acknowledge and see that for them it must be very important.

[Waltzing]

Profits don't have to "have doubled" to define value

Your right.

As MR M will remind us all the OCA model is not structured in such a way as to instantly double its Profits after tax in one reporting period half year or full year.

Add to that MR B has often remarked OCA financial are anything but straight forward. But then was tax law straight forward ever?

[dreamcatcher]

Have family in healthcare who pointed to staff shortages months ago.......

BusinessDesk
“The aged care sector will likely suffer acute staff shortages, significant additional expenses and may also suffer reputational damage,” said analyst Aaron ibbotson.
Aged-care providers are on the frontline of the pandemic with their customers a high risk for severe infection, he said.

Additionally, these businesses already experience staff shortages which could be made much worse by staff having to self-isolate during a large outbreak."

[Biscuit]

....the only tit bits that are of note to me since HY .....

Great post Maverick. Hopefully your observations were of tidbits? :blush:

[artemis]

Have family in healthcare who pointed to staff shortages months ago.......

BusinessDesk
“The aged care sector will likely suffer acute staff shortages, significant additional expenses and may also suffer reputational damage,” said analyst Aaron ibbotson.
Aged-care providers are on the frontline of the pandemic with their customers a high risk for severe infection, he said.

Additionally, these businesses already experience staff shortages which could be made much worse by staff having to self-isolate during a large outbreak."

Similar shortages of staff across the ditch and was reported here last year that some quiet approaches were being made. Private sector providers have the option of restricting new clients, and they may of course, especially if care subsidies already need cross subsidisation to support them.

[bull....]

A research note from Forsyth Barr said retail and healthcare had been the worst-performing sectors on the Australian market since it was hit with the omicron variant.
“The aged care sector will likely suffer acute staff shortages, significant additional expenses and may also suffer reputational damage,” said analyst Aaron Ibbotson.
Aged-care providers are on the frontline of the pandemic with their customers a high risk for severe infection, he said.
Additionally, these businesses already experience staff shortages which could be made much worse by staff having to self-isolate during a large outbreak

https://www.goodreturns.co.nz/article/976519835/investors-brace-for-omicron.html

[Old mate]

Bull you crack me up on the OCA thread. Are you a really old person who had a bad experience in one of there homes.?

[bull....]

Bull you crack me up on the OCA thread. Are you a really old person who had a bad experience in one of there homes.?

lol just posting some news which may have caused the big sell - off in retirement stocks yest as well as ardern announcement thats all. by the way im way to young for retirement village living

[winner69]

lol just posting some news which may have caused the big sell - off in retirement stocks yest as well as ardern announcement thats all. by the way im way to young for retirement village living

Bill me ol mate …thanks for sharingbthat link. Keeps us informed eh


Yes, hundreds of millions wiped off value of retirement stocks yesterday ……and the guy from Forbar speculated as to why

[JohnnyTheHorse]

Made heaps these last couple of days short RYM and SUM, covered into yesterdays close. Looking to reload on a bounce.

[bull....]

Made heaps these last couple of days short RYM and SUM, covered into yesterdays close. Looking to reload on a bounce.

why close now ? all in nice downtrends and omni not even here yet

[JohnnyTheHorse]

why close now ? all in nice downtrends and omni not even here yet

In anticipation of an oversold bounce in US markets (which played out somewhat today, however that's very weak how it has completely faded... maybe double bottom??). These were short term focused trades, I still have core short swings on the sector.

[bull....]

In anticipation of an oversold bounce in US markets (which played out somewhat today, however that's very weak how it has completely faded... maybe double bottom??). These were short term focused trades, I still have core short swings on the sector.

us markets just gone red after being well up not a good sign

[thegreatestben]

1.20 still on

Alot of people not happy with Bull's posts but he's looking like an oracle at the minute!

[cymonger]

OCA was such an awesome ride in 20' when it went down into the 50's. I think a lot of people did really well buying at those levels. I know I did.

I can see a similar opportunity developing this year. A big, fear-based drop, (certainly not to the 50's, but a drop) followed by a return to normalcy when things subside. I really don't think Omni is the bogeyman everyone thinks it is. In reality it is a much less dangerous version of a virus that will eventually help us move from pandemic to endemic. It's an important distinction.

But definitely some short-term pain happening right now. I think the difficult part here is distinguishing between catching a falling knife and missing a great buying opportunity.

[Waltzing]

1.10 any bets?

[Panda-NZ-]

It's below support so could go anywhere.

One buck is the panda valuation

[Muse]

ANZ came out with a bearish house price forecast for 2022 (7% price decline in house prices) - bold for the team as a division within the largest mortgage lender in NZ
* yes yes I know every economist has been wrong about house prices in NZ *

[Waltzing]

They might be basing it on the fact that new lending criteria has slammed the breaks on MG approvals.

Right now SUM other stock has out performed but it is also well off it highs.

[cymonger]

1.10 any bets?


Yes. We think so too...

:p

[Habits]

Now well under mid one-20s support line. Down sharply last six months. Not a good buy and too late to sell, wait on the sidelines

[winner69]

OCA and ARV down today

SUM, RYM and even Radius up

OCA fall not sector related? …..but stock specific?

[Old mate]

Could even say we will never see 1.30 again.

[winner69]

Could even say we will never see 1.30 again.

Há ha. .hang in there …one day we’ll see 130 again ….might even be next week:)

[allfromacell]

OCA and ARV down today

SUM, RYM and even Radius up

OCA fall not sector related? …..but stock specific?

OCA has a lot of retail interest, probably a lot of that driven by this very thread lol.

I don't understand why you'd sell at 1.18 today but not 1.30 just a few trading days ago, what's changed?

Fear and panic, something more pronounced in retail traders.

Obviously OCA will struggle more with staffing issues but they're also the only listed company that I'm aware of utilizing RAT testing, something that will be very crucial in the coming weeks.

[winner69]

What did Macquarie sell out for?

Think one lot was $1.10 …forgotten what the other lot went for.

Hope they invested proceeds well …be way ahead by now.

[Waltzing]

Depends how the next 12 weeks turns out. Aus looking ok? No cost blow outs? Low teens could be a steal... but then who wants to step into a falling knife.

[Beau]

Macquarie also sold about $1.20 and lots where in quick to get a bargain.

[Habits]

What did Macquarie sell out for?

Think one lot was $1.10 …forgotten what the other lot went for.

Hope they invested proceeds well …be way ahead by now.

It's easy to keep churning in the hope of catching the latest wave from other stocks. Usually too late. As well as miss out on the run-up of the stocks you just sold out of. Very frustrating. These days I only have a small handful of companies I love and OCA is not one of them. We sold at the peak early last year and mentioned it here at the time. I still enjoy driving past their great looking properties... the company will pick up again sooner or later.

[bull....]

1.10 any bets?

it might get there today :scared:

[Bjauck]

it might get there today :scared:
Summerset get a Covid infection yet it is OCA that suffers the bigger SP fall on opening!

[bull....]

Summerset get a Covid infection yet it is OCA that suffers the bigger SP fall on opening!

they do say sometimes the least best in a sector get sold off the quickest when things get tough

[850man]

89% of NTA now!

[Waltzing]

might be a bit of value for a raid here.

could even see sub 1.10 and well you would have take a few wouldnt you as MR B said long term value.

Not too many mind.

[allfromacell]

Feels a lot like the first covid capitulation

[bull....]

89% of NTA now!

it amazes me the facination with nta on this thread. it really is irrelevant

[dubya]

Feels a lot like the first covid capitulation

Yes it does. And I've got a feeling it'll go lower over the next month or two. Think I'll just sit on my hands, and wait.

[ralph]

it might get there today :scared:
Scary nearly there damn covid

[Waltzing]

quick you have to be quick orders building already.. market sees value here.

but you may get even better bits later on as the waves get bigger.

notice the number of cloth mask wearers..

All K95 masks gone at the local M10 store.

gets down to 1 and its nice value long term if they can sell something for a margin to cover running costs.. IF.

leave those calculations to Mav.

[allfromacell]

The staff and residents of theses locations are among the most highly vaccinated in the world. Wouldn't be surprised to see this stock back above 1.20 today or tomorrow if the US futures open green.

The panic is almost always overdone. Happy to have grabbed a few more this morning :).

[Waltzing]

yes cant see the panic lasting more than half a day .

[bull....]

i dont think you have seen the panic yet , when it does come make sure your toilet paper is handy

[ralph]

Not in a rush to cut my finger waltzing

[Bjauck]

they do say sometimes the least best in a sector get sold off the quickest when things get tough True...or the least 'in favour". OCA sp down by 25% over the past year: SUM down by 1%

[bottomfeeder]

Not in a rush to cut my finger waltzing

Seems to be some support above $1.13. Hope it lasts. Im catching the falling knife here. But realistically I am expecting more panic as Omicron sets in. Just have to keep accumulating. Running out of cash only a few hundred k left. Hoping for SKT takeover so I can realise some cash to put more into OCA at these prices.

[ralph]

They maybe doing you a favour by not taking SKT over just yet !!

[davflaws]

Just have to keep accumulating. Running out of cash only a few hundred k left.

My heart bleeds for you!

[bull....]

1.13 didnt last long .... timber

[Waltzing]

dont mind a bit if there is general panic in the sector for a few months..could go under 1? well....

[Ggcc]

I’m calm having a coffee and know this panic will be over in a few months. Happy to accumulate when it goes lower not if. Not to sure when that is, but sure we will see it in the next couple of weeks.

[Ggcc]

dont mind a bit if there is general panic in the sector for a few months..could go under 1? well....

It will go under $1 so be patient longterm. Of course this is not advice to not buy or to sell.

[winner69]

IPO price was 79 cents a few years ago

[Waltzing]

chart has huge support at 1.0

"Of course this is not advice to not buy or to sell."

Did my first eco paper back in 85... the prescription for central bank lower interest rate in recessions by Whitehead had been in print for decades.

QU E was just a natural progression suppose.

[iceman]

IPO price was 79 cents a few years ago

My average price is 47.6c for my small portfolio, wife's even lower. Will consider adding a few if it gets in the vicinity of the IPO price :-)

[Beagle]

It will go under $1 so be patient longterm. Of course this is not advice to not buy or to sell.

Why ? We always knew Omricon was going to get out into the community. What about the news that is has was not already anticipated last week ?
NAV is now probably very close to $1.50. Are any other companies in this sector trading at any discount to asset backing let alone a really sizeable one ? (that's a rhetorical question)

[Greekwatchdog]

Why ? We always knew Omricon was going to get out into the community. What about the news that is has was not already anticipated last week ?
NAV is now probably very close to $1.50. Are any other companies in this sector trading at any discount to asset backing let alone a really sizeable one ? (that's a rhetorical question)

Hey Beagle, Happy New Year. I just spoke to my broker and maintains this is there #1 pick this year in the sector. They are all stunned regardless of the reasons for sell down at current levels. ARV is #2.

[Ggcc]

Why ? We always knew Omricon was going to get out into the community. What about the news that is has was not already anticipated last week ?
NAV is now probably very close to $1.50. Are any other companies in this sector trading at any discount to asset backing let alone a really sizeable one ? (that's a rhetorical question)
People are just worried about the unknown. Panicking is the new norm. Every time we say don’t panic buy at supermarkets, people panic buy. I haven’t sold any shares, but anticipate that in the coming weeks OCA will drop below $1 due to shareholders panicking, unless they can prove that their residents are all doing reasonably well and that Omicron is not killing as many as Delta in nz.

Lots of people have paper losses in the last two weeks. Humans are predictable now when fear is their motivator.

I will buy more if it hits below $1 and am comfortable with OCA future and hold lots now

[winner69]

OCA most popular pick in that picking competition …picked 79 out of a couple of hundred

That’s a good endorsement

[Beagle]

Hey Beagle, Happy New Year. I just spoke to my broker and maintains this is there #1 pick this year in the sector. They are all stunned regardless of the reasons for sell down at current levels. ARV is #2.
Happy new year, thanks for that mate.


People are just worried about the unknown. Panicking is the new norm. Every time we say don’t panic buy at supermarkets, people panic buy. I haven’t sold any shares, but anticipate that in the coming weeks OCA will drop below $1 due to shareholders panicking, unless they can prove that their residents are all doing reasonably well and that Omicron is not killing as many as Delta in nz.

Lots of people have paper losses in the last two weeks. Humans are predictable now when fear is their motivator.

I will buy more if it hits below $1 and am comfortable with OCA future and hold lots now
Fear enough, opps sorry, fair enough :)


OCA most popular pick in that picking competition …picked 79 out of a couple of hundred

That’s a good endorsement

Yes, we saw the first time around when Covid hit in early 2020 OCA got hit hardest. I think fear of the unknown is more than a little overdone at $1.15 but there is definitely some real fear out there and as Ggcc mentioned, a lot of people, including myself, have seen significant declines in their portfolio in 2022. "Be greedy when others are fearful" Warren Buffet.

[biker]

Happy new year, thanks for that mate.


Fear enough, opps sorry, fair enough :)




Yes, we saw the first time around when Covid hit in early 2020 OCA got hit hardest. I think fear of the unknown is more than a little overdone at $1.15 but there is definitely some real fear out there and as Ggcc mentioned, a lot of people, including myself, have seen significant declines in their portfolio in 2022. "Be greedy when others are fearful" Warren Buffet.

Yep, happy to top up today at 1.14

[fastbike]

Yep, happy to top up today at 1.14
Yeah got a few yesterday at $1.12. No doubt I'll be crying next week.

[Ggcc]

Yeah got a few yesterday at $1.12. No doubt I'll be crying next week.
As I mentioned earlier be patient. It may have been the right thing to do, but at these times I don’t think we have seen the low for 2022. Either way good buying, but I’m after a bargain

[Goose]

As I mentioned earlier be patient. It may have been the right thing to do, but at these times I don’t think we have seen the low for 2022. Either way good buying, but I’m after a bargain
In my opinion it is excellent buying...I don't think that many people know how to value this company. The fundamentals haven't changed in a week. Hey, when Greg Tomlinson starts dumping shares then I will start to be concerned and double check my conviction (same across at Heartland where he also holds a truck and trailer load). His last activity is buying $2.5m at $1.41 in October 2021. As someone said on this thread, I'd rather be 2 minutes early to the dance than 5 minutes late. Keep calm and carry on.

[allfromacell]

In my opinion it is excellent buying...I don't think that many people know how to value this company. The fundamentals haven't changed in a week. Hey, when Greg Tomlinson starts dumping shares then I will start to be concerned and double check my conviction (same across at Heartland where he also holds a truck and trailer load). His last activity is buying $2.5m at $1.41 in October 2021. As someone said on this thread, I'd rather be 2 minutes early to the dance than 5 minutes late. Keep calm and carry on.

Exactly, as expected the shares traded back at 1.20 today, less than 24 -hours after the capitulation wick.

The great thing about the NZX is its low volume and weak market efficiency, it often provides gifts but most don't have the guts to catch the presents (knives).

Always happy to get my hands cut a bit every now and then when the value is so irresistible because it's only a matter of time before it's gone.

[Beagle]

Hard to say if the fear of what's coming is worse than what's coming ? I think almost everyone is fully cognisant that Omricon case numbers are highly likely to explode in an exponential manner as they have in Australia and we will see huge numbers of cases in the near future.
To me at $1.15 it is a 50/50 call as to whether that's the bottom or not if it weren't for the rout that's going on in overseas markets. When you overlay the two main risks including the macro situation overseas I think its very early days to suggest a bottom is in.

What I have learned from observing OCA relative to the rest of the retirement sector since Covid came upon us is that's it seems this one's much higher care services relative to independent living ratio seems to be reflected in higher volatility than other stocks in this sector. Whether this is logical or otherwise is debatable but the pattern is definitely there. For this and other reasons I remain cautious.

Overall in more than 4.5 years since it listed, to be frank OCA has disappointed me a bit. It promised so much and has so far delivered very modest returns for shareholders. All my concerns about the systemic issue of high annual wage cost inflation of 7-8% per annum in the cost to run this business remain...so I won't be getting too big in this regardless of the future price. Disc: pretty modest 4.1% portfolio allocation. Might take that up a bit, possibly to a high of 8% but I'd need to see a real bargain price to give me the encouragement to do so.

Its not a super high conviction stock for me because to date, over many years now, the staff are sucking up almost all of the gains and I don't expect that trend to change anytime really soon.

The risks, extra costs and challenges to run the business in an Omricon environment are readily apparent. I'm happy to pause and reflect and sit on my paws for a while and see what happens.

[Monarch]

I am extremely interested to know if OCA management have breakdowns of typical staff tasks and the productive time spent on these tasks. And I would be even more interested to see it. Is this info something a lowly shareholder can be privy to?

[Beagle]

Radius healthcare also reported today and provides a useful point of comparison. Financials' are here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RAD/383705/360515.pdf

I note they are also struggling with increased labour costs which are up 10% on the previous corresponding period (pcp) but I also note that labour costs as a percentage of gross revenue are 60%. Stripping out property revaluations OCA's total labour costs as a percentage of gross revenue (including DMF fees) are 67.6% up from 65% in the pcp so significantly more that Radius.

Excluding capital gains from resale of property here is the history of total employee costs as a percentage of gross revenue (including DMF revenue) since OCA listed:-
2017 60%, same level of efficiency Radius Healthcare currently have)
2018 62.3%
2019 64%
2020 66%
2021 65.9%
1H 2022 67.6%

Despite all the talk about transitioning to a new business model generating enhanced returns there has actually been a material decline in the efficiency of the business model, (this is what one analyst was getting at in the call today), since they listed in terms of what percentage of gross revenue flows through to shareholders. That said the change in the business model will generate higher resale profits in the future so overall the gradual business transformation is a good thing but like almost all good things they take a LOT of time.

Sure, some of the increase can be attributed to Covid specific matters, no argument there but this trend is concerning and started well before Covid and represents systemic challenges of our labour market and its flow through effect on shareholders returns especially in light of what appears to be a systemic issue with Govt underfunding the true cost of care.

Will the trend revert to the the low 60's percentage range when labour market challenges and Covid cost pressures ameliorate or do we face ongoing systemic challenges due to the severe staff shortages in the healthcare sector that will continue to pressure shareholders returns going forward ? That's the $64,000 question.

My opinion is these headwinds do not look likely to materially abate anytime in the foreseeable future so despite its apparent cheap price (as OCA is more affected by these challenges than any of the other main listed players) I see it as a hold at the current price and not the bargain it appears to be. I think the analysts are a fairly optimistic with their average $1.71 target price.

That said, I think its clear the development numbers in FY23 are going to be strong with 113 care suites at Lady Allum deferred into FY23 so we should see underlying eps up nicely next year. Whether that's repeatable in FY24 and beyond is very hard to say but I certainly don't see increasing DMF revenue as a panacea for all the challenges OCA faces and they will need to keep up a strong development pipeline.
Increased resales should also be a very good positive in FY23. My hope is that Maverick is right and that increased level's of new independent living units being developed over the next few years (which is where the real money is) will finally give shareholders some real joy.

It would be nice to see finally see this crack $2 but I think this could be a few years away. I guess the unimputed dividend yielding 3.25% is one of the best in the sector so that's something to help us as we travel this long journey to hopefully getting great returns in the future.

House price declines in 2022 could be the next challenge. Lots of pro's and con's.


I am extremely interested to know if OCA management have breakdowns of typical staff tasks and the productive time spent on these tasks. And I would be even more interested to see it. Is this info something a lowly shareholder can be privy to?

They're never going to give a small shareholder that info but I ran the analysis on wages costs as a percentage of gross revenue over the years and posted that in November 2021, see above. The trend is very clear and concerning which is why I remain with a modest position. I have learned the only way to make really good money with OCA is to buy them dirt cheap when fear is really rampant.

[winner69]

Forbar reduced target to $1.60 but still OUTPERFORM (thanks watchdog) …that’s good

But reading between the lines H222 performance likely to be pretty awful….probably all those wages and costs and reduced sales

[BlackPeter]

Just looking at the big picture:

13442

OCA did fall during the first Covid dip down to 40 cents (@23/3/20) and subsequently did rise to 160 cents (@5/2/21) - this was a 4 bagger in less than a year. Not bad.

OCA is dropping again (Covid mach 2, aka the Omicron pit).

I do see two questions ...

1) How deep is this pit?

2) Will it quadruple bag again afterwards?

Obviously - nobody can predict the future ... however - re Omicron some other countries are ahead of us (and I don't envy them for this leadership :) ). So - what did their retirement stocks do during Omicron?

Well, lets have a look - here is INA, one of the Australian Retirement villages (and yes, they do have less care and more focus on living ...):

13443

Interesting correlation to above, isn't it? And hey, given that our Australian brothers and sisters started the Omicron fun already 4 to 5 weeks ago, how come INA didn't crash through the floor? The correlation with OCA is just too good, isn't it?

So - maybe it is not Omicron spooking retirement stocks, but just inflation and the uncertainty in the financial markets?

Whatever it is - I don't see any indicator that OCA will crash down as far as it did last time - just watch INA.

The other question is obviously - will OCA have again the agility to quadruple its bottom price after the crisis?

Well, who knows, but I don't see any reason why they shouldn't come back stronger out of it.

What really will have changed after the Omicron peak in 5 to 6 weeks from now? Will there be a significant lower number of people needing care? Not very likely. However, the richer will be again a bit richer. Not good for a healthy society, but there for sure will be still more people able to afford a luxury care suite with views ... .

I think I just wait for the next triple or quadruple bagger. Obviously - I don't know, whether the SP might still slip a little bit more from here, but how would $4 in February 2023 sound? ... just asking :) :

[Beagle]

https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

Average analyst 12 month price target $1.64. Lowest analyst price target $1.45

Just a thought...Who's going to be paying for the VAST quantities of RAT tests that are going to be needed for staff and visitors ?

[BlackPeter]

Sorry for the head turner above ;) ; Looks like I did too much property acrobatic.

Just to see the direct comparison: Here are OCA (the blue line) and INA (the orange line) in one graph.

13444

Given that Omicron is already peaking in Australia ... it does not seem to be Omicron bringing the SP slightly down, isn't it?

[BlackPeter]

https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

Average analyst 12 month price target $1.64. Lowest analyst price target $1.45

Just a thought...Who's going to be paying for the VAST quantities of RAT tests that are going to be needed for staff and visitors ?

LOL - I guess the amazing thing about these 12 month analyst targets is that we always tend to use them if & when they fit into the narrative and ridicule them when they don't.

Problem with them is - nobody is able to predict future stock prices (Ben Graham) - and this includes all the analysts on market screener as well.

Just monitor their recommendations for a meaningful number of stocks and check the outcome after 12 months.

All you get is white noise as correlation ...

[Beagle]

House prices set for potentially a meaningful drop https://www.nzherald.co.nz/business/meaningful-drop-conditions-in-housing-market-could-be-ripe-for-prices-to-fall/4ECWQZCLW72I5NN3S2YV2BPA6A/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338 Maybe this is what's playing on investors minds as well ?

[850man]

https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

Average analyst 12 month price target $1.64. Lowest analyst price target $1.45

Just a thought...Who's going to be paying for the VAST quantities of RAT tests that are going to be needed for staff and visitors ?

Those RAT costs will apply equally to all retirement villages and are probably small in comparison to other things that OCA need to do to make themselves more attractive for investors.

[BlackPeter]

House prices set for potentially a meaningful drop https://www.nzherald.co.nz/business/meaningful-drop-conditions-in-housing-market-could-be-ripe-for-prices-to-fall/4ECWQZCLW72I5NN3S2YV2BPA6A/?utm_source=newsletter&utm_medium=nzh_email&utm_campaign=Premium_Business_Briefing_Newsletter&uuid=ae2dd95d629344ca8119b12a0d7d7338 Maybe this is what's playing on investors minds as well ?

Absolutely ... shows that investors are just humans (i.e. driven by fear and greed rather than by reason ;) ).

Obviously - the real estate price won't impact in any way the demand for care suites ... and hey, does it really impact on your ability to buy into a care suite if your property just stays at 2.2 million dollars (twice the average) instead of rising again by 25 % this year? To be honest - even a 10% drop wouldn't make the world of a difference, wouldn't it?

[Bjauck]

Absolutely ... shows that investors are just humans (i.e. driven by fear and greed rather than by reason ;) ).

Obviously - the real estate price won't impact in any way the demand for care suites ... and hey, does it really impact on your ability to buy into a care suite if your property just stays at 2.2 million dollars (twice the average) instead of rising again by 25 % this year? To be honest - even a 10% drop wouldn't make the world of a difference, wouldn't it?
Yep current house values compared to ORA prices have a good buffer to accommodate house price falls. OCA’s ORA price increases have been less than house price increases.

<irony> Being a NZ Homeowner means the NZ state & NZ financial & fiscal system provide an annual tax-free real return. If this entitlement does not happen, it is time to spit the dummy out of the pram. </irony> Sentiment will likely drive the Share prices.

[850man]

Absolutely ... shows that investors are just humans (i.e. driven by fear and greed rather than by reason ;) ).

Obviously - the real estate price won't impact in any way the demand for care suites ... and hey, does it really impact on your ability to buy into a care suite if your property just stays at 2.2 million dollars (twice the average) instead of rising again by 25 % this year? To be honest - even a 10% drop wouldn't make the world of a difference, wouldn't it?

I think for the majority of people who decide it's time to move into a retirement village, they will not reverse that decision if what they get for their house falls by <10%. it's usually other things that compel them to make that move.

[Beagle]

Agree with above comments especially that people make needs or lifestyle decisions almost irrespective of what's happening in the real estate market.
Well discussed before that OCA unit prices have seriously lagged real estate prices since OCA listed and also that people downsizing into a retirement village generally release a really meaningful amount of capital in the process BUT falling house prices do not help sentiment in this sector. Add that to all the other factors making up the wall of worry.

I'd be pleased and count it as fortunate all things considered given the readily apparent headwinds for 2022, to see this back at $1.45 at year end. Whether its gets there, time will tell.

[winner69]

BlackPeter - love your work today on this thread

Correct me if I'm wrong but I think you're saying - OCA, no worries at the moment. Even though nobody is able to predict future stock prices we will all be rich in a few years time ...... and if we are really lucky in the next month or two we might get the opportunity to be super rich (with even cheaper shares)

[mike2020]

If you think OCA lacks love take a good hard look at RYM from 2 years ago.

[BlackPeter]

If you think OCA lacks love take a good hard look at RYM from 2 years ago.

Interesting you brought that up ...

Ryman is the orange line, OCA the blue one:

13446

Actually - I didn't really realize how good an investment OCA was over the last 5 years compared to Ryman :) ...

[BlackPeter]

BlackPeter - love your work today on this thread

Correct me if I'm wrong but I think you're saying - OCA, no worries at the moment. Even though nobody is able to predict future stock prices we will all be rich in a few years time ...... and if we are really lucky in the next month or two we might get the opportunity to be super rich (with even cheaper shares)

Cheers.

... and yes, I think what I am saying is that for anybody who really wants to have a reason to panic, there might be better options than holding OCA shares ;) ;

Discl: hold both OCA and INA.ASX;

[Shareguy]

I agree with most comments on here but believe that the risks have been priced in to a degree. I’m a long term holder and have confidence in the future prospects. I have been buying more the last few weeks and now have a reasonable 6 figure holding. I see it as the best risk/reward in the retirement sector.

[Beagle]

I don't think there is any debate whatsoever that a lot of risk is already priced in....probably all known risks priced in already but you don't know what you don't know so we'll see what other "lovely treats" 2022 brings us as we travel this very long and winding journey towards financial nirvana.

[percy]

I don't think there is any debate whatsoever that a lot of risk is already priced in....probably all known risks priced in already but you don't know what you don't know so we'll see what other "lovely treats" 2022 brings us as we travel this very long and winding journey towards financial nirvana.

"We know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know."
With thanks to Donald Rumsfeld.

[winner69]

"We know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know."
With thanks to Donald Rumsfeld.

Very good percy - sums Oceania up to a T

I'm sure there are quite few things 'we do not know' - yep, I know that (so don't ask for a link)

[davflaws]

Very good percy - sums Oceania up to a T

I'm sure there are quite few things 'we do not know' - yep, I know that (so don't ask for a link)


Johari window - Wikipediahttps://en.wikipedia.org › wiki › Johari_window
(https://en.wikipedia.org/wiki/Johari_window#:~:text=The%20Johari%20window%20is%2 0a,settings%20as%20a%20heuristic%20exercise.)

[Beagle]

"We know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know."
With thanks to Donald Rumsfeld.

Very good. Beagle knows his nose usually knows when there's a quick feed to be had. No easy feeds here.
https://www.bing.com/images/search?view=detailV2&ccid=xiGuC4SO&id=87D40372773B64744E28C2F44310742A3F81197D&thid=OIP.xiGuC4SO9KQMfVOTjfprFgHaFj&mediaurl=https%3a%2f%2fthumbs.dreamstime.com%2fb%2 fbeagle-nose-5109862.jpg&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.c62 1ae0b848ef4a40c7d53938dfa6b16%3frik%3dfRmBPyp0EEP0 wg%26pid%3dImgRaw%26r%3d0&exph=600&expw=800&q=beagle%27s+nose&simid=608045031468851374&FORM=IRPRST&ck=C85BF39771058356B6DF8784C7F1A0AD&selectedIndex=0&idpp=overlayview&ajaxhist=0&ajaxserp=0 I think its going to be a long and winding road to find a decent feed with this one. Maybe $1.45 by year end if we're lucky. Think I'll nosey off and see if I can find a bigger and quicker feed elsewhere.

[winner69]

Most of the risk might already be priced in Oceania share price ...... but what about the 'sentiment' .... towards the sector and towards Oceania .... taking into account sentiment towards Oceania isn't that high to start with

[rugila]

The Master said:

"Yu, shall I tell you what it is to know. To say you know when you know, and to say you do not when you do not, that is knowledge."

Confucius, Analects, c 450 BCE

[Brain]

Most of the risk might already be priced in Oceania share price ...... but what about the 'sentiment' .... towards the sector and towards Oceania .... taking into account sentiment towards Oceania isn't that high to start with

The interesting thing is that most people on this thread think positively about OCA and Greekwatchdog posted on the retirement villages thread that four bars reckoned it was worth $1.65. So my question is and it is a question that I have asked many times before who is influencing the sharemarket with seemingly irrational selling?

[Waltzing]

"Confucius"

did he say anything about accounting standards?

what we need here is facts and clear accounting statements... very clear...

[Beagle]

The interesting thing is that most people on this thread think positively about OCA and Greekwatchdog posted on the retirement villages thread that four bars reckoned it was worth $1.65. So my question is and it is a question that I have asked many times before who is influencing the sharemarket with seemingly irrational selling?

All the more perplexing given all the analysts that cover the company like it and have a very favorable view, 3 BUY's and 1 Outperform https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

[Brain]

All the more perplexing given all the analysts that cover the company like it and have a very favorable view, 3 BUY's and 1 Outperform https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

Yes exactly and I am keen to have my question answered because if I can understand this then I am sure I can make a fair bit of dosh out of it.

[Beagle]

Yes exactly and I am keen to have my question answered because if I can understand this then I am sure I can make a fair bit of dosh out of it.

I don't think there are any answers other than sentiment is very poor and the risks presenting are quite clearly perfectly obvious to all.

Maybe Maverick could opine on why he thinks this is in the dog box ?

Good to have a free for all bleat about it and gets things and some frustration off one's chest.

[winner69]

Sentiment poor and Oceania the poor cousin of the sector on valuations (even Radius trades on high multiples) because Oceania doesn’t tell a very good story ….and communication is pretty poor. Nothing really to get excited about is there.

Price = fundamental value +/- hype …and no hype around Oceania (besides a small group on ST) that makes market movers excited …and for them to start buying.

And Oceania seem quite content with this state of affairs …stuff all promotion of the company

[Beagle]

Wouldn't kill them to have a couple of quarterly updates by way of "investor news" like ARV does so we effectively get 4 updates a year on progress when combined with interim and year end reporting. SUM effectively do this with their quarterly sales updates too. Not sure what RYM does, anyone know ?

[Brain]

Sentiment poor and Oceania the poor cousin of the sector on valuations (even Radius trades on high multiples) because Oceania doesn’t tell a very good story ….and communication is pretty poor. Nothing really to get excited about is there.

Price = fundamental value +/- hype …and no hype around Oceania (besides a small group on ST) that makes market movers excited …and for them to start buying.

And Oceania seem quite content with this state of affairs …stuff all promotion of the company


But Four bars are giving them good press and probably other share brokers think the same and I would guess the institutions would come to a similar conclusion so my question remains who is selling and who is as a result dictating the price of the share.

[Greekwatchdog]

RYM used to do a letter to shareholders. Not sure anymore.

[Maverick]

I don't think there are any answers other than sentiment is very poor and the risks presenting are quite clearly perfectly obvious to all.

Maybe Maverick could opine on why he thinks this is in the dog box ?

Beagle, I've got nothing of value to really add about the SP beat up that isn't already well known here. I really thought about $1.25 was going to be as low as it could possibly go. That was based on previous SP falls never going below a certain percentage of NTA. How wrong was I !
Obviously my usual fundamental analysis on this share is of little value for now while health sentiment and global panic are in charge. Other than , there nothing is actually wrong with the company.

I've got them earning 5% more EPS next FY report coming out in May. This could be further down if Omicron means Hamilton doesn't finish on time because the carpet layers and electricians are all sitting at home for a month. I do suspect though that OCA will navigate systems to get things done. This earnings rise should place the SP around $1.60 -$1.65 in normal times. ( so I am in full agreement with the analysts).

This was going to be their first really good result of growth but as they paid the wage subsidy back, had lockdowns and issued 12.5% more shares ( which wont really be contributing much in the way of earnings for now) then the EPS result will once again appear like minimal growth ...AS USUAL.

OCA has been stymied by covid now for nearly half of its publicly listed life. Every time the poor dog is about to get up it gets another smack across the snout.

It will have its day but it may be as far away as 2023-2024, basically when Waimarie is finished ( and then upwards and onwards for years from there- and when those days come the % gains will be far better on shares bought at $1.20 rather than waiting and buying in at say $1.60). But as you suggest Beagle , traders or short term guys may well find better value elsewhere in the meantime.
No surprises, that for me, I'm sticking it out as fundamentally everything is going on in the company beautifully- other than the SP.

Sentiment will change at some point ( probably only when the EPS rises) and those TAX FREE gains will be handsome.

[Baa_Baa]

... I'm sticking it out as fundamentally everything is going on in the company beautifully- other than the SP.

Sentiment will change at some point ( probably only when the EPS rises) and those TAX FREE gains will be handsome.

Easy to confuse market sentiment with long term returns, they're not correlated. For investors a low SP gives an opportunity to increase their holdings at low risk, especially when trading well under NAV/NTA.

Important always imho to revert to the reasons why one owns the equity asset, if that changed then sell some or all, but if it hasn't changed, hold or buy more when the market sentiment is at its most negative.

Long term is a difficult investment concept to get ones head around if watching the share price every day. Try not doing that, see if you can detach from the addiction of the market, and instead the value of the company.

Good luck, it isn't easy, but it works in the long run.

[Beagle]

Thanks mate. I think you're right about this being a 2023 or 2024 story. In the meantime owning OCA feels like this... https://www.youtube.com/watch?v=InyqOLxJGZM

[winner69]

From CPI report - The cost of building a new dwelling in New Zealand rose 16 per cent in 2021. That’s the materials and labour

Must be affecting margins - hope OCA have raised their unit prices

[BlackPeter]

From CPI report - The cost of building a new dwelling in New Zealand rose 16 per cent in 2021. That’s the materials and labour

Must be affecting margins - hope OCA have raised their unit prices

The 16% cut obviously only into the sales margin for new units. Wouldn't they make these days more money with reselling preloved units (which just need a bit of refurbishment)?

Might not be such a big cost factor after all ...

[Beagle]

From CPI report - The cost of building a new dwelling in New Zealand rose 16 per cent in 2021. That’s the materials and labour

Must be affecting margins - hope OCA have raised their unit prices

WOW...they need to get serious about this and have confidence in the desirability of what they're offering incoming residents.

[percy]

WOW...they need to get serious about this and have confidence in the desirability of what they're offering incoming residents.

I always thought the "big" profits were on resales,and the profits on new builds were just the "icing" on the cake.

[Greekwatchdog]

The 16% cut obviously only into the sales margin for new units. Wouldn't they make these days more money with reselling preloved units (which just need a bit of refurbishment)?

Might not be such a big cost factor after all ...

And new House builds will be up another 20/25 % by year end. Price increases coming out of my ears in my role...

[Beagle]

I always thought the "big" profits were on resales,and the profits on new builds were just the "icing" on the cake.

Absolutely right mate. I spent some of my holiday in a lakefront property in Taupo we found on bookabach but it was an original build from the 1960's and all the décor and furnishings appeared to be from the same era as well ! It gave me a valuable insight into the profound change residents can enjoy...moving from something that is extremely tired and in need of a total makeover inside and out (that would literally take many many months of time and effort and probably more than $100K to do), to something that is absolutely brand spanking new and modern in every way. Your typical incoming resident is moving from a $1.1m full sized house that's often very, very tired and badly in need of a massive amount of maintenance into a brand new or fully refurbished unit for around half the money.

That's worth something more than just the peace of mind, care and camaraderie that village life gives. It confers many benefits. OCA need to be sure they realise the full value of what they're offering residents and for too long now pricing of their units appears to have been at a level where they appear quite timid and unsure of themselves. I barked into Earl's ear a couple of times over this...was like water going off a duck's back.

Hopefully the new guy is more commercially aware...you'd think so coming from being director of investment banking at Jarden but repaying the wage subsidy was not an impressive start...something I know Earl was dead set against doing.

[850man]

Lower prices seen by some as lower quality - not justified from what I have seen of their villages

[winner69]

Probably a bit mean to say this is “I’ve done all I can and company not going anywhere so time for me to move on”

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/386494/363676.pdf



last of Macquarie connection?

[Curly]

A puff of encouragement in today’s. 04c rise?

[Waltzing]

Just wait turning to custard in NSW health system collapsing according the sky falling brigade..

Could be some big opportunities coming in about 8 weeks time if it gets ugly.

Covid 19 Omicron: Concerns in NSW over rising death rates, hospitals' ability to cope with surge - NZ Herald (https://www.nzherald.co.nz/world/covid-19-omicron-concerns-in-nsw-over-rising-death-rates-hospitals-ability-to-cope-with-surge/VI3JRI725ERZOIZ4WND2GRIZFU/)

is been a time to build up cash in the last 6 weeks.

[winner69]

The paper says Forbar reckon Oceania Underlying Earnings will come in at $49m for Year ended March 31

Good grief - in 12 months to March 21 it was $50.7m ... and that was down from $61.2m in 12 months to March 20


All those new shares early last year means EPS chart is looking really sad ..... about as sad as the share price chart ..... opps, maybe the share price does follow EPS after all (expected eps at $49m is just below 7 cents)
Goodness

[Beagle]

Feels like if that's right it would be a bitter pill to swallow. Pretty sure underlying profit was more than that years ago with less shares on issue.
Have you got a link to share ? No money in providing care that's one thing for sure !

[Greekwatchdog]

Don't forget that the NZ wide lockdown for 2 weeks and Akl lock down for xxx weeks will also have made impact. In the end we have no idea and have to trust the management team. Still believe the owe all shareholders a damn update

[Beagle]

Don't forget that the NZ wide lockdown for 2 weeks and Akl lock down for xxx weeks will also have made impact. In the end we have no idea and have to trust the management team. Still believe the owe all shareholders a damn update

Others in the sector have had to cope with that too. No wonder the share price is seriously depressed.

[Greekwatchdog]

Others in the sector have had to cope with that too. No wonder the share price is seriously depressed.

True that but then we have had sales updates from them and nothing from OCA. Market treats this as poor cousin to sector and until they prove it their operation works, it will be treated as such.

[bull....]

downgrade from bull ages ago.
bull ahead of the analysts lol

[Rawz]

downgrade from bull ages ago.
bull ahead of the analysts lol

True.. well done bull

[winner69]

Feels like if that's right it would be a bitter pill to swallow. Pretty sure underlying profit was more than that years ago with less shares on issue.
Have you got a link to share ? No money in providing care that's one thing for sure !

Updated this chart with Forbars expectations of UE being $49m for 12 months March 22

No comment

[RTM]

Updated this chart with Forbars expectations of UE being $49m for 12 months March 22

No comment

A picture paints a thousand words Winner69, no comment necessary.

[Beagle]

What a dog this is.

[Ggcc]

I’ve heard they are going hard on locking down facilities with covid concerns. People can’t move between floors and I believe staff and/or residents are getting swabbed twice a week in hotspots. This is good to see that they are looking well after residents, but all that costs money.

Another local resthome not Oceania had a staff member who contracted Covid and now that red home is in complete lockdown.

[bull....]

Updated this chart with Forbars expectations of UE being $49m for 12 months March 22

No comment

magaurie are clever folks

[Beagle]

What a dog this is.

Coutts tells me every dog has its day but I am losing patience. By June 2022 this company will have existed with Covid more of its corporate life than without. Maybe they are simply tarred with the Covid curse given they have such a high proportion of care compared to any other in this sector ?

This business transformation process we've heard a LOT about since this listed nearly 5 years ago including the much hyped point of inflection.
Which year will increasing DMF revenue start to overtake the hugely rampant systemic issue of seriously escalating care costs ? This is a BIG question I am really wresting with. To me they need to prove this will actually happen to prove their business model actually can deliver for shareholders. When can they prove this ? Obviously its not going to be FY22 so the question is will it be FY23, FY24 or some later year ? In a quieter and darker moment or two its crossed my mind more than once to wonder if this will ever happen ? Surely it will in some distant future year but do I have the patience to wait that long ? Beagle's as a breed are not well known for exhibiting extremely lengthy patience when it comes to getting their dog food and I am no exception.

Until they can prove their model works for shareholders and staff and management stop gobbling up all the gains the shares fully deserve to trade at a discount to NAV...that's my call on this.

[BlackPeter]

Coutts tells me every dog has its day but I am losing patience. By June 2022 this company will have existed with Covid more than without. Maybe they are simply tarred with the Covid curse given they have such a high proportion of care compared to any other in this sector.

This business transformation process we've heard a LOT about since this listed nearly 5 years ago including the much hyped point of inflection.

Which year will increasing DMF revenue start to overtake the hugely rampant systemic issue of seriously escalating care costs ? This is a question I am really wresting with.
To me they need to prove this will actually happen to prove their business model actually can deliver for shareholders. When can they prove this ? Obviously its not going to be FY22 so the question is will it be FY23, FY24 or some later year or will it ever happen ?

Until they can prove their model works this the shares trade at a discount to NAV...that's my call on this.

Why so little patience? Nothing has changed, it is just some investors (or should I say traders?) are loosing it and negative hype is swinging towards peak levels.

This is the time to buy for people with a long investment horizon.

Always better to buy discounted shares rather than hyped up shares. Just saying ... but I am sure you knew that anyway.

[winner69]

Why so little patience? Nothing has changed, it is just some investors (or should I say traders?) are loosing it and negative hype is swinging towards peak levels.

This is the time to buy for people with a long investment horizon.

Always better to buy discounted shares rather than hyped up shares. Just saying ... but I am sure you knew that anyway.

Patience needed .... indeed

EPS might look a bit sad but they (like others in the sector) have been buying and building things and along with revaluation of assets their Book Value per share is steadily increasing --- like about 65% since they floated ............ but only about the same as Arvida and way behind RYM and SUM. Even on this measure still the poor cousin of the sector

Often things become so entrenched things can't (and won't) improve ..... and patience wears thin

[winner69]

See our Liz couldn't contain herself and just had to tell the world that Skellerup's half year profit was going to be $1.5m more than expected

Obviously nothing good at Oceania to crow about ...........and we'll be waiting until until late May before we hear how things have gone

At least Ebos and Skellerup give Liz some thrills .... her patience must be running out at Oceania though ....at least its a job with a decent pay packet - all $150,000 of it

[winner69]

BP, talking of patience needed with Oceania I wonder if that Director who resigned the other day saw his patience run out ..... and gave up waiting

[JohnnyTheHorse]

Might get in trouble for bringing it up again... but maybe we did get a fair deal with MET.

[850man]

Might get in trouble for bringing it up again... but maybe we did get a fair deal with MET.

That was indeed a fun (and profitable) ride for those who got on the train

[BlackPeter]

BP, talking of patience needed with Oceania I wonder if that Director who resigned the other saw his patience run out ..... and gave up waiting

Well, if this was what he was doing (waiting for the SP rising), than I am really glad he resigned :): Personally I prefer directors who work towards lifting the SP instead of waiting for the lift ;) ;

[winner69]

deleted --- comments about McCawe's fellow directors possibly a bit unfair

[Waltzing]

W() what are you saying!!! The results out? where? what did we miss ?

Cant see this being a take over any time soon...

really this thread should have a sleep timer on it.

[winner69]

OCA bonds currently yielding 3.70% .... a bit lower than others in sector

At least market not thinking Oceania going broke

[Ggcc]

OCA bonds currently yielding 3.70% .... a bit lower than others in sector

At least market not thinking Oceania going broke
It will never go broke and neither should any other big operators. Too much involved already. A few more capital raises or bond issues maybe if they needed it.

[Playa]

These have done nothing for sometime, and with rising interest rates and a housing market coming off it's highs, they are not likely to be going somewhere positive anytime soon either. What was the old saying? You can't have too many? The new saying should be any is too many.

[Waltzing]

Its going to be a real test for these companies when the more transmissible variant arrives.

Surely inmates deserve the best and latest vaccines for the OMI variant as soon as it clears its flight testing..

The GOVT cant just flub the whole thing like the RAT ATAT TAT testing.

These stocks need the best juice shipped to them in the coming battle...

"any is too many"

Classic and yes it was reduced from a larger percentage to a small one at 1.40.

If it gets a 1.0 then might be worth a larger holding but only if it makes a profit...does it make a profit?

[Greekwatchdog]

I have way to many but don't care about todays share price. Whilst disappointing it is what it is and fir me it starts 2022/2023. And if you looked hard you will see the share price is now where it was in Oct 2020, so will would say its done nothing even with the large run up in house prices. NTA is currently $1.42. If you can't handle the heat then maybe you should leave the OCA kitchen.

[alokdhir]

After seeing recent rout of OCA ....I am feeling very lucky that I chose to see the writing on the wall and bailed out without loosing my pants during divvy run up . Since then its only downhill ...maybe something is hidden from our experts here .

[Baa_Baa]

After seeing recent rout of OCA ....I am feeling very lucky that I chose to see the writing on the wall and bailed out without loosing my pants during divvy run up . Since then its only downhill ...maybe something is hidden from our experts here .

Interesting comment from an investor, so this was a capital trade for you? On the other side some of us might be looking forward to about 30% (from the ATH) more shares in the next DRP. Long term is a mindset.

[Beagle]

These have done nothing for sometime, and with rising interest rates and a housing market coming off it's highs, they are not likely to be going somewhere positive anytime soon either. What was the old saying? You can't have too many? The new saying should be any is too many.
LOL that is kind of funny. Some dogged patience is required with this puppy that's for sure.

[Rawz]

Capitulation soon? Maybe the coming omicron wave will knock it onto its knees. Could it go below $1 briefly?

Dic, holding

[alokdhir]

Interesting comment from an investor, so this was a capital trade for you? On the other side some of us might be looking forward to about 30% (from the ATH) more shares in the next DRP. Long term is a mindset.

I am Investor in my core portfolio ....this I was following the leaders here ...jumped in only recently as a follower of OCA brigade ...but soon realised its showing weakness so bailed out ...Bull was sounding alarm bells too ...lol ....Price action was showing Bull maybe right

https://www.marketscreener.com/quote/stock/OCEANIA-HEALTHCARE-LIMITE-103506268/consensus/

[Baa_Baa]

Capitulation soon? Maybe the coming omicron wave will knock it onto its knees. Could it go below $1 briefly?

Dic, holding

That would be good. Imagine, you've identified an asset that you'd like to have a large part of and didn't intend to sell for a long long time, if ever, and it's on sale for well under NTA value.

That's long term investing. These are the times you buy or accumulate, not to capitulate and sell. Selling now would be stupid for an investor. Sell for under NTA, you being kidding surely?

Maybe not for a confused investor who is actually not a long termer and is sensitive to capital price movements of their long assets in the market.

Motive is important in investing, patience is essential, and the market only presents opportunities to take further advantage of the long term opportunity.

Recalibrating ones mindset is not easy, but it is profitable over time. If one has the time and the patience.

[ralph]

Capitulation soon? Maybe the coming omicron wave will knock it onto its knees. Could it go below $1 briefly?

Dic, holding

I think that's on the cards for oca & the whole sector .Its just when will covid hit .
Disc holding & stopped buying till it goes below a dollar or maybe change over to Ryman a top buy if it gets near 9.5 bucks long term opportunity of course

[Rawz]

I think that's on the cards for oca & the whole sector .Its just when will covid hit .
Disc holding & stopped buying till it goes below a dollar or maybe change over to Ryman a top buy if it gets near 9.5 bucks long term opportunity of course

I am the same.. keen to top up

Baa Baa has excellent advice in post above. However who is going to buy now? thats why the SP is drifting. Everyone waiting to top up below $1. Its going to become a self fulling proposition

[alokdhir]

I am the same.. keen to top up

Baa Baa has excellent advice in post above. However who is going to buy now? thats why the SP is drifting. Everyone waiting to top up below $1. Its going to become a self fulling proposition

So Bulls prediction when all were laughing at him is actually coming true ....He said " $ 1 before $ 2 " ....

[Rawz]

So Bulls prediction when all were laughing at him is actually coming true ....He said " $ 1 before $ 2 " ....

Yeah. Should not have run him out of town (oca thread). He was threatened with neg rep.
Its also why I like to see negative posts on FPH/MFT. Never know.. the bears could be right and an investor can get blinded..

In the end all three of these stocks mentioned are great long term holds imo.. However i have bought both OCA and FPH higher than current SP.. so its more just the short term buying thats annoying, i.e. could have bought cheaper. No worries on the long term holding

[bottomfeeder]

I would be worried if it was just OCA that was down, it would indicate that there was something wrong. As it's the whole sector that is down, indicates to me that it is concerns about property values. I see those as being unfounded as inflation will see construction prices move exponentially. Any property holding company will be a hedge against inflation.
Load up at these prices you will never see them again.

[Baa_Baa]

I think that's on the cards for oca & the whole sector .Its just when will covid hit .
Disc holding & stopped buying till it goes below a dollar or maybe change over to Ryman a top buy if it gets near 9.5 bucks long term opportunity of course

Agree mostly, except maybe not 'change' (sell to buy) to RYM, if you think this sector has long legs which I do, better just to accumulate a stake in all of them when they're on fire sale. Maybe go overweight in the sector, like OCA in my case.

Patience, there's no need to react right now, unless you're selling. Latest covid variant hasn't really shown its potential yet. Hope for the best, plan for the worst.

What's the plan if it went back under $0.40? See, it did that recently. Bargains do come around, it's just whether your investment thesis and time horizon cope with it, and whether you have the gumption to act on it when it happens, not before.

The accumulators and long terms aren't talking much lately, while I'm over communicating, so going to go dark again now, hopefully not reducing the chances of getting a chunk of the latest swing.

[ralph]

Agree about bull ,but I often change my mind about long term holds going nowhere sometimes rightly and some times wrongly.
Someone whom bailed out at 1.30 will be laughing now & if they want to get back in down the line well who knows maybe bull .

[Muse]

Agree about bull ,but I often change my mind about long term holds going nowhere sometimes rightly and some times wrongly.
Someone whom bailed out at 1.30 will be laughing now & if they want to get back in down the line well who knows maybe bull .

I got a bit of / some / a lot of time for bull. Some posters see him as a chronic downramper. He certainly doesn't mince his words and delivers them with a certain satisfaction - but none of that means he is wrong. I tend to agree with quite a bit of what he says

[Muse]

I would be worried if it was just OCA that was down, it would indicate that there was something wrong. As it's the whole sector that is down, indicates to me that it is concerns about property values. I see those as being unfounded as inflation will see construction prices move exponentially. Any property holding company will be a hedge against inflation.
Load up at these prices you will never see them again.

yes but you also have to separate a properties value into two distinct parts - land value and improvement value.

Interest rates go to the heart of land prices. Improvement values if thought of in terms of replacement cost are a good hedge for ongoing rises in construction costs but it forms the minority of property value.

It's my view the property market is right now at the most precarious position it has been in over the last 20-30 years. and that is a huge worry to me and why I am underweight in the sector (but still a holder in OCA, SUM and some private interests). that said, OCA has been slack on property prices so that should hopefully be a bit of a buffer in a downturn and b) RV's still have a tremendous business model under current legislation

[RTM]

yes but you also have to separate a properties value into two distinct parts - land value and improvement value.

Interest rates go to the heart of land prices. Improvement values if thought of in terms of replacement cost are a good hedge for ongoing rises in construction costs but it forms the minority of property value.

It's my view the property market is right now at the most precarious position it has been in over the last 20-30 years. and that is a huge worry to me and why I am underweight in the sector (but still a holder in OCA, SUM and some private interests). that said, OCA has been slack on property prices so that should hopefully be a bit of a buffer in a downturn and b) RV's still have a tremendous business model under current legislation

Personally I think the whole sector is holding its breath waiting for Omicron to do its thing...whatever that might be. And then to a lesser extent the property market is of some concern.
Pleased I halved my holding sometime ago in this sector. Am waiting for <100 to replenish.

[Muse]

Personally I think the whole sector is holding its breath waiting for Omicron to do its thing...whatever that might be. And then to a lesser extent the property market is of some concern.
Pleased I halved my holding sometime ago in this sector. Am waiting for <100 to replenish.

yeah I think you are right - re what the market is currently focused on, being covid.
but, for me, I'm more worried about what happens in 6-24 months from now after the effects from rising interest rates start to trickle through, than I am with peak covid cases at x thousand per day
In 3 years time OCA's share price will be far more dependent on what happened to interest rates and property prices, than what happened with covid.

Inflation & Interest rates are a double edge sword as they pinch you on both sides of the development margin equation - increasing your construction costs and putting downside on your resale values. and, more specific to OCA, wage inflation ramping up on an already high (and necessary) care operating cost.

sadly, for OCA, covid may simply just be the appetizer to the inflation & interest rate main course.

[BlackPeter]

Personally I think the whole sector is holding its breath waiting for Omicron to do its thing...whatever that might be. And then to a lesser extent the property market is of some concern.
Pleased I halved my holding sometime ago in this sector. Am waiting for <100 to replenish.

With all due respect - I think these Omicron fears related to market prices of retirement villages and care home providers are absolutely overblown.

Market is not dumb ... and anybody who wants to know what happens with stock prices after Omicron does not need to look further than Australia, the US or the UK. All three are already beyond the Omicron peak and what happened to their stock markets? Well, prices went up and down as they always do, maybe some very short term Omicron jitter, but this was it.

Our prices will go up and down as well ... but I doubt that Omicron will be a major driver for retirement villages into any direction. If you need to worry about something, than worry about interest rates rising, worry about property prices dropping, worry about political interference with the business model of retirement living, worry about shortage of care staff and a braindead government making things worse wherever they can and worry about climate change (anybody checked which of the retirement villages has most exposure to rising sea levels?);

But much more sensible than looking for things to worry about is in my view to leave the worrying to others and try to mop up some more discounted shares. Sure - they may or may not be cheaper in a month from now (I.e. bottom pickers should do what they are best at :eek2: ), but I am pretty sure that for anybody else it won't make a big difference in a year or two or three when they look at their portfolio :): And hey - there is this other saying: a sparrow in the hand is better than two doves on the roof ... or something like that.

[RTM]

BP, FM, I think the point has been made a few times previously (not by me) that when people get to the stage of their lives that its time to move to a village, and they need to make the move...they will do it. The selling price of their house to fund this is likely to be more than the purchase of the Right to Occupy in a village....or whatever its called. So I am not to worried about the long term prospects...irrespective of what the property prices do.

I am more worried about the short term effect of what COVID might do should it run amok in a village. Or maybe I should say "when it does run".

If it doesn't happen....great...I'll be happy to sit with my downsized holdings....which are still not insignificant. If they do get COVID jitters, then I am also happy to restock should they reach bargain prices. At this stage I am certainly happier with where I have redeployed the funds released.

[dubya]

I posted this article last week on the 'Retirement Villages' thread.
Probably worth posting here too.

Waiting lists at retirement villages as Covid anxiety drives desire for - security

January 30, 2022 | Sunday Star Times (New Zealand)


Polly Milnes once sailed the high seas with her husband; now she is taking shelter from the Covid storm in a Canterbury retirement village.

Milnes, aged in her roaring seventies, left her "very nice" three-bedroom Halswell home in suburban Christchurch last week, to move into Ryman Charles Upham in Rangiora.

Her bid to find security in a pandemic world is part of a trend since Covid-19 loomed.

Pensioners have been heading for the security of retirement villages since 2020, Retirement Villages Association executive director John Collyns tells the Sunday Star-Times.

"We found that during, and immediately after the lockdown, the number of inquiries about moving to a retirement village dramatically shot up," he says.

"It was not only from intending residents, but also from their kids, who were worried about their parents living in the family home during a time of lockdown, and seeing the problem of mental health, which older people in the community suffered."

As Omicron looms the same principles of concern and safety remain, two years after the initial outbreak.

Covid prompted Milnes to take the step years earlier than intended. She had moved into a nice bungalow with lovely neighbours, but then the pandemic came.

"My step-son and his partner are over at Akaroa and when we got locked down I was in nobody's bubble.

"The neighbours are lovely. But they were in their own family bubbles. I found it very lonely. The more I thought about it, the more I thought to myself 'I'm going to have to rethink my life'.

"I'm sure what I have done now would have happened eventually [but Covid] has made me rethink and just brought forward my actual original plans."

And Milnes was far from alone in her rethink. She's so far from alone that she had to wait eight months for a Charles Upham townhouse. Her friend Margaret found an assisted-living apartment faster.

"We moved for the same reason, feeling that we wanted to be in a caring community. Similar people under an umbrella of security, that's the main reason that I've moved," Milnes says.

"I still have my independence, but there's somebody here if you need any help.

"Covid could get in here, who knows? But you're in a community, you're not battling or wallowing around on your own. You feel part of a team, an old team, but a team."

After years sailing with her husband, then taking cruises, Milnes has now run aground in Rangiora, with Covid curtailing her wanderlust. Her last trip was a 75-day cruise, but she's OK with where she's found herself.

"Somebody is quoted as saying once you're in, it's like being on holiday with your own furniture, and I can reinforce that."

Retirement villages are distinct from rest homes, which are more akin to hospitals for the elderly than homes.

In 2020 a Christchurch rest home was at the centre of New Zealand's deadliest Covid-19 cluster, linked to 12 fatalities.

The Rosewood rest home was found to have breached its obligations including cleaning services and emergency provision of personal supplies.

As with the general public, retirement villages and their residents have had social issues during the pandemic, Collyns says.

Among those have been increased security to keep residents and the businesses safer, higher potential for loneliness, and the vexed issue of vaccination.

"It is fair to say that there is a small number, we're talking a very, very tiny number of residents who are unvaccinated," Collyns says.

"It's also clear that other residents who are vaccinated are very cautious about involving the unvaccinated residents in village activities.

"That certainly creates a bit of a challenge for operators to work out how they can involve unvaccinated people in the village.

"There are opportunities for unvaccinated residents to be involved, but it's a lot more complicated to do that. Our advice to residents is to get vaccinated."

He felt the broader public were aware during the pandemic residents "were quite clearly being looked after, they had activities organised, they were socially distanced, and they were doing fun things".

"We wanted to make sure that operators didn't lock the gates and behave in a way that was over-bearing and too protective, because they thought the residents needed to be protected.

"Just because a resident lives in a retirement village, they should not be worse off than if they lived in their own home in the community."

With around 60 per cent of villages offering aged-care facilities, added precautions were crucial, given Covid was particularly tough on the elderly.

Retirement Village Residents Association president Peter Carr warns that there is no one-size-fits-all village, so the haste to feel secure should not over-ride other considerations.

"One of the things I like to say to people who are considering going into villages is do your homework," Carr says, and employing a lawyer to look over the contracts was a key part of that.

"You've got to be right about your decision. It's very hard to claw back because you lose a lot of money when you change your mind."

Carr, NZ National Fieldays Society board chairman, lives in a Cambridge retirement village, just 400m down the road from his last house.

His role is to give residents a voice when dealing with retirement village operators.

Since the first lockdown, some village operators erred too far on the side of caution, in the eyes of their residents.

"In some places, people felt they were locked up. They were never locked up in the physical sense, because you can't, but they were advised by some operators 'please don't leave the land'."

Under the traffic light system the degree of freedom is greater, he says, though there is still plenty of caution.

His village has a waiting list of around 30, and the security that caution provides - again - is one of the reasons pensioners are lining up.

"People are starting to think they're going to feel safer by being in villages. And I think they are, to be honest," Carr says.

"[It's a fact that] people in villages have a longer lifespan than those outside. It's quite an interesting thing. Perhaps that's also an attraction."

[percy]

Thanks for posting.
An excellent article.

[Beagle]

Agreed, a great article but won't help sentiment in this sector or for OCA. I suspect those thinking they might be able to get some more at under $1 might get their opportunity in due course. Thank goodness I learned a while ago that you can have too many.

[geezy]

Agreed, a great article but won't help sentiment in this sector or for OCA. I suspect those thinking they might be able to get some more at under $1 might get their opportunity in due course. Thank goodness I learned a while ago that you can have too many.

that would be me :)

[Maverick]

No doubt the falling SP has got us all somewhere between frustrated and down right f**ked off. While I'm confident I have the fundamentals nailed down I`m proving completely hopeless at understanding the share price. I find it bizarre that such a fundamentally solid company with good growth prospects trading at 21% discount to asset backing.

The only soothing thing for me while watching the SP tanking is to have my spreadsheets on hand to re-consult to put my mind at ease that everything fundamentally is ( or isn't ) still ok. I thought others would appreciate me sharing some numbers that allow me to sleep so well at night through all of this. I hope this is some help to you.

While my s/sheets have intense detailing on every level ( for example specific deliveries, area values , area build margins, Nurse rates, DHB rates etc) the following is a very basic summary.
These are the past 5 years historical numbers and my 2022 expectations. It will give you an insight of the growth of various income streams , how the are tracking and the changing relative importance of each income stream ( such as village DMFs now gaining meaningfully, that are rendering aged care of increasing lesser importance).

.......................................2017...2018 ....2019....2020...2021....2022(forecast)
Aged care profit ($m).......31.9 ....28.9.....25........19.2 ...22.2....23.2
New build margin ($m) ....5.1.......21.1.....29........34.3....28.6..... 34.5
Village DMF($m)..............13.3....15........17.9......2 1.4....26.5....31.3
Resales ($m) ..................12.7 ....16.9.....15.1......11.5....21.5...22.4
U-NPAT($m) ....................14.......52........50.9......4 2.9 ...50.1...58.6

Notes.
Aged care profit -reaching point of inflection in 2020.
New build margin- will be higher in 2022 due to a high proportion of apartment deliveries and a large built up unsold apartment stock due to timing of seasons and covid lockdowns.( as long as next month isn't disrupted too much by omicron)
Village DMFs- rising to meaningful levels now and are very predictable based on previous sales .This growth is all but certain and continuous.
U- NPAT growth is excellent but EPS growth will be diluted by an extra 12.5% of issued shares.

Apart from the 2022 U-NPAT increase , I do not consider any of the above income streams to be out of trend nor at risk due to macro events. The unusual rise in 2022 U-NPAT is simply the sum of many small increases of the income streams. This growth will continue in the years ahead.

Comments.
-Resale prices of villas and apartments have been rising at about 4-5% p/a over the last 6 years so It's hard to envisage a big pull back given these rises have not reflected the current boom in the general HPI increases ( that seem highly likely to pull back).
-Beyond 2022 things will continue to rise on all income streams with a particular boost when Waimarie and other 2023/4 projects are sold down.
-Should the build rate be increasing as we are told, future growth just gets stronger. Watch for the future capex spend as proof .

The falling SP is industry wide not company specific . Even the most stable of Companies , ARV, has now fallen further than OCA over 2 years . I`d you want to feel better , just be glad you didn't buy RYM. I also find it odd that impending property falls no doubt causing this sell off, that SUM , being the most property centric company of all has done the best of everyone ...go figure?

My thinking for 2022 based on EPS above of 8.4c (that's a growth in EPS of 5% YOY) then normally a PE of 18-20 would be reasonable. That's a SP of about $1.50-$1.70 . But like I said , while I've got the fundamentals dialed in my SP predictions are terrible. So you guys and gals judge for yourself what the SP should be worth.

Needless to say that while this destruction of paper wealth is unsettling, I personally won't be selling as my confidence in the company itself remains rock solid.

[Old mate]

Thanks as all ways Mav

[stoploss]

Hi Mav ,
with Covid delays , supply chain issues , Labour cost increases it might be hard to come up with the forecast margin on the new builds.(34.5%
" I find it bizarre that such a fundamentally solid company with good growth prospects trading at 21% discount to asset backing."
I think your sentiment was echoed by many when the buyout of MET went through at the lower price ......
Thanks for all your analysis, a good long term industry to be exposed to ,even if it does take a lot of patience.

[Beau]

Thanks also for sharing Maverick much appreciated.

[Beagle]

No doubt the falling SP has got us all somewhere between frustrated and down right f**ked off.
[COLOR=#000000][FONT=Arial].......................................2017...2018 ....2019....2020...2021....2022(forecast)
Aged care profit ($m).......31.9 ....28.9.....25........19.2 ...22.2....23.2
New build margin ($m) ....5.1.......21.1.....29........34.3....28.6..... 34.5
Village DMF($m)..............13.3....15........17.9......2 1.4....26.5....31.3
Resales ($m) ..................12.7 ....16.9.....15.1......11.5....21.5...22.4
U-NPAT($m) ....................14.......52........50.9......4 2.9 ...50.1...58.6

Notes.
Aged care profit -reaching point of inflection in 2020.
New build margin- will be higher in 2022 due to a high proportion of apartment deliveries and a large built up unsold apartment stock due to timing of seasons and covid lockdowns.( as long as next month isn't disrupted too much by omicron)
Village DMFs- rising to meaningful levels now and are very predictable based on previous sales .This growth is all but certain and continuous.
U- NPAT growth is excellent but EPS growth will be diluted by an extra 12.5% of issued shares.

Apart from the 2022 U-NPAT increase , I do not consider any of the above income streams to be out of trend nor at risk due to macro events. The unusual rise in 2022 U-NPAT is simply the sum of many small increases of the income streams. This growth will continue in the years ahead.


My thinking for 2022 based on EPS above of 8.4c (that's a growth in EPS of 5% YOY) then normally a PE of 18-20 would be reasonable. That's a SP of about $1.50-$1.70 . But like I said , while I've got the fundamentals dialed in my SP predictions are terrible. So you guys and gals judge for yourself what the SP should be worth.

Needless to say that while this destruction of paper wealth is unsettling, I personally won't be selling as my confidence in the company itself remains rock solid.





No disrespect intended mate and you know I have always been appreciative of your input on here BUT, you have consistently been too optimistic with your underlying profit forecasts. We hit over 800 cases today and its quite obvious that now that schools are back with vast numbers of unvaccinated kids spreading it to their parents and grandparents case numbers will be in the thousands per day before very long at all, perhaps by the end of February.

OCA faces a huge number of challenges in this environment and many millions per annum in extra Covid risk prevention costs which the Govt have staunchly refused to reimburse them for. Further, the Govt are not even funding basic care properly, (the 4.8% care cost dispute).

In this environment I think they will struggle to do $50m underlying profit for FY22 (even aided and abetted by the change in depreciation accounting treatment for PPE) that's significantly less on an eps basis (with all the new shares on issue) than pre covid.

OCA do face the stiffest headwinds of their sector from the prevailing staff and Covid care cost perspective due to them having the business model with the highest level's of care. Further, I have previously clearly articulated my deep concerns about the rampant rise in human resource costs within the company and this is systemic multi year issue that continues unabated and uncorrected.

They seem cheap with the discount to adjusted NAV but they are cheap for good reasons (not the least of which is underlying eps going backwards since they listed many years ago) which is an appalling situation for a company that was supposed to be past the point of inflection in 2020.

If they get back to their listing price of about 80 cents then they would be cheap.

Mark my words mate, they will remain the runt of this sector until they can prove beyond reasonable doubt that their business model of high care actually works for shareholders. Until they can prove they can grow underlying eps year on year on year they will never get to a PE of 20. You earn PE's like that the hard way with multi year proof of earnings growth, they are not grated to you.

I don't think the extra multi millions of Covid costs per annum and all the other headwinds imposed on the business by Covid are going to end anytime soon.

Disc: Now down to a 3.5% portfolio allocation which has been rebalanced due to the natural dilutionary price process accorded to me by the market ...not in any hurry to top up.

Not intended as a dig at you as quite frankly I think you do extremely well to be as objective as you are, but since time began and Adam was a boy its easier to be more objective when you either have no shares or just a very modest holding. I know once I go over 15% for any one stock in my portfolio...my objectivity becomes severely compromised.

[Ggcc]

No doubt the falling SP has got us all somewhere between frustrated and down right f**ked off. While I'm confident I have the fundamentals nailed down I`m proving completely hopeless at understanding the share price. I find it bizarre that such a fundamentally solid company with good growth prospects trading at 21% discount to asset backing.

The only soothing thing for me while watching the SP tanking is to have my spreadsheets on hand to re-consult to put my mind at ease that everything fundamentally is ( or isn't ) still ok. I thought others would appreciate me sharing some numbers that allow me to sleep so well at night through all of this. I hope this is some help to you.

While my s/sheets have intense detailing on every level ( for example specific deliveries, area values , area build margins, Nurse rates, DHB rates etc) the following is a very basic summary.
These are the past 5 years historical numbers and my 2022 expectations. It will give you an insight of the growth of various income streams , how the are tracking and the changing relative importance of each income stream ( such as village DMFs now gaining meaningfully, that are rendering aged care of increasing lesser importance).

.......................................2017...2018 ....2019....2020...2021....2022(forecast)
Aged care profit ($m).......31.9 ....28.9.....25........19.2 ...22.2....23.2
New build margin ($m) ....5.1.......21.1.....29........34.3....28.6..... 34.5
Village DMF($m)..............13.3....15........17.9......2 1.4....26.5....31.3
Resales ($m) ..................12.7 ....16.9.....15.1......11.5....21.5...22.4
U-NPAT($m) ....................14.......52........50.9......4 2.9 ...50.1...58.6

Notes.
Aged care profit -reaching point of inflection in 2020.
New build margin- will be higher in 2022 due to a high proportion of apartment deliveries and a large built up unsold apartment stock due to timing of seasons and covid lockdowns.( as long as next month isn't disrupted too much by omicron)
Village DMFs- rising to meaningful levels now and are very predictable based on previous sales .This growth is all but certain and continuous.
U- NPAT growth is excellent but EPS growth will be diluted by an extra 12.5% of issued shares.

Apart from the 2022 U-NPAT increase , I do not consider any of the above income streams to be out of trend nor at risk due to macro events. The unusual rise in 2022 U-NPAT is simply the sum of many small increases of the income streams. This growth will continue in the years ahead.

Comments.
-Resale prices of villas and apartments have been rising at about 4-5% p/a over the last 6 years so It's hard to envisage a big pull back given these rises have not reflected the current boom in the general HPI increases ( that seem highly likely to pull back).
-Beyond 2022 things will continue to rise on all income streams with a particular boost when Waimarie and other 2023/4 projects are sold down.
-Should the build rate be increasing as we are told, future growth just gets stronger. Watch for the future capex spend as proof .

The falling SP is industry wide not company specific . Even the most stable of Companies , ARV, has now fallen further than OCA over 2 years . I`d you want to feel better , just be glad you didn't buy RYM. I also find it odd that impending property falls no doubt causing this sell off, that SUM , being the most property centric company of all has done the best of everyone ...go figure?

My thinking for 2022 based on EPS above of 8.4c (that's a growth in EPS of 5% YOY) then normally a PE of 18-20 would be reasonable. That's a SP of about $1.50-$1.70 . But like I said , while I've got the fundamentals dialed in my SP predictions are terrible. So you guys and gals judge for yourself what the SP should be worth.

Needless to say that while this destruction of paper wealth is unsettling, I personally won't be selling as my confidence in the company itself remains rock solid.




Thanks for your insights. I feel that the price depreciation comes in part due to lack of building materials. Summerset can’t even source concrete for some of their works and GIB not available until May-June. This is a nationwide shortage. If that were the case, can you work out what the loss of increases profit would be due to a halt in expansion for a year?

I’m a holder, but like many looking short term is showing its frustrations. Hopefully 2023 proves to go better

Plus then there is Omicron and how it could affect villages

[Beagle]

Thanks for your insights. I feel that the price depreciation comes in part due to lack of building materials. Summerset can’t even source concrete for some of their works and GIB not available until May-June. This is a nationwide shortage. If that were the case, can you work out what the loss of increases profit would be due to a halt in expansion for a year?

I’m a holder, but like many looking short term is showing its frustrations. Hopefully 2023 proves to go better

Plus then there is Omicron and how it could affect villages

For what its worth on the last investor call with half year results in late November they said that their construction contractors were managing supply chain issues quite well with limited impact...but that was more than 2.5 months ago so the current situation could be worse.

[Maverick]

Beagle, I very much appreciate your insightful and countering opinions. It is most healthy and why the forum is here, to debate.

Yes, I have indeed been too optimistic several years ago But to be fair they were different days. I was as green as and the only financials you had to know then was all retirement shares went up about 20% P/A , Couta had a bullet proof theory of 1 Rym=2 Sum=5 Oca and in fact we all thought “deliveries” meant “sales”…and covid didn't exist.

I've applied an intense focus since then, learnt and worked an enormous amount. To be transparent and open to scrutiny here for many reports now I've preannounced my categorized expectations publicly here and they have been pretty spot on.

You have a fantastic nose to smell trouble brewing or a feed for the taking and taking the correct action. I also applaud how you are willing to change direction often multiple times and notify us here as you do. Often to the displeasure of fellow posters.

From all of this I think it is clear that where we differ most is you are far more focused on 6 months ahead and you're damn good at it. Best summed up as a momentum trader while I'm a “buy and hold” value investor which can take years for sentiment to change. Also the tax free way. As an example I've bought sizeable amounts of RBD at $.60c, THL at $.42 SKL at $1.25 and HLG at $3. All of these took a couple of years at least to go from out of favour but the results speak for themselves. (OCA meets the selection process perfectly , but covid has extended the out of favour time frame)

You may be well right about the costs and effects of covid for the next while. I do believe I've factored in enough though, but I'm ultimately looking through it anyway.

Government funding will take care of itself, it has no choice. It can't get much lower without closures. I certainly haven't heard of anybody actually opening a rest home these days. OCA are currently down to making about only 2% profit on all the govt care revenue they receive after costs (when their extra bed DMFS and PACs revenues are removed). Private rest homes without these fandangled contracts must be all but non profit enterprises at this stage. I'm saying this is the bottom.
The $ numbers on my earlier post demonstrate that care profit is not the real source of profit growth anyway.
Ironically , OCAs side hustle nurse training programme makes almost the same profit as their ENTIRE care operation ( again , without including DMF or PAC extra revenues)

Supply or labour issues have not proven to slow OCA at any stage. Awatere is about to open in advance of its intended date. Again with my horizon , it will all sort itself out soon enough anyway.

I don't in any way want to come across preachy or an OCA salesman. I just wanted to put out some fundamental facts that suggest everything's going as planned, other than 5 months of SP falling badly.

OCA is on track doing what it said it would. If absolutely nothing was different right now other than the SP was $1.60 we'd all be saying what a marvelous company it is and what great investors we all are.

Keep your counterpoints coming Beagle, they are very welcome. I really think over both our 2 different time frames that we just might end up both right.

[Greekwatchdog]

They should have their supply chain sorted with the existing contracts. I would gob smacked if existing builds had issues considering those items would have been pre ordered months ago. The issues are going forward and how the manufacturer's sees there working arrangements with you and how they continue to supply remainder of their clients. There is just too much demand and not enough hours in the day to produce whats required.

[Brain]

I have asked this question before on a number of occasions and to me it is an important question particularly in the case of OCA. Most people on this thread view this share as undervalued and in the long term should be a good investment. Brokers value the share at higher than current price and I guess institutions would come to the same conclusion. So the question is who is driving this market? Is it the technical analysts that see a squiggly line trending down and Steepen the curve by selling in the expectation they can buy in the future at a better price or are there some “wise heads” who really understand what’s going on.

[Beagle]

Known Covid costs and issues, sentiment and fear of the unknown is what's in the driving seat at this stage Brain.
Fear and Greed have always been the biggest motivators. Greed's time will come again in due course but that time is not now or anywhere close just yet, in my opinion. Wait till we get many, many thousands of cases a day and its impact on this sector....you won't have to wait long.
It was always a case of once the schools went back and hundreds of thousands of unvaccinated kids started mixing case numbers would grow exponentially. Overseas schools make kids take RAT tests several times a week. Here, the current kindergarten incompetence of central Govt around the whole RAT matter means we are seeing just the very beginning of case numbers absolutely exploding.
Its virtually impossible for the share prices of this sector to head north in that environment.

[Baa_Baa]

Wait till we get many, many thousands of cases a day and its impact on this sector....you won't have to wait long.

...

Its virtually impossible for the share prices of this sector to head north in that environment.

And who would have thought a pandemic would come along and **** up everyones medium term investment plans eh? But it has been two years now and we are into the final phase, albeit scary numbers about to come.

Transpose that reality into an investment thesis and you're looking at a massive discount to N(TA/AV) already. Anyone with a longer term horizon will be capitalising on a dirt cheap future.

The really savvy will be patient waiting for the the 2nd Covid low. The first was under 40 cents.

[Beagle]

And who would have thought a pandemic would come along and **** up everyones medium term investment plans eh? But it has been two years now and we are into the final phase, albeit scary numbers about to come.

Transpose that reality into an investment thesis and you're looking at a massive discount to N(TA/AV) already. Anyone with a longer term horizon will be capitalising on a dirt cheap future.

The really savvy will be patient waiting for the the 2nd Covid low. The first was under 40 cents.

I am not sure you can be sure that we are in the final phase of Covid. New and more dangerous variants are a credible and near and present threat in my opinion. If I was confident we were in the final phase I would be warming up the truck engine getting ready to back up the truck....but I am not even looking for the truck's keys at this point.

Picking the next low is not going to be an easy thing. Some good TA skills like you have and I have tried to learn a little about over the years might come in quite handy ;)

[nztx]

And who would have thought a pandemic would come along and **** up everyones medium term investment plans eh? But it has been two years now and we are into the final phase, albeit scary numbers about to come.

Transpose that reality into an investment thesis and you're looking at a massive discount to N(TA/AV) already. Anyone with a longer term horizon will be capitalising on a dirt cheap future.

The really savvy will be patient waiting for the the 2nd Covid low. The first was under 40 cents.


very very patient indeed .. but there are still abundant rich pickings elsewhere :)

[winner69]

I have asked this question before on a number of occasions and to me it is an important question particularly in the case of OCA. Most people on this thread view this share as undervalued and in the long term should be a good investment. Brokers value the share at higher than current price and I guess institutions would come to the same conclusion. So the question is who is driving this market? Is it the technical analysts that see a squiggly line trending down and Steepen the curve by selling in the expectation they can buy in the future at a better price or are there some “wise heads” who really understand what’s going on.

Good question Brain

A while ago an investment manager (like a real investor and not one of these guru broker analysts) told me that the top 10 to 15 shareholders in a company are the greatest influencers on where that company's share prices goes .... retail investors per se just follow along

It seems that investment managers aren't as keen on the retirement sector as they used to be. Their in depth analysis and thinking (more than just underlying earnings and PE ratios etc etc) seems to imply not really the best place to invest at the moment. I see little evidence of buying in this sector so assume that some are lowering their exposure (I see Harbour Asset and Kingfish have been net sellers lately)

Retail investors and TA people might create a bit of noise but if what this guy told me is even a bit right then its only noise - the 'influencers' set the trend

Whatever the reasons for prices dropping in the sector isn't OCA specific - the whole sector is down from 52 week highs - OCA -30% / SUM -23% / RYM -39% / ARV -25% ...ouch

[bottomfeeder]

How low can it go. I am loading up, as I can't see the future as thought about five months ago, has not changed. Way overweight in OCA, and have to say there are concerns about where it will end up.

[Waltzing]

under the 1's would be good.

[winner69]

How low can it go. I am loading up, as I can't see the future as thought about five months ago, has not changed. Way overweight in OCA, and have to say there are concerns about where it will end up.

where wil it end up --- possibly 85 cents in May when they say something

[Curly]

Ouch down another .03 cents. Sold over half my holding early Nov. One of my better moves in hind sight. The sell order is the most difficult for me, especially with OCA as good things will happen down track. Sell order was in at set price for my entire holding. It took some days to sell off just over half the holding with countless sharsies transactions. Retained balance as price dropped to low. Will be looking to get in again down track. At what pice? Mnnn, not sure. Doubt we will see .40c again unless we see major crash which is possible in todays climate.
$1.00 will be a trigger for many I guess and .80c for others more bolder. Issue price, .79c, who would of thought this could happen.

[Rawz]

1 dollar. The magic number. See you soon baby

[ThaiJohn]

Remember what Warren Buffett says....: Be fearful when others are greedy, and be greedy when others are fearful.”

[Beagle]

Being a shareholder in OCA makes me feel like this
https://www.bing.com/images/search?view=detailV2&ccid=T1M16HmY&id=9A8BB35AD3D454CA795EDFE4092C0C93285227A0&thid=OIP.T1M16HmYoFI0e2etkaQJuwHaE5&mediaurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.4 f5335e87998a052347b67ad91a409bb%3frik%3doCdSKJMMLA nk3w%26riu%3dhttp%253a%252f%252fmedia.safebee.com% 252fassets%252fimages%252f2015%252f5%252fsick-dog.jpg.838x0_q67.jpg%26ehk%3dzx0zw046TNmyFGmxSEc7 3RRS%252f43MFU9rJ8kXb%252fLJ7V8%253d%26risl%3d%26p id%3dImgRaw%26r%3d0&exph=555&expw=838&q=images+of+sick+dogs&simid=608014365413046461&FORM=IRPRST&ck=8B9D9DB01E4A76FF8AE00E444A7096DB&selectedIndex=0&idpp=overlayview&ajaxhist=0&ajaxserp=0

A sick puppy in need of TLC but there are no nurses to help me lick my wounds.

I wouldn't completely rule out the possibility we'll revisit the listing price of 79 cents again but I think anything like 40 cents again would be a HUGE surprise.

[Panda-NZ-]

People who recieve inheritance immediately waste it generally.

I wonder how much that is contributing to inflation in america.

[Waltzing]

harping and barking on...a balanced portfolio... well B and M , plus Soros often say go for the Jugular....

sell this puppy now if you can...take your lumps or your bones... spit them out ....

[winner69]

Mav's forecast Underlying NPAT is 58.6m or EPS 8.4 cents (Forbar story implies 7.0 cents)

That EPS is much the same as May 2018

Share price in Feb 2018 was 98 cents

So no earnings growth in 4 years suppose going sub $1 seems about right - and I'm sure sentiment around OCA is less favourable now than waht it was back then so sub 90c is on cards

Bit spooky eh

[Waltzing]

cash em and trash em...a short then...never get emotional about a stock they say...

[Antipodean]

EDIT:Nevermind got the calculations wrong way around

[Beagle]

At least with this ugly mange infested mutt, you get a decent discount to NTA unlike all the other mutts in this trashed sector.

[Waltzing]

oh dumpster diving....

sniffing about in the trash....

whats that sound ....


https://www.youtube.com/watch?v=bjSpO2B6G4s

[dompf]

At least with this ugly mange infested mutt, you get a decent discount to NTA unlike all the other mutts in this trashed sector.

Long term this sector will bounce back big time.

Too many people retiring with lots of money.

Sad to see it in such a rut and itÂ’s all of the providers in NZ and there maybe more to come; weÂ’ll at least until borders open up so actual labour can come in and covid has a lid on it which is anyones guess maybe it isnÂ’t anytime soon.

Good buying in front though I reckon - good companies will always be good companies.

[Beagle]

Should be good long term buying at around the IPO price of 79 cents if its get down there otherwise I am happy to run with my modest free carry stake. I think there have been many disappointments since this listed nearly 5 years ago, not the least of which is watching staff and management eat ALL the gains so far from the business transformation process. Maybe shareholders will get some crumbs left over in due course but that's not this financial year and maybe not next year either in my opinion.

[Playa]

holding any is too many at this stage

[bottomfeeder]

Amazing how the sentiment just gets trashed when the shareprice is oversold. It seems to be standard psychological fare, that as the SP gets hammered, the doomsayers come out of the woodwork with talk of the SP getting down past 80 cents, soon it will be receivership and perhaps closing down altogether. We know that they have a fixed loan of 100 million at 3.3 percent for five years. We know that the official inflation rate is close to 6% as well the real inflation rate must be closer to 9%. Second hand buildings values follow the costs of new builds. It has been suggested the building inflation index is closer to 12 percent. So I see that OCA looks quite well placed to succeed quite well once these valuations take effect.

Mind you at $1-06 my total holding has just made break even, any further drops and I will be in loss making territory, so disappointment with the company is understandable. But I believe that recovery will come back over the next twelve months.

Even after the crash of 1929, those that bought the right shares, at the right price, were rewarded as the SP's recovered after two or three years plus more.

Again, no one know the future or what is around the corner, as well Covid has added an extra unknown variable. But for the life of me I dont know how AIA has maintained its SP.