I'm just chucking it out there but there may be a possibility that the share price is being suppressed by the anticipation of interest rate increases and the uncertainty of how much these may be?
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I'm just chucking it out there but there may be a possibility that the share price is being suppressed by the anticipation of interest rate increases and the uncertainty of how much these may be?
Ryman has also been down from a high of $8.39,today's is its first day above $8 for a while,as I've observed many times the price is driven up at the end of the day by buyers on the international index on good volume(Have a look at the intraday chart)perhaps tomorrow will be a better day for Sum?
Couta - prob good news for if i have erred
I have thrown SUM out and and added to RYM with the dosh.
SUM been a great ride for a couple of years but it seemed a dumb idea to have both, esp when price movements are pretty highly correlated.
My rationale was i believe that the worst RYM can do is match SUM but over time RYM has more upside potential. From a market sentiment perspective RYM is the sector leader and because of its size will remain so. A well performing SUM helps maintain the high profile of the sector, a sector certain to rise.
But if the world turns to custard in the next week or so an the market starts to collapse RYM will be sold off ....an then waiting for the next recovery
Sector traders just follow squiggly lines, can't be much of a life really, sitting behind a screen glued to a squiggle for 40 hours a week. What we are seeing is them playing catch up with Ryman following that exceptional report and boost for Summerset.
Oh well, if Ryman has to tag along too on Summersets coat tails then that's got to be good for the NZ50 and the sector and investors in general. Onward and upward for all.
When you consider the price is basically the same now as it was in early November 2013 and since then we've seen the 4th consequetive best retirement company award, exceptional sales for the 4Q 2013 and the annual result with underlying profit up 46% I think we have seen some price earnings contraction already, consistent with anticipated increases in interest rates this year.
On another subject, the world as we all know is a crazy place at present but none of what's going on in Crimea or possible expansion into or incursions into the Ukraine has any effect on elderly folks desire to live in a safe caring environment in N.Z.
On the other subject of the relative merits of RYM and SUM, with the growth rate of SUM being clearly superior to RYM and with SUM's laser focus on N.Z., to coin the phrase so often used by Percy, we're well positioned :) Settle in for the long haul and enjoy the prevailing tailwinds highly supportive of an enjoyable cruise.
SUM is currently trading on a PEG ratio of less than 1, i.e. price earnings is circa 33 times, (based on underlying profit, excluding revaluations, which in many ways in my opinion understates true earnings seeing as property has a long history of gradually increasing in value) and the growth rate is 46%. PEG = 0.72 = exceptional value. History tells us that it is extremly rare to find growth stocks trading on a PEG of less than 1 and when you do there is a lot of money to be made. History has a way of repeating itself.
Agree Roger, Summerset is due for an outperform phase now Quadrant are gone.
I find the views of some concerned about interest rates a little quizzical;
Excluding non interest bearing occupancy advances which have no external interest rate exposure, Summersets debt/equity ratio becomes 19%, quite a low exposure really for any company, Ryman’s figure is a little higher at 29%.
Higher interest rates may influence the small market of village owner operators who would be interested in buying a Summerset village, but then Summerset are not selling, have no intention of doing so, and thus it becomes a moot market matter.
Also, it is entirely unlikely that the respectful target market of 75 year old plus freehold home owners are going to be at all influenced by interest rates in deciding when or if they will require aged care.
They typically have no mortgage or debt and will generally gain from a higher interest rate environment as the surplus cash from their house sale will actually earn them interest.
Higher interest rates, no problem.
They are probably not concerned with a war in Crimea either. What keeps them up at night is whether they remembered to turn the light of in the lounge and what is the name of the person lying in the bed next to them that they have been married to for the past 60 years.
What is the wait period for buying one of these units. If it is short then it will lengthen slightly if oldies are slowed in selling the family home. The build rate can also be adjusted to allow for this. So is there really in great affect in the medium term?
Bought another 20,000 last week and looking at more.
Not sure MAC has COMPLETELY missed the point, snapiti, in fact ALL the points he made are highly relevant.
I take your point onboard also, but come on, the selling time for residential fluctuates between low 20 days in the good times and about 90 days at the nadir, a variance that is immaterial in the selling cycle of retirement units.