The whole sector is persona non grata and likely to stay that way while the real estate market is in steep decline.
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The whole sector is persona non grata and likely to stay that way while the real estate market is in steep decline.
OCA was two years ago (for one day) on super special for 40 cents. No fundamental reasons at all, just lots of negative hype during the first Covid dip.
So, what exactly are we worried and complaining about? At worst this is another amazing opportunity to ride the negative hype wave and play a deep value game.
Just spare a thought for the poor buggers who sold the shares last time at ridiculous prices (say anything below 80 cents). They will need to live with their money destroying decision forever. Just try as well not to make the same mistake!
Lack of staff and the lack of funding.
I just hope the government either changes their funding structure for retirement villages and/or villages start charging much more for care, or the villages start focusing less on helping and more on making money.
I want the best option which benefits residents and the business.
To really stick it to the Govt all they need to do is to only take private paying punters into their care centers, the thousands left on the sidelines would then become the Govt's problem to sort out, that is essentially why all the not for profits are closing because a lot of their residents are Govt subsidised and as we know undersubsidised means loss running.
"So what exactly are we worried and complaining about ?" Answered comprehensively already. This is not a 23 March 2020 "many thought the end of the world as we knew it was near type scenario". The market is waking up to the fact that underlying earnings have never grown since this listed 5 years ago and in a white hot super intense demand situation for care and nursing staff, future care cost inflation might actually be worse than what's been experienced in the past ! (7-8% per annum). Remember that OCA has experienced care cost inflation at 7-8% per annum when inflation generally was benign at 2% per annum ! What's care cost inflation going to be for them in the current much higher inflation environment ?
Even if they can execute some earnings per share growth in the next two years there was an interesting comment I took note of on CNBC this morning.
Discussion topic was of lack of authenticity in possible perceived future earnings growth due to high inflation.
Let me outline a possible future scenario to illustrate my point. Here's the thing. Suppose underlying earnings for the year ended 31 March 2024 are in fact 10-11 cents per share. At face value we might all breathe a sigh of relief that earnings have grown since they floated 7 years prior and that on the face of it the business is finally working for shareholders. Thank goodness for that we might collectively think, but wait !
If inflation is running at 7% for the next 2 years, (is there anyone left who believes its transitory anymore ?), that's 3 years of inflation at that level counting last year which combined with inflation since this listed means earnings in real inflation adjusted terms are still going nowhere ! Effectively the apparent earnings growth becomes disingenuous earnings growth through high inflation...just one more thing to keep in mind for the future for all companies not just this one.
After the Alpha and Delta, they see the old don’t die in their masses from covid (omicron), they all die with covid……. A death is horrible for any family to deal with, but based on stats the retirement villages and investors should not be too worried about Omicron if residents get regular boosters.
For sure and death is a part of life especially at the age of the ones that died with Covid, many of them would have died by now anyways in all probability. As I have mentioned before in just one care centre I know of about 4 yrs ago, 20 residents died with the flu over that winter but you never heard about it.
Without rhyme or reason Ryman is going down disproportionately. Good thing I don't have many.
I'm not buying any more OCA just in case the bomb goes off and the market collapses completely.