What's happening with Ryman guys?
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What's happening with Ryman guys?
Has been under MA200 for a while and has had no news for some time may have to wait till closer to next set of results to see any significant price increase, notice that Sum also testing the old $3.20 level again after its lastest set of good results both stocks at around the price they were 2 years ago so pretty stagnant overall.
Ryman share price is looking weak trading at $7.79 today, which is under both the 50 day EMA [moving average] $8.10, and the 200 day EMA $8.03.It did drop to $7.22 on the 17th October last year.Will be interesting to see if it tests that price again.
The full year result is due mid May.
Not a dividend yield company. That appears to be where the money is going at present.
Thanks for the info, see what happens I think
Attachment 7211
Happy Anniversary
Paper Tiger
Underlying earnings is what counts. Underlying earnings takes full account of all income actually earned in the year including the resale of occupation licences during the year at higher values than they were previously sold for and takes into account all realised development margins and any income these companies make from the actual operation of their villages, which in SUM's case is ostensibly nothing. International financial reporting standards (IFRS), requires property companies to declare income inclusive of the revaluation of all property to current market value each year. This gives a false view of earnings as values can track up, down or sideways and no matter which way they track the company doesn't actually earn money on the unit value changes until the year in which they are subsequently resold.
Simply put, a profit isn't a profit until it is actually realised. IFRS accounting standards accounts for unrealised profits which may not in fact be earned for a decade out or potentially even longer when the unit is eventually vacated and resold to another occupier.
SUM are the best of the bunch at clearly articulating the difference between accounting methodologies...LOL at least they get that right. RYM and SUM on circa 30 times underlying earnings and MET on about 18.
In my opinion RYM and more especially SUM have got a bit ahead of their fair value and we may now be in a long slow grind of under-performance while earnings growth slowly catches up to the SP. Both stocks have significantly under-performed the market in the last year and I expect they'll continue to under-perform for at least one more year, probably significantly longer. Its interesting to note consensus 12 month broker price targets are very close to where SUM and RYM are currently trading whereas consensus for MET is circa $5.80 v the current SP of $4.75. Clearly on a discounted cash flow basis the brokers are using MET is the only stock in this sector to offer any real value.
Disc - Own MET. Happy to wait indefinitely for $6.50 for RYM. Most likely in my opimnion is RYM won't go down to $6.50 but will track sideways and with earnings growth over the next year or two will probably be fair value around where they are now, in due course. For those that want (for whatever reason), to use IFRS earnings its worth noting that while RYM is on 17 times IFRS earnings MET is on about 9.
Hmmn very interesting Roger,well I'll continue to watch the charts and see when either the sideways stall has ceased,or the slow trek down has turned.
Gee this share must still be extremely boring.
FY announcement in 2 days and not a word on this thread in the past 2 months.
That $6.50/share looking more and more elusive Roger. :)
My forecast... Underlying profit up around 17% on previous year and a divvy of 7.2c/share for H2 (Total of 13.5c/share for the full year).
Disc. Still a happy holder.
Record profit 136 Million, best of breed aye.
“Our first village in Melbourne is one of our fastest selling ever. We’ve got ample proof that our expansion into Melbourne was the right thing to do.''
Many commentators had doubted their expansion into Australia. So the good Doctor must have enjoyed stating that!
LOL, classic post mate. I reiterate my previous viewpoint that what matters most is underlying profit, a fact the company itself points out is the relevant measurement basis. (BUT see below)
Underlying profit is $136,316,000 which on 500,000,000 shares, (good they see no need to issue vast swaths of shares to directors and management on really cheap advantageous terms so that the CEO can subsequently sell them using inside knowledge like SUM companies do), so underlying EPS is 27.26 cps and on $8.10 odd last time I looked the PE is 29.71. Decide for yourself if this is value or not.
For me I recognise this is without any question whatsoever the best of breed and one of N.Z.'s premier growth companies, incredibly well managed and operating is a sector will strong demographic tailwinds.
Unfortunately all those factors are already priced into the current SP in my opinion BUT its interesting to note that using the Ben Graham valuation formula, (and note this is one of the very very few companies that you can reliably count on a sustained g number for this formula where v = eps 27.26 x (8.5 +2g, where g = 15%) we get $10.50.
Its also possible to make the argument that underlying EPS is a very conservative, (yes accountants are conservative) way to measure EPS.
You could argue with some degree of validity that at the very least housing goes up in line with inflation and in line with generally rising construction costs so some degree of the annual revaluation is baked into the core of this model i.e. say 2% underlying increase per annum on their asset base, (I use 2% as a proxy for estimated long term inflation and increase in build cost).
Now I need to look at their asset base and add 2% annual growth as part of earnings and we get...
Asset base, quick look off the analysts presentation is $3.3b. Fair value movement in investment properties 2015 $217.6m last year $174m.
If one took the view that 2% of growth in the asset base is baked in each year, (rather than subject to various ups and down of the property cycle), over the very long haul through inflation and rising construction costs, (which seems a fair viewpoint to me given the 100+ years of data on house price inflation we have in N.Z. then you could make the argument with a fair degree of credibility that earnings of $66m in revaluations on average over the property cycle are fairly certain each year and therefore adding that into underlying earnings we get underlying earnings $136.3m plus baked in inflation based revaluations of $66m = underlying earnings of $202.3m. This gives EPS of 40.46 cps and puts the stock on a trailing PE of 20.
I think this post is a Eueka moment for me in understanding the fundamental shareholder value drivers of this company.
Putting that 40.46 cps into the Ben Grahame valuation formula gives a fair value of $15.57. Hmmmm
Disc just bought a modest shareholding.
I'd be interested in others viewpoint on the theory of long term baked in revaluations through inflation and rising construction costs, does that seem a legitimate theory to include those with underlying profit or does underlying profit already adequately capture those gains anyway through the resale process when units change hands every 7 years or so ? Thoughts ?