A Very Good analysis there - Beagle
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A Very Good analysis there - Beagle
I work in real estate industry (technology manager for a real estate company) and we are putting together systems in place for tenants to view properties and for listings etc. Pretty much exactly video calling and virtual tours, so yes that could and should be used for showing properties in retirement villages
I'm comfortable long term, (not expecting great things this year for obvious reasons). I really like the sector, the business model of all the operators is extremely tax efficient, and the demographic trends are undeniable.
I never wanted to sell SUM but the board never took on board my insistence over many years they needed to move to a fixed weekly fees for life model, in line with the rest of the sector and over the years they simply haven't been able to sell the units they've built. In my opinion the board have made a very poor call on this matter and its really hurting the company. I have also come to have real doubts about Julian's ability to work with Councils and key stakeholders to get developments done in a timely manner. The no growth thing when the company was priced for strong ongoing growth went down with the market like a lead balloon and was the trigger to find a better opportunity in this sector elsewhere.
I really do have a very strong desire to have really meaningful exposure to this sector long term and this provides the best opportunity (by a very long way), at current pricing. I would be happy to buy ARV if it gets down to NTA-V. Other than that I can't tell you what future trigger may impact my investment decisions because...well, that's in the future. I don't think the share price is going to rise back to NTA of $7 anytime soon and I'm quite comfortable with that.
An investment of 100,000 shares in MET is ostensibly the same as buying a nice retirement unit worth $700,000, for just $405,000. Covid 19 almost beaten here or not quite yet, that's a deal that's simply too good not to accept. Thing is, I have calculated 100,000 shares actually (with the interest free resident loans), gives you all the future benefit with resident and other gearing, (over 58% gearing the vast majority of which is free resident loans) of all future tax free capital gains from ~ $1.7m worth of property.. and that's the hidden gem of this retirement sector right there and that's why I like this sector and the business model.
Finally, this extract from MET announcement of 20 March 2020 should be noted
Quote:
Metlifecare has not observed any material impact on its retirement village unit sales or admissions to residential aged care homes to date and does not expect the pandemic to have a disproportionate effect on Metlifecare.
Yeah, was $2 a share, (about half NTA) and very shortly thereafter there was an attempted takeover at $3.90...history never repeats, or does it ?
https://www.nzherald.co.nz/business/...ectid=10761913
Ha who needs enemies with friends like that alright! A punt is all there is to go for really when you have so much time on your hands and everything else has moved on up, say go for AIR with no practical operation on the up swing or could invest in a SME and have you hands full...then that is a losing play here in NZ with illusionary Government support...its okay if you are offered a Trump grant, direct cash.. however that is USA not here... so take a punt on MET is just as constructive...
Discounts to NTA can exist for very long periods (as can premiums's to NTA). For example MCK has has maintained a decent sized discount to NTA across 2012 to 2019 and probably before this as well.
If you go back a little bit further than Beagle has in his good-growth statistics, MET growth metrics start looking a bit shaky. MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). So from a long-term perspective its been well deserving of its dog reputation.
Unlike SUM/RYM, MET never made it to new high's following the GFC (The June 2007 share price was $8.25).
The really key question is, Is today's version of MET (including its management team) better/different to the version that destroyed value and existed 10 years ago. Beagle has given some reasons to consider. Are they strong enough to revalue the company to near NTA? The jury is out on that one.
Disc - was a holder and sold out a few months ago. Didn't rebuy quickly in the low $3's as I thought the takeover speculators bailing out would push the price even lower.
How many other potential interested suitors were there for MET again ?
Arguably, I dont see too much of the value in MET has disappeared during C-19 either