Bought heaps of ATM the next day after the last meeting at a fraction over $9 and they roared up within a month to over $14...not so good since then though.
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A really important question Winner, and your point was raised at the "meeting". Are we talking this up to a blinded frenzy ? We discussed other companies of course and the banter was pro`s and con`s with them all but with OCA no one could actually come up with a fair "Con". Oversupply and government intervention were considered but they didn't stack up.
All those present were free thinking individuals way past the "hand waving, hallelujah , timeshare" bunch. I don`t think anyone there "runs with the mob" or is under the influence of "mass hysteria."
We all know there are things we don't know. So I'm sure we are all ears for contrary opinions.
Yes I have turned up the Beagle nose forward sensor to maximum intensity looking for risks and there are some which I'll unpack shortly but all business's have challenges and the FA with a forward PE of about 12, very cheap for this sector and the market overall, TA also looks very attractive, leadership looks top notch and we all know the strong demographic tailwinds.
Against that is a modest chance of Govt policy change and HR issues but all business's have challenges recruiting the right staff at an affordable pay rate.
Earl Gasparich told me they have room within their annual Govt funding allocation to increase the pay for nurses to reduce the drift towards the public sector caused by the recent settlement nurses achieved with the DHB. The gap has been as high as $6 per hour...they will close that gap as best they can in the meantime and it will be closed completely with the next annual review of govt funding.
It is noted that the Sands in Browns Bay is scheduled for completion in May 2019, also OCA's balance date so any delay in completion will have a considerable effect on FY19 eps but will flow straight into Fy20's result. Worth noting however that the company has a very good track record of delivering new facilities on time and on budget.
Meanwhile Forest astutely noted at the ST meeting that many of those 272 units to be completed this year are high value units and if they make 35% development margin on those...eps could be interesting seeing as they only did about 130 units last year.
You can't have too many :D
It must be true. The dogs are barking it!Quote:
You can't have too many
Seriously, OCA has all the attributes of an excellent investment - but some of the boosting is starting to get close to the pump!
We just need to be sure that we understand the fact that exposure to property is a big factor in this sector , and property is theoretically in a huge bubble in this country
Property is also a big factor in a lot of other listed securities so its worthwhile to keep reminding ourselves how much our entire portfolios are exposed to property. Debt securities included
I have VHP for instance. Property.
And then theres Turners owning property as well. CMO as well. How far does ones exposure to property really go??
True true. BUT the point of difference of this company is it has a high focus on the late care stage.
Two things about this is that if dad needs the last 2-3 years of his life to be intensively looked after then the family are hardily going to "time" his entry depending on his fallen property value (other wise you`re looking after him). The other thing is that he will have to come up with say 1/4 of a million for a care suite/bed rather than 1 million for a villa. Surely that's pretty achievable even in a downward property cycle.
Just saying that the very real property risk is going to treat OCA better than others.
Much more defensive, I couldn't agree more Mav.