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Yes I was one of those, bought a lot for less than $1.50 sold them within the 3 years for more than $3.30 when you posted:
It didn't :p
Current SP for OCA is $1.19 we will not see $2.38 within three years.
And do not try to wiggle out of it by claiming you meant from listing.
Disc: Hold OCA, do not hold SUM
Hello Snowy. Have you been to OCA Milford? Brownsbay,? etc . Have you looked at their results/ figures? Have you analysed Beagles very accurate material ? Even with the elephant about it’s not going to double. It’s going to treble and I’ve got a trainload to back my opinion !! The global pension funds are simply growing and they are monstrous and they must shelter those funds in blue chip stocks and this is certainly 1 of those
Shares are on the most modest PE for this fast growing sector. Without even any PE expansion, (which I would argue they will certainly get as they continue to prove the robustness of their business model) all it takes is 26% compounding growth in underlying eps per annum to exactly double your money (if the PE stays the same). Then there's the gross dividend yield of about 5.5% (my forecast this year) and growing each year.
Ok.... just spent most of the day trying to understand even more of OCA- ORA machine. Talked to a very pleasant chap heavily involved in the Meadow bank development (He was just who any proud company should be represented by). Then spent the rest of the day doing a load of scribbles , calculations ,assumptions and guesses......here's is my result ....OCA is worth $1.50 July next year. Thats 11.7 eps at a Pe of 13. (25% share price increase from this year, no surprises there)
This based on:
-last years normalised profit, (which is sustainable.)
-add 2% on the care side of the business,
-add the DMF's of the new 2018 fy housing stock (obviously this will be mostly unrealised as nearly all new ora's will still be active for another three years or so- but the profit is still there).less 20 % for unoccupancy
-add new sales of 272 new units delivered in FY 2019 with sales margins at 20% ( I've also applied 20 % discount to allow for unoccupancy, mind you ,the 30 unsold units from fy 2018 should have become occupied by then to help fill the gap)
As much as ARV is also very good and SUM has ongoing great credentials at a now low PE, OCA is in a slightly different class. That is, more needs based , affordable (for the semi wealthy ) and essentially send customers off to their "happy hunting grounds" every 3-4 years at 8% p/a (allowing for six months unoccupancy between needs based guests.)Rather than a standard retirement villa which is about 7.5 years@ 4% p/a - The highlighted percentage figures are the DMF rates only
lots of assumptions and arbitrary percentages used which can easily be disputed by minds far smarter than mine but the guts of it all is rather stunning as an investment.
I do maintain the theorem ......you just can't have too many
Take into account that Kiwisaver Funds are now in excess of NZD$50 Billion. That $50 Billion has to find a home somewhere (maybe a nice new unit in Meadowbank!) This is just my opinion but I don't think the fund managers / brokers have discovered OCA yet. I think the latest Macquarie sell down has raised some awareness. Once the fund managers and brokers understand it I think you will find this stock will more than double even triple. The unknown is how long it will take but it will get there. Just remember the fundamentals of this business and the Grey Tsunami that is coming......
Great post mate, no argument from me. Interestingly the national average value of a needs based care suite is just $236K. Pretty sad if someone can't afford that by the time they're 85.
Very defensive needs based business model and I like how they're also building a lot of nice apartments as a mix at many of their sites so people can seamlessly shift from an apartment to a care suite as their needs change. Yes SUM's lower PE is on my radar but we need to see evidence they can sell the 450 units per annum they're building and is this really the right time to be considering expanding into development in Australia ? I hear Melbourne real estate is really coming under pressure. I really like the points of difference that OCA is not considering expanding there, whereas SUM and MET are, and soon to be ARV too ? I especially like that 65% of the next 7 years of developments in N.Z. is already consented. With the difficulty of gaining resource consents now (newbies, please refer to my post #2022) its impossible to overstate the attractiveness of this aspect of the company. This company also has a good moat too, not easy by any means to build a stellar reputation for late stage care.