Becalmed in No Man's Land ?
Quote:
Originally Posted by
couta1
I have been giving this some more thought and it is possible they may not make the 15% plus underlying profit growth based solely on the new villages coming on tap (As at the end of March balance date only a small number of sales from these will be included in the result) However what we don't know is how many resales they have had over the last 6 months(Could have been a bumper period) so the 15% may be acheived. Whatever the result I know for sure that the following year going forward is going to be a stunner and so i am extremely positive, if the irrational market sends the price lower it will be short lived as im certain the forward guidance will be very bullish. Look at Sums very lacklustre Q1 sales metrics and the market wasn't too harsh on the share price(I'm sure in times past that result would have sent the price below $4) but because of the bullish forward guidance the market has been lenient, how much more so should that be the case with the best operator in the sector with the most consistent long term results and management that can be trusted on what they say.
Thanks mate, appreciate you sharing your thoughts. SUM got some treatment for one quarter of perceived under-performance ($4.45 marked down to $4.22 at one stage, circa 5%) so for a well respected company to miss on one of its crucial all time ANNUAL lynchpins, that being the coveted 15% annual growth I don't think its beyond the realms of possibility the market could treat this more harshly, (after all if it happens this would amount to a crucial earnings guidance miss, guidance they put too the market as being confident of achieving) and its guidance that the market has always seen as one of the fundamental pillars upon which this company's reputation has been built. I agree that forward guidance is always the most important thing but failure to meet previous forward guidance would be a new thing for RYM and a big blemish on their otherwise almost perfect record.
I don't necessarily disagree with you mate but just want to highlight that SUM made no specific guidance regarding individual quarters sales performance, indeed they reiterated forward build rate guidance at the same time), whereas the RYM situation is different and potentially more serious.
I think a correction of possibly somewhat more than 5% might eventuate..but if we're being charitable we should say the stock in theory should find support at around $8 with an earnings miss but who can be sure, whereas on the other hand we are locked in a multi year trading range with a ceiling of $9. To me, it seems at $8.50 RYM is presently in some sort of no man's land equidistant from either possibility which looks like 50-50 to me. Anyone got a spare coin I could toss :) On reflection I think the chance of a short term sustained bounce above $9 is slightly outweighed by the possibility of a short term correction slightly below $8 so I shall keep my powder dry for now.