Given Kiwis have a bad habit of selling into an offer this is entirely possible.
We don't seem to back much for the long term - get a nice looking short term offer and off we go.
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Bigger than OCA, but just some random thoughts:
Just listening to the news of Australia on fire ... and looking at the Australian population pyramid (https://www.worldometers.info/demogr...-demographics/). Nearly 4 million Australians are currently between 65 and 85 and each of them can at any stage just hop on a plane to NZ and stay here forever.
If only 1% of them decide that they have enough of the increasing heat and the smoke and want to spend the reminder of their years in a more benign climate with less smoke in the air - this would be already 40.000 more people queuing up for a nice retirement village place in NZ.
I recon I need to increase my share of retirement stocks (with OCA being one of the most reasonable priced) . The future looks sizzling hot ...
We have been taking friends from Wellington around retirement villages. They had almost decided on a two bedroom unit at summerset Ellerslie for about 900k. I took them out to the Sands and it was a no brainer for them they paid a deposit the next day for a 1.2 M$ unit. We were all very impressed with the Sands. Proximity to the beach and restaurants in Browns Bay make it an excellent location. Our friends had a number of units to choose from. Oceania will not have any trouble selling these ultimately. The restriction that all residents have to be 70 and over could rule out a lot of prospective buyers. OCA have done a great job with the Sands. I believe it bodes well for the future. I am a happy shareholder.
Other than doing nothing which seems to be the case (if they had done anything it would be announced if more than a % movement) Macquarie might be looking at the nice rise recently to find some insto's to offload to off-market. Otherwise there's no evidence Macquarie are doing anything at the moment and they probably see the potential to close out their fund that OCA is part of with a windfall profit... which isn't now or anytime soon.
As for private equity, who knows really, the big money might want to hedge their acquisition plays in this sector in which case OCA is a logical alternative choice value play to buying the leaky building saga at MET. I'd be disappointed to see an acquisition bid on OCA, I reckon they'll run up a 3-5 bagger from here before the serious money wants a long term sniff.
Nice feed back Brain, thanks for posting.
Yes, once you've visited OCAs Sands(and others ) you can clearly see their style with the premium makeovers they are all about , and the areas they are in.
By any chance do you or your friends know how many units were sold and under contract (or still available) and the sale price groups they fall into, they have 3 rates. And if you do know any of this what was the date.
If they ran a disciplined approach towards cost control I'd be in. The market needs to see more evidence that internal controls regarding cost are working well. OCA could get some support in 2020 from funds reinvested into the sector from the cash generated by the takeover of MET. The other big beneficiary from a MET takeover will be SUM which is still cheap on a forward earnings basis considering their long established and very well proven growth rate.
Brains anecdote seems to indicate a certain amount of price flexibility at the good end. Perhaps OCA will maximise this aspect and costs will be less critical to success. Of course some discipline but I just that sometimes you have to spend more than say an industry average to sustain premium quality and branding. Location not so important in this case either...
Quality lingers.
Mav, a nod is as good as a wink anywhere though its a lot easier to get caught with trails these days, so the rumours will spread but only the well and truly disconnected can have any hope of getting away with it.
Back in the old days when I first worked in the stockbroking trade it wasnt even illegal. All those printed contract notes out in the back office got seen by a lot of people haha.
Sorry Maverick I don’t know the answers to your questions for sure because I didn’t want to grill the sales Manager which is what I would wind up doing to get accurate answers.
My impression is that probably nearly half of the independent units are sold or under contract and probably evenly distributed in the price tiers. I have no idea about the occupancy of the care suites.
we visited 2 days ago.
I guess my key takeaway is that this place is classy. It has an energy about it being located close to the beach and shopping centre. Many of the places we visited did not have this energy they had the feeling of this is where people come to die. Not the case with the Sands.
If OCA can continue to do this type of development they will be developing a great brand. Happy to be a shareholder.
Thanks for the response Brain. Just for fun I put your 50% Sand apartments sold into the s/sheets. I fully understand your figure is just an impression and very rough. It is a little less than sales I had extrapolated from last known info given by OCA in September.
I have also applied this new, lower sales rate to their other building currently selling down ,Meadowbank stage 4.
The updated result from Brains guess is HY1 profit of 31M , apply a PE of 13.5 and the share price should be $1.38
I have been predicting, using the extrapolated sales rates from actual known sales back in September, the share price under the same conditions would be $1.50.
So lots of share price appreciation ahead either way.
These HY1 profit forcasts includes the care side profit of the business as being flat.
The problem with waiting for Macca to finish their exit, waiting for more "proof" the care costs are under control and waiting more years to financials to look back on is that the share price will have also adjusted upwards accordingly. I think ARV is a good example of this as far as share price growth and time taken to get market acceptance goes.
Its hard to imagine being able to buy OCA at $1.02 ever again. New share holders now have to pay an extra 15% to get on board.
Weekly chart, log scale. Technical breakout this week from longish term resistance, now support. Trend line breakouts Oct & Nov confirmed. Not too late to get some, $1.21-$1.23 should provide stern price resistance. Break up through there ATH has blue skies above.
Enjoy :)
If there was deep value at the current price like some here are suggesting multiple parties including private equity would be talking to Macca's and OCA's board about a takeover instead of MET. We're still 2 years away at least from this company being 50/50 new business model with ORA based care v old model which has more cost leaks than a sieve.
I hope it is $2.20 by Christmas 2020 because if it is SUM will be ~ $15.
I think the ideal time for Macca's to dump their remaining ~ 250 million shares is when shareholders have their cash in hand from the MET takeover. There will be a lot of money looking for a new home in the sector at that point.