From where you get it?
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Let's not sugarcoat things. It's a fear-driven market right now, and things will almost certainly get worse before they get better. As Tommy Lee Jones said in Men in Black, "A person is smart. People are dumb. Panicky, dangerous animals and you know it." Witness Jacinda telling people please not to panic and raid the Supermarkets tonight, and before she could even finish her speech, people were ripping packages of Spaghetti off the shelves like it was gold.
And yet, to those who can keep their heads, think of the tremendous amount of wealth that is going to be created buying a company like this at these prices. Tragedies often involve a further transfer of wealth from the fearful to the powerful. This virus will pass. Our population is still aging. The retirement sector is still gonna boom. Nothing about any of that has changed. This will be a ten banger from here in 2024. At the VERY least a five banger. That's a tremendous opportunity.
Definitely a long term perspective required on any purchases being made currently. But there has to be long term value. Right?
I saw a Fed guy saying they had infinite money so dont you worry. Which of course scares me silly, but the powers that be are determined to create inflation and stocks and property tend to benefit from that.
While the ludicrous imbalance of fear and margin calls v's "patient buyers" or " buyers with no cash left "are the only drivers of this situation (I will not call it a functioning market) there are a few positive considerations;
-care suites must surely be in red hot demand right now,and this is where the good money is made.
-embedded value will be realised as predictable as concrete setting, after all, are our community of clients going somewhere else?
- as Beagle correctly reminds us, a load of weekly GOVT funding is certain.
- GOVT injected stimulus into the economy will certainly eventually end up in a combo of NZSX and property prices.
- when we emerge from the "lost 3 months in NZ" we will all be 3 months older.
... now here's the kicker, Earle has said there has been no noticible change (up until last weeks announcement) that anything has changed in sales , resales performance etc.....
so.....reworking my spreadsheets assuming that NO transactions of anything property based happens in the next 2 months ahead then OCA should make 50m (pre tax) underlying profit FY2020.
Thats a stunning return at even 50 cents SP!
Will this company go bust in the mean time, why would it?
Thanks for reworking the numbers Mav. Keep you chin up mate.
I'd expect that with the gyrations we have already had (with a few people burnt a second time) that an upswing will be slow.
It may pop up but profit takers (or lower loss takers) will step in and punt the price down a bit again.
I doubt it pops up as fast as it went down.
Yep, you nailed it once again Bull.
Property will definitely crash and old people will either all die over this or no longer need late stage care anymore because Covid has stopped cancer and those other details that used to happen.
OCA is in big trouble , thanks for bringing it to our attention.
I didnt say the property market would crash , i said in limbo means not doing anything. retirement stocks need a rising , good market to make there margins.
covid is worse than cancer etc because it kills and spreads with such speed so yes a spread in a care bed facitilty may potentially empty the whole place which means no income from care beds and there may not be the people to replace them if the virus is rampant in society. as an investor its not all rosy and bullish people need to think of every senario for stocks , obviously your bullish and im not so that sums the market up beautifully dont you think
I don’t see how demand will get less here. We tried to get my great Aunty into home a couple of years ago. Told it was a two year wait for a half decent one. My old man ended up just chatting to a guy and bought one at a “lesser” establishment through the back door. The waiting times for some folks are very long. By the time you need one, it’s too late.
And secondly if elderly people contract this thing and it has ongoing implications, a care home is the best place for them?
I can see balance sheets being affected by property value yes, but bottom line after it washes out, not so much. I imagine there will be some teething time to get back to normal Ops.
Some better news, Chairperson Elizabeth Coutts has been buying shares in OCA for 56 cents.
Mmn, she might have read Beagles post and realises the discount to NTA. :)