Only time will tell who is correct, but I am thinking Summerset will surpass Rymans sp within 5 years.... take into account a possible share split for SUM may occur.
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Dividend gone and RYM up to $12.00.
I agree that $240m is achievable for FY19 which gives 48 cps but where I see the PE as being good value based on historical norms is 23.5 which suggests $11.28 as a target price for RYM. I note brokers average target price is $10.60. http://www.4-traders.com/RYMAN-HEALT...072/consensus/ and average rating is underperform which is what I also think they'll do for the rest of the year from here.
RYM have enjoyed a very strong run recently. Too strong for the fundamental's in my opinion.
OCA (the dark horse of this sector) could do a real bolter this year being on a FY19 estimated PE, (my estimate) of just 10-11 which is too cheap for this sector considering their care reputation which is second to no one including RYM.
With RYM at over $12 you're paying a Rolls Royce forward PE for very early in the FY19 year of over 25...nothing ever goes wrong with Rolls Royce right ?...oh hang on a minute...
Fair price for RYM at the moment is approx $11.50 so yeah.... about 6-7% overvalued based on 15 years historical SP vs Underlying Profit (UP) analysis... but based on the bright year ahead, no one is paying a Rolls Royce price at the $12.20 mark... just a bit more than history suggests.
RYM will have a boomer this financial year. They have, in my opinion, already stolen some of the current financial year's UP and put it in the announcement for Financial Year End 31-Mar-2018 just to get it near the 15% mark. They can easily afford to.. but, again in my opinion, they have (albeit slightly) contravened a key criterion for defining "Practical Completion' before which UP on new builds can be claimed.
Agreed. RYM have just shed their dividend so there's no logical reason to pay 107% of fair value right at the moment which will most likely lead to frustration as it underperforms in the short run.
I think with the market where it is you are very wise to try and focus on what's best value and likely to appreciate the most in the next year. OCA and TNR two obvious candidates.
Beagle who is TNR