Isn't it funny how all the brokerages that were dissing RYM during the housing decline have changed their tune..
I have now seen DCF valuations and target prices for RYM from three brokerages ranging from $2.90 - $3.10, which ironically are now higher than my own current valuations. When as recently as 08/09 and even 2010, those same brokerages had doubts about the viability of RYMs business model in a declining housing market, and had valuations far below my estimates.
Now we have comments like this coming from recent broker reports on RYM:
And almost identical admissions from two other brokers that RYMs pricing is not entirely set by the residential housing market.Quote:
Ryman well positioned to leverage its pricing
With a potential scarcity of high quality product and large
well capitalised operators, RYM with its 20+ year track
record remains well positioned to enjoy very strong demand
for its product and to leverage its pricing accordingly.
I find this incredibly ironic that they now profess RYM to have some pricing power even in a declining market... But now this is no insight right? its simply hindsight now that RYM have proven it. It seems the role of the broker is simply one of commentary rather than insightful thinking about the micro and macro economics when it was truly useful (i.e. when the stock was trading at a hefty discount !!)..
Of course there is some link between village pricing and the housing market (i.e. The old person buyers have to have enough equity in their homes to afford them to start with!) but the fact remains that RYM have considerable pricing power and will continue to do so for the foreseeable future, even if the residential market as a whole continues to decline.
I agree with the latest broker reports, but its the timing that makes me wary. It wasn't difficult to see this 1, 2 or even three years ago.
Don't trust broker reports and think independently is the lesson. That is a lesson that has been hammered home to me countless times now since 2007.