I reckon they’ll struggle to sustain eps growth of 17% in H2 ...ie full year likely to be less than 10%
Forbar will disagree of course ...what’s their latest outlook tj
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Interesting we are talking about high PE for ARV (we won't bother looking at other metrics like highest dividend yield or cheapest price to book) - some say SUM is on 14.2x 2019 forward PE, OCA on 14.3x 2019 foward PE, and... ARV on a 13.9x 2019 forward PE (that was before todays bigly results were released - probably lower now after the impending concensus upgrade around full year profits)... RYM on 25.3 and MET on 13.1 but nobody cares about that - one has always been wildy overvalued while the other has unknown remedial costs and all sorts of not so great stuff
Looking at FY20, well the three horses above, sorry, 2 stallions and a dog, are pretty close (all in the mid 12's)... wow 4 years ago if anybody had tried to remotely see ARV in the same light as others listed at the time, it would have been meet with nothing but laughter
2H likely to be softer than previous years (relative the first half) but probably a record and FY19 ARV on track to beat the famed ryman in terms of underlying EPS growth, maybe even come dangerously close to sum others (how embarrassing that could/would/might be!)
After RYM, the market leader as we all know, posted a NPAT drop, I got a bit worried (market didn't really care) ARV would do the same (it did a year back), but no... quite the opposite... and NPAT is the thing that counts the most isn't it?
Tomorrow I reckon Forsyth gonna say $1.75, a record 12 month price target from them for ARV... but we all know it'll probably struggle to stay above $1.30, too much attention going to OCA for anybody to notice ARV
After spending the evening on this one I reckon ARV is doing a very good job.
The tricky thing about this industry's reporting is that there is just so much interpretation of retirement village profits.
Personally , I'm only interested in full 28% after tax ,"underlying earnings".
By using the "underlying earnings" it essentially strips out the distorting property valuations which helps to compare a retirement village profit with a more simple company such as MVN (which basically makes plumbing stuff, no offence MVN holders, it's just an example)
That being said, I do greatly desire the property revaluations essentially because it keeps the investment asset,(the retirement unit) therefore the rent of it, up with the cost of living / inflation. This is really important when today's nest egg has to pay for a plumber thirty years from now...$600/hr?
So based on "underlying earnings" and adjusting for 28% tax .. ARV makes a 5.1% profit after tax at a share price of $1.32.
To me , that's a darn good return on something that keeps up with inflation and is constantly expanding with unimpeded growth for at least 15 years.(while using the clients money)
BUT..... while ARV is a VERY fine investment at this price it is clear the market is out of love with these stocks so only awards rather low PE multiples. So I reckon $1.30 ish is going to be it for a while.
Also, I do maintain that SUM and certainly OCA are even better options.
Not sure what you mean by normalized profit Maverick but underlying earnings per share is the standard by which professional investors and analysts compare these retirement companies and ARV looks the least compelling of the options on this basis having earned just 4.32 cps in the latest half, up just 17% hence why I believe they will continue to underperform the sector. Their metrics don't cut the mustard for me. I haven't been a shareholder at any stage and extremely unlikely to be in the future. OCA my preferred stock in this sector and I see no valid reason to take a diversified approach at this stage. If SUM get down to the low $5's it might be worth rechecking my SUM's on that one and getting slightly more diversified again.
Quite rightly pointed out Beagle- of course. I can get so focused on the numbers I completely miss the correct terminology. I've corrected my post thanks.
I fully agree that OCA is the standout choice of the sector (can`t have too many) but if OCA wasn't there I`d be quite comfortable holding both SUM and ARV for the long term.
You know the saying , "If Mary leaves the party we will all jump for Joy."
I agree 100% mate. I'm sure we agree there's nothing fundamentally wrong with 17% underlying earnings growth on a forward PE of 15, more compelling metrics than RYM for example and it has quite a different business model to SUM so if it wasn't for OCA's compelling investment proposition I'd be happy to own some ARV and be back in SUM already.
Share price in free fall ....might hed to 110/115 to complete a nice cyclical pattern
Did somebody actually look through the half year accounts and worked out whats really going on - reports were rather obtuse.
I don't believe one single down day, after a month of holding up reasonably well against it's peers, counts as a 'free fall'.
Especially as noted above it went ex dividend on this one day.
Soory guys for mentioning free fall ....it was when it hit 125 after opening at 130. Did recover a bit ....thats good
Hit a raw nerve did I
But H1 result didn't set up a great H2 result did it