It has been said before, this one is currently trading more or less in line with the sectors ( excl RYM ) multiples.
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As winner stated above... more or less the same for FY18.
Looking at FY19 - Lower stock and fewer developments have it almost flat at 10-11x earnings again there.
As the sector is mostly trading at 9-12x FY19 earnings... OCA is no different in the range of 90-120.
That FY20 looks like the year to be really excited about OCA.
Page 27 I will leave this as something for people to judge for themselves. http://nzx-prod-s7fsd7f98s.s3-websit...390/273470.pdf
Was just pointing out the difference between NTA as reported and this net adjusted value thing.
Just thought that most on here know about and understand NTA (and you quoted the wrong number).
Doubt if most on here would understand what this net adjusted value means anyway. For those interested in learning the right hand chart on Slide 24 sort of explains where the extra $60m adjustmentscome from.
Question - Why do you think they exclude the present value of net development cashflows and earnings at both current and future developments (including The Sands and Meadowbank Stage 4 which are under construction) when calculate this net adjusted value — would make the $1.01 higher eh
Fair enough mate. To be honest there's whole books been written on accounting for development and construction contracts and valuation thereof so its far from a simple subject. To opine with any clarity on the subject I'd have to wrap my head around the whole process of what they're doing which is more than likely to make my head hurt so I'm not sure I want to go there to be perfectly honest about it. I think my preference is to simply accept that they have probably used generally accepted accounting methodologies to arrive at that value, their accountants probably exceed my pay grade and probably far more current with the latest accounting standards for construction contracts.
For what its worth, (which I freely admit isn't much as I haven't studied their methodology in any real detail) I think its clearly right that they exclude future developments as they're not currently in progress and the gain from that future development should be recognized in the period of its completion. One should not overlook the number of developments they have consented however as this is a key business risk that's been removed from future cash flows...(ask Julian about the business risk of getting consents at the next SUM annual meeting regarding the Boulcott site).
Its probably worth noting at this point that the cost of getting a consented development can run well into seven figures and I would imagine those costs have been capitalized and included as part of their land valuation.
Regarding current projects in process. From memory the generally accepted process is to use a "percentage of completion assessment process" to determine carrying value and one can't account for gains on the cost of construction until a practical completion certificate of the units has been obtained and an unconditional sale contract has been executed. They might however account for gains on completed units held but unsold at balance date based on independent valuation. Probably throw this into the embedded value formula somewhere or other.
Worth noting that the intangible asset carrying value in the balance sheet is very low and the company is starting to build a credible track record of completing developments on time and on budget, let me assure you this is no easy feat in the Auckland construction market in particular. There's also no value in the balance sheet recorded for their excellent reputation in the care sector, a reputation that nobody builds easily or quickly.
At $1.00 cum a 2.1 cent dividend, a theoretical ex divvy price of 97.9 cps and a forecast underlying profit of 8.42 cps, (directors confirmed guidance as you know) that's a current year PE of just 11.6.
Seems very reasonable indeed to me, all things considered. I think the analysts are being pretty tough on OCA...how good are they really when they were saying on average AIR was only worth $2.10 this time last year ? Analysts have been known to revise valuations dramatically and just try ever getting an apology from one for being wrong lol.
If the market gets a "little silly" to the downside in the days and weeks ahead I might open my shoulders a fair bit more with this one as people are always going to get old and need care aren't they !
Hello chaps
I'm 100% with Mr Beagle on this one (OCA being an amazing start up venture having exceeded every projection in their IPO)
Do I read it right --42 million profit far exceeding IPO projections?
Big % of income (Aged Care) streaming in from a stable NZ Government every 2 weeks (geeeeez I've waited 6 months for big public companies to pay).
Some really nice building projects coming along. I have visited 2 of them.
A wonderful reputation (goodwill).
And an approaching tidal wave of customers
Mr Winner69 just sell and I'll add to my considerable holding as I am very very confident here on this 1.
I don't think he's thinking of selling mate. Knowing Winner a little I think he likes to play devil's advocate and debate both sides of the argument.
Director continues to buy on market, a good sign of confidence.
Hey winner, OCA only worth 1/11 of Ryman SP by the looks not 1/10.
...as t_j says OCA is grossly undervalued .....but 10x or 1/10 is easier to work out
Rough day today eh ....watched QF161 from SYD do 2 aborted landings before heading to CHC, AIR SYD flight aborted one landing but was OK second time around and Virgin BNE flight landed beautifully first time in ....and in between a little Sounds Air plane had a decent of landing as well.
Its averaged a tick over 10% since lsiting
Interesting on the day it listed it was 9.2% of RYM and today it is about 9.2% ...spooky eh possums
When it was ramped up to 110 in Augst or thereabouts the % got to over 11% but reversion to the mean kicked in ...as it was overvalued at that time
Who me ?...ramp a stock, surely not !!!!...wash your mouth out with soap and water :D
Bit of a bummer of a week for OCA share price in that it closed at 102 being the same as last Friday
No recovery this week which doesn't bode well for the next few months
Their business model is sound going forward and as discussed the PE is very reasonable for this sector and compared to the market overall. Its a needs based business with very strong long term demographic tailwinds. Early days but this looks like a good long term growth stock to me. Short term doesn't concern me.
That just proves that both OCA and ARV are fairly/correctly valued at the moment with most of the next years performance priced in (punters are bullish)
On the other hand SUM was up more than 3% over the week ....with the marketing starting to price in F18 expectations .....with a fair bit to go, making SUM the best bet of the three by a long way.