This thread is rapidly becoming yet another coronavirus fallout thread. Where's OCA these days?
:confused:
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This thread is rapidly becoming yet another coronavirus fallout thread. Where's OCA these days?
:confused:
Ok, poor choice of words on my part, I meant it in a relative sense. Circa 20 something % debt/GDP for NZ vs well over 100 for some of the EU nations...I know which one I'd be happier with. I'm under no illusions about the deep hole we're facing.
Anyway, OCA...where to from here? I guess it really depends on when this market is going to catch up with reality. If the market continues to rock along in denial, is it going to get into the 90s in the short term? If the market starts to get a more realistic about what we're facing, is this going to be a relatively "safe stock" and maintain the current levels in the 80s, or are we falling back into the 70s or worse?
At a guess up to 10% reduction in property values in the short term, more or less, some regions impacted more than others (is OCA heavily Auckland based?), and then 2 to 4 years of flat values before we see some upside. Can we see much of a divvy from OCA if this is the case?
Average expectation of economists is for 6-9% reduction in real estate prices in the year ahead. Taking the mid point of 7.5% has an impact on OCA's portfolio of as at 31 December 2019 $1,496m of $112.2m, 18.25 cps
If we assume average real estate values went up 2.5% in the period from 31 December 2019 to the end of February 2020, before the Covid 19 became a worldwide pandemic, NTA + 2020G - V (the real estate market was very strong in January AND February 2020 so this looks like a reasonable assumption) we get a net forecast adjustment of ~ 5% to real estate prices. This works out to a net adjustment of 12.2 cpsa takes NTA + 2020G-V down to 89 cents per share.
Given the massive uncertainty of how this Covid 19 disease will play out I think the shares are fairly priced at 83 cents.
At this point my assessment is that at 83 cents OCA is trading on about a 6-7% discount to Covid 19 adjusted NTA which seems fair and reasonable.
By comparison I estimate MET's NTA + 2020G - V at $6.16 and at $4 they are trading at a 35% discount to adjusted NTA. MET looks considerably better value to me than OCA. All other companies in this sector look overpriced to me, RYM dramatically so and SUM also heavily overpriced.
Beagle - you thingie COVID adjusted NTA for OCA (and maybe MET) doesn't seem to allow for ongoing losses from the running of the business on a day to day basis (esp care)
Just one random observation I made with OCA (but actually with most of the stocks I am monitoring): Nice bottom around March 22 (give or take a couple of days), strong recovery but then trouble to smash through the MA 50 (the green line in this picture):
Attachment 11323
Just wondering whether the dead cat bounce is petering out? ... this might be a good time to fasten the seat belts.
MET has almost no care mate and OCA do okay from their care, (possibly a bit worse than okay with extra security guard and other Covid 19 costs).
Profit for both will be down due to less property settlements but much more comfort from MET's discount to NTA than OCA's.
SUM and ARV considerably overpriced based on NTA-V and RYM are almost as stupidly overpriced as AIR.
Yeah BP, OCA not really the bargain at 83 cents they appear to be. Just fare, fear or fair value, take your pick :) (Okay I really must be bored out of my mind to be playing excessively with puns)
Hopefully something coming on that front...
https://www.newsroom.co.nz/covid-19/...axpayers?amp=1
Announcements about extra funding for the aged care sector would be made “later in the week”, the director-general said. Surely that must mean today.
(Bloomfield said on Tuesday the money would “help offset some of the additional costs they are incurring to both prepare and look after people who may have or who do have COVID-19, for extra security and so on”.)
I don't see that as an apples for apples comparison, Beagle. AIR is arguably overpriced because of its precarious future, RYM has been brought down from previous heights because of Covid-19 concerns but has a strong future given demographics and it's pre-eminent position in the industry. Would you care to reconsider or comment?Quote:
SUM and ARV considerably overpriced based on NTA-V and RYM are almost as stupidly overpriced as AIR.
So far as OCA's shareprice is concerned I reckon it's about right around the mid 80c's in this market. I wouldn't attempt any sophisticated valuation in today's volatile world!
It was just a throw away line. RYM trading at 2.7 times its pre adjusted Covid 19 NTA makes no sense to me relative to the fact that OCA and MET which are good companies in their own right are trading at discounts to NTA. AIR trading at about NTA when their business model is in complete tatters, (just 1% of previous demand for goodness sake) makes even less sense.
Fact is RYM over the last 5 years have grown at the slowest rate of the industry, (OCA haven't been around for that long so can't compare them to OCA).