Nah, not bitter...just having a good tongue in cheek bark and a playful bite of Winner's leg...a bad dog has to bark about something lol
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I don't think fear is a major worry.
More concerning is that all participants in the sector are really struggling to sell the units they "deliver"
I can't help wonder who came up with the euphemistic term deliver. I used to think that meant delivery to an incoming resident and can't help wondering how many others and mislead by the use of this creative term.
The Couta reversion theorum says SUM is worth about $6.70 now, Beagle set your buy alarm in readiness.
Yeah, no need for technical analysis (TA) or fundamental analysis (FA), just stick with Couta1 analysis (CA).
Seeing as the outlook is so WEAK maybe SUM should revert right to the bottom of the 40-60% Couta1 Gold Standard theory relative to RYM ?
If the market has a decent correction and RYM comes back to say fair value of around $12-13, 40% of that is just $4.80 - $5.20, heck SUM could retrace right back to $5 :eek2:
this post is a few weeks old now but with SUMs very disointing result out and now MET I think it is worth restating. (Saves me retypying)
it would appear new sales are slowing across the board so the growth model of " keep building even more " is dead. I do not see the market as over supplied at this point, rather, it is now better balanced. After all , we still need 1700 new deliveries in total YOY for our aging population.
I believe we have currently reached a point of collective sustainable building numbers and am actually very happy to see build rates now being trimmed rather than bloodymindedly flooding of the market.
In order for the various business's to keep impressive growth rates there are options the players have chosen.
RYM , expanding in to Aussy,
SUM , expanding into Aussy, albeit only just starting now and a few years behind RYM.
ARV, buy existing villages,
OCA , adding value to existing stock, focusing on late stage care.
MET , no clear direction, let's just hope we get taken over.
IMO SUM is heading to mid $7-$8. I can see no reason to own SUM right now especially after they doomed the share price with their statement of " no underlying " growth next year. Crickey ...it might even go into the $6's
Impact of rising building costs was HUGE in 2019
On average each new sale proceeds were $665k ..up 17% on 2018
But on average realised gain per sale was $185k ...some 2% less than 2018
This implies that on average the average cost per unit was a whooping 27% than 2018
Mix of location / unit size etc etc might explain some of the variances but at the end of the day the cost of what they’re building went up by more than the selling prices went up.
That’s what happens when margins are down significantly.
No wonder they saying margins will reduce further ...and I’d hazard a guess that’s the main reason for no growth in 2020 earnings ...got heaps of relatively expensive new stock to sell.
But as long they continue to sell stuff for more than it cost no worries going forward.
Good post mate but I think its clear the market is well and truly saturated. Julian Cook might as well have got a fire hose out and just hosed down the share price. "Spooky" how all of a sudden they can predict FY20 profit this far out when they didn't actually issue a forecast at all last year at any point. You'd swear they want the share price to have a major correction.
On another subject, RYM building villages all over the place around where I live and I can't help wondering how they are going to sell all those units.
a lot of ryman villages have a waiting list to get in.
if a resident hears there a brand new village being built not too far away and that they can transfer later down the road when a space opens up at their desired village it can’t be too hard to fill them up fast.
also my neighbour tells me all her friends are in ryman villages and won’t stop raving about how great it is and how happy they are there so word of mouth has to be worth a lot.
never heard any comments like that about Summerset.
I did a site visit at SUM's Hobsonville waterfront village in 2017 and everyone I met seemed very contented...mind you it was a beautiful sunny day, the tide was in and we had just won the America's cup that morning so that might have had something to do with everyone walking around looking very happy :)
Fact is on an objective basis the numbers of RYM's sales have not been that impressive in the last 5 years given the size of the company.