http://www.sharechat.co.nz/article/5...land-reinzhtml House prices look fine to me. No worries.
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http://www.sharechat.co.nz/article/5...land-reinzhtml House prices look fine to me. No worries.
http://www.interest.co.nz/property/8...d-volumes-fall
Slightly different perspective with more emphasis on Auckland housing market...
True. "In Auckland house prices lifted 2.5 percent on the year to $850,000 while outside of Auckland prices climbed 11 percent to $431,000." The median price in the Auckland market has still gone up by more than the inflation rate (CPI) over the past year (2.2%)
For investors that is in addition to their net rental income (and their stellar returns from the past few years.)
Not fair is it
Fact of life though is that RYM have always commanded a higher multiple than SUM and others.
Possibly because they are #1, been around longer by others, trusted etc and maybe seen as more than just a property company because they actually make money out looking after oldies (besides property deals).
Looks like they made $30m odd from looking after orders. So maybe some see RYM worth $x as a property company PLUS a multiple of this $30m odd
We need to live with this premium that RYM commands. Won't change tomorrow - but maybe 5 years time it will be different.
Couts hypothesis stood test of time though - spooky
I hear what you are saying Winner but one company is growing presently at twice the rate of the other and on average over half of the last decade has grown at three times the rate of the other. How many more years is it necessary to outperform RYM to at least get on the same PE ? I would have thought five years at three times the rate of growth would be all the evidence one needs as well as this year growing at twice the rate.
Its not logical, in fact it fly's so far in the face of logic as to beg the question of what do some institutions know that I don't ?...or is this a free hit like when AIR was $1.75 nine months ago ? The divergence in PE compared to RYM is right at the extreme end of the range, the Bollinger bands are very tight and we have (apart from yesterday's close, if one assumes that's an aberration) just broken through the 30 day MA. On a fundamental basis a forward PE of 14 is about half its average since listing.
How often does this have to be explained to you?
http://www.sharetrader.co.nz/showthr...647#post672647
http://www.sharetrader.co.nz/showthr...627#post672627
http://www.sharetrader.co.nz/showthr...908#post671908
SUM is years behind Ryman which has been public since 1999, with opportunities in both NZ and Aussie, huge pipeline moving forward... not many reasons not for there to be a premium on Ryman...
Don't compare growth rates of a $4.5bn company to that of $1bn company... as said before law of larger numbers do apply to Ryman and Summerset is yet to experience it.
Summerset is still a great business, my grandparents are looking at monterey park I would happily hold SUM... I just wouldn't complain about its peers being given a star next to their name.
Might take years to see a good enough return...
Don't care if its not fair...in the long run it screams "opportunity"...15 or so years to go to retirement so I am happy to play the long game. I haven't seen too many long term opportunities this good in recent years. Coutts got a truck load of these...I think he's on the money with this one well and truly.
Most of their profit is from development but as you know they are expanding their care offering with dementia units and more supported living facilities.
A lot more embedded value in existing units now.
hardt - You predicate your thesis that there's more to be made from care services on the assumption that side of the business doesn't have rapidly rising staff costs or that all those costs will be met by increased Govt funding...I wouldn't be too sure of yourself on that front if I were you. I think Couta1's statements and concerns in that regard expressed on the OCA thread have a lot of credibility seeing as he and his wife have worked in that sector for decades. (I know Couta1 as a very good friend and not as some stranger on the internet, so can vouch for his track record in the industry). As for RYM's expansion into Australia, plenty of housing concerns over on that side of the ditch and RYM's SP has still been ostensibly flat for over 3 years now.
Buying at this ~ $9 price compared to SUM is something I believe will see continuing under-performance in one's portfolio relative to how it could be structured. That's how I see it and I've been spot on with RYM for the last 3 1/2 years, (correctly called it as going nowhere and vastly overpriced just over 3 years ago) so more than happy to back my own judgement and put my own money where my mouth is on this company.
I have the runs on the board. Lets see how your call goes on this one when you've been on the forum for 3 1/2 years. I'd be more than happy to short RYM and double down on SUM at this sort of valuation discrepancy...will look to endeavor to execute that plan very shortly.
Biggest volume day in SUM for some months, recently punched through 30 day MA and Bollinger bands are very tight. FA screams out great value and they're reporting their half year result in just on a months time...just saying...people should as always, DYOR.