Maybe stuffed
Possibly like some other stock that is doing well this year with tailwinds of low oil prices and favourable currency impacts that may not be repeated.
Maybe the 'future' is already priced into both of these stocks
Printable View
A somewhat obscure but nevertheless not entirely irrelevant analogy in as much as clearly both stocks currently enjoy strong tailwinds. Interesting to note that one stock is on a consensus current year forecast PE of only 5.5 reflecting potential correction of tailwind factors and the other on a forecast PE of 22, priced at four times the earnings rate while they're both enjoying a year of very strong earnings growth. Food for thought ? you be the judge mate. Both stocks looking to grow EPS ~ 50% this year.
Harvey, maybe I have this wrong, I don't follow closely anymore. One of the brokers has a build forecast of 400 in FY16...where they are going to build that many I don't know ???
I would say though that credit where's it due. SUM's development margin has improved significantly and clearly last year's appointment of a procurement manager has worked wonders for their construction costs. MET desperately need to find someone with the same level of skills as a medium term target development margin of 15% which they acknowledge they are likely to undershoot in FY16 is really quite pathetic. Disc - I am also completely out of the retirement sector now. The whole sector is fully priced IMO.
Bejauck - Agreed. MET most exposed to potential Auckland correction as a percentage of their village portfolio, then SUM then RYM.
Prospects for Auckland's house prices ? This makes interesting reading and some of the comments hit the nail on the head too, especially the second one down.
http://www.interest.co.nz/property/7...towards-summer
Another excellent result by the best in the business.
It looks like the SUM sp increase was pared back by close of market yesterday. Maybe in the current share market and property market, the retirement sector have to produce profit upgrades just for the share prices to remain about level?
I think its because SUM is already 'very well valued' (not quite overvalued) and there seems to be lofty expectations regrading build rate and sales, which so far they have meet... but with a potentially slowing real estate market (well mainly just in Auckland), and increasing villages being built left right and centre (ie more competition) it will become harder to 'deliver' (in my view - over the coming years, maybe not this year or next year, but in the next decade) and of course the dividend alone (which is peanuts) isn't going to be enough to support it, during these potentially questioning times...
Ryman is "the best in the business" in terms of growth and good management, although SUM isn't far off... (ARV of course still takes the cake from a balance of dividend and growth point of view, and of course in terms of occupation %)
I sense an old battle between OG and TJ about to commence again reading the last bit of the above post, Tui anyone.