The difference being Jim is the meeting we attended last week was about selling a village while the AGM is just about presenting a whole bunch of facts and figures to converted believers:cool:
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Hey, I can't let that one slide through to the keeper without a response, especially after you comment earlier in the Air thread, you keep bowling bounces eventually I have to hit one away even though we're mates and all that..its time I updated you on my SUM position, (Sold out half at $3.58 and then the other half at $3.52 some time back) :cool: Sometimes technical analysis works, sometimes it doesn't :)
Good going on the Sum sale Roger, are you still holding any?
Hi Couta.
Can you clarify where you get the number 13 from? From RYM's announcement yesterday (Refer https://www.nzx.com/companies/RYM/announcements/253278 ),
New villages are being planned at:
1 Birkenhead, Auckland
2 Devonport, Auckland
3 Brandon Park, Melbourne
4 Pukekohe
5 Newtown, Wellington
6 Tropicana Farm, Blockhouse Bay, Auckland
7 Greenlane, Auckland
8 Rangiora, Canterbury
I note that they have not included the new college site at Wheeler's Hill in this list, are there any others?
On top of this, there are 3 under construction but as such I wouldn't count them as Land Bank, especially numbers 1 and 2 below which now have residents I understand.
1 Bruce McLaren Retirement Village, Howick, Auckland
2 Weary Dunlop Retirement Village, Wheelers Hill, Melbourne
3 Petone
I started this $6.50 thing by stating that's where I saw it at fair value to me a little while back and stand by that view.
In my opinion many people, myself included have a required rate of return in equities that fairly rewards them for the specific risk of a stock and the market risk. Lets suppose for the sake of this argument that a typical expected return on an equity investment is 15%. Lets also suppose that RYM achieve their medium term stated goal of 15% EPS growth and we know their dividend yield is 1.4%.
I'd be expecting a 13.6% improvement in the SP to compensate me for the equity risk and woefully low dividend yield. The stocks trailing PE had blown out to 35 times last years underlying EPS results when I made that comment a while ago and in my view this isn't supported by a 15% growth rate in EPS.
My contention is that a PE in the mid-late twenties is more appropriate with a 15% growth rate going forward which is supportive of a price of approx. $6.50 as at about 2 months ago.
I think its more likely that we will see a lengthy pause in the SP at around current level's while we wait for growth to catch up. If the stock price does nothing for say 18 months in effect shareholders only get a 1.4% dividend yield and in my case, this undershoots my required rate of return by 13.6%. Therefore I am indifferent to paying $6.50 now or about $8 in 18 months or so.
Look at it another way, the stock price is up 125% in the last two years and the EPS growth has been 40%. Ask yourself whether the price can keep going up unsupported by EPS growth ?
PE expansion cannot go on forever and in my opinion is highly likely we'll get PE contraction either through continuing price correction of lengthy SP stagnation.