Not surprising because they are both still primarily care based companies and OCA has a focus on care suite development.
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Yes, an impressive amount of development proceeding and planned. I wonder, though, whether the emphasis on Auckland will act as a bit of a drag on the company, considering the property slowdown there. Notable, also, is the lack of any activity in Wellington, an area currently short of retirement options.
Disc: Holding
Well with my family we had a very infirm elderly loved one in need of hospital care BUT had full intellect and a loving family and was not short of a bob so the Privately owned care suite offered us a miracle --hospital care with privacy and ownership. We couldn't "buy" the care suit quickly enough and what a fabulous thing it was --but like a house at Mill-brook it will cost but a fraction of the house our loved one owned . It led to a significance investment in OCA. So we couldn't have cared less if the house was down to half its value, it still covered the desperately needed care suite.
That is a key point peopel seem to be missing out on.
Generally when we are younger we want to make a property purchase on the basis we will do OK out of it long term. Even if we buy / sell into the same market.
But with OCA (and the likes) this is (generally the last property decision an owner will make. So the focus will be on quality of life in the remaining years, not future property cycles. So if they take a "hit" on the sale of current property to get the final property for their future its not such a big issue.
Likely the only people grumble are those on the inheritance list. But maximising quality of life and care options should be the over-riding issue.
That is right...do u want the money or the service? Have anyone of u look after the sick oldies? Most of their kids do not want to look after them..therefore they all go to full care retirement village..
I think the development report is very impressive, given the climate in which construction is being knocked back and not completed on time. It really shows the core competencies of OCA, obviously the other one is carrying out such a high standard of care.
Front footing the consenting now is going to pay dividends further down the line, I'm sure behind the scenes they have extensive 5 year plans on what will happen. Also like the pragmatic approach to converting current forms of care into care suites which are the higher earners and probably easier to fill as time goes on.
I had the option to double down on SUM, especially on how overcooked this recent downturn is. I'd say currently based on PE both stocks are valued at around the same relative to their price. However, OCA has imo more upside at this point, which will likely not show for years from now. The relative exposure to property prices on the whole is also lesser on OCA than SUM and that is why I added more OCA and will happily hold on my SUM investment.
Good post value investor. My sense is I agree they are indeed on a very similar PE. SUM has a stellar and well proven 7 year+ track record of exceptionally strong growth, stronger on an average basis than RYM ever achieved. They have the runs on the board !!
OCA are about to complete their second year and its anyone's guess what the underlying profit will be. I like their business model and their prospects but with Macquarie having a 42% stake and the clear overhang this is enough of a factor of itself to favor SUM but when one looks at SUM's stellar track record of growth and long proven business model this looks like comparing a proven thoroughbred stayer with a young filly both competing at the Grand National Steeplechase event. I like proven stayers but this filly definitely has future promise.
For the sake of complete clarity I still hold a good sized and meaningful stake in OCA.
I see Generate is as impressed as I am with the performance of OCAQuote:
Oceania healthcare has the dubious honour of being the weakest performing P&I holding in March
Great post Value, fully agree with all of your points. I am very impressed with OCAs latest investor update. I feel well informed and even proud to see what "we" are part of. They are seriously impressive projects.(although a little ugly from the air , but hey , it's what they look like from the road and inside that matters).
It does cause me to wonder "why" they did it. It can surely only be motivated by our Aussy friends trying to lift interest in the company and SP???
The company do seem to have an excellent handle on investor realations and presentations.
While I have to agree with Beagles analogy of OCA being a young filly , it seems to be managed by a very competent and experienced syndicate.
OCA may not have been listed very long,but some very experienced people on board,The Chair,director shareholder Gregg Tomlinson,CEO, and their highly regarded property manager.
So it is no surprise to me that they do what they say they will do.
Good proactive presentation to keep the market fully informed and I agree that there is the distinct prospect this was at the behest of Macquarie but I wouldn't rule out the prospect of senior management reading this thread and some people on here were recently wondering how the developments were progressing, so that question has been answered in a very complete way.
Possibly Macquarie really want to sell down this year but I think the market needs to see some more numbers first.
Is that one of those head and shoulders pattern forming on the chart .....hope not but share price could go back to 79 cents
Nobody though HGH would fall back to 131 when some saw a H&S pattern ....you never know we could possibly see another bargain of the century buying OCA at 80 cents (30% off its highs)