What are the thoughts on getting to 1.40 next week? Or are we going to pause at 1.30 for a while?
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What are the thoughts on getting to 1.40 next week? Or are we going to pause at 1.30 for a while?
TA on ATM showed a possible step down unless FA showed some upward trends which could still happen. OCA TA showed a solid base and you can continue to whatch and invest in for a long time to come if the FA shows an incremental trend up and they start to pay dividends from cash flow. If there model works then you could still buy in under 1.50 or more and hold for 5 to 10 years.
https://www.nzherald.co.nz/business/...PUTOHONKQ6AFU/ Paywalled article about St Heliers OCA development site from the Herald last weekend.
I was out St Heliers way today so stopped by to see the Waimarie site. Earthworks are well and truly underway and security fencing was up so nosy dogs could not get a sneak peak other than from the road. Its about 1 Km to the east of the main St Heliers café and shops area, mostly a flat easy walk or drive by motorised cart. From the road I looked to the northwest and the views of the Waitemata harbor and cityscape are breathtaking.
It will be a breathtaking development with stunning panoramic views of the city, inner harbour and the Hauraki gulf. A nice park in front of it means those views will be unimpeded in the future and there's even a nice area for off the leash walking of one's dog. St Heliers, (for those that don't know Auckland) is one of the oldest most established eastern suburbs full of very upmarket homes. I am sure this development will meet strong demand from locals of the right age. Two other cars with older folks stopped to look just in the few minutes we were there. Mrs B also thought it was a stunning site.
I'll leave the really short term share price movement thing to others if you don't mind Old mate as I'm in for the long run. Very short term share price predictions are a crapshoot, might as well toss a coin. That said, over the next few months there will be a huge amount of money coming out of term deposits so it wouldn't surprise me to see this somewhere around $1.50, (possibly even higher), before the interim report in late January 2021. Once that report comes out and the analysts and professional investors do their revised calculations, that's when the fun will really start....but who knows, often momentum creates momentum and it could be $2 by Christmas. Time will tell.
Fundamentally, I still think its very, very cheap at $1.30...by my own estimates only on a forward PE of 11, (which is a no growth PE in this market) which makes no sense whatsoever for a company that's reached the point of inflection and about to start on years of solid growth. The sector average PE is 18 and I think this is where OCA will rerate too, over time. Over what period of time I do not know and that will depend upon OCA garnering the respect and trust of the investment community as a growth company. This respect and trust needs to be earned and is never given freely. The future is very promising but like all things about the future, time will tell.
P.S. I note this development creates 76 independent living apartments and just 31 care suites, (a very high proportion of independent living units for an OCA development). Its quite probably well worth noting for the potential of how good this development could be for shareholders that the upmarket luxury apartment market in Auckland is white hot at present. https://www.oneroof.co.nz/news/38510
Quick update on the chart, weekly log scale, 17MA & 43MA (approximates 50/200 day MA's) golden cross follow through nicely with a big bolt up from low $1 range. Solid close on weekly high SP speaks to strong demand. RSI toppy but can absorb more upside. Resistance above including ATH could slow things down a bit, leading to some consolidation around the mid/high $1.30. That said, a breakout and close above ATH $1.39 could see a run up into blue sky (ref SUM chart this week). Possible channel forming, upper line currently at ~$1.60, lower $1.15.
GLTAH
https://www.nzherald.co.nz/nz/politi...Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ?
Certainly the golden age for real estate investors looks like it will continue - covid level one (while Europe and the USA spikes), low interest rates, no stamp duties, no CGT.
When travel restrictions ease further, will returning kiwis and safe haven seekers flood into Aotearoa demanding a little patch of land to call haven? Has the property investment environment been sweeter?
Definitely a golden circle location in a top suburb. Still cannot believe they got planning permission. I used to occasionally jog along the waterfront as a student and had my snack and drink at Cliff Road/Glover Park. A nice little shopping area at St Heliers, it used have that coastal village vibe.
A Jewel of a spot and probably the units will be out of my price range when I become eligible to live there. I will press my nose against the fence and have whine from outside sometime too!
Yes...I know quite a lot, (more than I want to know but unfortunately I have too as a Trustee), about how extraordinarily difficult that can be. Residential development consenting on volcanic cones is best described as an exceptionally challenging process. Makes Boulcott street for another company look like short walk in in the park on a warm spring day. Highlights a key difference between the capabilities of the respective experts employed by the two companies and is something I haven't really thought a lot about until quite recently.
Mrs B and I did have a wee bit of a chat speculating about the pricing of the best apartments and what price they might command. Hard to put a figure on it...but...just for fun lets take a wild guess. OCA are reported to be spending $130m..lets allow for a contingency, (I know they would have already allowed for contingency's in the $130m figure) and suggest its $140m so if their development margin is 30% that suggests gross sale proceeds of ~$200m.
76 apartments and 31 care suites. Lets assume a care suite is on average about half the size and cost of an apartment so that suggests an average of approx $2.2m per apartment = $167m and $1.1m per care suite = $34m. Those numbers on an average basis for that area appear quite commercially feasible to me and suggests the premium north facing apartments with the most commanding views will be in the mid-late $3m range.
What's very cool is this whole development from beginning to end is effectively being financed at just 2.30% fixed for 7 years.
It certainly points to a a crack team behind the consenting process.
I thought a similar pricing for the apartments, if not a bit more if they are tempted to add a premium on to their normal margins. It would be a jump up from my South Auckland spot, but my locale is not its targeted market - although my holding in Oceania is on its way currently to boosting what I can afford when the time gets closer :)
with SUM blasting up i think SUM of us missed the boat on that one as to think we were holders a few years back and moved to this slower moving train... if MR B is right again it may be time to take some more. But SUM has really show where prices might go if this stock starts to fire up.
$4 million for the best views , a friend bought a property 20 years ago down the coast from moon bay and is now sitting well positioned and a view of the entire harbour out and across from rangi..
i think he paid , well but not much.
If SUM do $110m underlying this year that's eps of 48 cents so at $9.74 that's a forward PE of 20.2 which is not unreasonable for the current market dynamics.
Once OCA build the trust and respect of the investment community that they're also a growth company and their different business model works ostensibly in a very similar manner I think we will see OCA rerated to a similar ratio. If they can do 10 cps in the 10 months of FY21, (annualized 12cps) that suggests 12 x 20 = $2.40 is plausible sometime in 2021 or 2022.
"sorry i should be zooming sweden about now i could not resist"
When MR B moves into his luxury apartment and settle down to write a "Beagles Best Dividend investor Guide" or some such and from where ever i am residing i will order my copy.
The PE is high but im not going to argue as valuing commercial property is not my area but i was surprised we did not get more for our commercial partnership property last year. The other partners did not seem to take my view that rental commercial property for professional practises should attract a premium.
These suites are a mix of private and commercial as they are attached to a health care service and as such should attract a premium price due to their locations.
By now some may have read the article on lock downs from WHO.
Right - no more tax / politics talk on this tread
So back on topic
With a booming property market (even the RBNZ wants it to keep going up) and low interest rates and with Oceania's plans coming to fruition the future is bright
For believers in relativity theory OCA share price at least $2.40 next year
YOU CAN'T HAVE TOO MANY OCA
I believe the exact phrase we coined is "You can't have too many" Got to get in early and let the next 22 years of compounding growth fuel our ability to buy the best apartment at St Heliers so we can move into Eagles Nest...opps sorry, Beagles Nest when we're 80 and write that book. Could be called "Being a Dividend Hound"...taking a dogged approach to investment returns...does have a nice ring to it :)
If you could please write just a three or four page whitepaper now you'd probably help ~30% of the contributors to this board make a significant difference to their net wealth over the next few years!
Very happy with my OCA hold, bought about a third of my holding around 70c and another two thirds around 95c - might be buying a property near the end of the year and I'll be damned disappointed if I need to cash these up to do that! Alas, I now can't really afford to accumulate any more...
always leave 20% in cash