Apologies. Anyone with a brain.
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Surely the equity value is the markets assessment of the cash OCA can produce.
Flavours of Sailor Rob there, hinting that others arent serious investors. Bit of humility needed, loads of successful investors on here with different strategies. Particularly now, its a funny old time on the sharemarkets generally, lots of sh!t cos going up like crazy. Shame not to join the party IMHO. Cause celebre probably doing ok with crypto this year... awesome
According to the last financial report they get two valuations from commercial property brokers.
So the next valuation I assume will wipe out circa $200M plus of asset value + whatever they have completed in that time.
Very approximate.
Original post was ambiguous. I read “cos” as an informal “because”’. However OP may have meant “companies” so fair enough. There is always a wide disparity in performances for various reasons. There are 181 listings on the NZX from big to small. So if some dreadful companies have shot up, maybe some good as well as bad companies have gone backwards…including OCA. Overall the market has been fairly flat so far.
mpg down 27%, peb down 26%, Kmd down 20%, sct down 20%, hgh down 18%. RYm down 18%, SKL down 11% etc.
In NZD terms, and in capital terms European markets are up an average 10% and S&P500 is up 15%
What's your point and what does it have to do with OCA? You implied (maybe said in a way) that the NZX is a dog market, when it's not at all for specific shares, it's only a dog if one has a market index, or the shares that the market currently thinks are worth less than they might be through the eyes of a value investor.
But that must surely be the definition of opportunity, seeing value in underpriced shares, and getting some, or some more? If you value a market and its shares by the share price that the market affords it, then you will miss any opportunity to get some, or get rid of some, when the time seems right to do so.
I think that your generalism on this was the undoing of your argument. As far as OCA is concerned, imho it would be wise to ask oneself whether now or around now is a good value investment, be it to get some, or accumulate a few more. I'm in the later having gone overweight OCA. It's cheap, cheap as, and in a year or two from now I expect to be proven right, by the market who right now are mis-pricing OCA, to our advantage.
Carpe Diem.
You really are making a mountain out of the mole hill that was my post in response to the OP. I misread the OP’s “cos” thinking they meant because. No I did not imply that the NZX is a “dog” market. I am sorry if you inferred that. I am overweight NZ shares currently. As a market I certainly don’t think it has gone up like “crazy” either. It is a stock pickers’ market.
I agree there are some good opportunities as a result of what may may be current mis-pricing. I too have accumulated OCA shares recently.
Carpe ius diem?
Not sure why $200 million will need to be wiped. 8% reduction seems pretty steep considering already accounted for much of the previous years market rate falls.
CBRE Limited and Colliers Limited are used regularly for independent valuations of property assets.
Quote:
Originally Posted by Annual-Shareholders-Meeting-Minutes-signed.pdf (2023)
Also worth noting in the same document they advised no need for a capital raise and even headroom for growth if required.
Does anyone buy REINZ figures that the housing market is up 5 - 6% in the last quarter or so? Short term data can be misleading.
I would suggest just more houses in a higher price brackets sold in the last months than the previous 12 months.
Prices in the same bracket i don't think have increased at all, they may well have decreased. Sales volume and auction clearances have been poor whilst listings have grown substantially.
Didn't mention REINZ - agree their data should always be investigated further.
OCA have a history of more modest increases due to property valudation (FY 23 ~0.5% and FY 22 ~2.0%) so I'm not worried about a sudden revaluation down of their assets - my assertion is that is already accounted for.
We need EPS growth and sales volumes.
I suggest you have a chat with a valuer like CBRE or one of the RVs to find out how they actually value RVs, which are then included in the RVs' accounts.
What I can tell you is that they use a combination of income capitalisation and discounted cash flow (yes, cash flow).
No weighting is given to comparative sales as valuation with RVs is underpinned by the specific strength of the Leases and Tenant covenant, and not the bricks and mortar.
What would the cashflows be if they stopped expanding and just completed their existing builds and sold them even for a 10% profit and collected the DMF on resales?
As they are reinvesting profits from new sales & resales into more assets, the increase asset valuation surely does need to be considered.
This is why I get a valuation of around 99c & over time that should grow as long as they continue to make profits from sales & keep operationally at least break even or more.
Valuation is an art rather than a science, it is often said. Nothing could be truer imo!
A discounted cashflow valuation takes into consideration a multitude of factors - principal one being cost of capital and the discount rate. A 1% movement there can have have a marked impact on valuation, especially with interest rates where they have been and where they are now.
Then there are the risk factors which are notoriously difficult to quantify and build into the discount rate.
Finally, the short term (1 to 5 years) free cashflows have a proportionally bigger impact than the terminal cashflows (>10 years).
From the above, it can be assessed that the short term (5 years) heavy capital expenditure and ongoing underlying operating losses have the greater impact on the valuation of OCA than say, a mature entity.
As my ex-boss used to coach us young rookies in the game, always ask yourself how long is a piece of string!
Warriors win again. Warrior’s fans getting even more excited. As one fan said ‘we’re on roll, early in the season but no way is this not our year’. Up the Wahs
Oceania fans seem to be getting slightly more excited as well. Cash rolling in from more sales to please the analysts …and the market. Sentiment is changing and share price will end the year well over a buck
The stars are aligning, both are destined to do great things this year. Where one goes the other goes
This is our year
UP THE WAHS