1.04 last defence looking at the depth , if it busts i guess it is a reflection of the margins being under pressure sector wide i believe
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1.04 last defence looking at the depth , if it busts i guess it is a reflection of the margins being under pressure sector wide i believe
You're are worry Maverick
Profit downgrade from $75m to $64.5m
Downgrades usually come in threes many say
Don't be too pessismistic with your next downgrade or two....bearing in mind F18 underlying earnings were $52m
I see your reported profit figure of $50m to $65m is a lot less than F18 .....hmm
Maybe the pros have done the sums as well and thats why the share price is languishing
Someone is manipulating the market...sorry I cannot say any more. Its a little disappointing to see them down at $1.04 again. I think their business model is brilliant.
I think that we will see Oceania stagnant for a while (approximately 6 months). Looking at what they are projected to pay for dividend, I can get better in other shares and ones that are also gaining in capital value (HGH). I don’t plan on selling what I have as I am still making capital gain on this share and I don’t trade, but I do rebalance. I do think this share is worth $1.15 at least, but I don’t control the market
I reckon you have hit the nail on the head as to why the SP is currently substantially undervalued, basically stagnation and some large holders seeing better use for their money elsewhere and probably a disbelief that the SP is back at $1.04 after what was a discounted $1.10 at the time selldown by Maccas. I never thought we would see the price under $1.10 again 6 months ago but it just reinforces my mistrust of the market to get things right, I back myself and therefore continue to hold an XXXOS sized position. PS-My 12 month target price is $1.30 and $2.50 within 3 years.
I like those numbers Couta. I've done as much homework as this mere mortal can do on their reports. As stated above I come up with a FY19 underlying profit of 50-65 ( the large variance due to delivery dates of their new builds as to which FY They will be sold in)
At 60 million that's an EPS of ten, multiplied by a PE of 13.5 ( that's all this grumpy market will afford it currently- i believe it "should" rise to 17- 18 in years to come , given its probable,strong growth trajectory.)
then wallah...... a share price in SIX months of $0.10 x 13.5 = $1.35.
I do think your price of $2.60 in 3 yrs is reasonable but it's dependant on the market raising its PE rating. It surely must by then, especially with MAQ exited and some history building up.
Even if Mr Mkt still won't budge on the PE then the company will still deliver strong underlying growth so it might take five years to get there all by itself. ( but I seriously doubt it will take that long).
Hi All, this is my first time posting on this forum and I am an absolute beginner as an investor in share (and businesses). First of all, thank you for all the information and sharing of your knowledge here, it has been great reading the posts on this forum.
I am learning to read the annual reports. I noticed that in the OCA report, it has something like 'Change in fair value of investment property' as one of the income, and it was like 34m in 2017 and 1.6m in 2018. May I ask what it is actually? Is it just based on valuation of the property, and not actual cash income? Is this specific to business related to property investment? I guess if this is the case and the income is not realised until things are sold, so it is just income on paper?
Apology for asking such basic questions. Thanks for your help!
Hi Champion, welcome to the forum!
And yes, you are right - the change in fair value is just a "paper gain" unless realized. These revaluations however are not confined to property companies (other companies have to value as well every year their stock and assets, be that wine, honey, milkpowder, "goodwill" or - in this case - real estate.
How else would you find out what a company is worth? Paper gains are still "real" as long as a company could realise them. Take it some other way - if the asset value of a company is $2b, than you might be prepared to pay more for it than for the same company when the asset backing was only $1b. And if this increase from $1b to $2b happened during a certain period, than the company just had an additional $1b as "income".
If a company makes say $100m by selling widgets but leaves the money in a bank account (instead of "realizing its value and spending it) - would you call this just a "paper gain" as well?
Thank you BlackPeter for explaining. I am not sure how the valuation is done (I have briefly read through the notes) but in residential property, valuations done by registered valuers are often very inaccurate (+/-20% at its best?) so if it is similar then basically the actual profit of the company could vary significantly for a real estate related business. And I would think that in terms of dividend payment a rise in asset value will not (and should not) be paid out? And if I read the reports correctly, if we take away the increase in asset value (capital gain) then the business is actually not very profitable (including other retirement villages not just OCA)?
Is it true that it is not that easy to find out how much each care unit costs to run and how much income it is bringing in (excluding asset value)? Or is it just me not understanding how the financial statements should be read? I would think that is the most important information to know?
Thanks again!
Often it’s better to look at presentations to understand the business rather than the accounts
Your care question . Oceania made $11,000 odd ebitda per bed for the last half year. See page 29
http://nzx-prod-s7fsd7f98s.s3-websit...805/294060.pdf
Thank you winner69, exactly what I am after!