Retirement village operators

[Maverick]

Thought it was about time to revisit basic PE`s on the village shares after all the share price changes of the last few months skyrocketing.(Except OCA aye Winner)

I know some very esteemed accountants here don't like PE`s for measuring every company's value but for me it's the cornerstone to weigh up whether a share is “ under”, “over” or “about right.” I apply it to every investment I make including rental houses. (disc; I don't have any rental houses with the crazy PEs they have these days - even in Wanganui)

The following figures are all based on underlying profits. I have made notes on the dates for the latest profits being used as ALL these villages grow so fast that the results get out of date fast.

RYM, PE30.2 Based on its very recent HY1 annual forecast for 5 months from now.
ARV, PE 18.9. From its HY1 report 1 month ago.
SUM,PE 15.2. Based on a forecast annual profit (by myself and others here of 116 million) in 2 weeks time.(I know this profit is not fact but basing it on last year's actual result is now out of date)
MET, PE 13.4. Based on annual results delivered 4 months ago. If it`s leaky building costs, which are finite, were not included then it would be PE-12.4
OCA.PE 13.3. Based on last annual actual underlying profit. This figure is now 7 months out of date. (My own figures point to a strong HY1 profit increase in January which would make the PE 9.7 but this is my own workings so one should do there own forecasting here.)

So for me;
RYM is way too dear
ARV is fair value. (sold out 100% today, sorry TJ, just better value out there.)
SUM is still cheap given its very strong growth history,
MET, well that's a double whammy right now with the takeover drama. Its seems to be a very good buy on fundamentals alone and then a marvelous punt with the takeover thing on top of that. Probably a screaming buy before the impending announcement.
OCA. Very cheap and it all depends on its upcoming HY1 result as to how cheap it

I did this post 2 weeks ago and that was about when the share prices went nuts , so time for updating the new PE's under the same parameters as above
RYM PE 32
ARV pe 21.4
SUM pe 17.5
MET PE 15.5 (at 7.00 share price)
OCA pe 15.7 (my forecast as per above PE 11.5)

It is worth noting that these PE's are not tax imputed as most NZX other companies are.

For me the changes are :
ARV is now too dear for its slower (than its peers )EPS growth.
SUM no longer cheap but still good value long term.
OCA , at worst if the upcoming announcement is flat it is still fair value when compared to its peers. There is however plenty of upside if it can demonstrate the usual village growth achieved by its peers (which all use the same old DMF model) and care profit is at least "flat."