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  1. #91
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Beagle View Post
    Is more than a little spooky. The other day I noted way back in 2011 when SUM first listed the situation prevailed even then.
    Thankfully the past no matter how sticky is not always a good guide to the future and I note for many years the two stocks traded on not dissimilar underlying PE's.
    That situation is vastly different today.

    At the mid point of RYM's forecast 31/3/20 underlying profit of $257.5m RYM trades on a forward earnings of 51.5 cps = forward PE at $16 of 31.
    If SUM make $117m underlying for 31/12/19 that's also 51.5 cps, that's right folks exactly the same, and SUM's only a forward PE of just 15.5.

    SUM trading at half the PE is not common over the years comparing these two and reflects the fact that SUM's earnings have grown much faster than RYM's over the 8 years since its listed that we can compare these two.

    Heck, if SUM lifts its build rate in 2020 and the real estate market is strong so we get a ~ 25% lift in underlying profit for 2020 to 64.4 cps at $8 (even though this is a fresh all time high), SUM could be trading on a forward PE for 2020 of just 12.4 times earnings. WOW, that is stupidly cheap and this sector is going to be on fire and flush with well over $1.5 billion dollars of capital looking for a new home after the probable MET takeover. SUM were nearly $8 way back in August 2018 so in relative terms has done very little in gains for well over a year.

    2020 could be SUM's year and with a resurgent real estate market there's no logical reason why we shouldn't see some PE expansion up towards the market median PE of 19.
    How good could it get for SUM in 2020 ?. 19 x 64.4 cps underlying earnings = $12.23. We could see 50% added to SUM's price in 2020 in a favourable rerating scenario. One day the market will wake up to what a phenomenal growth story SUM has been since it listed, maybe after a decade of fantastic growth, heck that's late 2021, not that far away and could be $15 by then. I think its time to add SUM more to my position.
    I’ve copied this over to the SUM thread - deserves to be there in case some miss it

    Property market in 2020 - Westpac who are usually the gloomiest of the Bank commentators are getting excited - there 7% increase in prices forecast for 2020 is likely to happen before April they say (7% annual increase as at March) and revised their year end forecast to somewhere near 10%

    That’s good eh
    Last edited by winner69; 23-12-2019 at 08:13 AM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  2. #92
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    I’ve copied this over to the SUM thread - deserves to be there in case some miss it

    Property market in 2020 - Westpac who are usually the gloomiest of the Bank commentators are getting excited - there 7% increase in prices forecast for 2020 is likely to happen before April they say (7% annual increase as at March) and revised their full year forecast to somewhere near 10%

    That’s good eh
    Thanks, I was thinking of doing the same but you beat me to it. Yes it is good and I have been thinking for some months now that 100 year low interest rates would have a significant impact.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #93
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    Quote Originally Posted by Beagle View Post
    Thanks, I was thinking of doing the same but you beat me to it. Yes it is good and I have been thinking for some months now that 100 year low interest rates would have a significant impact.
    Further to this ANZ set a new lending record for a week this month ( I think 09-14 Dec ) this beat a record set in 2015.
    So pretty sure Auckland would have turned around , Wellington has had a good 3 months to end the year for sure.

  4. #94
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    Both OCA and SUM off to the races today! so nice to see.

  5. #95
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    I wonder how much is advance buying to replace MET with other retirement stocks, versus reassessment of the 'correct' value relative to MET value. (Or is a lot of it straight TA knee-jerk response.)
    Will there be another spurt when the big funds go to replace MET in a month of two, once they get paid out?

  6. #96
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by tobo View Post
    I wonder how much is advance buying to replace MET with other retirement stocks, versus reassessment of the 'correct' value relative to MET value. (Or is a lot of it straight TA knee-jerk response.)
    Will there be another spurt when the big funds go to replace MET in a month of two, once they get paid out?
    The money has to go somewhere and there's about $1.5 Billion of it.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #97
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    Quote Originally Posted by Beagle View Post
    The money has to go somewhere and there's about $1.5 Billion of it.
    ARV also up a creditable 17 cents....

  8. #98
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    The whole sector seems to be enjoying a big boom, because of the MET takeover offer.
    Probably not a good time to start investing in this sector at the moment ?

  9. #99
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by limmy View Post
    The whole sector seems to be enjoying a big boom, because of the MET takeover offer.
    Probably not a good time to start investing in this sector at the moment ?
    Track record is what you should be focused on now. Does your favourite choice(s) in this sector have a long and well proven track record of growing earnings per share to justify the current price ?
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  10. #100
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    I also hold RYM and SUM, and I think the sector is sound, especially with the baby boomers adding to an aging population.
    I'm just wondering if it's currently overbought because of the MET offer.

    Would it be wiser to wait for the takeover news and cash overflow to settle down first and then reinvest in the sector, say in the new year ?

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