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  1. #121
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    Quote Originally Posted by couta1 View Post
    Stocks like RYM/FPH/MFT always look expensive yet they keep increasing in price, I remember holding FPH for a while when it was $3 only about 6 yrs ago, some investors have the nous and ability to just buy these stocks and sit on them for a long period of time making huge gains for themselves and kudos to them, I intend to do the same with my PAZ holding but I'm more of a trader nowadays so are unlikely to have many stocks which are true long term holds excepting HLG which is my long term income hold.
    I remember my broker saying that FPH was "overpriced" when it was about $3.

    I listened and decided not to add my holding then so I ended up adding to an underperforming stock because it was about "to turn around under a new CEO". It ended turning around 360 degrees and went further down....

  2. #122
    Guru justakiwi's Avatar
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    This is my concern too. People are living much longer, staying in their own homes longer, and by the time they need to move elsewhere, chances are they are going to need a higher level of care than village units will provide. Down the track the greater need will be more care beds, not more occupy your own villas. How are these companies proposing to provide a higher number and level of care beds/services, when their villa sales drop? I have seen mention of the impact of higher staffing costs - we are not well paid - but you can’t provide quality care without staff. In 10 years (probably less) the rest home I work in, will not be able to manage with our current staffing levels. We already have several residents who should probably be in hospital level care. More and more people require two staff for toileting/mobilising. In other words, the needs of our elderly are increasing rapidly and what was once “low level” care (rest home care) is very quickly becoming something else.

    It isn’t even just about the property market slowing down. It is about a potential reduction in the suitability of villa life for our elderly down the track.

    Quote Originally Posted by Snoopy View Post
    I went to a retirement village Christmas function last week where the manager said that the only way they could keep up their villages care beds to a high standard was to subsidize that side of the business from occupation right resales out in the occupy your own villa section of the village. I think if the property market does slow down for ten years many villages operating today will be in serious trouble.

    SNOOPY

    discl: Not an investor in the retirement sector, and it has now moved off my watch list.

  3. #123
    ShareTrader Legend Beagle's Avatar
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    SUM people simply don't get the retirement sector and that's fine, their loss. Perhaps they could point me in the direction of another share with a 36% average annual growth in earnings in the last 8 years, one that's trading on a forward FY20 PE in the mid teens ? Probably best I don't hold my breath waiting for that insight to be shared
    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

  4. #124
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    Quote Originally Posted by Snoopy View Post
    The only thing I can see that is pushing retirement shares higher is historical trends

    SNOOPY
    its a wall of money looking for a home though. That's what drives stockmarkets higher and yes it is exacerbated by straight line projections and bandwagon jumpers with no concept of value but if the amount of money seeking returns continues to grow then that places higher bases for support levels on prices.
    And my theory is that capitalist cycles get larger and larger as they progress toward their crash burn and resurrect stages. So there are good reasons why the market continues to go higher and higher until irrational exuberance is long forgotten and this time its different statements are coming from all directions.
    For clarity, nothing I say is advice....

  5. #125
    ShareTrader Legend Beagle's Avatar
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    The other Beagle needs to get around and visit a few retirement villages and get an understanding of why people want to live there but my sense is he is so far removed from the hunt he'll head off in another direction for probably many years and miss heaps more gains coming.

    Penetration rate amongst the oldies is just over 12% and I think this will steadily rise over the years ahead to 17-18% as more and more people recognise the many benefits of retirement village living. Massive tsunami of oldies approaching retirement village living age will ensure exceptionally strong demand growth for at least the next 25 years.
    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

  6. #126
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    Quote Originally Posted by Beagle View Post
    The other Beagle needs to get around and visit a few retirement villages and get an understanding of why people want to live there but my sense is he is so far removed from the hunt he'll head off in another direction for probably many years and miss heaps more gains coming.

    Penetration rate amongst the oldies is just over 12% and I think this will steadily rise over the years ahead to 17-18% as more and more people recognise the many benefits of retirement village living. Massive tsunami of oldies approaching retirement village living age will ensure exceptionally strong demand growth for at least the next 25 years.
    It’ll be interesting to watch how the new PIL performs in this space.

  7. #127
    …just try’n to manage expectations… Maverick's Avatar
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    Quote Originally Posted by Maverick View Post
    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."
    Last edited by Maverick; 28-12-2019 at 08:01 PM.

  8. #128
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    Quote Originally Posted by Beagle View Post
    SUM people simply don't get the retirement sector and that's fine, their loss. Perhaps they could point me in the direction of another share with a 36% average annual growth in earnings in the last 8 years, one that's trading on a forward FY20 PE in the mid teens ? Probably best I don't hold my breath waiting for that insight to be shared
    Not quite, but CDI comes close. FY2018 profit of $33.6 million, FY2010 profit $2.9 million = 35.7% CAGR. I'll have to disappoint you on the PE in the mid teens though, CDI is only trading at a PE of about 11. Also trading well under NTA (market cap $252 million, they own land worth $338 million as of the last annual report and about $40 million in cash).

    I guess SUM is not a bad second option if you already have enough CDI.

  9. #129
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    Quote Originally Posted by mfd View Post
    Not quite, but CDI comes close. FY2018 profit of $33.6 million, FY2010 profit $2.9 million = 35.7% CAGR. I'll have to disappoint you on the PE in the mid teens though, CDI is only trading at a PE of about 11. Also trading well under NTA (market cap $252 million, they own land worth $338 million as of the last annual report and about $40 million in cash).

    I guess SUM is not a bad second option if you already have enough CDI.
    I have to admit I have cast my eye over CDI mfd.

    A significant difference between the 'good' retirement village operators and CDI is that the likes of Ryman have their own team of builders as well as their own land bank. Thus Ryman can control all steps of the project development process, whereas CDI cannot. This could leave CDI land values liable to be written down as building cots rise so that the CDI total subdivision development costs remain competitive (?).

    SNOOPY
    Last edited by Snoopy; 28-12-2019 at 10:58 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  10. #130
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    Quote Originally Posted by Snoopy View Post
    I have to admit I have cast my eye over CDI mfd.

    A significant difference between the 'good' retirement village operators and CDI is that the likes of Ryman have their own team of builders as well as their own land bank. Thus Ryman can control all steps of the project development process, whereas CDI cannot. This could leave CDI land values liable to be written down as building cots rise so that the CDI total subdivision development costs remain competitive (?).

    SNOOPY
    A fair comment. I'd argue that having your own builders only delays the inevitable - if it's materials inflation then it doesn't help much, if it's labour inflation they won't hang around for long if Ryman doesn't pay them competitively. The other side of this coin is CDI have very low overheads. They run without debt, and if the market turns to custard they just retrench and wait for it to pass. From 2007 to 2008, CDI's revenue fell from $39.5 million to $5 million, and they still turned a profit of $1.6 million. Keeping the work outsourced makes the company better able to adapt to external conditions.

    I appreciate the business model is very different to the retirement operators, just offering it up as it more than meets Beagle's request. I own both. Liquidity could be an issue with CDI for some, but with the size of my portfolio it's not a concern.

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