Retirement village operators

[Lola]

if the met things goes ahead no doubt most of the proceeds will stay in the sector

that’ll create a lot of buying

good eh

interesting announcement from pil today....another option to look at. But bal may not approve.

[Beagle]

If the MET things goes ahead no doubt most of the proceeds will stay in the sector

That’ll create a lot of buying

Good eh

Yes, SUM things make a lot of good common sense.

[Joshuatree]

interesting announcement from pil today....another option to look at. But bal may not approve.

So Taciturn Lola. Care to put some flesh on the bones of your words, a link maybe, thanks.

[King1212]

On PIL announcement

[Joshuatree]

Thanks , here i will put the link in for both of you. PIL mkt cap $4.3 million.


Promisia Integrative Limited (“PIL”) - Suspension

"NZXR has suspended the quotation of PIL ordinary shares after the announcement by PIL that it had entered into a conditional agreement to acquire certain aged care facilities (the “Acquisition”). The Acquisition constitutes a reverse listing which, in accordance with NZX guidance, triggers a suspension of quotation."

[penn]

Interesting that SUM are going up with MET, I thought that the more shares needed for a takeover then if SUM was one of the other two bidders for MET their share price would be static or down. The ones going down today are RYM and ARV .

[oldtech]

SUM have been heading up since July, so I'm not sure this is related to MET

[macduffy]

Interesting that SUM are going up with MET, I thought that the more shares needed for a takeover then if SUM was one of the other two bidders for MET their share price would be static or down. The ones going down today are RYM and ARV .

I doubt that SUM is one of the bidders, they have their own comprehensive expansion plans. However, if they were and if they planned a scrip offer, it would make sense to bid their shares up to minimise the cost ( in shares) to them.

[Baa_Baa]

Couta1 theorem sure is spooky, with most talk about the RYM:SUM ratio reversion to mean 50%, then this week SUM $8 and RYM $16!

Looking more closely, the ratios of RYM:AllOthers is volatile, some are trending positively, others not so. So far I've found no correlation of the theorem to anything useful, like timing buys or sells, for any of the operators. Fun though not particularly useful.

Attachment 10907Attachment 10908

[Beagle]

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.