SUM - Summerset Group

[ratkin]

Well said Roger. As I have already noted several times, too many people unduly discount the benefits of entering a village, and appear to take a cold, calculated and potentially-misinformed approach to establishing the true value of village operators from the perspective of prospective entrants. However, IMHO, it is a key driver of enterprise value.

This post from earlier in the year made me laugh. NewGuy has in a short time gone from caring about the residents to complaining not enough are dying. Quite a turnaround

[percy]

Far from it. My concern is that the latest resales volumes signal a marked change in tenure, which has significant implications for the overall business model. As a heavily committed investor, that causes me considerable disquiet and warrants further discussion and analysis.

Lift your game, Ratkin.

Anyone who has been on sharetrader awhile knows the big problem with Ratkin.
He does not post often enough!!!!!!!!!!!!!!!!
A very astute investor we can all learn a lot from.
His game is at a high level we can all aim for.

[percy]

Well I am let to learn anything from him/her, but I'm happy to sit tight and be amazed in due course

Just because people are not posting all the time,does not mean they are not watching the market.
There are a lot of very astute people who make very little noise and can easily be missed.
It is very easy to read a whole thread from start.That way you can quickly see who was right and who was wrong.
Ratkin is one whose judgement is very sound.

[ratkin]

Also, how much time did you spend dredging the thread trying to find "dirt?"

I guess online papparazzi have a lot of time on their hands. Tragic but hilarious.

Was first page i looked at , there you were in tandom with Roger, both dancing to the same tune.both either excessively optimistic or pessimistic based on your position, which seems to change every few months

[nextbigthing]

What concerns me on this thread (about investing and financial markets in general) is that seemingly about 10 obviously very intelligent people with significant accounting knowledge can't even seem to agree/work out how to value this company and how the accounting policies work exactly. And that there's the scope for companies to so easily hide poor results etc but just changing a few reporting methods etc. This is terrible. A spade should be a spade.

[couta1]

Shame you bailed Goldstein (Hopefully you'll be back) I'm sitting tight as you would expect ,I don't see any change in the company fundamentally just a blip in Q3 resale numbers but good new unit sales ( I'm expecting even better in Q4) I've got my own ideas on the reasons why Q3 sales were down as do others of you. As I see it as a blip trying to work things out mathematically is not necessary at this point IMO, just look at it as a blip and see what the next quarter brings.I suppose working at the coal face gives you more reason to relax and sit tight when you see the happy lives in the Sum villages and Rym also. All I see is a whole lot of red ink everywhere(Not just Sum) at the moment and I'm hurting big time believe me but I won't be selling this stock and I've been consistent about my outlook right through which doesn't mean I agree with everything the board does and the likes of their reluctance to build dementia units but when a baby cries do you give it away?

[Beagle]

Was first page i looked at , there you were in tandom with Roger, both dancing to the same tune.both either excessively optimistic or pessimistic based on your position, which seems to change every few months

I think you'll find that post is factually incorrect, (faulty observation skills). He holds I don't. Furthermore the outlook for the company has changed dramatically in the last few months as has my position. The SP is tanking for very good reasons not the least of which are genuine concerns regarding short term loss of growth momentum.

What concerns me on this thread (about investing and financial markets in general) is that seemingly about 10 obviously very intelligent people with significant accounting knowledge can't even seem to agree/work out how to value this company and how the accounting policies work exactly. And that there's the scope for companies to so easily hide poor results etc but just changing a few reporting methods etc. This is terrible. A spade should be a spade.

You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion

[Goldstein]

Shame you bailed Goldstein (Hopefully you'll be back) I'm sitting tight as you would expect ,I don't see any change in the company fundamentally just a blip in Q3 resale numbers but good new unit sales ( I'm expecting even better in Q4) I've got my own ideas on the reasons why Q3 sales were down as do others of you. As I see it as a blip trying to work things out mathematically is not necessary at this point IMO, just look at it as a blip and see what the next quarter brings.I suppose working at the coal face gives you more reason to relax and sit tight when you see the happy lives in the Sum villages and Rym also. All I see is a whole lot of red ink everywhere(Not just Sum) at the moment and I'm hurting big time believe me but I won't be selling this stock and I've been consistent about my outlook right through which doesn't mean I agree with everything the board does and the likes of their reluctance to build dementia units but when a baby cries do you give it away?

Absolutely Couta1. A part of me wanted to buy today instead of sell - and I actually thought about you and almost decided to hold tight. However, I would have had to break one of my investing rules and ignore a stop-loss. I also reasoned the following way:

(i) I think that the recent fall in the share price is due to lower than average re-sales.
(ii) I'm guessing that the quarterly resale numbers within a year are correlated. (If the tenants get through the winter then they're likely to make it through until the following year). So we may also see Q4 results down as well. This will hopefully give me some time to get back in.

However, after selling I then see the Chairman buying shares who has an unfair advantage over me - having access to information about current tenures. It is possible that a number of tenures ended in Q3 and these will show up as re-sales in Q4. Had this notice come out earlier I may not have sold. He will know the answer to what I am guessing at in (ii).

At the end of the day though, this is not how I make a living. I design wind forecasting systems for wind farms in the northern hemisphere amongst other things. So I know a little about physical and statistical modelling. There's an on-call component to my job, and sometimes it just gets really stressful - and I just don't have the time to keep an eye on the market. I've actually been drawn off task more than I would have liked over the past week - and found it a bit stressful.

As far as SUM goes, I think I smell a buck to be made. I posted a plot on #2812

You can see that after the company went public there were lower than expected re-sales in 2010 and 2011, just accounting for historical stock becoming available. However, during 2012 and 2013 there were higher than expected re-sales. It's my view that the market over-rewards for high re-sales and absolutely hammers the stock for low re-sales, when in actual fact nothing has fundamentally changed at the company.

I suspect I'll be back with SUM by Christmas.

[couta1]

Just another quick comment on why I think Q3 was a blip, this winter was most unusual in the care centers in that winter occupancy is normally full or close to it with Dec-Feb being the low occupancy period but this year all the care centers that I know of all suffered from low occupancy during the winter until about 2 weeks ago when occupancy has suddenly picked up with most facilities getting full again. I'll let you draw your own conclusions, I've drawn mine

[Snow Leopard]

...You all know I'm an accountant and at the risk of repeating myself like a parrot all that matters is underlying earnings per share, that's operational earnings from the villages, if any, plus realised development margin on units sold and realised re-sale margin on units re-sold. Everything else is just noise although can give some insight into future profits, (e.g. solid revaluations on land or units can give a guide that future earnings from new and existing developments will be higher when those paper revaluations are actually realised). hope that helps settle any remaining confusion

Whilst accepting that you could be an accountant and agreeing that you repeat yourself like a parrot I otherwise fundamentally disagree with everything else you assert.

I hope that stirs things up again.

Best Wishes
Paper Tiger