SUM - Summerset Group

[MauroNZ]

Conservative... I like it. They have consistently surprised to the upside with development margins. I drilled senior management and directors about development trends at the annual meeting and they were all conservative saying they didn't expect any further gains from 28%. Build target growing to 600 units over the next couple of years, (assuming they don't expand into Australia). SUM stocks just make good common sense to stick in the bottom drawer and let compound growth in underlying earnings do its thing. SUM is shaping up as a classic under promise and over deliver stock. Happy holder and added a few more this morning.

http://www.sharechat.co.nz/article/2...s-rise-27.html

A few years ago at the annual meeting when they raised their development margin from 15 to 17% Julian Cook played down the scope of increasing it beyond 17%.
Its actually the CFO Scott that sets the prices of new units at SUM villages. He's a good solid numbers man and really knows his stuff.

Thanks Beagle, nice post. So do you still consider a fair value the current range of share prices?.

[Beagle]

Thanks Beagle, nice post. So do you still consider a fair value the current range of share prices?.

I think its very sound value at the current price. SUM have built a highly credible track record of growth since listing over 6 1/2 years ago. The company is very well governed by a very capable board and Julian and Scott are driven men determined to succeed.

[Patient Panda]

Thats a phenomenal development margin. Another great result

[oldtech]

And yet their reward is the share price heading south. The market proves itself to be irrational yet again ...

[trader_jackson]

And yet their reward is the share price heading south. The market proves itself to be irrational yet again ...

This time is different... I don't think it is too irrational
Holding up pretty well really

[Beagle]

And yet their reward is the share price heading south. The market proves itself to be irrational yet again ...

I suspect the market is misinterpreting the future development margin guidance. All I think Julian is doing is saying the 33% is a bit unusual and he is giving analysts a heads-up not to model that or some higher figure into their DCF valuations. Anything in the late 20's % per annum and the increased build rate for FY19, 20 and beyond is going to give excellent growth going forward. I remain of the view that it is illogical that one of the very fastest growing companies on the NZX with a well proven track record should trade at a material discount to the market average PE. In the medium term I expect this illogical situation will not prevail and long term holders will continue to do very well.

[Ggcc]

Interesting article

https://www.nzherald.co.nz/business/...ectid=12106724

Great result for me and a great longterm hold

[Beagle]

Interesting article

https://www.nzherald.co.nz/business/...ectid=12106724

Great result for me and a great longterm hold

Huge potential over there, none of which is being priced in by the market.

[Ggcc]

Huge potential over there, none of which is being priced in by the market.

Interesting about the lack of staffing in the retirement sector in general due to previous government allowing fewer overseas people into the sector.... Are kiwis just no good in this sector? Lack of, or lower amount of empathy? I have found that kiwis in general could improve a lot on their work ethics, but I have no idea in the retirement sector.

[trader_jackson]

I suspect the market is misinterpreting the future development margin guidance. All I think Julian is doing is saying the 33% is a bit unusual and he is giving analysts a heads-up not to model that or some higher figure into their DCF valuations. Anything in the late 20's % per annum and the increased build rate for FY19, 20 and beyond is going to give excellent growth going forward. I remain of the view that it is illogical that one of the very fastest growing companies on the NZX with a well proven track record should trade at a material discount to the market average PE. In the medium term I expect this illogical situation will not prevail and long term holders will continue to do very well.

Long term holders will continue to do well... just maybe not as well as previous years - game changes if they do expand into aussie successfully, just doesn't help that houses prices are definitely going down in aussie.
ARV had 43% margin in 1H18