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14-09-2018, 04:52 PM
#6821
For clarity, nothing I say is advice....
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16-09-2018, 10:56 AM
#6822
I'm still amazed that in our lifetimes we have seen interest rates go this low and borrowing is so cheap. At 4.20% and having that much money go into it makes me wonder.
It use to be a huge part of looking at balance sheets especially a few years ago so good for SUM to take advantage, not sure how long this is going to last. I'm sure with Kiwisaver growth and the govt contributing again to the super fund there must be a lot of cash rolling around.
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16-09-2018, 11:12 AM
#6823
Originally Posted by peat
Yes thats very generous to loan funds at 4.20% for 7 years. I imagine there is walls of cash from conservative kiwisavers looking for a home in bonds of one sort or another. Good for us indeed.
Is there something up with this number 420 recently what with Tesla takeover being set at that and now Summerset yield.
Obviously !! ...
https://www.urbandictionary.com/defi...420%20friendly
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16-09-2018, 12:56 PM
#6824
Very cheap rate to lock in funds for 7 years. Plenty of financial grunt to undertake their Australian expansion now and pursue strong growth on both sides of the Tasman
Forward PE only 16.5 and average earnings growth rate of 45% since listing and SUM people think its expensive against a forward market PE in the low 20's...go figure.
Some people still don't grasp the very basics of sound investing where the PE is less than the growth rate. https://en.wikipedia.org/wiki/PEG_ratio
Disc: Looking to add SUM more on any slight pullback.
Last edited by Beagle; 16-09-2018 at 01:33 PM.
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
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17-09-2018, 06:35 AM
#6825
Junior Member
Originally Posted by Beagle
Very cheap rate to lock in funds for 7 years. Plenty of financial grunt to undertake their Australian expansion now and pursue strong growth on both sides of the Tasman
Forward PE only 16.5 and average earnings growth rate of 45% since listing and SUM people think its expensive against a forward market PE in the low 20's...go figure.
Some people still don't grasp the very basics of sound investing where the PE is less than the growth rate. https://en.wikipedia.org/wiki/PEG_ratio
Disc: Looking to add SUM more on any slight pullback.
Hey Beagle,
Thanks for all your posts, I follow your posts on SUM and OCA quite religiously... kind of contradicts my user name! Any way I have 2 questions for you, What portion of your portfolio is exposed to the retirement sector and apart from property price movements what other risks do you think is involved for some one quite heavily exposed to the aged care sector? I have started a modest portfolio in the last couple of years and have about 40% exposure to the sector. and hold RYM, OCA & SUM. Thanks in advance for your advice.
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17-09-2018, 08:48 AM
#6826
Originally Posted by Sinvester
Hey Beagle,
Thanks for all your posts, I follow your posts on SUM and OCA quite religiously... kind of contradicts my user name! Any way I have 2 questions for you, What portion of your portfolio is exposed to the retirement sector and apart from property price movements what other risks do you think is involved for some one quite heavily exposed to the aged care sector? I have started a modest portfolio in the last couple of years and have about 40% exposure to the sector. and hold RYM, OCA & SUM. Thanks in advance for your advice.
Great question mate, I was just looking at the same thing last week, I am quite heavy in the retirement sector as well. With the exception of EBOS, my portfolio is almost 30% in this sector.
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17-09-2018, 08:58 AM
#6827
Australia announce royal commission into retirement villages
http://www.thebull.com.au/articles/a...ommission.html
guess probably not a good time for summerset to go to aus now.
guess they can feel happy there will be no investigations here if the banking investigations is anything to go off, as they say nz is squeaky clean.
one step ahead of the herd
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17-09-2018, 09:00 AM
#6828
Originally Posted by Sinvester
Hey Beagle,
Thanks for all your posts, I follow your posts on SUM and OCA quite religiously... kind of contradicts my user name! Any way I have 2 questions for you, What portion of your portfolio is exposed to the retirement sector and apart from property price movements what other risks do you think is involved for some one quite heavily exposed to the aged care sector? I have started a modest portfolio in the last couple of years and have about 40% exposure to the sector. and hold RYM, OCA & SUM. Thanks in advance for your advice.
Probably less than what it was as he said he’s gone big on Heartland ...but then Heartland could be described as beingbin the aged care sector
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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17-09-2018, 09:15 AM
#6829
Originally Posted by Sinvester
Hey Beagle,
Thanks for all your posts, I follow your posts on SUM and OCA quite religiously... kind of contradicts my user name! Any way I have 2 questions for you, What portion of your portfolio is exposed to the retirement sector and apart from property price movements what other risks do you think is involved for some one quite heavily exposed to the aged care sector? I have started a modest portfolio in the last couple of years and have about 40% exposure to the sector. and hold RYM, OCA & SUM. Thanks in advance for your advice.
Welcome to the forum Sinvester. Without any doubt the risk to the sector apart from property prices is dominated by Government policy. At this stage Govt has chosen not to release the preliminary findings of the tax working group for reasons best known to them but there is speculation that a capital gains tax may be less likely than previously thought. In any event its worth noting that the sale of an occupation right falls under the financial arrangements section of the Income tax Act and would presently be exempt from any capital gains tax on property per se, unless the Act was changed such that a possible new proposed Capital Gains tax also includes gains under financial arrangements which I think is very unlikely.
Human resources is another area of significant challenge for the sector. One shouldn't underestimate the additional costs imposed by the pay equity settlement last year as the process works its way through, caregivers will eventually earn as much as $27 per hour in 2020 or is it 2021, (Couta1 help me out here mate).
This affects retirement village operators with a more intensive care operation the most. ARV, OCA and RYM. SUM least affected due to its predominant independent living care model.
The significant pay rises accorded to Nurses in the DHB settlement are presently causing some waves in the retirement sector as there is presently a significant difference between what DHB's are now paying Nurses and what retirement village companies are paying. My understanding is this is probably only a temporary matter as funding increases should be forthcoming for all those in care but I will ask the CEO of OCA about this on Wednesday night at the shareholders association presentation.
Due to the tax policy working group's present work and risk from Govt policy change I have kept my sector exposure at a very modest level up until quite recently with the OCA placement but my sense is that the Govt policy intervention risks now appear lower than I previously thought so I am looking at increasing my stake in OCA and SUM fairly considerably as opportunities present themselves in the coming months.
This is a sector with huge demographic tailwinds and the structure is such that these companies are all very tax efficient. I think RYM, ARV and MET shareholders will also do very well over the long run and I wouldn't rule out buying RYM if the SP corrects to somewhere near historical normal valuation metrics.
P.S. I got on with the job of adding a bit to my OCA holding this morning.
Last edited by Beagle; 17-09-2018 at 10:19 AM.
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
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17-09-2018, 09:33 AM
#6830
Thanks Beagle... helpful post.
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