SUM - Summerset Group

[minimoke]

Pierre

You sound like you have a similar plan as I have.

In value the most I hold in $ is ryman. Bought them at IPO and have sat on them ever since and doing very nicely thankyou. These are in my "safe" (no meddling) portfolio. I see these as steady as you go and potentially the least growth shares

In my "risk" portfolio I hold both SUM and OCA. On current values I hold roughly 3 x more OCA than SUM.

I see OCA having more growth potential than SUM based on age of company and enhanced "care" focus.

These shares are part of a retirement plan. The plan involves hitting a financial value each year with an expectation it will have a certain value on retirement day. My expectation is the higher the capital value at that point the better the dividend yield for my income.

Three shares in the retirement sector is enough for me. I see these three delivering the best opportunity for meeting financial targets.

If OCA or SUM hit my stop loss I will sell. I've been stung already by SUM and see them as most likely candidate for disappointing me again. Portfolio is due a full review shortly so I may adjust stop loss settings as at the moment I am well ahead of target

[winner69]

Rob said at the AGM “The board receives weekly reports on sales and resales and “we review village by village in a lot of detail.”

Some might say that’s good and keeping the finger on the pulse ...but weekly a bit of an overkill? They deserve even more Directors fees if they review things in a lot of detail each week

Wonder if they get weekly updates on the mystery shopping.

[RTM]

Thanks for the summary from the meeting Beagle. Much appreciated and longer term sounds encouraging. SUM are a small % of my portfolio...2.8%. I think I’ll just sit on what I have for now, will consider buying more if the price has a 4 in the front of it. I’d be more interested at current price if the dividend yield was a bit higher.....

[Beagle]

Baa Baa - Julian Cook made some comments on sales initiatives in his address to the annual meeting, herewith an extract

Sales results for the business were pleasing in 2018. Since that time we have seen some slowing of settlements in Auckland and Christchurch. Since the appointment of Fay French as our GM Sales we have been working on a number of improvements to our sales and marketing approach. We have introduced increased training for sales managers, mystery shopping of our own sites to ensure quality control and customer service standards, improved measurement and reporting of inquiry numbers, conversion rates, and key sales statistics.
We have an enhanced incentive structure for sales managers, more responsive marketing, and an increased focus on engaging with local communities. In response to the slowing in settlement times we have put increased focus and emphasis on marketing and sales conversion in the Auckland and Christchurch markets.

Pierre I'm tossing up whether to reallocate my funds in this sector so my questions are:
a) which of my three companies do you think has the greatest growth potential over the next 5-6 years?
b) in which order would you rank the other two?
c) is there another listed retirement sector business which you think will outperform all three of my companies.

SUM's proven track record of growth is unmatched on the NZX even by the much revered RYM and I also noted therein that RYM's forward PE never went under 12 during the GFC and that SUM's current forward PE is less than that.
I believe SUM is currently very very cheap compared to RYM.
I also believe SUM is very cheap relative to OCA and I would reiterate my horse racing analogy that while OCA is a very young filly showing considerable promise at the trials SUM is a well proven thoroughbred with an impeccable winning record.
My rating in this sector is
1. SUM
2. OCA
3. ARV
I don't rate RYM at the current price and believe shareholders are in for disappointment as they find that RYM is exposed to the same market dynamics as SUM but is trading on almost exactly twice the forward PE despite its slower growth rate and material exposure to the fast declining Australian property market.
I think RYM makes a great sector "short" at ~ $12 for those that want to increase their holding of one of the above but ameliorate their sector risk.

The answer to part c of your question is in my opinion, NO. I don't rate MET's prospects well at all.

[couta1]

From my inside knowledge of the sector I rate both RYM and OCA ahead of SUM others. PS-I can't comment on ARV.

[Beagle]

As an accountant I stick to the numbers and what's best for me and leave the emotional feel good stuff to others but for what its worth I think a 97% customer care satisfaction survey is more than convincing enough for me that the board and management are NOT a bunch of ruthless cold hearted people.

[couta1]

As an accountant I stick to the numbers and what's best for me and leave the emotional feel good stuff to others.

No worries mate but remember people are emotional beings especially the elderly.

[winner69]

No worries mate but remember people are emotional beings especially the elderly.

Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM

[couta1]

Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM

It sure will, that will never change it's the Gold standard measurement tool. PS- Results of customer satisfaction surveys shouldnt be given too much credence as often the % of the total number of facility residents filling them out is often low.

[Beagle]

No worries mate but remember people are emotional beings especially the elderly.

You know me mate, I'm not a totally number obsessed person and it definitly matters to me that SUM are trying to improve their care standards.
I think its a very good thing that of the 6 directors two, Dr Marie Bismark and Dr Andrew Wong are extremely well credentialed and obviously very well respected in their field of expertise

Also he needs to take an interest in ‘statistics’ and ‘mean reversion’ eh Couts

SUM share price will remain about 50% of RYM

LOL I'll keep humouring your guys as my good mates that this is relevant until one day this "old wives tale" disappears into the annuals of history as the stuff of former legend but I do note that 55% of $12.20 for RYM is about $6.70 which is about my price target for SUM for one year out so you guys might be all good for another year lol