SUM - Summerset Group

[Jay]

Dead right mate, I agree 100%. My early guess is for underlying profit of $150m for FY20 giving about 65 cents per share. Put a market median PE of 19 on that and we're off to the races at over $12, maybe even more as institutional money from the MET takeover pours into SUM. You might even feel compelled to attend the annual meeting in April 2020 this time and hear about the excellent growth prospects

So according to a certain person's theory that would put RYM at $20-24, which could well be given as you say with funds lying around with somwhere to go

[Beagle]

Could well be by the end of 2020 as people consider RYM's profit for 31/3/21. I think the whole sector is in for a very good year in 2020.

[Beagle]

Decided to give myself another early Christmas present, one I know will give me much pleasure in the long run, SUM more SUM shares this morning, (bought more yesterday as well).
I have 100% confidence in the board and senior management and believe they will add tremendous value over time.
This is still trading well below the median PE for the NZX50 and doesn't deserve to be given its extraordinary track record of growth over the last 8 years.
Forward metrics for FY20 based on my best guess of earnings show this as outstanding value and will likely break through the $10 barrier sooner rather than later in 2020.
A ten dollar something price by the time of the next annual meeting in April 2020 wouldn't surprise me in the slightest.
I think a significant amount of cash from the MET takeover is going to be reallocated to SUM and if you wait until after the cash is released from that takeover SUM shares won't start with an 8 handle. Better to buy before the reallocation into SUM if you're in a position to do so, in my opinion.

[winner69]

Decided to give myself another early Christmas present, one I know will give me much pleasure in the long run, SUM more SUM shares this morning, (bought more yesterday as well).
I have 100% confidence in the board and senior management and believe they will add tremendous value over time.
This is still trading well below the median PE for the NZX50 and doesn't deserve to be given its extraordinary track record of growth over the last 8 years.
Forward metrics for FY20 based on my best guess of earnings show this as outstanding value and will likely break through the $10 barrier sooner rather than later in 2020.
A ten dollar something price by the time of the next annual meeting in April 2020 wouldn't surprise me in the slightest.
I think a significant amount of cash from the MET takeover is going to be reallocated to SUM and if you wait until after the cash is released from that takeover SUM shares won't start with an 8 handle. Better to buy before the reallocation into SUM if you're in a position to do so, in my opinion.

Good on you

Somebody has to keep the volume ticking over seeing most have gone on holidays already

I take it NZX closes down at 1 o’clock

[Beagle]

Yeap, 1 p.m. close today mate and then we look forward to unwrapping our MET present on Friday morning. All other Christmas presents this year will pale by comparison

[couta1]

Yeap, 1 p.m. close today mate and then we look forward to unwrapping our MET present on Friday morning. All other Christmas presents this year will pale by comparison

Yeah I'm looking forward to unwrapping that Christmas present also and then putting it up for sale to the highest bidder.

[peat]

you must be up to the gunnels by now Beagle and good on ya
However I've reduced just a little.

[Beagle]

you must be up to the gunnels by now Beagle and good on ya
However I've reduced just a little.

Thanks mate. I really do think its a $10 stock in 2020, (am strongly inclined to believe my own B.S, especially after a very good and likely to be very successful MET foray).
Pretty sure I am not done yet. When you zoom out and take a 5 year view the SUM's look quite startling.
Year ended 31 Dec 2014 they made $24.4m underlying profit. If they make say $115m this year that's an average compound growth rate of 37% per annum !

Even if they grow underlying profit at just 15% in 2020, which really is a base case my estimate that's $132m on 226.8m shares gives 58 cps.
At $8.50 that's a FY20 PE of 14.7. That's a PEG ratio based on historical growth of only 14.7 / 37 = just 0.4 and has me wondering if SUM itself is not vulnerable to a takeover ?

Even if we have entered a new more mature phase of growth for the company and RYM type growth of 15% per annum is the new normal using my no growth PE of 11 for the ultra low interest rates and 1g where g is the sustainable growth rate estimated for the next 7-10 years I get a fair PE of 26 and valuation numbers vastly north of the current share price. I know $15 sounds "whacky" talking about it now...a 76% potential gain in the next 2-3 years is highly likely in my opinion as the value is there.

Even if the PE just rerates to the market median of 19 and why wouldn't it with their track record... and underlying growth continues at 15% for the next 3 years I get 51.5 cps for FY19 growing to 78.3 cps earnings in 2022 x 19 = ~ $15 in 2022.

I would be very disappointed in SUM becomes a takeover target as I honestly believe the company has a fantastic future and will be a very powerful force for creating shareholder value over the long run. They have a very experienced and highly articulate senior management team and an excellent board and I know the CEO and CFO are very intelligent and highly motivated guys.

[winner69]

Who would have thought SUM would be $9 by the end of the year (2 days trading to go)

Still relatively outrageously cheap

Beagle needs to revise his expectations

[Raz]

Who would have thought SUM would be $9 by the end of the year (2 days trading to go)

Still relatively outrageously cheap

Beagle needs to revise his expectations

I think we all will, been buying plus another stock..not too many compelling propositions on the NZX currently...