SUM - Summerset Group

[Beagle]

I forecast this will happen within a decade with Ryman generating good returns and Summerset great returns over this time frame.

Nicely summed up.

[Snow Leopard]

You guys should really be looking at the future winners in this sector ARV & OCA.

[Maverick]

I recon SUM might be ready to disappoint a little later this month.
With greater understanding from my recent OCA wrangle I've run my updated spreadsheets back over SUM.

The general consensus here seems to be an underlying profit of 115-118m. (I was one of them too). Now I'm changing my forecast down to around 111 m.

Thats basically a PE of 18.5 at $9 and an underlying YOY growth of 13%.

So good value for sure but the growth has substantially tailed off from its stunning previous YOY growth rates.

Basically SUM's built rate has plateaued to around 400 units per year but what really hurts is they are selling much slower . Although the average sale price per unit is heaps more it still isn't enough to keep the growth at the level it has been.

Looking ahead I personally question wether their target of 600 units PA is wise until we see increasing new sales. I suspect SUM have already been choking the built rate.

I anticipate their annual underlying earnings growth will be more inline with RYM from here (who obviously had to go over to Aussy to maintain their ever increasing build rates)

Snow Leopard seems on the money here saying OCA and ARV are the new kids to deliver high growth rates.( I obviously pick OCA way ahead of ARV, no surprise there)

Anyway, you all know I've been wrong before , just the results of my workings for those interested.

[peat]

Technically it would make a lot of sense for a correction back to $8 or thereabouts.
It has put on 72% in the last 8 months. without a significant retracement.

[dreamcatcher]

Fisher Funds Management reduced holding from 14m to 11.2m to 4.95% ...... may be a worry for recent buyers

[winner69]

Technically it would make a lot of sense for a correction back to $8 or thereabouts.
It has put on 72% in the last 8 months. without a significant retracement.

Probably just a bit of rebalancing as a result of SUM value rocketing up

Be a worry though if Kingfish reduced their holding ...that would signal lower level of conviction

[Beagle]

Good bounce off the 30 day MA the other day and technically its looking very strong. Never count out Julian and his team to deliver surprisingly good earnings growth.

Fishers said in their Kingfish monthly report they had trimmed their position after adding several times last year. Still 8% of their portfolio.

I believe they can do ~ $140-150m underlying profit this year and have them on underlying eps of 64 cents for FY20, forward underlying PE of just 14.

Compelling fundamental value considering their long track record of being the fastest growing retirement company on the NZX.

[winner69]

Wow property market on fire big time


Busiest January for a while

Median price up 11% on January last year and even the price index reaches new highs

https://www.reinz.co.nz/Media/Defaul...ary%202020.pdf

[Beagle]

Good current info, thanks for sharing. Even Auckland is on fire ! MET is being sold way too cheap and less than current NTA eh. Who cares though, SUM is where the really strong underlying eps growth is...other retirement companies have "pup" eps growth by comparison.

[BlackPeter]

Not that exciting ... but today SUM's number came up to check consensus forecast and recommendation:

So - how good are analyst consensus predictions?

SUM had in January 2019 a (peak) share price of $6.50 and analysts (consensus) forecast for January 2020 was $7.75; The share price in January 2020 however actually peaked at $9.25;

Analyst consensus predicted the SP to rise by 19% and rise it did, however consensus significantly underestimated the amount of the actual rise (42%).

Looking into the consensus buy recommendation - SUM's Buy recommendation in January 2019 was a "Hold"(5/10) - i.e. analysts said that the share will roughly move with the NZX. This was no quite right, because SUM outperformed the NZX50 over the last 12 months by 15%.

Both analyst consensus prediction and recommendation has been ways too pessimistic to be useful, i.e. for my wee exercise I call them both "FAIL".

I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showth...arket-analysts

8 stocks checked so far (checking for each consensus and buy recommendation);
Consensus shareprice forecasts correct: 1/8; analyst hitrate: 12.5%
Consensus recommendation vs NZX50 correct: 2/8; analyst hitrate: 25%