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18-02-2020, 11:03 AM
#8711
Originally Posted by 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%
Which just goes to prove that coin tossing is a far more accurate method than following analyst predictions.
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18-02-2020, 11:11 AM
#8712
Originally Posted by couta1
Which just goes to prove that coin tossing is a far more accurate method than following analyst predictions.
You might be right .... though my results so far might well prove that analyst recommendations might be useful - as long as you bet against them.
The only problem is - while it seems to be more likely that they are wrong (obviously - depending on the definition of "wrong"), you can't rely on them to be wrong, sometimes they are not :
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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18-02-2020, 11:31 AM
#8713
Better off to DYOR. "Past performance is no guarantee of future performance" But think about this. How many times in your life have you read that disclaimer ?
Have you ever read this one that I have long believed is the truth "Past performance is no guarantee of future performance but it is the very best guide we have" ?
Reason for this rant. DYOR is not that hard, just look at a companies history and extrapolate things out and adjust for known current economic factors.
All that suggests to me is SUM is on for a cracker year in 2020. Maybe $150m underlying profit ?
Shares were ~ $8 in mid 2018. Are they really that expensive now given the real estate pendulum has swung so dramatically towards growth again compared to back then ?...or maybe they are really cheap ? $150m would give eps of 66 cps and put SUM on a forward PE of just 13.6 at $8.98.
13.6 with their track record of eps growth. Hmmmm
Last edited by Beagle; 18-02-2020 at 11:35 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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18-02-2020, 11:51 AM
#8714
Couta theorem is weighing heavily on SUM SP, stuck on 53%. All you need to know, FA, TA, analysts, dyor, all worthless useless waste of time. Lol.
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18-02-2020, 11:53 AM
#8715
Westpac Raises house price forecast to +10% in 2020 !
https://www.nzherald.co.nz/business/...ectid=12309458
LOL Baa Baa I will stick with FA and TA...others are welcome to use Coutts theorem if they like.
Last edited by Beagle; 18-02-2020 at 11:55 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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18-02-2020, 04:27 PM
#8716
Member
Just as fyi, last weekend there was an open home at Kenepuru village, I couldn't go as per family activities.
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18-02-2020, 04:42 PM
#8717
Originally Posted by Baa_Baa
Couta theorem is weighing heavily on SUM SP, stuck on 53%. All you need to know, FA, TA, analysts, dyor, all worthless useless waste of time. Lol.
Yes FA and TA just a lot of mumbo jumbo / sorcery or whatever you want to call it .....and not backed up with any scientific evidence.
Couta ReversionTheorem is a Law of Nature so very meaningful ...just like gravity keeps man firmly planted on earth
At the top of every bubble, everyone is convinced it's not yet a bubble.
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18-02-2020, 04:48 PM
#8718
Last edited by Beagle; 18-02-2020 at 04:49 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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18-02-2020, 05:56 PM
#8719
Fair enough mate. Central to any bull case is a sell down of existing inventory and a lift in the build rate this year.
Resale volumes should start increasing nicely in the years ahead and if the N.Z. real estate market is going up 10% this year we are going to see some very strong gains on resales.
Probably too early to predict with any degree of accuracy what 2020 looks like but certainly the real estate market has started off with a hiss and a roar so the early signs are encouraging.
You and Maverick are both around that $110m mark. I'm sticking with $115m or thereabouts for FY19.
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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18-02-2020, 09:27 PM
#8720
Better hope forsyth are wrong by miles... they saying underlying EPS growth of +7% for FY19...and, perhaps worse still, EPS growth expected to continue to grow slower than sum others (1 in particular I like) for FY20 and FY21... WOW!
With growth of +7%, +16.7%, + 15.5% this is far below the previously trumpeted CAGR of 30 something percent for the past several years... I suppose past performance really is not an indicator at all of future performance.
EPS growth is gonna be really high they say, but sum are saying it is only going to be 7% (meanwhile on sum other threads EPS growth of "high single digits" was rubbished)
No worries - although they still have an outperform rating on it, Forsyth are gonna be wrong by miles and we're gonna see something close to that CAGR rather than terrible "high single digits" growth rate.
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