It would appear that optionA is now unfolding. It is too soon to panic yet but it looks like the first canary in the coal mine has fallen off his perch.
I am very disappointed and concerned after these results.
The next step for me is to find out why the unsold new stock is piling up and if it's a sistemic problem or just a timing thing. Interesting that they have low numbers of empty resale units but a truck load of empty new stuff.
Beagle, I will now definitely be seeing you in Wellies later this month at the meeting.
Just wondering - is it really a "truck load" of new stuff which is vacant?
They did build last year 454 new units and sold from Q2 2018 to Q1 2019 342 new units. If we assume an average sell time of 90 days (I read that somewhere), than there are now 112 of these units still unsold. This is roughly 3% of all of their units. Sounds like they managed as well to reduce during this quarter the number of re-sell units available. End of last year they had 1.4% of their restock uncontracted (annual report), which would add up to 52 units, now they have only 40.
Numbers don't sound that concerning to me - new units will need longer to sell (if you throw a large bunch of product into the market it takes just a bit longer to be absorbed). Quite normal situation - and sure, the building market is a bit softer than it used to be.
Sales numbers are not a reason for exuberance, but I don't think they are a reason for undue concern either. Just an average year in a quite future proof industry. If this is like bad years looks like - who would not want to be a holder?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
The Beagles had to visit north shore hospital last week for Mrs Beagle's knees and her arthritis problem. I was staggered by the number of older people there and we had to wait for hours in a queue to be seen by one of the specialists. It occurred to me that the strength of the long term demographic tailwind in this industry is mind blowing and actually quite difficult to get one's head around. The forward PE is very realistic and its hard to see how anyone can go wrong in the long term at the current heavily beaten down price. The track record this company has of growing earnings since it listed is exceptionally good. I see no reason to buy RYM and pay ~ double the PE to invest in the same industry albeit with the added risk and exposure to the substantial decline in the Melbourne property market but each to their own...
Last edited by Beagle; 05-04-2019 at 01:34 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
summerset results today are not good , sales down , overhang of units developing and they confirm the market is slowing. this is not good for retirement stocks hence why all of them are getting sold off today. I have been warning for quite awhile things were not healthy in the sector and slowly it is starting to materialise.
dont worry utilities power companies have sustainable divs
Look forward to it mate, I have my flights booked and Couta1 is on board so he'll be there. I think its simply a timing thing, taking longer for people to sell their homes.
The Beagles had to visit north shore hospital last week for Mrs Beagle's knees and her arthritis problem. I was staggered by the number of older people there and we had to wait for hours in a queue to be seen by one of the specialists...
Hospitals do tend to have a lot of older patients anyway I guess especially for the “elective” orthopaedic procedures. Plus public hospitals have to manage a burgeoning demand within constrained budgets. At Weekends and after hours you may see a younger demographic!
summerset results today are not good , sales down , overhang of units developing and they confirm the market is slowing. this is not good for retirement stocks hence why all of them are getting sold off today. I have been warning for quite awhile things were not healthy in the sector and slowly it is starting to materialise.
dont worry utilities power companies have sustainable divs
Aged care is scarcely profitable and the Government will make sure it stays that way which leaves SUM and the other retirement outfits as real estate companies. QV reports show the housing market is cooling off nationally, with a fall-back in Auckland. I think there is worse to come yet but that it will be a trend and not a rush.
This time is different... I don't think it is too irrational
Holding up pretty well really
Posted about 8 months ago... share price was 25% or so higher than it is today... really did hold up very well for another month and a half.
Given the 'we are slowing down big time' light has been flashing on SUM for a while now, it was mystifying to see it bounce in early Feb... the writing seemed to be on the wall for months prior, and this has just confirmed it.
Residents need a reason to go to an ever increasing number and ever flasher villages... the 'that's a nice unit in a nice place' no longer cuts it... they need the full english breakfast and sum listed operators just don't do a good job at the continuum of care side of things in all their villages, while others do (and will be far more resilient in a housing slow down)
Not even a month ago ARV was singing a near totally different tune to SUM today: both with solid pricing and settlements... at over $6, holding up pretty well really.
Aged care is scarcely profitable and the Government will make sure it stays that way which leaves SUM and the other retirement outfits as real estate companies. QV reports show the housing market is cooling off nationally, with a fall-back in Auckland. I think there is worse to come yet but that it will be a trend and not a rush.
totally , its refreshing to see someone else sees them as predominately property development companies and secondly aged care providers
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Originally Posted by Maverick
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