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  1. #7181
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    Maverick you need to tap into the Couta relativity ratio to be in tune with the force when it comes to RYM/SUM, for years Beagle has been waiting for a consistent lasting disturbance in the force to no avail,like a dog chasing it's tail.

  2. #7182
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Maverick View Post
    I'm in awe of your computer skills BP,Do you have a teenager helping you?
    i don't wish to stunt any insightful conspiracy comments on your graph but on a slightly different matter I just can't reconcile why RYM has a slightly forward Pe of 24 (profit only officially indicated at this stage) while SUM has an actual Pe of 14. Go figure?

    yes yes , rym has loads of history and it's graphs are all super smooth growth dream charts ,so that Pe is perhaps warrented ( maybe in a different country or market mood.) However SUM have also build up a similar set of constant ,silky smooth , growth charts. They have a lot of years under their belt now too.

    I would never expect such a yawning PE gap between to similar companies producing the same goods and results. Therefore either RYM has to come down , SUM has to be rerated up , or we just have ourselves a Toyota over a Ferrari (when they both have the same job of taking the kids to school)
    RYM seen as the premium / bigest stock in the sector (NZ)....best in breed or similar phrase

    RYM on the Boston Consulting list of one of the great wealth creators globally over many years

    RYM is held by global instos and investors and they seem happy holding reasonable chunks

    This makes RYM desirable and it’s multiples have always been higher than its peers in NZ ....relative PEs are what matters and I doubt whether that will change any day soon.


    In saying that there have been times when PE has been outrageously high and subsequent 3 year returns have been poor ...and conversely times when PE has been below average and thats been good buying times.

    Get the picture .....life isn’t always logical or straight forward.

    Like why does SUM have higher multiples than OCA
    Last edited by winner69; 06-03-2019 at 09:18 AM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #7183
    ShareTrader Legend Beagle's Avatar
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    Just to expand a bit on that for the newbies on here. Couta1 has this theory called the Couta1 relativity theory that says SUM will inevitably revert to a trend line channel of 50-60% of the share price of RYM.

    Now I for one must admit this theory has proved remarkable resilient in recent years to my huge surprise especially seeing as SUM have consistently been growing underlying earnings much much faster than RYM. Indeed as Maverick has observed the price relativity of these companies is such that they each earn a similar underlying eps now and the price is almost entirely based on the market according RYM nearly double the forward PE.
    My good friend Couta takes great pride in espousing the merits of his relativity theory and how its proved to be so correct over the years whenever we catch up.
    Of course with me being a numbers man as long as SUM keep growing eps faster than RYM I think one day his relativity theory will be busted wide open, a bit like his one on TRA which says it should be $3.80
    The same thing will happen one day with this SUM / RYM thing but until them I humor him with acknowledging his prowess. (The things you do for your mates)

    RYM is vastly overpriced for this stage of the real estate cycle. I called this emphatically at $14 last year and was the only one to do so. I still think its considerably overpriced.
    RYM never grew earnings at an average rate of 43% per annum in its first 7 years of operations. The numbers say SUM has built an enviable track record, (probably unmatched on the NZX to the best of my recollection). I think Harbour recognise a value growth stock when they see one.

    Yes BP I think they were working the trading range for a while there and yes I think we now have a breakout.

    One could make some sort of argument that OCA as a relative newcomer to the market and with a less well proven track record might in some respects deserve a slightly below average sector forward PE until they prove themselves, (I like their business model, their board and management and think they have excellent long term prospects) but that same argument holds no water whatsoever with SUM.

    Nobody in their right mind would question SUM's track record since listing so does it deserve a below sector forward PE rating ?. Definitely not in my opinion.
    Last edited by Beagle; 06-03-2019 at 09:31 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

  4. #7184
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Maverick View Post
    I'm in awe of your computer skills BP,Do you have a teenager helping you?
    Is it that bad? No, no teenagers at home anymore - and our youngest passed already the magical thirty and certainly does not teach me computing skills ;

    Quote Originally Posted by Maverick View Post
    ...
    i don't wish to stunt any insightful conspiracy comments on your graph but on a slightly different matter I just can't reconcile why RYM has a slightly forward Pe of 24 (profit only officially indicated at this stage) while SUM has an actual Pe of 14. Go figure?

    yes yes , rym has loads of history and it's graphs are all super smooth growth dream charts ,so that Pe is perhaps warrented ( maybe in a different country or market mood.) However SUM have also build up a similar set of constant ,silky smooth , growth charts. They have a lot of years under their belt now too.

    I would never expect such a yawning PE gap between to similar companies producing the same goods and results. Therefore either RYM has to come down , SUM has to be rerated up , or we just have ourselves a Toyota over a Ferrari (when they both have the same job of taking the kids to school)
    RYM is basically in the same category of blue chip investments as e.g. AIA, FPH, MFT and similar. They are basically used as pseudo bonds and large foreign funds bought in and pushed the price up. The risk I can see in that is what's happening if the NZD starts for whatever reason to drop - all the foreign funds would concurrently line up at the exit - which is when the magic couta formula could get a major dent :

    SUM is a good company, but I don't think they are in that league yet. But sure - something to look forward to , but obvioulsy in that case the same risks would apply ...

    Anyway - my assumption is that RYM and SUM will over the years come closer together PE wise, and it probably will be a combination of RYM giving and SUM taking ...
    Last edited by BlackPeter; 06-03-2019 at 09:32 AM.
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  5. #7185
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by BlackPeter View Post
    Anyway - my assumption is that RYM and SUM will over the years come closer together PE wise, and it probably will be a combination of RYM giving and SUM taking ...
    ^^^^^ This, I agree 100%. If I could reliably borrow the scrip for several years I'd be more than happy to double down on SUM and take the same short position in RYM to hedge my additional investment. Couta1's relativity theory will be confined to the annuals of folk lore history in due course.
    Last edited by Beagle; 06-03-2019 at 09:35 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

  6. #7186
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    Keep dreaming guys.PS-SUM companies need a lot more work on the care side of their business to match certain other companies.

  7. #7187
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    The money is in property development, not in looking after tax payer funded old people.

  8. #7188
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    Quote Originally Posted by freddagg View Post
    The money is in property development, not in looking after tax payer funded old people.
    spot on!

  9. #7189
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    Holder in all 3 but I like the development and resales part of the business.

  10. #7190
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    Quote Originally Posted by freddagg View Post
    The money is in property development, not in looking after tax payer funded old people.
    True but I view things from the inside and having the best quality care clouds my buying perspective in this sector.

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