SUM - Summerset Group

[winner69]

Good stuff. Regional housing prices are going gangbusters.

...and going gangbusters more as every month passes

House prices in NZ since 1990 seems to have increased heaps more than most countries as the chart from The Economist shows

Home owners may feel richer but we are probably much, much poorer as a society and an economy.

But as long as we have the likes of SUM to ‘invest’ in does all that matter

[Beagle]

Interesting, thansk fro sharing.
Do you like Italian food Winner ? Looks pretty cheap to retire there

[kiwico]

House prices in NZ since 1990 seems to have increased heaps more than most countries as the chart from The Economist shows

But of course another aspect of this is currency and rates of exchange over a period of time which this ignores. Not so long ago $1 bought not much more than 25p but has been double that for much of the tying-to-get Brexit period - such a change would have a very telling effect on this making houses more expensive in other currencies but not necessarily NZD. Arguably it means the NZD is still too strong.

[winner69]

But of course another aspect of this is currency and rates of exchange over a period of time which this ignores. Not so long ago $1 bought not much more than 25p but has been double that for much of the tying-to-get Brexit period - such a change would have a very telling effect on this making houses more expensive in other currencies but not necessarily NZD. Arguably it means the NZD is still too strong.

Chart shows real house priced indexed to 1990

Thus only shows how much house prices have risen since then ....not the average value of houses

All it’s showing that NZ property prices have risen faster than the other countries shown, not the relative value

[value_investor]

I see underlying profit of about $110m during the end of year report. Interested to see how high this one goes but its still a decent buy relative to what you can get in the market.

[winner69]

I see underlying profit of about $110m during the end of year report. Interested to see how high this one goes but its still a decent buy relative to what you can get in the market.

C’mon value - don’t be so pessimistic - $100m isn’t that much more than last year

Have you forgotten to allow for extraordinary revaluation gains of 2016/2017 which are only just beginning to get realised (ie go into Underlying Earnings)

At least $120m by my workings

[Beagle]

I'm right into looking at how the various business model's in this sector have performed over the last 5 years because I believe that gives a genuine feel for how successful the relative business models of each company are.
In the MET thread I observed that they had grown underlying earnings 97% in 5 years and RYM 92%.
100% in 5 years is often referred to as a benchmark as this exactly equals 15% per annum growth compounded over 5 years, i.e. 1.15 x 1.15 x 1.15 x1.15 x1.15 = 2.01 or 101% growth.

So which model works best ?
In 2014 SUM's underlying profit was $24.4m and if they do $120m this year that's 4.91 times their 2014 result a 391% increase. Just "a little" more than MET or RYM I think 391% growth speaks for itself which is why this remains my top hold in this sector.
I expect the share price to test all time high's in early 2020.

[winner69]

If speculation is true and SUM acquire Metlifecare what do punters think will happen to the SUM share price.

[dreamcatcher]

If speculation is true and SUM acquire Metlifecare what do punters think will happen to the SUM share price.

OK w69 I will take the bait........... SP probably goes down

[Baa_Baa]

If speculation is true and SUM acquire Metlifecare what do punters think will happen to the SUM share price.

Depends on what they have to do to raise the purchase $ and resulting EPS. If combined EPS is accretive SP goes up, if not it goes down while SUM swallows the debt/equity raise. Too early to speculate imho, SUM might not be the buyer.