SUM - Summerset Group

[Beagle]

Summerset are experiencing very strong demand for their villages. Stock unsold was at a record low as a percentage of overall stock as at the half year just passed.
Not much to add to post #5505 other than they have a very high resident satisfaction at 94%.
As expressed in that post I am happy to hold through the uncertainty and believe the market is presently pricing in a worst case scenario of full tax for all future profits and a dramatically slowing real estate market. I don't foresee either of these events happening and believe SUM taking into account its historic compound growth rate average of 48%, its currents year's projected growth rate, its land bank, caliber of its management and directors and a 2017 PE of just 12.2 represents an outstanding opportunity. The last time we saw a company of this caliber in this sector on a forward PE of 12 was RYM in the midst of the GFC. Their stock price more than tripled in the following 5 years.
Its not just talk either Hoop. This by FAR my #1 investment position which I am very happy to hold long term despite apparent headwinds.
Actually another example of more recent outperformance was the tide of negativism against AIR this time last year when they were $1.75.
Its always darkest before the dawn. Be Greedy when others are fearful - Warren Buffett

[Hoop]

..........
Actually another example of more recent outperformance was the tide of negativism against AIR this time last year when they were $1.75.
Its always darkest before the dawn. Be Greedy when others are fearful - Warren Buffett

Sure its all to do with negative sentiment...shareprice may catch up with excellent future income..At the moment the negative sentiment has lowered the PE..and looking at other stocks in history a lower than average PE for that stock (or sector) can last a long time..In the meantime the bull runs on without you...
I have no doubt SUM is an excellent long term stock...and I will back into SUM when this sentiment changes for the better...When I sold out of SUM late last year my money stayed in cash apart from PPH while the market looked worrying bad then went into ATM PPH(more) MEL (for the divvy) AIR a bit later..I ran with the bulls (MEL excepted) ...not sitting around waiting for SUM & AIR to come right..
Yes AIR's investor sentiment was bad too and those holding went underwater for a long time (missing out on the equity bull run) ...Why hold when you can stay away and enjoy the bull run on other stocks... TA will tell you when that negative sentiment disappears and then buy back into that loved stock for a price only a fraction more than now..

Be Greedy when others are fearful - Warren Buffett ....Warren got greedy and jumped into something he said could never understand, but did now (Airlines)..Fast wind to Sept 17 he is on a hiding next to nothing..I guess he wished he never learned to understand...eh..

[Beagle]

U.S. airlines up strongly overnight Hoop. He'll come right on that bet. You as a TA specialist should appreciate that its back tested the 100 and 180 day MA for a few days now, (both at $4.93) and showed good resilience so far. Regarding the bull running on without me, well not at all Hoop. The market index is almost exactly where it was last September.
In that time AIR has doubled, (holding) ATM has more than trebled, (holding) HBL has done very nicely indeed, (holding) as have some of my other portfolio picks and SUM is down about 10% and is looking fundamentally extremely cheap.
I don't require instant gratification from all my stocks mate and I am sure Warren Buffet doesn't either When a stock is growing profit at circa 50% per annum and the shares are going sideways and offer more and more compelling value, history shows me, (with the performance of RYM at the depths of the GFC), that substantial profits are just over the horizon. Its not a question of if you'll make a lot of money, just a question of timing. I am happy to be patient with SUM and trust their management who I know are highly motivated.

[Hoop]

.............. just a question of timing.............

Thats exactly what I've been trying to tell people on ST for years now...including today...a mistimed buy using buy & hold investment strategy and you have to wait, months maybe years..3.5 years and still counting with retirement village growth stock RYM

[Beagle]

Thats exactly what I've been trying to tell people on ST for years now...including today...a mistimed buy using buy & hold investment strategy and you have to wait, months maybe years..3.5 years and still counting with retirement village growth stock RYM

Yes absolutely Hoop I hear exactly where you are coming from. Both Winner69 and I made our feelings crystal clear 3.5 years ago about RYM's lofty 35 + underlying earnings PE valuation at that time and have done well staying out. Big difference between a forward underlying PE of ~ 36 at the time for RYM and ~12 now for SUM that's for sure !
Very hard to go wrong buying a stock on an underlying PE of 12 when the underlying earnings are growing at ~ 50% per annum.
Some naysayers will point to emerging headwinds and conveniently overlook over $400m of embedded value. (nearly 3,000 units at $140K embedded value each as at 30 June 2017). Fact is there is a LOT of fear and uncertainty around retirement stocks at present exactly like there was a LOT of fear and uncertainty around AIR shares this time last year at $1.75 as ten new entrants announced new services to N.Z.
Honestly mate I am highly appreciative of your excellent TA posts and you know I usually look for stocks where FA and TA line up. This is still holding above the MA indicators mentioned earlier today and the FA screams to me "deep value". I am happy to be patient with this one just like I was with AIR last year at $1.75 when all the sheep were jumping off the cliff in fear. They're both very well managed companies and I really rate Julian Cook, he's a bright guy and so is the CFO Scott Scoullar. The Board are ably lead by Rob Campbell.

[Snow Leopard]

Thats exactly what I've been trying to tell people on ST for years now...including today...a mistimed buy using buy & hold investment strategy and you have to wait, months maybe years..3.5 years and still counting with retirement village growth stock RYM

Hoop, this is the SUM thread.

Best Wishes
Paper Tiger

[Beagle]

https://www.nzx.com/files/attachments/263382.pdf
The secret to understanding SUM's future profitability is contained therein. I will give readers a hint. Look at page 20 and how embedded value of existing units has grown very strongly in the last six months in particular and the last year. Multiply that by 2,999 units, gives just on $420m of embedded value waiting to be unlocked as residents exit their units and then have a good look at the average age of residents moving in and the latest tenure stat's.
Wrap you head around that and you'll understand that this company is headed rapidly towards making well in excess of $100m per annum by FY18, my estimate this year $85-90m, official company estimate $72-75m this year.

The hounds long range nose is picking up some extremely juicy capital gains coming with this one but shareholders will have to wait for a while as all pervasive uncertainty reigns supreme right at the minute.

But wait there's more. Maybe, just maybe, Taxcinda Marx won't be biting chunks out of our portfolio value with her huge teeth ?
http://www.msn.com/en-nz/news/nation...cid=spartandhp

[Lewylewylewy]

I hold sum.

I am concerned about labour government damaging the property market. Minor concerns about staffing.

I am holding and may but more if labour get in and the price drops, or if national get in and it doesn't.

I will probably decide whether or not to sell in 2023.

[Hoop]

Hoop, this is the SUM thread.

Best Wishes
Paper Tiger

You are not understanding my posts (but maybe I'm not understanding your post)..my feline friend..
Let me expand so these FA people see my TA reasoning....

Late September 2016 SUM falls from 5.60 to 5.20 support...It looked like a real buy of "cheap" shares (remember the shareprice fell even though the results announced were very good Total sales for the quarter the highest ever)..Hell it even trapped me at the time thinking bullish and writing the 5.20 bounce could be a bottom..but TA caution was very much evident..and had me referring to the other thread on 30th September 2016 post#266 SUM Status....HOLD, DON"T ACCUMULATE YET

Buying in/accumulating after the 5.20 bounce would have a mistimed buy ( TA told everyone not yet.. wait!!) ..Judging from ST thread from August to Late September many B&H investors would've have done mistimed buy/accumulations...interesting to read back on this thread (starting Mid August 2016)..(Kudo's to Black Peter)


That mistimed buy in late September 2016 sees SUM investors still underwater (-6%) a year later...Could have been worse as many investors have a knack at buying at the top..that mistimed buy back in early September 2016 sees SUM investors underwater by -12% a year later

[Hoop]

A good day for the retirement sector SUM up 4 to 5.01 ..the first day in trading after a new poll out yesterday seeing National back in front...It seems this market sector has negative sentiment towards Labour..more political effect than I thought...
SUM still not a TA buy yet but looking better..Support testing buyers could be "in" early (more risk)