SUM - Summerset Group

[Beagle]

Share price fallen back late in the weel and on a weekly close is just contained in the long uptrending channel (spooky eh)

Looking at this and noting what I said a few weeks ago about range trading everything points to SUM share price trading between $5.60 and $6.80 all of this year.

Even that PE chart I posted the other day suggests that this will occur .... the $6.80 being a PE of just over 15 on $100m underlying earnings, probably all the market thinks its worth.

Doesn't seem exciting but with the shareprice still returning about 25% pa over a long period I shall just have to keep holding

25% per year is so boring you can just sleep your way to doubling you're money every three years. (25% compounded for 3 years = 95.3% gain). Happy to bore myself stupid all the way to my retirement at that rate mate

Fisher funds trimmed their holding a bit recently. In a behind the paywall article on NBR they said their portfolio had become unbalanced with the recent strong run in SUM so they had to trim some to keep their self imposed allocations intact. The investment manager went on to say that they thought SUM was good value for the growth on offer. I gathered the impression they wouldn't be selling any more.

[allfromacell]

Did SUM go ex-divi yesterday? I didn't notice a drop?

[blackcap]

Did SUM go ex-divi yesterday? I didn't notice a drop?

It's a tiny dividend, probably lost in the noise. Not sure what happened yesterday but it may have gone up... just not as much as if it was still CD

Good to see it up again today, going well and great things ahead.

[Zaphod]

SUM is one of the few companies that I don't keep a track of the ex-DIV dates, because it's so small it never really effects the SP much, and I have a very long term view on the investment itself.

[Beagle]

It's a tiny dividend, probably lost in the noise. Not sure what happened yesterday but it may have gone up... just not as much as if it was still CD

Good to see it up again today, going well and great things ahead.

Yes they went ex the ~ 7 cent divvy yesterday, recovered the dividend on the same day just like AIR did. Hard to keep good companies down isn't it
Disc: Topped-up SUM more today. Long term you can't go wrong...

[value_investor]

The brakes got pumped a bit on price with all the implications that may be put in place by the govt of the day I think.

What type of growth are we expecting on underlying profit in this FY then?

Another 40% would be a heck of an effort but perhaps not attainable. Even a 'modest' growth of between 10-20% would still value this company on a forward basis as amazing value for money ($6.44 on this day).

[Beagle]

Hey Couta1. How's that special reversion theory of yours holding up mate ?

[couta1]

Hey Couta1. How's that special reversion theory of yours holding up mate ?

Sum now overvalued, but not for long once RYM get closer to their result and things revert back to the mean where they should be. PS-You have to expect a bit of irrational exuberance from time to time, but long term, well you know the story.

[Ggcc]

I don’t see Summerset overvalued. I see that Summerset was undervalued for way too long.

[Beagle]

I don’t see Summerset overvalued. I see that Summerset was undervalued for way too long.

I could not agree more. Share prices follow earnings per share or more correctly earnings per share in the foreseeable years ahead. SUM shares have been in the wilderness for too long. My best guess on the underlying forecast for FY18 this early in the year is $100m underlying profit and on 224m shares that's 44.64 cps.
At $6.79 they're on a forward PE of just 15.2. Why should SUM with its stellar record of profit growth be on a forward PE well below the market average of about 21 ?
A current year PE of 21 would give them a SP of 21 x 44.64 = $9.37 later this year / early 2019...impossible ?...or maybe not ?