SUM - Summerset Group

[MPC]

Report at the end of the month will be interesting. It has creeped up a bit the last few days and a little more interest and volume being shown. P/E ratio is crazy but this should lower as the earnings rise. This is definitely one to watch and is one of my picks for the year. Hopefully a dividend announcement will attract more investors as well.

[Vaygor1]

Interesting fact.

When Ryman had a market cap of roughly $485 million in 2005 (what Summerset is now) it was making about 24 miilion in profit. Summerset makes 6 million. Rymans return on equity was around 12.5% while Summerset is 1.8%

Without delving into any analysis, this suggests that either RYM's market cap was too low at the time it was $485M, or SUM's market cap is too high now, or a bit of both.

RYM market cap at $485M equates to $0.97 per share. This was the price around March 2006.

Same market cap with a 4 times difference in profits and 6 times difference in Return on Equity between the two.... I don't think changes in market sentiment over the last 6 years would have caused a difference this big. Your view Hoop?

[KJ]

Interesting fact.

When Ryman had a market cap of roughly $485 million in 2005 (what Summerset is now) it was making about 24 miilion in profit. Summerset makes 6 million. Rymans return on equity was around 12.5% while Summerset is 1.8%

Perhaps SUM's profit to be announced this month will be close to $20m?

[JayRiggs]

I think SUM has become very overpriced.
I haven't looked at anything in detail, but going by their forecast 2012 full year profit of $9.7 million (from moosie_900's post) and 214,819,360 shares on issue, that would come to 4.5c earnings per share.
And at today's closing price of $2.46, that's a PE ratio of 54.67!

Total guess here, I think at current prices, it's taking into account what SUM would be earning in 2 years time?
I was accumulating up to $2 and stopped after that, would dearly love to buy more.
I hope when SUM do report, the market will be disappointed and it'll go down to $2 so I can buy more!

[croesus]

I agree Jay.... NZ stocks like SUM, PPL .. etc.. are over hyped.. too many mums and dads.. have jumped in, perpetuating the capital gain..

coz deposit rates are low and boring, investing in finance companys is akin to buying aticket for a Jet star flight... not cool... the SUMS and PPLs investors will eventually ( those buying at current prices ) get whacked...

the real money will be made , eventually in the likes of WID, CRP, BLT, etc

[KJ]

Highly unlikely my friend (taken from the HLFYR report):

The retirement village developer and operator's net profit before tax for

half year 2012 was $3.7 million, up $4.7million on the first half 2011.

Underlying profit of $6.9 million for the half year 2012 was up 133% on the

same period in 2011. Its IPO forecast for full year 2012 is $9.7 million.

Pure speculation with a market cap like that, just like most stocks at the moment. I don't doubt it is a strong company though and that it deserves the price, I just think RYM is underpriced if SUM is so strong.

So if the HY was $6.9m do you not think that $15 to $20m is possible for the FY? Overpriced?-probably but the same could be said for many NZ stocks at present my friend.

[percy]

First of all my sympathy to Kathleen Corbett's family.
Very difficult when an old person has been in hospital.Hospital does not want them staying taking up a bed.So family needs to find somewhere for the person to be cared for.Summerset failed to take care in this case.This is likely to be a "growth area" for rest homes,so as hospitals do not become clogged up. As the person has been in hospital,and is still unwell,rest homes are going to have to offer a "hospital" type service.
I trust Summerset,Ryman and Metlife can, and will lead the way in provding this "hospital" type service.

[karen1]

Not defending SUM, but I did a bit of searching, and came up with the following interesting links regarding retirement villages, some of which are historic:

http://www.nzherald.co.nz/retirement...ectid=10735966 refers to the Eldernet group

http://www.consumer.org.nz/reports/r...s-investigated

http://www.consumer.org.nz/content/u...(Part%201).pdf this article mentions two, one RYM, one SUM, and is a worthwhile read

http://www.nzherald.co.nz/nz/news/ar...ectid=10660260 refers to Norfolk Court in Dargaville, Eldernet group

So SUM is in the news right now, but undoubtedly there will be other similar media items, which might refer to any one of a number of villages, as time moves on. Theft by staff is another issue which has drawn media attention in the last year, and if I remember correctly one of the villages involved was RYM, another SUM. No retirement village is going to be perfect, 100% of the time, as much due to the nature of the clients they deal with, quality of staff, as anything else .

[percy]

[So SUM is in the news right now, but undoubtedly there will be other similar media items, which might refer to any one of a number of villages, as time moves on. Theft by staff is another issue which has drawn media attention in the last year, and if I remember correctly one of the villages involved was RYM, another SUM. No retirement village is going to be perfect, 100% of the time, as much due to the nature of the clients they deal with, quality of staff, as anything else .[/QUOTE]

Thanks Karen1,all very true.We must also remember our hospitals fail to offer proper care at times.
Unfortunately we are human ,make mistakes,and can do better.
That understood ,the likes of SUM,RYM,and MET have a record good care.

[karen1]

Hi Percy, you're quite right, hospitals often fail, public and private. I wont start on the "medical misadventure" side of things! Suffice to say, often, to err is human..

What I do know is, one of the hardest choices in life is where to put your ageing parent/s, or yourself. Vigilance, 24/7, is a prerequisite for care of the aged, from all concerned - family, staff, etc.

I overlook a rest home, with sevenl units in my immediate view. These units house independent, mainly sole occupants. The staff are reasonably vigiliant, but sadly in many cases the families are not. At least 5 occupiers only get visits at Christmas and presumably birthdays, judging by the sudden surge in visitors. The rest of the year must seem very long. Too often families are quick to point the blame when something goes wrong, but perhaps if they took more interest themselves they might in fact prevent a wrong occurring, although that appears not to be the case which started this latest discussion.