SUM - Summerset Group

[winner69]

One thing that chart highlights is that since listing SUM share price has increased by ~35% pa ....with dividends not a bad return for the buy and hold punters

But over 50% pa from late 2014 - that's what short/medium term traders aim for

[Raz]

Sold down substantial parcels in RYM & SUM today as have another investment commitment...ran out of time to hang in any longer..haha love the banter on here although my AIR weighing overall has taken the hardest hit..hardly surprising.

[Grunter]

She'll become overbought soon and then those that want a sub $5 entry will just have to bide their time aye.(Might even pick a parcel up myself at around $4.80)

Believed that SUM was valued at $5-$5.50 before the latest results. Now with that raised, perhaps another 15c to 20c has been added in that latest result.

Am watching for signs of profit-taking to get out if necessary and buy back in later

[couta1]

No worries winner, thanks for the wee chart.

[Beagle]

SUM been growing underlying earnings at 44% compound per annum so in effect just over doubling every two years whereas RYM been growing earnings at about 20% a year and takes four years to achieve exactly the same earnings growth so its no surprise really that their price relativity has been changing.

[couta1]

SUM been growing underlying earnings at 44% compound per annum so in effect just over doubling every two years whereas RYM been growing earnings at about 20% a year and takes four years to achieve exactly the same earnings growth so its no surprise really that their price relativity has been changing.

But that's the thing, apart from the spurts and dips, Ryman SP has always been roughly double what Sum has and Sums 44% versus Rymans 20% hasn't to date changed that pattern because Ryman is baking a significantly larger pie if you get my drift. Admittedly it is drifting toward 60% at the moment but Ryman is currently off the boil.

[Beagle]

But that's the thing, apart from the spurts and dips, Ryman SP has always been roughly double what Sum has and Sums 44% versus Rymans 20% hasn't to date changed that pattern because Ryman is baking a significantly larger pie if you get my drift. Admittedly it is drifting toward 60% at the moment but Ryman is currently off the boil.

2016 was always going to be SUM's year with the massive increase in build rate from 300 to 400 units per annum...
RYM a great company, no question but SUM are the fastest growing and I believe you'll see that continue to be reflected in their relative SP performance going forward from here mate. I believe you'll see that relativity move to 70-75% or possibly even more over the next year or two. My mate the late Ben Graham tells me from his grave that SUM are going to be massive wealth generators for patient long term investors.

[winner69]

It started off at this 50% but because SUM have 'grown up' and now do most of development in house (and making bigger margins) that factor needs to change to reflect that

I see the factor going to 65% plus

Interesting concept - more 'rule of thumb' maybe?

Can't go past real numbers though - and one of those is that SUM was on the same Price/Book multiple as RYM it would be $7.12 (today). OK allow a premium for Ryman top dog status but SUM should really be at $6.50 plus

That's what I am trading to - earnings growth plus higher multiples over the next year

[couta1]

2016 was always going to be SUM's year with the massive increase in build rate from 300 to 400 units per annum...
RYM a great company, no question but SUM are the fastest growing and I believe you'll see that continue to be reflected in their relative SP performance going forward from here mate. I believe you'll see that relativity move to 70-75% or possibly even more over the next year or two. My mate the late Ben Graham tells me from his grave that SUM are going to be massive wealth generators for patient long term investors.

We will agree to disagree, 70-75% would be a pipe dream IMO when you consider Rymans target of 850 units for 2017 and that doesn't include the Aussie numbers, furthermore they are aiming for their Aussie build rate to match their NZ build rate by 2020. If you do the projected maths on those combined unit numbers, we are looking at some serious compounding growth by 2020, a growth Sum will be unable to match unless they expand beyond NZ. All of the big 3 will/ have generated massive wealth for patient long term holders and astute traders have probably done just as well.

[Beagle]

We will agree to disagree, 70-75% would be a pipe dream IMO when you consider Rymans target of 850 units for 2017 and that doesn't include the Aussie numbers, furthermore they are aiming for their Aussie build rate to match their NZ build rate by 2020. If you do the projected maths on those combined unit numbers, we are looking at some serious compounding growth by 2020, a growth Sum will be unable to match unless they expand beyond NZ. All of the big 3 will/ have generated massive wealth for patient long term holders and astute traders have probably done just as well.

Totally respect your point of view mate and always a good idea to bat different viewpoints around to gather perspective. It seems to me (for suitable sites) that land prices in Melbourne have gone crazy with Ryman being outbid once or twice and / or paying lots when they do win a competitive tender process and yet on the other hand Local Government has recently placed some sort of major tax on foreigners buying their houses, (was it 7% stamp duty or something even higher I forget ?) which could have the effect of being somewhat off-putting to foreigners and dampen house prices down. Maybe a little squeeze coming both ends for Ryman do you think in terms of their margin's ?

On the other hand SUM have 7 years land supply, (assuming they have learned something from the Boulcott site), that gives them heaps of land bank to develop.

For what its worth mate (and I bow to your greater expertise with knowledge of the sector), but I think there's heaps of room for SUM to grow in N.Z.