SUM - Summerset Group

[Beagle]

After careful analysis of the full year accounts the best word for the result is:

'ludicrous'.

At some point this is all going to have to slow down.

Best Wishes
Paper Tiger


Disc: hold

Not for a long while yet. Strong demographic tailwinds for the next 20 years ! Shareholders have a tiger by the tail with this one and are hanging on for the ride of their life !
Lets the good times roll..oh gosh wasn't that a Cars song https://www.youtube.com/watch?v=7BDBzgHXf64

[troyvdh]

I agree Tiger..usually I look at the SP trajectory...SUM hasn't reached previous highs has it,,?

[winner69]

After careful analysis of the full year accounts the best word for the result is:

'ludicrous'.

At some point this is all going to have to slow down.

Best Wishes
Paper Tiger

Disc: hold

Total revaluations are ~11% of the portfolio - suppose in line with property price increases we have seen

Even more than I expected with my $120m npat forecast

Property market has to cool sometime eh - maybe punters are still a bit wary

[winner69]

I agree Tiger..usually I look at the SP trajectory...SUM hasn't reached previous highs has it,,?

So true mate

Was $5.60 in September so still a bit below that

Just shows you how much sentiment has turned against the retirement and property sectors

No worries though

[kizame]

Attachment 8706

Monthly chart trajectory

[winner69]

I see fair value as 4.60 for this share, based on a discounted cashflow model and a lot of assumptions, but hey got to put a value on it somehow..

Either way I am happy to pay a fair price for a good company.

Consider redoing your sums after this announcement?

You were probably a bit light for F16 .... but then again the future is more important eh

[James108]

Consider redoing your sums after this announcement?

You were probably a bit light for F16 .... but then again the future is more important eh

Yes, without looking in depth yet there are atleast two things in this announcement that should increase my models fair value:

1. build rate increased to 450 (I assumed 425). However the long term build rate is by far more important (build rate can't grow forever) and given aggressive ramp up it may be appropriate to revise upwards (I assumed long term build rate 500/year).
2. Development margin much higher than expected, however may be due to housing boom, at this stage I am reluctant to change assumed long term average of 17%

[Lewylewylewy]

...Property market has to cool sometime eh - maybe punters are still a bit wary

Exactly correct. I see these stumbling along upwards, carefully. They're posed to become a bargain, but at risk of dropping if the housing market falls. I'll be riding these as close as possible to that fall (if it happens - it may just stagnate, which will mean only a bit of a drop).

Their story will be an interesting one over the next 20 years, but won't be a buy and hold for gains every single year.

Disc: Hold a modest portion, which sit in my long term hold category. I may dip in and out of these over the years.

[stevevai1983]

Yes, without looking in depth yet there are atleast two things in this announcement that should increase my models fair value:

1. build rate increased to 450 (I assumed 425). However the long term build rate is by far more important (build rate can't grow forever) and given aggressive ramp up it may be appropriate to revise upwards (I assumed long term build rate 500/year).
2. Development margin much higher than expected, however may be due to housing boom, at this stage I am reluctant to change assumed long term average of 17%

This year's exceptional results are mainly due to increase build rate + increase in development margin. especially development margin, if next year margin reduce to 20% and build 450units, the growth will be small.

[Beagle]

http://www.stuff.co.nz/business/8976...+February+2017

Must say Julian Cook is looking young, fit and very healthy...just like Summerset