SUM - Summerset Group

[couta1]

Silk Roger and I only mentioned 5 year point of reference remember this is a long term investment as Norah Barlow so apptly put several months ago

[couta1]

Sorry Silk not silk

[couta1]

Sorry my tablet has developed a key malfunction keeps changing your name to silk

[iceman]

Sorry my tablet has developed a key malfunction keeps changing your name to silk

Maybe you need to connect your tablet to the Chorus fibre network again

[couta1]

Nah Iceman I'll stick with copper its fast enough for me and of course will be much cheaper after Dec2014

[Beagle]

Is 25% per annum growth really such an unrealistic expectation ?

2012 Underlying profit up 88% year on year
http://www.summerset.co.nz/investor_...se%20FINAL.pdf


2013 half year Underlying profit up 45.4% on previous compareable period
http://www.summerset.co.nz/investor_...r%20Report.pdf

Clearly defined growth stratagy and land bank for 5 years + development already on
hand.

Speculation or well founded growth investment, you decide for yourselves.

[Snow Leopard]

To be honest I have come to the conclusion that I do not really know how to value MET, RYM or SUM. The models I am comfortable with give much lower values than the numbers most brokers and the optimists of ShareTrader throw around.

BUT.
For my model that gives RYM a current value of $7.525 on a 15% growth rate:

For SUM with a 15% growth rate of their current profit (of $20M9) : $3.240;
For MET with a 15% growth rate of their current profit (of $56M6) : $3.836;

Now whilst I expect RYM to follow the model, I fully expect both SUM and MET to pick their game up, SUM quicker that others (MET) .
So both should really be valued higher, but I have not yet done the work to come up with what I would consider realistic scenarios.

So as a conclusion I would suggest that according to the majority world view then currently:
RYM is fully priced;
MET is probably fully priced;
SUM is cheap.

I hold all three of these and taken together they constitute 36% of my total NZX holdings and whilst they are going up I will keep them.

[Another] BUT
I worry that current valuations of these companies have actually lost sight of the fundamentals of what these companies consist of how they should be actually be valued.

Best Wishes
Paper Tiger

[Beagle]

^^Well...without wishing to overstate the completly obvious, I think its pretty clear that SUM is growing much faster than Ryman's average of 15% and has more room to do so with its improving margins by bringing development in-house. That and management are clearly focused on the task in N.Z and don't have thr risk of overseas expansion.

[Goldstein]

To be honest I have come to the conclusion that I do not really know how to value MET, RYM or SUM. The models I am comfortable with give much lower values than the numbers most brokers and the optimists of ShareTrader throw around.

BUT.
For my model that gives RYM a current value of $7.525 on a 15% growth rate:

For SUM with a 15% growth rate of their current profit (of $20M9) : $3.240;
For MET with a 15% growth rate of their current profit (of $56M6) : $3.836;

Now whilst I expect RYM to follow the model, I fully expect both SUM and MET to pick their game up, SUM quicker that others (MET) .
So both should really be valued higher, but I have not yet done the work to come up with what I would consider realistic scenarios.

So as a conclusion I would suggest that according to the majority world view then currently:
RYM is fully priced;
MET is probably fully priced;
SUM is cheap.

I hold all three of these and taken together they constitute 36% of my total NZX holdings and whilst they are going up I will keep them.

[Another] BUT
I worry that current valuations of these companies have actually lost sight of the fundamentals of what these companies consist of how they should be actually be valued.

Best Wishes
Paper Tiger

Thanks PT.

I think there are a few intangibles here. SUM seem to be developing a good brand as mentioned previously. I hope this carries on as some of the management are retiring.

I'd love to know where RYM came in the list of Australasian retirement companies of which SUM leads the pack as far as happy residents go.

SUM also seems to purchase jolly nice sites.

[percy]

The retirement village sector is strengthening with the strong companies,MET,RYM,SUM ,BUPA[16 villages], and wealthy investors being attracted to the sector.
There is room for all these companies, and I am sure they will raise the sector's standards,and services.