SUM - Summerset Group

[hardt]

I see Salt Funds is short retirement villages. From their latest June fact sheet:



https://static1.squarespace.com/stat...+June+2017.pdf

Queue sad trombone for that 2.7% return this year for Salt Funds.

[winner69]

Love this bit of advice in that newsletter -

For those chasing unsustainable NZ dividend yields you are at major risk. It is easy to get lured into the lobster pot but it is a lot more difficult to get out again.

[Beagle]

Honestly mate, with performance like they're "achieving" I didn't even bother to read their commentary, why would Top Dog or the Hound bother to listen to their advice !

[percy]

Is it possible to short Salt.?

[Joshuatree]

Which one lol

[trader_jackson]

I see Salt Funds is short retirement villages. From their latest June fact sheet:



https://static1.squarespace.com/stat...+June+2017.pdf

Isn't Metlifecare one of their largest longs??

[Bjauck]

Have you seen the new Hobsonville Village ?...
... For a couple of hours there I was wishing I was 70 and could move in already

No...not yet. It is good that they are providing a range of residence sizes and locations. Those waterfront units could tempt existing residents by the sounds of them...I am not certain but I think licencees can move between villages without incurring deferred management fees a second time*.

I think I was born a senior...I would have loved the security and relative tranquility of a village from my 20's onwards.

* We have an excellent transfer policy, and the Deferred Management Fee is only ever paid once, even if you move to another home within a Summerset village. However for people who move into a Summerset care suite that provides dementia care (currently planned for our Levin village), the Deferred Management Fee will be payable again.
https://www.summerset.co.nz/why- -5cs/certainty/

Can I transfer to another village?

Yes, Summerset has one of the best transfer policies in the country. Conditions apply.
https://www.summerset.co.nz/karaka/faqs/show/costs

Disc: Long term holder

[James108]

Honestly mate, with performance like they're "achieving" I didn't even bother to read their commentary, why would Top Dog or the Hound bother to listen to their advice !

They have outperformed the NZX50/ASX200 over the last 3 years (since their inception). Looks like they are achieving fine so far..

[Joshuatree]

Thanks Thor. Looking at this Salt snippet from the outside ;an investor who wants to get in at some point I concur with this snippet from Salt. Different if you're still in; ride it out maybe?.All about managing risk.

"The Fund remains slightly net short the retirement village sector butdid cover its mid-sized Summerset short near its lows as share pricesfell sharply during the month as the long-awaited housing slowdownbegan to be priced in. We now have a large long in Metlifecare, a largeshort in Ryman, a tiny short in Arvida and a modest short inSummerset which we put back on after it bounced on a (last??)earnings upgrade late in the month.
We have waxed lyrical (or cacophonous) on many occasions abouthow retirement village investors are facing potentially significantbalance sheet risk when housing and thence retirement unit salesslow. While we model each name out fully, we think very simply about



relative positioning in the sector.

Who would want to own a propertydeveloper after the market has peaked?

Who would pay multiples of adeveloper’s NTA for developments not just on the land that theycurrently own but on future land purchases that are merely a glint intheir eye?

That is the situation with Ryman and Summerset. Our issueis not their management capability but their balance sheets andvaluation now that the housing market has turned.


Conversely, Metlifecare is at a 10-15% discount to NTA, with this beinglargely locked in and it will be progressively realised as currentoccupants gradually pass away. Moreover, their balance sheet is farless geared, making them less vulnerable in the event that the currentstagnation in house prices and sharp contraction in house salesmorphs into something nastier."

[winner69]

From Salt -

Who would pay multiples of adeveloper’s NTA for developments not just on the land that they currently own but on future land purchases that are merely a glint in their eye?

When I said something similar a few weeks ago I got told things like 'you can do better' etc and generally lambasted. Apparently Saying or even thinking such things means one 'just doesn't get it (the model that is)

Maybe Salt don't 'get it' either and could do better.

Note 1: SUM NTA is about $2.50.
Note 2: is there really going to be a property market collapse anyway?