SUM - Summerset Group

[Beagle]

Looks like its continuing.

Sorry peat I don't follow the logic of you posting an old wedge pattern from a few months ago when the price was $4.97 ? Time to update your chart I reckon and to me its seems perfectly clear we have a breakout from that wedge pattern now at a closing price of $5.50. SUM stocks on the NZX are very cheap on a forward earnings basis and this is one of them so I am expecting big things for 2018 for the SUM share price as the market finally wakes up that this company has a very resilient business model that's well capable of generating strong earnings growth in a flat real estate market.

[JeremyALD]

Will we finally see this breakout into the $6 range? Surely it's time. I can't handle yet another fall back down into the $4s haha

[Yoda]

Nearly back to where we were 15 months ago......
Its been a long time coming.

[winner69]

Will we finally see this breakout into the $6 range? Surely it's time. I can't handle yet another fall back down into the $4s haha

That 6 bucks a certainty and not too far away either.

Looking ahead F18 earnings +20% so growth alone could take share price to $6.60

SUM been punished for some reason by the market over the last year or so and ‘rerated’ down and PE down to about 15

Just a little rerating upwards will add another $2 to the share price and that’s just taking to the PE to 17. Nothing dramatic

So next year we could easily see $7.60 as the SUM share price,

Jeremy - I reckon you are going to have a boomer of a year in 2018 with your value / cheap stocks. They reckon ‘value’ has been out of favour for too long and ‘growth’ stocks have gone as far as they realistically can - so ‘value’ will be the big thing. That’s your forte eh - boomer year coming up for you mate.

Don’t forget with SUM you get ‘value’ as well as ‘growth’ in 2018. Good eh.

[winner69]

That pre Xmas announcement of much better earnings than previously forecasted was really good news.

As intimated above the timing also suggested that new unit sales didn’t reach the 450 they have been touting for a long time. The early January announcement will probably go along the lines of ‘New unit sales of 420 for the year were slightly down on guidance because of delays in processing things which held up final settlement. Nonetheless we have been making heaps out of the sales we have made and will make more money than we told you a few months ago’

So in reality selling less units than expected but making heaps more than expected on the sales made. The media created property collapse really hurting eh ....which proves the media and reality are poles apart.

The best part is they have a pretty good kick start to the new year with say 30 extra sales being finalised in January - on top of the ones they expected to sell in the March quarter

Might need to revise your F18 expectations upwards Mr Beagle

[Beagle]

Good posts winner I agree 100%. While its likely that they won't make the 450 new build this year, (the timing and quantum of the profit upgrade announcement together with its tight range was clearly issued to give investors some comfort ahead of what is most probably going to be slightly disappointing Q4 sales numbers), by implication after 10 months of really wet weather and now we're in a golden spell of fine weather I would imagine this will allow their builders to catch up over summer and should allow a great completion rate over Q1 in FY18.

Too early to talk FY18 number with any confidence but as you know my preliminary thinking based on higher numbers of resale's at higher level's of embedded value and running with 450 sales for FY18, I think ~ $100m underlying profit is potentially achievable for underlying EPS of 45 cps. If the market starts to understand the resilience of their business model in normal market conditions it might apply a normal market PE again which could see serious market outperformance next year.
I think this has genuine potential for a total shareholder return of ~ 50% next year.

[winner69]

Almost a new all time high

Whether it’s 560 or 562 or 565 doesn’t really matter - it’ll be 600+ soon

This just the breakout or whatever they call it

[Beagle]

Yeap...the Couta relativity theory is going to get busted big time in 2018. RYM trading at a Rolls Royce forward PE while SUM companies growing twice as fast trade on half its PE but nothing ever goes wrong with Rolls Royce engines does it

[couta1]

Yeap...the Couta relativity theory is going to get busted big time in 2018. RYM trading at a Rolls Royce forward PE while SUM companies growing twice as fast trade on half its PE but nothing ever goes wrong with Rolls Royce engines does it

Low volume holiday noise at the moment, small fish hoping to get a feed of the Q4 metrics, need to wait a bit longer to get a clear signal. Time will tell if the Reversion to the mean stranglehold will be broken.

[dabsman]

Very happy with price but will be happier it stays at this level or moves forward when everyone comes back from holiday in mid January