Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.
Don't mess with the Couta Theorum mate, it's got a very long proven track record. PS-Have you thought about which country your going to head to. PPS-I'm currently working at a Ryman facility.
The Couta Theory is one with a long proven track record - however, since SUM's last earnings report and another year of 40% growth, I don't see the 1:0.5 ratio returning. Market forces can only withstand that sort of pressure for so long until the Couta Theory becomes folklore. In saying that, the Couta Theory should be discussed by Directors at both of their AGM's.
Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.
Then why has SUMs shareprice only increased at about the half the rate that earnings have grown
PE has contracted steadily while earnings are booming .... interesting
Maybe retirement sector stocks are priced on other things than a profit multiple ... which really is a methodology used by most to avoid a bit of hard yakka
Anyway SUMs PE ratio of the years below. RYM trend is much the same (but of course bigger numbers)
At the top of every bubble, everyone is convinced it's not yet a bubble.
The Couta Theory is one with a long proven track record - however, since SUM's last earnings report and another year of 40% growth, I don't see the 1:0.5 ratio returning. Market forces can only withstand that sort of pressure for so long until the Couta Theory becomes folklore. In saying that, the Couta Theory should be discussed by Directors at both of their AGM's.
SUM will grow slower from here on in, about 20-25%this year and then in around 3 years will be 15% like RYM, hence the Couta Theory will remain intact.
SUM will grow slower from here on in, about 20-25%this year and then in around 3 years will be 15% like RYM, hence the Couta Theory will remain intact.
LOL mate. Share prices follow earnings and future earnings expectations. Always have done and always will do. Future relativity will be a function of their relative underlying EPS and growth rates of the two companies and perceptions about future growth rates in underlying earnings. I still have SUM at $100m underlying at this stage for 44 cps which puts them on a forward PE of just 16.6 and this for a company that's demonstrated over the last 6 years an underlying earnings compound growth rate average of 45% per annum.
I agree with your assessment of SUM's growth rate this year. Too early to say regarding next year or the year after but they are investigating Australia carefully and are on record at looking to ramp their build rate up to ~ 600 units per annum over the next few years. RYM on the other hand probably trading on a forward PE of about 25 at the current price and I would expect a continuation of their 15% growth rate for the foreseeable future. RYM fairly valued in the late $11's in my opinion, SUM others like SUM and OCA are better value with the (same / slightly better) growth prospects.
Last edited by Beagle; 06-06-2018 at 12:26 PM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Market happy with SUMs PE of 16/17 and to me that seems a pretty realistic price
So share price will hang around the low 700s until punters start thinking about next, probably sometime after half year and some guidance. Thatll be the trigger to take it to 830/850 early next year
Yes share price will follow earnings expectations
At the top of every bubble, everyone is convinced it's not yet a bubble.
So with respect to RYM, another reasonable year of ~15% growth took them to underlying earnings of $203.5m or 40.7 cps. If they replicate that again this year we'll see 46.8 cps. I reckon a forward PE of 23.5 has always been good value for RYM so good value in my book is $11 and I back that multiple up with many many years of watching their SP. Anything more than that its getting a bit ahead of itself in my opinion and leads to short term underperformance.
2020 or 2021 year we could see SUM's EPS exceed RYM's. The effect on their relative share prices could be interesting to watch.
Last edited by Beagle; 06-06-2018 at 02:51 PM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Probably SUM shareprice about 55%/60% of RYM shareprice if that earnings scenario played out
You asked .......
LOL I'm not biting anymore
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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