RYM - Ryman Healthcare

[In4a$]

Sold at $8.88 to someone who paid too much for them like I did for my Xros and others,off to work at a Ryman facility now naked of shares for a few weeks or maybe months,have a nice day all

Nice profit Couta , It's a great feeling going home on a Friday having made a few bob on the sharemarket

[Beagle]

Sold at $8.88 to someone who paid too much for them like I did for my Xros and others,off to work at a Ryman facility now naked of shares for a few weeks or maybe months,have a nice day all

Congrats mate, nice trade and great sale price. PE is FAR too high at the current price so definitly a good sale in my opinion.
Thanks again for the lift the airport the other day

[troyvdh]

Dear Winner no offence intended its my belief that the RYM share price will never reach $15 "they" are to smart to allow that to happen...."they" had a share split a few years back at about $11...I believe it was 5/1...but I do get your point however.
Cheers troy

[winner69]

Congrats mate, nice trade and great sale price. PE is FAR too high at the current price so definitly a good sale in my opinion.
Thanks again for the lift the airport the other day

Long at a lot of things when only considering 'half cycles' is a bit dangerous, especially if one thins that recent trends are the norm.

RYM share price gone from $2 bucks odd to $8 bucks odd over the last 4 years or so. Great stuff reinforcing best buys are when market valuations are low. In that period RYM actual performance only accounts for 30% of the increased shareprice, the other 70% coming from multiple expansion / more positive market sentiment.

Back to the 'half' / 'whole' cycle concept. Over the whole market cycle from 2001 to now RYM average PE (underlying earnings) has been 22.. It's been as long as 13 and is at it highest now close to 40

Underlying earnings have grown at 22% pa over the same period. That average PE seems about right then.

So on a 'whole' cycle basis it is inevitable that RYM will see its PE fall below 20 (ouch). No much hop of any decent returns over the next 3 or 5 years if buying close to 9 bucks today (buy and hold that is)

No idea when but I will keep holding RYM as long as the current uptrend remains in place. When that broken take the profits and wait for the next big rise from wherever it will end up. (See you do need to follow those squiggly lines)

Interesting SUM is already undergoing a rerating down. Only a few years since floating so much to work on but it's PE since floating has drifted down from 40 odd to below 30. Looks like that heading to 20 odd as well (another ouch)

All a load of **** eh because this time is different eh. Old buggers like me don't think so and as Mr P said 'the market giveth and the market taketh away'. My approach is that I don't like that taketh away bit.

[Vaygor1]

…...RYM share price gone from $2 bucks odd to $8 bucks odd over the last 4 years or so.

You are factually correct in your statement Winner however RYM share price has also gone from $2 bucks odd to $8 bucks odd over the last 7 years.

Buying RYM at $2.10 in April 2007 was a great buy (I don't think anyone would argue with that), and then RYM got even cheaper from then until recovering back to the same price of $2.10 in about June 2010.

Using $2.10 in April 2007 as the datum, and using 25% growth increase year-on-year, I get the share price in April 2014 as $10.01

If I use $2.50 in April 2007 as a fair price for RYM as my datum and then use 20% as my year on year growth, I get a share price of $8.95 for April 2014.

I don't see anything unusual about RYM's current share price (I don't think you do either from reading your previous posts), and I can't see any reason why RYM's existing growth rate, whatever the measure, is going to diminish in the next 5-7 years.

It then follows that if one wants to invest in something that pays a dividend plus earns 20% return per annum by way of capital gain, then buying RYM now anywhere below $9 looks like a way of achieving it.

PE will drop considerably upon announcement in 11 days (assuming approx 20% growth in earnings) unless current share price climbs 20% to $10.67 in the same period, and I can't see that happening.

Disc: Holding.

[winner69]

You are factually correct in your statement Winner however RYM share price has also gone from $2 bucks odd to $8 bucks odd over the last 7 years.

Buying RYM at $2.10 in April 2007 was a great buy (I don't think anyone would argue with that), and then RYM got even cheaper from then until recovering back to the same price of $2.10 in about June 2010.

Using $2.10 in April 2007 as the datum, and using 25% growth increase year-on-year, I get the share price in April 2014 as $10.01

If I use $2.50 in April 2007 as a fair price for RYM as my datum and then use 20% as my year on year growth, I get a share price of $8.95 for April 2014.

I don't see anything unusual about RYM's current share price (I don't think you do either from reading your previous posts), and I can't see any reason why RYM's existing growth rate, whatever the measure, is going to diminish in the next 5-7 years.

It then follows that if one wants to invest in something that pays a dividend plus earns 20% return per annum by way of capital gain, then buying RYM now anywhere below $9 looks like a way of achieving it.

PE will drop considerably upon announcement in 11 days (assuming approx 20% growth in earnings) unless current share price climbs 20% to $10.67 in the same period, and I can't see that happening.

Disc: Holding.

All my historical numbers going back to last century are based on RYM financial years (September) and using December year end shareprices. At end of December the market has had time to digest the previous full result and to some extent includes anybody's first cut outlook for the following year

You are using April 2007 at 250 as a 'fair price'. That point in time was when RYM earnings multiple was at its previous highs - a PE of 35 on trailing earnings (FY06) or if punters forecast were spot on a PE of 31 on forecast earnings

As such I don't see 250 in April 2007 as a fair price to use as a starting point.

If was trading at average PE over the cycle of 22 then a fair price would have been 155 to 175

Lets take midpoint of 165 at April 2007 and multiple by 22% pa growth you get 663 for April 2014 - not quite 865

I just think you have picked a good starting point for your calcs, not a realistic one

RYM shareprice will hopefully increase for some time (maybe to the next US election) bit inevitably there will be a PE contraction. So not a good long term buy and hold investment at todays price I reckon

All a load of **** though - because this time its different eh

[Vaygor1]

I am not disagreeing with you Winner, just putting a different perspective on it.

What I do know is that purchasing at $2.15 in April 2007 was a move I am very pleased with (and I bought a lot more RYM for a lot cheaper as the price reached significantly lower levels after that, much to my pleasure and astonishment).

Dividends/share since then have paid me 47.44 cents to-date with another 6.6c/share (my forecast) due around 20 June bringing the total to 54.14 cents.

If dividends rise by an average of only 18%/annum from now on, then by June 2021, I will have received a total of $2.30 back in dividends alone from my $2.15 purchase. That makes the actual PE for that purchase only 2021-2007 = 14 on dividends alone let alone earnings. ( I guess you could call it a PD or Price Dividend Ratio of 14)

I find it difficult therefore to think that $1.65 in April 2007 would be considered a fair price with the benefit of hindsight we now all have and I would have happily bought for $2.50 if that was the price at the time knowing what I know now.

Oddly enough, using an April-2007 price datum of $2.25 and compounding by your 22%/annum, I get today's price at $9.05 … again, no surprises there from my viewpoint.

I am not saying you are wrong or right in any of this and I am not saying I am either. 'Fair price' is what we all strive to work out when buying/selling anything, including shares. It is the difference in what one person perceives as fair compared to another that makes this whole thing so interesting.

[winner69]

Agree with every word you say there vaygor. We both seem to have done very well.

You bought in 2007 when the PE was historically high and have been fortunate that the PE has continued to expand (slightly)

I bought in 2011 (at a slightly higher price than your but not that much higher) when the PR was sub 20 and have been fortunate to have benefitted from the doubling of RYMs PE / improved market sentiment)

I beliwve that the PE cant go any higher and inevitably some time it will fall to 20 again.

That's why I am following the squiggly line on the chart .... and keep most of what the market has giveth

[winner69]

Vaygor -

'Fair price' is what we all strive to work out when buying/selling anything, including shares. It is the difference in what one person perceives as fair compared to another that makes this whole thing so interesting.

Over time most things don't ever trade at 'fair price' / 'fair value' or whatever

Invariably the actual price is way abover or way below fair value. Take RYM as a case in point - if fair value was say at a PE of 22 than the actual price has only been within 5% of fair value only about 15%-20% of the time ...the rest of time it has been overvalued or undervalued

The ups and downs of the sharemarket eh

[winner69]

Really bored tonight

Updated an old chart from the archives

The black line is RYM actual price (monthly) and the red line is a price at 22 times underlying earnings. The September year reported eps number is pushed back to previous April (market is clever forecasting a year end result) and advanced to the next March (market knows previous years result but not quite sure of the next number). A sort of trailing as well as forecast PE.

So significant periods of being 'under valued' but heck it surely is overvalued at the moment