RYM - Ryman Healthcare

[iceman]

I agree First NZ are great brokers with an excellent research arm. But that doesn't mean I follow them blindly. (I was the one who first posted the $6.95 valuation on this website when it came through to me)

I have sold another 7% of my holding at $6.47. Roughly 14% of my holding now sold these last two days. That's enough for now though.

My own spreadsheet (which has served me well when identifying RYM as a screaming buy), now tells me that RYM is 25% overvalued on its 2012 earnings, and 15% overvalued on the expected EPS of around 19.6cps. (That is based on underlying earnings, rather than NPAT, which is how the company reports)

Now, if Ryman were to uprate their earnings growth rate to around 25% per annum (from a consistent 15-16%) for the next five years, I would consider the current price a good entry price.

However, I see that as hugely unlikely. It is possible an ASX launch may boost the price, but that is relying on "some greater fool" rather than earnings fundamentals.

I therefore agree with Paper Tiger above that people buying today are paying for an earnings capability that is at least two years down the line.

That being said, I still hold 85% of the holding I had as of Friday last week. It's hardly that I hate the stock, just that I think it prudent to take some profits after what I consider an absolutely stellar run since 2011. I wish those buying in in 2013 all the best, because it's still in my interest to see Ryman do well!

Sparky, may I just say that I have followed your very thorough and well considered comments on this stock (SUM & PGW as well) for quite a while now. I appreciate them enormously because you have both knowledge and time that I don't have to research these companies in much greater detail than I possibly can. Along with other great posters here that have taught and helped me a lot, I would like to share a little story to say thanks to all of you.

Early last year my 2 teenage daughters had to sell (other party wanted out) a half share in a bach in a highly priced North Island beach holiday area, that they got from their mother and I when we divorced many years ago.
We decided to put 30% of their money in the NZX. Of that we put 50% in RYM, 35% in HNZ and 15% in CEN.

Today we sold half the RYM shares and have sold all the CEN shares since Norman-geddon. We are currently looking at using the receipt of those sales to buy back the half share in the bach, although my daughters who did not really want to invest on the NZX last year, now question whether we should move so much cash into property again
They suggest (not overly influenced by Dad) they should put it into SUM, PGW, AIA and SAN so we probably will !

My 17 & 15 year old daughters are pretty happy and would like to say thanks to you STC and all the other posters on here that so freely share their great knowledge. I second that without hesitation !

[janner]

You are not alone with those thoughts iceman..

We all learn from this site.. From the many contributors.. Sparky ( bless his cotton socks ) just learnt about Coppocks..

The more we all give,..

Well you know the rest of that statement..

[iceman]

I would be completely amiss if I wrote such a complementary post on RYM like I did above and thanking the influential posters for my daughters, without formally mentioning Sauce. He/She more than anyone got my focus on RYM originally (my own shareholding goes back much further than my daughters investment). My apologies for not including Sauce in my thank you message above but that's the risk I ran with even thanking/naming anyone

[troyvdh]

I do not believe (I could be wrong) that any major holders have sold. That would be a game changer....true ?

[Beagle]

And they are ??? :-))

Summerset is another one worth taking a long term position in, in my opinion.

[enzed staffy]

Has anyone seen the ryman result due out today?

[enzed staffy]

oh apologies its tomorrow

[Pakiri]

Underlying profit just over $100.2 million. Final dividend 5.4cps

[Beagle]

Not highlighted in their announcement but i did the comparison with last years profit announcement and last year operating cashflows improved 27% to $169m and this year they increased 31.4% to $222m !!

Acqusition of new property at Birkenhead Auckland. I am very pleased to see them adding to their Auckland development programme.

Very happy with the result which is at the top end of my expectations.

[skid]

Iceman, that's the coolest thing I've read in a long time. Thank you for sharing the story with us, which serves to show an important lesson - Shares exist to serve us.

Buying back your share in the bach is in my opinion the BEST thing you can do because it will deliver you and your girls much joy. I can't think of a better outcome than using profits to boost your lifestyle with an asset which will also gain over time. Not that you should listen to an anonymous clown on the Internet....

Be careful what new equities you buy now, it's pretty expensive out there.

Sound advice-Ive heard that holiday batches have pulled back a bit .If thats the case you may get some change out of your purchase back in.
In terms of shares -things have surged so much that it seems logical that the market is becoming overbought-if thats the case,buying back in after the correction would be good buying[or simply avoid the loss]