RYM - Ryman Healthcare

[Vaygor1]

Raising the tone a bit, (hopefully), what I find more than a little frustrating is that while SUM appears to be substaintially better value than RYM, (last years profit growth 46%) for a PEG of well under 1, PEG of Ryman is about 2, Sum's reluctance to give any forward guidance (other than it won't replicate last years growth rate), is somewhat annoying, especially seeing as its peer group, both MET and RYM are happy to do so, (note MET's projected profit upgrade today). I think SUM's directors need to have a think about this at some stage in the future.

I too would be frustrated with SUM's silence on forward guidance, especially after announcing they won't replicate last year's growth rate… a statement that I feel needs some kind of basis to back it up and should additionally provide some kind of guidance band/range. I mean, as Harvey Specter alludes to, does 'wont replicate' imply a better or worse result compared to last year? It certainly begs the question.

My own take on SUM is that they are a good company with a great future. While Norah Barlow was MD & CEO I have had my trust in them dented a few times by for example this piece of prose written about herself around 2010/2011:

"Ms Barlow has Summerset Retirement Villages starting to sway to a 'more interpretive consumer' rhythm. As her competitors build by rote, she, with the finest attuned ear in the sector, has subtlety reshaped the product to meet a market in flux."

In my experience is that this sort of stuff is auto-biographical 99% of the time; the same sort of fluff that Rakon would write about themselves.

With Norah gone now (as I understand), I will be very keen to take a fresh look at SUM, but not before the next set of audited results come out. In my (possibly paranoid ) mind there is a small chance that SUM's latest sterling results might have been a little too ahead of themselves at the expense of next year's figures. Something that I hope with all sincerity is not the case.

[Beagle]

^^ I don't have any qualms about the veracity of the financial results. To be clear, there's absolutely no question in my mind that they're talking lower growth this year. I guess they've clearly articulated their forward build guidance and report quarterly sales results, (others in the sector don't), so I figure, (for now anyway), its up too analysts and investors to try and extrapolate the dots for themselves but I would muse that perhaps this lack of meaningful forward guidance in some small way may have contributed to SUM underperforming its peers over the last year in particular ?

[Beagle]

Guys, SUM hasn't underperformed its peers over the last year. Only its SP has. Huge difference.

What do you attribute that too ?

[Onion]

Sentiment. Basically, the market hasn't yet realised the potential of SUM. When it does, expect much more rapid SP growth

You sound just like couta!

[Joshuatree]

lol thats what i thought too Onion. Be great to see some of this extensive research you've "done" new guy.

[blocker3]

My crude rule of thumb is that SUM is half the price of RYM (last year) .So is now RYM to over valued (YES in my opinion) or is SUM to under valued ( YES in my opinion).

Interesting

[Joshuatree]

Any newspaper articles we can check on that?

[Beagle]

My crude rule of thumb is that SUM is half the price of RYM (last year) .So is now RYM to over valued (YES in my opinion) or is SUM to under valued ( YES in my opinion).

Interesting

Pretty much how I see it too. SUM are fair value around $3.50 and RYM around $6.50 IMHO. Anything above that is blue sky market darling stuff and I for one will never pay for market darling status where its not backed up by fundamentals. SUM need more runs on the board to justify a higher price than this.
RYM need to keep growing at the same rate, (18%) to justify anything like their current SP and I doubt that will happen.

[stoploss]

Pretty much how I see it too. SUM are fair value around $3.50 and RYM around $6.50 IMHO. Anything above that is blue sky market darling stuff and I for one will never pay for market darling status where its not backed up by fundamentals. SUM need more runs on the board to justify a higher price than this.
RYM need to keep growing at the same rate, (18%) to justify anything like their current SP and I doubt that will happen.

Roger , do you work for Morningstar ?

[stoploss]

harsh call, stoploss.

I totally agree with Roger. SUM is well priced, while RYM is overpriced. No emotion, just cold hard facts.

I suppose the upside will be , we won't have to hear from Rog on the RYM thread until the s/p is $ 6.50 !!!!!