RYM - Ryman Healthcare

[couta1]

Don't get it mate but probably offensive but I am thick skinned

You have your strategy which you sticking to and I don't rubbish you for that.

Check in again when RYM shareprice starts with a 6 - my head might have come out of the sand by then

The icon wearing the glasses indicates it was a tongue in cheek kinda comment there winner, no offense intended. PS- You really will need the stubborness of a mule to see a 6 in front of this share IMHO.

[Beagle]

I'll be sticking with my formula on a PE of 8.5 for a no growth company plus the five year average of EPS growth. This suggests PE in the mid 20's is fair value x whatever their underlying profit is and last time I worked these numbers it had a 6 in front of it. I'll have another look at it tomorrow when we get the latest EPS numbers and growth but an underlying EPS gain of less than 20% is my pick but broadly speaking I agree with W69's prognosis.

Ryman is a fantastic company and extremely well run, a company that other players in the industry especially SUM could learn a lot from, a company that's got ahead of itself in term of a fair price based on earnings which is why over the last 12 months its so dramatically under-performed the market as I posted yesterday and why it will continue to do so in my opinion for the foreseeable future until it trades on a fair price earnings ratio for the current growth rate. My chequebook stays in my pocket until RYM trades at what I consider to be a fair price and if that makes me a donkey, mule, horse or any other type of equine creature in others eyes, I'm all good with that Let's not forget the company's own stated medium term objective is for medium term EPS growth of 15%. Which investment bible please tell, suggests this modest growth warrants a PE north of 30 ????

Very few of you know how hard real estate has been belted around many of the provinces in N.Z. like I do being well connected with the GM N.Z. of one of the major real estate agencies who's travelling around N.Z. all the time...chinks are starting to appear in bullet-proof armour that many of you think is a never ending cycle of ongoing significant revaluations, you mark my words there are issues on the horizon.

As I said many many months back, it probably won't ever get down to my buy price of circa $6.50, far more likely the SP will track sideways for a significant period of time allowing EPS growth to gradually catch up to enable the $8 or thereabouts to be fair value...and of course what has the SP done for all those months, exactly what I said would be the most likely scenario. In the meantime while Ryman shareholders have had ostensibly no growth in SP for 12 months and a pretty pathetic unimputed dividend of only 1.5% the NZX50 has gone up quite considerably. RYM is red hot favourite in my book to significantly underperform the NZX50 in 2015 with my other trifecta picks for massive underperformance being SUM and XRO.

One day the company will have to start paying tax, let's not forget the quality of their results is very poor in that they're basically not paying any tax at present which is a situation that surely can't last indefinitely, so normalise their profit by the company tax rate of 28% and the valuation looks even more stretched

[couta1]

Hey Roger I thought you were picking Sum as the red hot favorite to underperform the NZX50 in 2015 so your putting a dollar each way now but wait what about Met? (The other horse that's run ahead of itself)

[Beagle]

MET on a PE of 21 last time I looked so misses out on my trifecta bet by a nose. Development margin of over 20% at MET, margins Norah and team can only dream about.

[couta1]

MET on a PE of 21 last time I looked so misses out on my trifecta bet by a nose. Development margin of over 20% at MET, margins Norah and team can only dream about.

First appearances can be deceiving Met have a lot of issues to face that Rym and Sum don't in terms of buildingcost maintenance and less geographical diversity etc but tthat's another story. Anyway interesting day for Rym tomorrow re markets reaction or not to half yearly.

[winner69]

I reckon underlying earnings around $70m .... consistent to past performance

[winner69]

I reckon underlying earnings around $70m .... consistent to past performance

Whoops - I got a bit over excited ..only $66m

They will catch up in second half

[winner69]

The 37% increase in real profits is fantastic .....shareholders a lot wealthier now with sort of increase in book value.

[Vaygor1]

The 37% increase in real profits is fantastic .....shareholders a lot wealthier now with sort of increase in book value.

Yes. Another whopper in EPS increase which will eventually translate into Underlying Value.
13% increase in U.V. less than I was expecting. I was thinking 18% with fingers crossed for 20%
Will be watching the webcast in 10 minutes.

[Beagle]

Ryman posts improved underlying profit performance but growth slows to the slowest in many years.
Underlying profit was $66.3m on 500m shares = 13.26 cents per share at a growth rate of only 13%.

13.26cps x 2 suggests full year underlying earnings of 26.52 cents per share.

Taking into account that EPS growth , (after many years of very comfortably exceeding their medium term target of 15%) is now struggling to get there then I see fair value assuming they can in fact meet their 15% medium term profit growth target on a consistent basis going forward, (which is no certainty,) as a PE of 23.5 using my 8.5 PE + medium term growth, (15) so fair value $6.23.

I expect a lengthy ongoing period of market underperformance as reality bites based on slowing growth. Stock is presently over-priced by 30% in my opinion but I am pretty sure others will have a different opinion and that's fine