RYM - Ryman Healthcare

[peat]

All residents/businesses of Christchurch,Kaikoura and now Wellington, are finding out the simple joys of dealing with insurance companies.
I for one would never again buy shares in an insurance company.

Buffett likes them. I'm nervous about climate volatility meaning they dont get the premiums correct. But oops, off topic. Hey Hi Ryman! hows that price/nta ratio up there?

[Beagle]

Hi Roger.

Thanks for your post. I tried to add a reputation comment for it except the system won't presently let me.

I have been a bit quiet on ST of late but have come to realise that my level of contribution activity is quite variable. At times very active, and at times not. It seems that once I get into the mode of posting the activity level stays high for a while. Maybe this post will be a catalyst for another 3 month flurry.

Enjoying a circa 10% (pretax) dividend based on RYM acquisition costs is nice - no denying that.
However the real attraction is the dividend (as it has done to-date) will continue to grow at an average minimum compounding rate of 15% per annum for the foreseeable future.
RYM may well strike a bump in the road in the next 18 months in my view, however I believe the dividend growth will continue unabated given their financial position and access to free cash flow.
Further, in my view such a bump (should it occur) will have zero impact on RYM's medium term goal of averaging minimum 15% growth per annum in underlying profit.

When I started buying RYM at $2.11 in September 2007, the share was just as expensive then as it is now given it's metrics at the time, so I wouldn't say I bought them cheaply. Some people thought I was mad paying over $2, however buying RYM today at under $9/share today is no more expensive than $2.11 back then... and in 10 years time when RYM is $50/share people will think under $9/share back in good ol' 2017 was a real bargain.

Unfortunately we never got the chance to talk much at the recent Auckland ST meeting. Would be nice to have a 2nd Auckland meeting this year... around earlyish September say?... thoughts?

Vaygor1.

Hi Vaygor1,

Yes absolutely it would be great to have a good chance to chew the fat with you mate as I missed having a good yack with you at the last meeting. I was down one end or the other of the long table and you were in the middle, never mind it looked like you enjoyed yourself and others enjoyed themselves very much too. Can't see any reason we shouldn't have a Sept get together, give other Auckland ST folks and us a good chance to chew the fact on 30 June results announced in August.

[Zaphod]

Buffett likes them. I'm nervous about climate volatility meaning they dont get the premiums correct. But oops, off topic. Hey Hi Ryman! hows that price/nta ratio up there?

He seems to love the entire chain, from retail insurers right up to the reinsurance business. Very surprising in some respects, but obviously I defer to his financial wisdom.

[couta1]

Chart starting to look ugly.

[Beagle]

Chart starting to look ugly.

See previous comments on this thread and many comments on SUM thread. I believe SUM and to some extent MET are considerably better value than RYM and have better medium term prospects for profit growth ARV also fully priced in my opinion.
The charts of both SUM and MET look fine whereas as you point out RYM has had a clear break down through its 100 day moving average and is looking very weak from a TA perspective and you know what I think from a fundamental perspective. Many others are copying a lot of RYM's systems, fixed fee for life for example and others are learning fast how to develop their properties and make highly satisfactory development margins with further scope for improvement.
RYM no longer deserve any PE premium with little or no scope to improve their already well perfected operational and development systems. Two more years in the wilderness for RYM shareholders eating nothing but 1.5% unimputed dividends and unless you bought them very cheaply you can hardly feed a sparrow on that dividend yield.

[allfromacell]

I think the market is just a little cautious of the property market at the moment. There is now 2440 Properties in Auckland City listed for sale on Trademe up almost 15% from the start of the year. Regardless of your business model when you own billions of dollars worth of property your value will drop when property valuations drops.

Long term of course this sector will do great.

[Beagle]

I think the market is just a little cautious of the property market at the moment. There is now 2440 Properties in Auckland City listed for sale on Trademe up almost 15% from the start of the year. Regardless of your business model when you own billions of dollars worth of property your value will drop when property valuations drops.

Long term of course this sector will do great.

Just be a bit careful with stat's like that. A lot of people withdraw their property from sale over the Christmas holidays because they'd rather go on holiday than deal with tyre kickers and time wasters and then relist in late January when they get back.

[allfromacell]

Just be a bit careful with stat's like that. A lot of people withdraw their property from sale over the Christmas holidays because they'd rather go on holiday than deal with tyre kickers and time wasters and then relist in late January when they get back.

Fair enough, I should have clarified I'm taking from January / February and not counting the Xmas period where they were far lower (1767 was as low as I saw, but yes it's irrelevant). The point is the trend is going one way.

[macduffy]

Demolition was to start on 9 January, but 2 months later (and 4 months since the earthquake) progress with demolition is essentially nil.

A popular guess is that the insurer disagrees with the need for demolition, and - indeed - Ryman initially told residents that all was well except for a problem at one end. Ryman was at the point of starting an upgrade when the quake struck, the cost of which will conveniently be avoided with a full insurance payout. Never mind the wellbeing of residents from from the damaged block, most of whom have been relocated to Bob Scott village, and are in many cases miserable being away from their friends, doctors, hairdressers, shops, etc.

Pleased to report that I detoured this morning past Malvina Major Village and that demolition of the damaged block is well underway. Large trees have been removed, heavy machinery on site and hard hats busy removing windows.

[Gerard]

In this mornings Herald an article discussing JLL's Retirement Village Database White Paper. The actual paper can be found at the bottom of the article.

http://www.nzherald.co.nz/business/n...ectid=11823962

I have kept an eye on this ongoing report (updated once or twice per year) which gives good insite to industry build rates, age demographics, industry trends etc. and comments on the large operators with stats on market share etc.

I note the range of comments from various contributors regarding the share price over the past few years and possible trends over at least the next couple. I am reminded of a Buffet saying in regard to markets "in the short term the market is a voting machine, but in the long-term a weighing machine" Clearly the Ryman share price had got ahead of its increase in valuation metrics with a doubling of price back in 2013, so the valuation had definitely become "stretched" at that time. As long as Ryman (and others such as Summerset) continue to deliver record results, the share price will be "weighed" accordingly by the market .