RYM - Ryman Healthcare

[Beagle]

Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.

[couta1]

Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.

Don't mess with the Couta Theorum mate, it's got a very long proven track record. PS-Have you thought about which country your going to head to. PPS-I'm currently working at a Ryman facility.

[Nasi Goreng]

The Couta Theory is one with a long proven track record - however, since SUM's last earnings report and another year of 40% growth, I don't see the 1:0.5 ratio returning. Market forces can only withstand that sort of pressure for so long until the Couta Theory becomes folklore. In saying that, the Couta Theory should be discussed by Directors at both of their AGM's.

[winner69]

Shares should always be assessed based on their track record and outlook not some arbitrary relativity theory.

Then why has SUMs shareprice only increased at about the half the rate that earnings have grown

PE has contracted steadily while earnings are booming .... interesting

Maybe retirement sector stocks are priced on other things than a profit multiple ... which really is a methodology used by most to avoid a bit of hard yakka

Anyway SUMs PE ratio of the years below. RYM trend is much the same (but of course bigger numbers)

[couta1]

The Couta Theory is one with a long proven track record - however, since SUM's last earnings report and another year of 40% growth, I don't see the 1:0.5 ratio returning. Market forces can only withstand that sort of pressure for so long until the Couta Theory becomes folklore. In saying that, the Couta Theory should be discussed by Directors at both of their AGM's.

SUM will grow slower from here on in, about 20-25%this year and then in around 3 years will be 15% like RYM, hence the Couta Theory will remain intact.

[Beagle]

SUM will grow slower from here on in, about 20-25%this year and then in around 3 years will be 15% like RYM, hence the Couta Theory will remain intact.

LOL mate. Share prices follow earnings and future earnings expectations. Always have done and always will do. Future relativity will be a function of their relative underlying EPS and growth rates of the two companies and perceptions about future growth rates in underlying earnings. I still have SUM at $100m underlying at this stage for 44 cps which puts them on a forward PE of just 16.6 and this for a company that's demonstrated over the last 6 years an underlying earnings compound growth rate average of 45% per annum.
I agree with your assessment of SUM's growth rate this year. Too early to say regarding next year or the year after but they are investigating Australia carefully and are on record at looking to ramp their build rate up to ~ 600 units per annum over the next few years. RYM on the other hand probably trading on a forward PE of about 25 at the current price and I would expect a continuation of their 15% growth rate for the foreseeable future. RYM fairly valued in the late $11's in my opinion, SUM others like SUM and OCA are better value with the (same / slightly better) growth prospects.

[winner69]

Market happy with SUM’s PE of 16/17 and to me that seems a pretty realistic price

So share price will hang around the low 700’s until punters start thinking about next, probably sometime after half year and some guidance. That’ll be the trigger to take it to 830/850 early next year

Yes share price will follow earnings expectations

[Beagle]

So with respect to RYM, another reasonable year of ~15% growth took them to underlying earnings of $203.5m or 40.7 cps. If they replicate that again this year we'll see 46.8 cps. I reckon a forward PE of 23.5 has always been good value for RYM so good value in my book is $11 and I back that multiple up with many many years of watching their SP. Anything more than that its getting a bit ahead of itself in my opinion and leads to short term underperformance.
2020 or 2021 year we could see SUM's EPS exceed RYM's. The effect on their relative share prices could be interesting to watch.

[winner69]

2020 or 2021 year we could see SUM's EPS exceed RYM's. The effect on their relative share prices could be interesting to watch.

Probably SUM shareprice about 55%/60% of RYM shareprice if that earnings scenario played out

You asked .......

[Beagle]

Probably SUM shareprice about 55%/60% of RYM shareprice if that earnings scenario played out

You asked .......

LOL I'm not biting anymore