RYM - Ryman Healthcare

[Onion]

Good info mate, makes it dead easy for those dazzled by RYM's fancy village razzmatazz reception area's to understand. Absolutely correct. I am sure you will recall that both you and I went out on a limb in a few years ago and called RYM overvalued at that PE of 37 and correctly predicted years of underperformance. You would think given that fact more people would make an effort to understand our point of view...human beings are funny though...they get emotionally attached to "pet" stocks that they have done well with, emotional attachment even if it costs them money relative to other stocks in the same sector.

I'm happy with the return from both SUM and RYM (with DRP).

	1 yr	2 yr
SUM	47%	21%
RYM	44%	23%

I wouldn't mind if all my shares underperformed like RYM.

[couta1]

SP certainly smoking it, $13.60 and little sell depth.

[winner69]

Historically if you held Ryman for 5 years or more you will have done very well with outstanding returns. That is why Ryman always appear on Boston Consulting's list of great global wealth creators.


However the returns are far greater when the starting point is cheap (lower than average PE) than when the starting point is 'expensve (high PE). See the difference between the 2003 and 2006/2007 starting points. I think that is what beagle is trying to say.

Hasnt been too many periods when punters have lost on RYM (the redcells) or got pretty low returns (yellow cells) ....but those periods started when the PE was way above average (or high)

pretty sure the numbers are correct

[winner69]

My conclusion from all these discussions is that over the next 5 years -

• RYM returns will be slightly less than the long term average of 24% pa - say 18%-20% pa (because starting PE is above average)
• SUM returns will be about the long term average of 25% pa because its PE is about average (fairly valued for the sector)

[Beagle]

Historically if you held Ryman for 5 years or more you will have done very well with outstanding returns. That is why Ryman always appear on Boston Consulting's list of great global wealth creators.


However the returns are far greater when the starting point is cheap (lower than average PE) than when the starting point is 'expensve (high PE). See the difference between the 2003 and 2006/2007 starting points. I think that is what beagle is trying to say.

Hasnt been too many periods when punters have lost on RYM (the redcells) or got pretty low returns (yellow cells) ....but those periods started when the PE was way above average (or high)

pretty sure the numbers are correct

Yes thanks mate, returns from 2013 to 2016 were absolutely abysmal. You and I went way out on a limb and emphatically stated that we predicted very low returns for those years...but I give up, with that track record....many posters think we obviously know nothing.... Markets often irrational eh mate. Might go to a PE of 37 again (up another 32%) before 3 more years of extremely poor returns. History never repeats itself does it...(sarcasm intended)

[Beagle]

My conclusion from all these discussions is that over the next 5 years -

• RYM returns will be slightly less than the long term average of 24% pa - say 18%-20% pa (because starting PE is above average)
• SUM returns will be about the long term average of 25% pa because its PE is about average (fairly valued for the sector)

If RYM's earnings grow at 15% per annum average their PE would have to stay well above average and in fact expand from its current level to generate that return. Far more likely their PE returns to about average (for them) and the SP underperforms earnings growth. Reversion to the mean. I think you might be about right for SUM and their average earnings growth for the next 5 years might be about that level.
Probable PE expansion when the market finally wakes up to a decade plus of growth well above the sector average.

[couta1]

Yes thanks mate, returns from 2013 to 2016 were absolutely abysmal. You and I went way out on a limb and emphatically stated that we predicted very low returns for those years...but I give up, with that track record....many posters think we obviously know nothing.... Markets often irrational eh mate. Might go to a PE of 37 again (up another 32%) before 3 more years of extremely poor returns. History never repeats itself does it...(sarcasm intended)

I doubt whether the people that bought at $8.80 a year ago and now with a price of $13.60 really give a toss about the next few years, those inclined will probably cash in their chips and lay on a beach for a while.

[Beagle]

I doubt whether the people that bought at $8.80 a year ago and now with a price of $13.60 really give a toss about the next few years, those inclined will probably cash in their chips and lay on a beach for a while.

That's one theory. I have another one. I think there are a lot of holders that have become enamored with the company for the value its created for them and will simply stick with what they are attached too and comfortable with.

[couta1]

That's one theory. I have another one. I think there are a lot of holders that have become enamored with the company for the value its created for them and will simply stick with what they are attached too and comfortable with.

And good on them, sometimes fickleness can be a curse.

[winner69]

That's one theory. I have another one. I think there are a lot of holders that have become enamored with the company for the value its created for them and will simply stick with what they are attached too and comfortable with.

They are the true long term investors ......and not that many of them around

The rest of us are just traders .....you can’t put it any other way