RYM - Ryman Healthcare

[Patient Panda]

Hi guys, first time poster and certainly a beginner. I've been reading the RYM thread and SUM thread. It seems that the PE ratios many of you quote are much higher than what the ANZ trading platform quotes. I think this might be because you're using Underlying Profit to calculate EPS whereas perhaps ANZ is using Reported Net Profit After Tax. Not sure, but it confuses me a bit why ANZ would use something that gives such a different PE to what many of you would use. Would anyone be kind enough to take a minute to explain? Thanks, Tiddly

Hey Tiddlywinks and welcome.

ANZ quotes all stocks using their IFRS EPS and therefore too the PE.

Underlying profit gives a better representation of how the business is doing and shows much more clearly the cashflows as it removes the effects of asset price changes included in IFRS figures.

however IFRS figures can also be used to an extent to see how future underlying profit will look as the asset price movements accounted for in IFRS figures have a delayed flow through as villages are able to increase the cost of their license to occupy in line with the asset price increases (or increase them to a level the demand can handle at least). Whilst their correlated with the time delay I think its only indicative.

[winner69]

Just had a look at the chart over the last few months, what a thing of beauty and even though I don't currently hold any one must always admire beauty.

Good discussion on the ATM thread about investor behaviour - worth a quick read

Explains to some extent why Ryman is seen by some as outrageously over priced compared to SUM ( or why SUM is incredibly cheap relative to RYM) on things like PE ratios etc

What those punters overlook is that no matter what the fundamentals say Ryman is more popular than the sexy beautiful (cheap) SUM.

The market is a popularity ‘contest’ rather than a beauty ‘contest’

[Beagle]

SUM famous investor said in the short term the market is a voting machine but in the long term its a weighing machine. I still believe that is the case and I am not alone. Professional analysists have this as underperform and a price target of just $10.60. Even if they grow underlying earnings by 20% this year to $244m that's 48.8 cps and this puts RYM on a forward PE of 28.9 times right towards the top of their historical trading range. I think people buying at this level will find it does indeed underperform the sector in the medium term. (Wouldn't rule out the market according an even higher PE in the short term...momentum a powerful force and things often overshoot a fair way before coming back down to earth over time). Over time I think there are SUM better ways for investors to build their retirement capital but each to their own and I can certainly understand why many long term investors are very loyal to the company and will continue holding regardless of the metrics.
https://www.marketscreener.com/RYMAN...072/consensus/

[Patient Panda]

SUM famous investor said in the short term the market is a voting machine but in the long term its a weighing machine. I still believe that is the case and I am not alone. Professional analysists have this as underperform and a price target of just $10.60. Even if they grow underlying earnings by 20% this year to $244m that's 48.8 cps and this puts RYM on a forward PE of 28.9 times right towards the top of their historical trading range. I think people buying at this level will find it does indeed underperform the sector in the medium term. (Wouldn't rule out the market according an even higher PE in the short term...momentum a powerful force and things often overshoot a fair way before coming back down to earth over time). Over time I think there are SUM better ways for investors to build their retirement capital but each to their own and I can certainly understand why many long term investors are very loyal to the company and will continue holding regardless of the metrics.
https://www.marketscreener.com/RYMAN...072/consensus/

I concur about the famed Warren Buffet quote, in the long run it is a weighing machine. I think the only time you’re going to see 10.60 per share is after a share split.

For another perspective
Rym are on a similar PE to POT but growing much faster and RYM have very similar growth to FPH but trade on a PE almost 20 less than FPH.

[Beagle]

I concur about the famed Warren Buffet quote, in the long run it is a weighing machine. I think the only time you’re going to see 10.60 per share is after a share split.

For another perspective
Rym are on a similar PE to POT but growing much faster and RYM have very similar growth to FPH but trade on a PE almost 20 less than FPH.

Hi Panda bear,
Appreciate your perspective but I find its best to stick to PE comparatives within the same sector as you could just as easily for instance make the case that a forward PE of 29 for RYM looks far to high compared to ATM on 30 who have just grown their profit 100% or SML on a estimated FY19 PE of 25. Buying RYM now at $14.09 taking a five year view I really think one is going to do better with SUM or OCA but having a bob or two on all 3 probably isn't silly and some would say ARV might do well too, not so sure about MET. The best approach with these growth shares is to stay invested and be a patient Panda or Beagle

[macduffy]

I concur about the famed Warren Buffet quote, in the long run it is a weighing machine. I think the only time you’re going to see 10.60 per share is after a share split.

For another perspective
Rym are on a similar PE to POT but growing much faster and RYM have very similar growth to FPH but trade on a PE almost 20 less than FPH.

Yes, a great quote, but it was Benjamin Graham's, not Buffett's.

[Patient Panda]

Yes, a great quote, but it was Benjamin Graham's, not Buffett's.

Too true! Thank you for the reminder

[Patient Panda]

Hi Panda bear,
Appreciate your perspective but I find its best to stick to PE comparatives within the same sector as you could just as easily for instance make the case that a forward PE of 29 for RYM looks far to high compared to ATM on 30 who have just grown their profit 100% or SML on a estimated FY19 PE of 25. Buying RYM now at $14.09 taking a five year view I really think one is going to do better with SUM or OCA but having a bob or two on all 3 probably isn't silly and some would say ARV might do well too, not so sure about MET. The best approach with these growth shares is to stay invested and be a patient Panda or Beagle

yes maybe important to take different sector comparisons with a grain of salt but I think theres still some use in it.

Could be a decent chance RYM is getting close to a point where we might see it track sideways for a year or two till EPS growth pushes it higher again. No doubt I will continue to hold. If it hits 4x NTA I might sell a portion but certainly not all. Yes the key ingredient as always is time and patience

[RupertBear]

yes maybe important to take different sector comparisons with a grain of salt but I think theres still some use in it.

Could be a decent chance RYM is getting close to a point where we might see it track sideways for a year or two till EPS growth pushes it higher again. No doubt I will continue to hold. If it hits 4x NTA I might sell a portion but certainly not all. Yes the key ingredient as always is time and patience

Yes this impatient bear sold out at $8 after it kept going sideways and I cant make myself buy back in at the current price but if it drops I will get back in and I wont be selling! Another lesson learned

[Beagle]

Yes this impatient bear sold out at $8 after it kept going sideways and I cant make myself buy back in at the current price but if it drops I will get back in and I wont be selling! Another lesson learned

I wouldn't be too hard on yourself mate. It ostensibly tracked sideways for 3 years as correctly predicted by SUM on here and the way the SP has been going lately its well into the process of setting itself up for a repeat. For what its worth I would be a buyer at $11.50 in a pullback otherwise I am happy to remain more fully invested elsewhere. I know I probably won't get them at that price and I'm quite okay with that.