RYM - Ryman Healthcare

[Lawt]

I presumed that the $6.90 figure was a 12month target. However the market appears to assuming it needs to get there by tea-time.

I must admit, been waiting for this day for 30yrs. Always knew it would come again - same s#&t, different decade.
Last time I was out about 2 months prior to the crash, now just got to time this one right.

[NZSilver]

I've just seen reference to "some greater fool theory" with regards to what is happening to Ryman's price.

It is hard to disagree with people who think Ryman's price is higher than intrinsic value.

I have already pointed out that if Ryman's earnings are less than superb (eg, just very good), the share price could get hammered.

My concern is therefore what I should do:

1. Sell some or all of my holding at its inflated price levels now or some point in the next few weeks, and then hope to buy in cheaper?

or

2. Hold on, knowing it is becoming overpriced and that it may just plateau for months or even a year until value catches up with the price, or that it might dip a bit or a lot on bad news, and I simply hold on knowing my holding cost me a little over $3.00 per share. Even if it drops to $4.50 (which now looks crazy cheap) I'm still winning. But if there's a big dip, I would surely regret not taking some off the top.

One of these options will make me a greater clown (eg, a richer one). The other might make me a little foolish. Trouble is, I'm not sure which one!

Much to think about over the next week. I might go riding in taxis this week to see if any of them are proffering share tips, in which case it's time to GTFO.

Sparky what did you do with SUM and what happened there?

[kizame]

I've just seen reference to "some greater fool theory" with regards to what is happening to Ryman's price.

It is hard to disagree with people who think Ryman's price is higher than intrinsic value.

I have already pointed out that if Ryman's earnings are less than superb (eg, just very good), the share price could get hammered.

My concern is therefore what I should do:

1. Sell some or all of my holding at its inflated price levels now or some point in the next few weeks, and then hope to buy in cheaper?

or

2. Hold on, knowing it is becoming overpriced and that it may just plateau for months or even a year until value catches up with the price, or that it might dip a bit or a lot on bad news, and I simply hold on knowing my holding cost me a little over $3.00 per share. Even if it drops to $4.50 (which now looks crazy cheap) I'm still winning. But if there's a big dip, I would surely regret not taking some off the top.

One of these options will make me a greater clown (eg, a richer one). The other might make me a little foolish. Trouble is, I'm not sure which one!

Much to think about over the next week. I might go riding in taxis this week to see if any of them are proffering share tips, in which case it's time to GTFO.

If you look at the markets and in particular a rising stock such as RYM,knowing that it has risen so steeply and that the market is jumping on anything looking good,AND you gaze at charts,you will know that they always correct(except with the case of DIL and XRO)but they are special cases.You Never lose money taking a profit,so I would lock in those gains and be pretty chuffed,cos there is a darn good chance the market will correct. The Risk: that ryman have something up their sleeve that you don't know about.

[troyvdh]

Can I suggest Sparky that this is the same dilemma that folk like my self who have quite significant dosh tied up in res prop's are facing ..given that these as well as have/are increasingly gaining in value....
As we know those folk moving into Ryman facilities have to sell there houses first.......so for me at least I see RYM both as sharemarket beast but also a res property play cheers troy...

[Toasty]

Yep, I always saw Ryman as a property play mixed with healthcare. appreciate the thoughts.

Why isn't VHP going ballistic then? Its property mixed with Healthcare and delivers a good return. Probably not as well run and this is probably the wrong thread and once again I haven't researched anything...etc. Just a random thought

[NZSilver]

Originally Posted by NZSilverSparky what did you do with SUM and what happened there?

Bought in at $1.40 in the IPO. Sold out at $1.79 as there was another stock I was interested in. Regretted it, should have sold something else. Bought back at $1.87, sold out at $2.15. Can't remember why. Regretted it. Bought back at $2.42 in the placement, holding, and this time, not intending to sell down unless there is a really good reason......

That was a Rhetorical Question Sparky...

But great to see your honesty, I think RYM is a hold.

[winner69]

Sparks

- your homework says RYM is a solid long term 'hold', you and nobody else knows what it may be worth one day
- you and some others think it has got ahead of itself pricewise. It probably has been ahead of itself for sometime
- some (even you seem to agree) the market might fall quite a lot - if so when, we don't know
- you seem keen to protect the profits you have already made, or most of them

The adages let profits run / never try to time the market / and as Mr P said the market giveth but the market taketh away just as quick

For stocks that keep rising I have for a long time used a thing called Average True Range (ATR) as a sort of trailing loss'. Google it and see what it means as investapedia or something will explain it better than me

Essentially when a stock is consistently rising over so does the ATR. I use the ATR as the price to sell if the price starts falling. You can have tight 'stops' by using a ATR of 2 or loosen it up a bit by using a factor of 3 or 4. Nothing worse than selling and seeing the price go up again eh. To me a tried and true method that suits me. Like I I like holding stocks for years if they keep rising but I am ready to sell if indicators look like its going to down.. You'll never sell at the top but collect most of the gains.

Here is a chart of RYM with the ATR at 4 (4 times Average True Range) shown. You can see it works well for RYM and would have kept you in for the last few years (my data was a bit wonky prior to 2011 so didn't go back any further). I confess that I don't sell the exact time it hits the ATR but wait a day or two - invariably the price seems to recover. Eventually you will leave a percent or 2 on the table but have made more than that in the times the price has recovered. Would have avoided selling in that recent slight dip.

On this chart the red line is at 5.51 after todays action. I wouldn't sell until it gets back to that price (or higher if the ATR goes up). I don't have any RYM so don't need to decide but sure you will do the right thing

[troyvdh]

mmm..appreciate the post....how much do you attribute the health of the residential housing market to the SP of RYM....thus far I can only assume that it aint much...cheers...

[percy]

Thats a scary chart friends

agree, dont sell yet

but get ready !!

Still holding yourself at the ready?Footsie posted that on 02/02/2007.
Funny the more things change the more they stay the same.

[percy]

ENP. from craigs investment partners.
Since listing in june 1999 RYM has delivered it's shareholders a total return,which includes shareprice appreciate and divdends of 1,043% or 24.3%pa.
Our population is ageing,proportion of over 65s is expected to double from 12% today to 26% by 2041.The number of over 85s is set to increase 4 fold from 1.4% to 4.8% by 2041.
The aged care operations generate care as management fees that represent 35% of RYM's total revenue.The sale of new units acconts for 27% of revenues,and the resale of units 38% of revenue.
RYM is exposed to change in value of its units when these are resold,which happens on average of every 7 years.However,the company earns management fees which equates to 20% of the
0riginal price {over a five year period},providing the company with a buffer against any fall in value.
The market perceives RYM fortunes to be closely linked to the housing market.RYM proved the market wrong.Not only did it maintain profitability over 2008 and 2009,but it was one of the very few companies that delivered earnings growth.EPS have grown by 18% pa since 2001 and dividends by 22%pa.An investor who purchased shares in the IPO has seen their dividend yield rise from 4.4% in 1999 to 19.6% today.

Posted 17/04/2010.
Find it still interesting.Not linked to the property market.
When Nana needs to go into care,doesn't really matter what the property market is doing,