RYM - Ryman Healthcare

[percy]

The difficulty with that strategy is that if the share price turns up today, you will have to wait until the price goes to nearly $8 before you can buy any. I struggle with that strategy myself, it is probably the better strategy, but I'm drawn towards trying to catch those falling knives.

I have too few fingers left to loose any more catching falling knives.!!
With the sp dropping both EMAs will fall.Once the sp has moved up through the 50 day EMA, you can then just about judge it will go through the 200day EMA.Then buy.
Try looking at Yahoo SUM chart, and you can see I timed my entry in early January at $2.92 perfectly.

[winner69]

I hear the Auckland market is like a balloon that's been pricked at present. All that speculative dodgy ? Chinese money is looking for a new tax free casino / playground.
Revaluations have underpinned this sector for years. Sure there's the well known tsunami of aging folk to underpin the sector's growth going forward but I reckon the revaluation's could take a breather for many years. The whole sector is fully priced IMO and dividend yields are absolutely pathetic all the more so because they're unimputed. Not sure I'd bother even if it does get to $6.50. As you've suggested it could take up to five years for this sector to become really attractive value again...

At least you 'get it' mate

Just because a share is cheaper than a year ago doesn't make it cheap or good value does it

Most shares when they get supercharged PE ratios (RYM included) show poor or negative returns for the next 3 to 5 years (sometimes longer) as PEs revert to more reasonable levels. PE currently still supercharged but beginning to fall back

And RYM itself will continue to grow, probably with increasing profits

[Biscuit]

I hear the Auckland market is like a balloon that's been pricked at present.

The Auckland housing market is always giddy (either with exuberance or with vertigo). If it ever were truly burst like a balloon, I suspect the ramifications would be much broader than just Rymans. No more overseas trips for all those middleclass Aucklanders who thought they were doing so well.

[Biscuit]

I hear the Auckland market is like a balloon that's been pricked at present. All that speculative dodgy ? Chinese money is looking for a new tax free casino / playground.
Revaluations have underpinned this sector for years.

I also don't see any evidence that the Ryman shareprice correlates at all with the CPI-corrected Auckland residential property market. It seems almost the opposite trend?

[Bjauck]

I also don't see any evidence that the Ryman shareprice correlates at all with the CPI-corrected Auckland residential property market. It seems almost the opposite trend?

I broadly agree. In 2010-12 when the Auckland property market was flat RYM's sp increased by about 50%. In 2014 & 2015 RYM sp has dropped by about 20% whilst the Auckland house market has boomed.

Interestingly, it seems RYM sp has increased by about 600% over the last 10 years. (Incidentally - It has seen price growth similar to ATM over that period - with ATM having the edge). Perhaps the SP performance is linked to demand for its services, general economic conditions and investor sentiment rather than specifically to Auckland or NZ property prices

[percy]

I broadly agree. In 2010-12 when the Auckland property market was flat RYM's sp increased by about 50%. In 2014 & 2015 RYM sp has dropped by about 20% whilst the Auckland house market has boomed.

Interestingly, it seems RYM sp has increased by about 600% over the last 10 years. (Incidentally - It has seen price growth similar to ATM over that period - with ATM having the edge). Perhaps the SP performance is linked to demand for its services, general economic conditions and investor sentiment rather than specifically to Auckland or NZ property prices

Ryman CEO Simon Challis has often pointed out Ryman is not collated to NZ property prices.

[troyvdh]

Thankyou Couta...I agree...given that RYM had a share split 5-1 at around ...$11.30 ???? a few years back....me thinks that many folk could view the current share price as being "expensive" which we both agree is quite nonsensical...and when the SP eventually does rise to similar territory...folk may well see better value in a share that is available at $2..something....just saying...cheers

[Beagle]

RYM's SP took a pretty solid hit during the GFC. The main issue I have is (unless you've been living under a rock on another planet for the last seven years), this tailwind demographic story is so well known by everyone its already built into the price and then some. Also technically its in a clear downtrend. It will be a good investment over the very long run but try telling that to someone who paid about $9 circa 2 years ago who has "enjoyed" a pathetic circa 1.5% unimputed annual dividend rate since then. Closing price of $7.05 a new low for the year speaks for itself. I don't buy stocks in a downtrend.

[stevevai1983]

RYM's historical dividend%.
07 4.96%
08 2.92%
09 3.72%
10 2.95%
11 3.04%
12 2.72%
13 1.98%
14 1.35%
now 2.01%

The SP is close to 'good investment' now.

[winner69]

RYM's SP took a pretty solid hit during the GFC. The main issue I have is (unless you've been living under a rock on another planet for the last seven years), this tailwind demographic story is so well known by everyone its already built into the price and then some. Also technically its in a clear downtrend. It will be a good investment over the very long run but try telling that to someone who paid about $9 circa 2 years ago who has "enjoyed" a pathetic circa 1.5% unimputed annual dividend rate since then. Closing price of $7.05 a new low for the year speaks for itself. I don't buy stocks in a downtrend.

Yes RYM shareprice did take a hit during the last GFC but it wasn't because of declining earnings. They were still selling plenty of units and were booking favourable fair value adjustments and all that sort of stuff.

The share price fell because market sentiment drove the PE down from just under 30 to about 15. Again negative returns for a few years when Ryman has a lofty PE. Happens with a lot of stocks (and even markets). Reversion to the mean and that sort of stuff.

Methinks the same process is underway at the moment.

And while the PE falls (a measure of market sentiment) Ryman keep on making heaps of money.