sharetrader
Page 249 of 462 FirstFirst ... 149199239245246247248249250251252253259299349 ... LastLast
Results 2,481 to 2,490 of 4615
  1. #2481
    Member
    Join Date
    Mar 2015
    Posts
    472

    Default

    I like the 22 PE underlying earnings chart Winner, it is quite interesting.

    In an environment where interest rates are low, growth stocks should be in high demand and we have seen that with elevated PE's. So when I look at this chart, I have to take into account that interest rates today are a lot different to what they were in 2008 when valuation for Ryman would have been considered very cheap. Ryman and retirement sector have grown considerably over the last few years and it looks like the sector fundamentals stack up for further growth over the next few years and beyond.

    At current valuations, as long as we get continued underlying profit growth over the next few years, your original investment if you bought today is going to look very good. I see it as a buying opportunity with more positives than potential negatives.

  2. #2482
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,737

    Default

    Quote Originally Posted by trader_jackson View Post
    I always compare 'the general company' to the nzx 50 average, which I think is around 18 or 19, although this comparison is far from fool proof.

    If you want to be more precise comparing it to peers can be beneficial, although some may be in different stages (eg summerset more growth) or differently structured to others (eg arvida more care focused)
    According to Morningstar the nz market PE is 15.5

    Ryman on reported earnings ( npat) is at 13/14 .......interesting
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #2483
    Member
    Join Date
    Mar 2015
    Posts
    472

    Default

    Yes but how much of the NPAT is capital gain? If you are basing RYM on PE, you have to price in year on year capital gains similar to this year. If value of assets stay the same year on year, NPAT would fall. It is conceivable that NPAT could fall and underlying earnings continue to grow. I imagine if this was to happen, RYM would pay less tax because there were no capital gains, this would increase cashflow and potentially go into the dividend pool.

  4. #2484
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,737

    Default

    Quote Originally Posted by Nasi Goreng View Post
    Yes but how much of the NPAT is capital gain? If you are basing RYM on PE, you have to price in year on year capital gains similar to this year. If value of assets stay the same year on year, NPAT would fall. It is conceivable that NPAT could fall and underlying earnings continue to grow. I imagine if this was to happen, RYM would pay less tax because there were no capital gains, this would increase cashflow and potentially go into jthe dividend pool.
    zaphod - not too sure what you really saying here.

    As I have said before I prefer using real NPAT (including unrealised fair value adjustments) and the basis for valuation is Book Value.
    Last edited by winner69; 21-11-2015 at 03:24 PM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  5. #2485
    ShareTrader Legend Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    21,362

    Default

    Thanks for the charts Winner. I really think Ryman as our premier growth stock with the most consistent record of growth over the long haul is worth at least a PE of 23.5 based on 8.5 for no growth + 1G. G= 15.
    Looked at another way this places it on a PE premium to the market of about 5-6 and I think it's worth all of that.

    Using Ben Graham's formula of v = historical underlying earnings eps x (8.5 +2G) gives 27.1 x 38.5 = $10.43. I stick with my 1G formula based on current year earnings which gives $7.32 with a little bit of wiggle room then RYM is on my radar for a re-entry at some stage but I am also watching the technical's which don't really look all that flash. Possibly better to wait on the side-lines because the unimputed dividend yield is only circa 2% per annum until there's a very clear break over $8. That said sitting there waiting with cash in the bank isn't going to give you much more than 2% anyway.

  6. #2486
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,737

    Default

    Roger - in Ben Graham's days did they have such things as 'underlying earnings'?

    He might have come up with an alternative formula if they did?
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #2487
    ShareTrader Legend Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    21,362

    Default

    Just my way of eliminating the capital gains mate. I guess back then earnings were simply earnings so if we apply his formula to the capital gain inclusive earnings the stock is very cheap. But let's forget about capital gains because the Auckland market has the skids under it after gaining 25% last year. I think its about fair value now but as we've discussed before its easy enough for the stock to continue to track sideways for 3 or 4 years in total and undershoot on the downside, so its possible we could see as much as another 24 months of the SP doing very little. Definitely one to put on the watch list but I struggle to see the catalyst for a breakout ?
    Last edited by Beagle; 21-11-2015 at 03:59 PM.

  8. #2488
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,737

    Default

    Quote Originally Posted by Roger View Post
    Just my way of eliminating the capital gains mate. I guess back then earnings were simply earnings so if we apply his formula to the capital gain inclusive earnings the stock is very cheap. But let's forget about capital gains because the Auckland market has the skids under it after gaining 25% last year. I think its about fair value now but as we've discussed before its easy enough for the stock to continue to track sideways for 3 or 4 years in total and undershoot on the downside, so its possible we could see as much as another 24 months of the SP doing very little. Definitely one to put on the watch list but I struggle to see the catalyst for a breakout ?
    Fair comment.

    Doing a DCF for such companies is fraught with danger unless you really have some inside knowledge. I did one earlier this year after FY15 results and it came out about $7.50. Really sensitive to house price inflation assumptions and the number of new builds. Playing around with some scenarios gives ranges of $7-$8.

    So like you I can't see any real real break out of the current range. When things do revert to the the average / norm invariably they do undershoot.

    We might just get that $6.50
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #2489
    Banned
    Join Date
    Oct 2010
    Posts
    610

    Default

    They are not just relaying on Akld but huge profit mark up in Melbourne...Mel will be generating good profit for them.

  10. #2490
    Senior Member
    Join Date
    Jun 2005
    Location
    , , .
    Posts
    1,324

    Default

    Quote Originally Posted by winner69 View Post
    zaphod - not too sure what you really saying here.

    As I have said before I prefer using real NPAT (including unrealised fair value adjustments) and the basis for valuation is Book Value.
    That's Nasi Goreng's post that you've quoted, not mine

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •