RYM - Ryman Healthcare

[Master98]

following is Morning Star new review after 1H results:
"Focus on Quality and Demographic Trends Underpins Further Strong Demand for Ryman's Services
Ryman Healthcare reported first-half fiscal 2016 underlying profit of NZD 70.3 million, up 6% on the prior corresponding period. The company maintained its guidance for growth of 15% for the full year, implying second-half growth of around 10%. This seems like a big step-up, but should not be a stretch, given that the number of developments completing in the second half will step up materially, and given that the firm is also seeing a contraction in its sales cycle. In essence, those wishing to buy into retirement villages are doing so now off the plan, when in the past most resident sales occurred following completion of the development. This provides confirmation of the acute shortage of retirement living and aged care properties in certain corridors. Ryman has been quite strategic in this regard, specifically building villages in areas that were first settled in the 1960s. These areas have a high weighting to residents who are 75-85 years of age, an age cohort that has high demand for Ryan's retirement living and aged care offering.

We make minor compositional changes to our earnings forecasts, with our NZD 8.50 fair value estimate and narrow moat rating both unchanged. At current levels, Ryman is slightly undervalued, with a forecast fiscal 2016 distribution yield of 2.0%, based on a 50% payout ratio."

[winner69]

That's Nasi Goreng's post that you've quoted, not mine

Sorry mate - all my life i have had a problem of getting people mixed up.

Must have been thinking of you at the time.

[winner69]

following is Morning Star new review after 1H results:
"Focus on Quality and Demographic Trends Underpins Further Strong Demand for Ryman's Services
Ryman Healthcare reported first-half fiscal 2016 underlying profit of NZD 70.3 million, up 6% on the prior corresponding period. The company maintained its guidance for growth of 15% for the full year, implying second-half growth of around 10%. This seems like a big step-up, but should not be a stretch, given that the number of developments completing in the second half will step up materially, and given that the firm is also seeing a contraction in its sales cycle. In essence, those wishing to buy into retirement villages are doing so now off the plan, when in the past most resident sales occurred following completion of the development. This provides confirmation of the acute shortage of retirement living and aged care properties in certain corridors. Ryman has been quite strategic in this regard, specifically building villages in areas that were first settled in the 1960s. These areas have a high weighting to residents who are 75-85 years of age, an age cohort that has high demand for Ryan's retirement living and aged care offering.

We make minor compositional changes to our earnings forecasts, with our NZD 8.50 fair value estimate and narrow moat rating both unchanged. At current levels, Ryman is slightly undervalued, with a forecast fiscal 2016 distribution yield of 2.0%, based on a 50% payout ratio."

Part of that says - NZD 70.3 million, up 6% on the prior corresponding period. The company maintained its guidance for growth of 15% for the full year, implying second-half growth of around 10%. This seems like a big step-up, but should not be a stretch,

Unfortunately Morningstar analyst +6% in H1 and +10% in H2 doesn't give you +15% for the full year

Ryman need +23% in H2 to get full year up to +15% for full year

Morningstar mentioned 'a big step up' - sure is but Ryman will do it

Quality of analysts these days

[Master98]

Part of that says - NZD 70.3 million, up 6% on the prior corresponding period. The company maintained its guidance for growth of 15% for the full year, implying second-half growth of around 10%. This seems like a big step-up, but should not be a stretch,

Unfortunately Morningstar analyst +6% in H1 and +10% in H2 doesn't give you +15% for the full year


Ryman need +23% in H2 to get full year up to +15% for full year

Morningstar mentioned 'a big step up' - sure is but Ryman will do it

Quality of analysts these days

lol winner69, seems like Morningstar analysts didn't get well paid.

[trader_jackson]

lol winner69, seems like Morningstar analysts didn't get well paid.

For what its worth, I think it was above what Forsyth had expected by a few %

[Vaygor1]

The catalyst for the $8 breakout will come in 6 months when the unrealised gains from the pre-bookings of 4 entire villages being completed in H2 this FY become realised. Maybe even as early as Feb/Mar 2016 if the speculators out there kick in a bit sooner.. as they do.

I keep hearing about the poor dividend that Ryman pay, but how many companies grow that dividend year on year by at least 15%? Not many.

I have been buying RYM at a fairly constant rate since Sept 2007. My average buy price right now is $2.54 and the dividend about to be paid plus the one 6 months back totals 14.6 cents. That is a pre-tax 5.75% per annum return on my investment by way of dividend alone. Assuming I don't buy/sell, in one year that return will be minimum 6.7%. Two years from now it will be minimum 7.8%, the year after that I'll get at least 9% and so on.

In terms of capital gains to-date I can't complain (SP increase over 200% during an average hold period of 4 years), and I have bought loads at PE's higher than they are today. Buying today would yield much the same result as that above… but I guess if such a virtually guaranteed outcome would leave a bad taste in ones mouth then greener and more certain pastures can always be found elsewhere... maybe.

[winner69]

The catalyst for the $8 breakout will come in 6 months when the unrealised gains from the pre-bookings of 4 entire villages being completed in H2 this FY become realised. Maybe even as early as Feb/Mar 2016 if the speculators out there kick in a bit sooner.. as they do.

I keep hearing about the poor dividend that Ryman pay, but how many companies grow that dividend year on year by at least 15%? Not many.

I have been buying RYM at a fairly constant rate since Sept 2007. My average buy price right now is $2.54 and the dividend about to be paid plus the one 6 months back totals 14.6 cents. That is a pre-tax 5.75% per annum return on my investment by way of dividend alone. Assuming I don't buy/sell, in one year that return will be minimum 6.7%. Two years from now it will be minimum 7.8%, the year after that I'll get at least 9% and so on.

In terms of capital gains to-date I can't complain (SP increase over 200% during an average hold period of 4 years), and I have bought loads at PE's higher than they are today. Buying today would yield much the same result as that above… but I guess if such a virtually guaranteed outcome would leave a bad taste in ones mouth then greener and more certain pastures can always be found elsewhere... maybe.

You doing well mate and Ryman making you rich

My investing approach is different to yours. I take an 'active investor' with one of the key drivers being don't lose your money - and that means don't give back what the market giveth / lock in most of the profits or whatever you want to call it. I would have hated seeing 50% of what I had disappear over 2 years in 2007/2008 for instance

Simple Ryman chart below, Easy to see when winner has been a shareholder and periods when he hasn't been. One day no doubt I will be a shareholder again

Yes Ryman has consistently had great financial results - just that the market has valued this performance at extremes lows and highs

[LAC]

I wish I could pick the highs and lows with this stock, having a lot less experience than most people on here, I just keep it simple, I will buy as long as price doesn't get toooo ridiculous and sell in 2035 I would hope it's worth more than I am purchasing today.
I will keep taking profits on other riskier stocks in my portfolio and throw them at Ryman. Hope it works out for me.

[Vaygor1]

You doing well mate and Ryman making you rich

My investing approach is different to yours. I take an 'active investor' with one of the key drivers being don't lose your money - and that means don't give back what the market giveth / lock in most of the profits or whatever you want to call it. I would have hated seeing 50% of what I had disappear over 2 years in 2007/2008 for instance ...

Hi Winner, & thanks for the chart.

Your investing approach is a bit different to mine for sure…and yes, it was very uncomfortable to see so many shares I'd bought for circa $2.10 in late 2007 worth only $1.30 by late 2008 (a 42% drop all up). But I was convinced that $2.10 in late 2007 was still a good price given the company's fundamentals, so as the price dropped, and dropped, .. and dropped, all it meant was I had to find more capital to buy more and more RYM at even better bargains... with the side benefit of lowering my average RYM buy price.

Given the situation I was in, I don't know if I could have followed your approach even if I wanted to… I had already put my stake in the ground at $2.10 and I couldn't bear to sell at a loss in late 2008 when RYM's fundamentals looked so good.

But here's the funny thing…if with hindsight, I had followed your approach (and there is absolutely nothing wrong with it), I would have held off buying until late 2008, but I know I wouldn't have bought anywhere near the volume as I did via the circumstances I described above. I couldn't have ever jumped in (at least back then) with such a large volume in comparatively such a short time frame. The upshot being, that in %age terms I would have done a lot better had I followed your approach for sure, but in dollar terms I don't think I would have made 1/4, or at least 1/2 as much.

…… But I have learnt a lot since then. If history repeated itself, who knows?

[Vaygor1]

I wish I could pick the highs and lows with this stock, having a lot less experience than most people on here, I just keep it simple, I will buy as long as price doesn't get toooo ridiculous and sell in 2035 I would hope it's worth more than I am purchasing today.
I will keep taking profits on other riskier stocks in my portfolio and throw them at Ryman. Hope it works out for me.

It will work out for you Lac…, nothing surer. I can't see a better long-term bet with such a predictable outcome on the NZX… but remember, I am biased .