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26-02-2020, 11:21 AM
#1391
You could be right Peat, especially if the markets keep on tanking.
Interestingly on the supply side issue, I note Arvida have a major ramp up in their build rate this year. Will they be the exception or will that be more proof the market is totally awash with unsold units ?
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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26-02-2020, 11:44 AM
#1392
Rather than supply being the problem is it possible that demand has fallen away
Retirement living theae days only affordable for the rich and famous?
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26-02-2020, 12:07 PM
#1393
I've said this once, I've said this a thousand times... it is about balancing care side of things with the units side of things.
You can't have a crap and/or small care operation and be largely units... eventually people aren't too keen on being told "when the time comes and you need care, well we might try fit you in otherwise you'll have to go down the road and move out as our care side of things is pretty small here [at the village - aka good luck to you sir when you need more than just a unit!]" (this is the approximate words that came out of sum villages - no joke)... this is what MET and SUM are. They have a care operation, but relative to their units it is pretty small.
You also can't be too reliant on care otherwise things get squeezed (eg how ARV and OCA were when they listed, and ARV has now greatly expanded their units side of things, and continues to do so, as does OCA... unfortunately OCA doesn't seem to have great cost controls when it comes to their care side of things in recent time)
You have to have a balance... a real continuum of care... this is what ARV, OCA and RYM are doing well, and ARV and RYM are doing really well (aka making more and more money out of the care side).
Because that real continuum of care is what is actually driving demand and will continue to do so as the population ages and has more variety of villages to select from (and I say real as MET has 4064 ILU's, and 934 care beds, apartments and suits - aka for not even 20% of the operation is care, meaning if 5 people need to get care at once, only 1 of them might be able to stay in the same village, the other 4 have to go elsewhere). We are starting to see this with serious slow downs at MET and SUM... why go to one of these villages, have the uncertainty of likely not getting into care when you need it most,when you can go down the road to an ARV, RYM or OCA village that 'has it all?'
Sum people on this thread totally ignored the increasingly obvious value proposition of having a good, fairly large (but not too large) care operation (that is ideally profitable) as part of ones villages and instead thought the more units one could pump out, the better it would be - how wrong this is turning out to be... so yes, demand has fallen away for villages that are increasingly inadequate at catering for the changing needs of that demand... and likely increased at those villages that are increasingly adequate at catering for the changing needs of that demand... that is why I have never owned MET or SUM as the music as always going to stop at some point.
Disclosure: I have been saying this for years and am glad fairly recent results from the sector have finally validated this.
Last edited by trader_jackson; 26-02-2020 at 12:11 PM.
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26-02-2020, 12:12 PM
#1394
Fair comment BUT you have to wonder why Ryman have been struggling to sell many units in recent years especially seeing as they are the pioneers of the continuum of care model and only charge a 20% DMF fee ? To me this suggests if the market leader is struggling to sell their new units the entire market is massively over supplied.
I guess we will find out in due course if ARV really are the exception to the rule. Time will tell but for me RYM are the (very overpriced) gold standard and if they are struggling to sell, all will struggle to sell.
Last edited by Beagle; 26-02-2020 at 12:13 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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26-02-2020, 12:34 PM
#1395
Originally Posted by winner69
Rather than supply being the problem is it possible that demand has fallen away
Retirement living theae days only affordable for the rich and famous?
Maybe the ORA system has had a bad rap - in so far as real estate inflation gains have not accrued to the resident. Perhaps a new method of ownership/leasehold needs to be offered?
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28-02-2020, 10:13 AM
#1396
I would think the chances of this deal not proceeding due to the black swan event and its effects on the global markets is now VERY REAL.
The upside simply is very limited at 11 cents. NTA is "very strangely" exactly $7. Downside potentially as bad as $2 - $3. SELL
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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28-02-2020, 10:46 AM
#1397
Junior Member
Originally Posted by Beagle
I would think the chances of this deal not proceeding due to the black swan event and its effects on the global markets is now VERY REAL.
The upside simply is very limited at 11 cents. NTA is "very strangely" exactly $7. Downside potentially as bad as $2 - $3. SELL
Agreed, the risk at the moment doesn't seem worth the extra 10c. I've sold since sold out.
Although I'm more curious than anything to see these big players buying up large. Will happily watch from the side lines.
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28-02-2020, 06:13 PM
#1398
I sold down my position over the last week. In these market conditions a better offer is extremely unlikely. The risk/reward is too skewed for me to continue holding.
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09-03-2020, 10:37 AM
#1399
Anyone else noticed the share price decline ? $6.84 today so arbitrage to the $7.00 takeover has expanded out to 16 cents despite the shorter timeframe to the proposed takeover.
With the very rapid spread of Covid 19 might this takeover be at real risk now ? What happens to other stocks in this sector if this takeover is withdrawn ?
Weren't institutions and other shareholders expecting about 1.5 Billion in cash from this takeover to be reallocated elsewhere in the market, one presumes predominantly among other sector players ?
Any implications for the market overall if this offer is withdrawn ?
Last edited by Beagle; 09-03-2020 at 10:39 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
09-03-2020, 10:56 AM
#1400
Junior Member
Originally Posted by Beagle
Anyone else noticed the share price decline ? $6.84 today so arbitrage to the $7.00 takeover has expanded out to 16 cents despite the shorter timeframe to the proposed takeover.
With the very rapid spread of Covid 19 might this takeover be at real risk now ? What happens to other stocks in this sector if this takeover is withdrawn ?
Weren't institutions and other shareholders expecting about 1.5 Billion in cash from this takeover to be reallocated elsewhere in the market, one presumes predominantly among other sector players ?
Any implications for the market overall if this offer is withdrawn ?
Considering the boost the others in this sector got once the offer was announced, you would think they would drop at a similar rate if the offer is revoked, although looks like OCA has dropped by itself anyway.
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