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  1. #1606
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    Quote Originally Posted by Beagle View Post
    Pumped for a reason. There's deep value here and MET have the strongest balance sheet with the lowest gearing in the sector and will be least affected by a slowdown in development.

    There was already a widely held belief the scheme of arrangement in its current form and price would not proceed. If that was not the case the market would have adjusted the ~ $3.90 price much, much closer to $7.00 which was due next month. My view is the activation of the material adverse event clause simply triggered an irrational response from some investors and anyone who was quick enough and jumped on board in the low to mid $3's should be very happy indeed. I don't think many people think its 2019 again, I'd suggest almost nobody does.

    We have common ground in feeling a sense of bewilderment that the market per se is starting to react to unprecedented quantitative easing and there appears to be a real disconnect between the market and the likely underlying performance of the economy. I am very cautious as to how this all ends so am only buying companies like MET who are not only very deep value at the current price but also have very low debt, good cash flow and their business will only be affected by Covid 19 in a moderate way. It will be easy enough for them to slow down construction to meet the new normal market conditions and they have the strongest embedded value in the sector so the natural churn of existing units will see them able to maintain underlying profits at robust level's.

    SUM by comparison is much higher geared, carries approximately a 17 year land bank (all debt funded) at the current build rate, which is frankly an absurd level of land to hold in the likely new normal in which we now live and most importantly of all, SUM relies on its development activities for the majority of its underlying profit.

    MET has the oldest and most established portfolio of assets and is much better situated to weather this event and yet trades at a 46% discount to NTA whereas SUM trades at a 20% premium to NTA.

    I think the chances of a takeover at a significant premium to the current $3.77 price sometime in the next 24 months are very good. I doubt whether this will be at $7 in the new environment but even $6 gives a potential 59% return on yesterday's closing price. Even if that doesn't happen the value relative to the rest of the sector is very clear to me and I would expect the company to be more proactive with reinitiating their share buyback scheme, at perhaps a significantly enhanced funding level if the shares stay anywhere around their current price.

    On a 12-24 month view the chances of a decent gain from here look very good indeed.
    Is the balance sheet really that much better than Ryman or ARV.. thereís no real upward trend in metrics looks like itís going to be stagnant to downwards growth wise

    That said I guess you canít argue with NTA argument and the fact that thereís been an overreaction to the deal being rejected

  2. #1607
    ShareTrader Legend Beagle's Avatar
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    Its about resilience for now. RYM has close to 40% external debt. That's a lot of debt to service with development shut down. https://www.nzherald.co.nz/business/...ectid=12319294

    http://nzx-prod-s7fsd7f98s.s3-websit...968/317506.pdf
    Last edited by Beagle; 10-04-2020 at 04:38 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  3. #1608
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    Just like to say as a village resident,these places are a gold mine for the owners.to give you some insight,my wife & are in the mid 70's [we moved in 11 years ago,because we have no live family & travel a lot,or we did,now cancelling heaps of trips,but now you have to be over 70 to get in]So why is that important,well you buy in & 3 years later if you move out or do the right thing & pass on . So in our case [not good for them as we have lived too long you lose 30% of what you paid to get in],we paid $300k & if we go we get back a maximum of $210k & if properties have gone up we get nothing extra,now if we pegged today,they would spend about $50k to completely upgrade the 2 bedroom unit & sell to the next mug for well over $600k on todays market.Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies.Hope that helps you guys out a bit,have a good easter AT HOME [to look after us old buggers who probably cant fight the virus].Happy days..

  4. #1609
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    Quote Originally Posted by crighton100 View Post
    Just like to say as a village resident,these places are a gold mine for the owners.to give you some insight,my wife & are in the mid 70's [we moved in 11 years ago,because we have no live family & travel a lot,or we did,now cancelling heaps of trips,but now you have to be over 70 to get in]So why is that important,well you buy in & 3 years later if you move out or do the right thing & pass on . So in our case [not good for them as we have lived too long you lose 30% of what you paid to get in],we paid $300k & if we go we get back a maximum of $210k & if properties have gone up we get nothing extra,now if we pegged today,they would spend about $50k to completely upgrade the 2 bedroom unit & sell to the next mug for well over $600k on todays market.Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies.Hope that helps you guys out a bit,have a good easter AT HOME [to look after us old buggers who probably cant fight the virus].Happy days..
    Thanks for another insightful post there, Crighton. Have a good Easter and take care.

  5. #1610
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    Thanks crighton

    Iím feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

    Where your next travels taking you?
    ďJust consider that maybe the probability of you being wrong is higher than you think.Ē

  6. #1611
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    Quote Originally Posted by winner69 View Post
    Thanks crighton

    I’m feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

    Where your next travels taking you?
    Just because people are getting on in years does not mean they are stupid, ill informed or ill advised.

  7. #1612
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    Quote Originally Posted by winner69 View Post
    Thanks crighton

    I’m feeling just a little guilty that the company I own is screwing mug oldies for as much we can get away

    Where your next travels taking you?
    No guilt whatsoever
    Providing a great lifestyle and a caring environment until the end of life.
    It is easier for a camel to go through the eye of a needle than a rich man to enter the kingdom of Heaven

  8. #1613
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    Quote Originally Posted by crighton100 View Post
    ...Please dont forget that all the time the unit residents are paying a fixed fee every week for the pleasure of staying & that covers all the outgoing costs for the village.So you can see the company is in a great position [running all the time of the shut down & fully financed] & as soon as its all over away they go again,selling the departeds units & so far we have lost none in our village.they really are looking after us oldies.....
    It sounds like you are in the best place during the Epidemic. I have heard similar from other retirement villages - that the village will organise prescription collection, have their own grocery ordering services and generally keep an eye on independent unit residents during the lockdown.

    This is contrary to the down ramping narrative put about by some. If I were being cynical, that had been to try to buy back into the retirement stocks at as a cheap a price as possible - the epidemic being a not to-be-missed opportunity to exploit.

  9. #1614
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    Quote Originally Posted by Bjauck View Post
    This is contrary to the down ramping narrative put about by some. If I were being cynical, that had been to try to buy back into the retirement stocks at as a cheap a price as possible - the epidemic being a not to-be-missed opportunity to exploit.
    To be fair, my recollection is that speculation of that nature was predominantly prior to the govt presenting a clear plan to minimise the risk of widespread community transmission.

  10. #1615
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    Quote Originally Posted by cyclist View Post
    To be fair, my recollection is that speculation of that nature was predominantly prior to the govt presenting a clear plan to minimise the risk of widespread community transmission.
    Villages had already introduced their own CoronaVirus responses some time prior to the government’s plan. However, Fair enough, I may well be being too cynical.

    My recollection is that it was down-ramping of retirement villages in general as being a more risky place (in epidemics) for independent unit living by the elderly, as opposed to living in homes in the community.

    My opinion based on from what I have heard, is that Whether in lockdown or not, the elderly in retirement villages have more facilities and village security measures to insure social distancing is possible.

    I think the pivotal moment when down-ramping stopped was when the opportunity arose for purchase of shares at sufficiently deflated prices. Those purchasers may then have suddenly decided that would not give voice to their opinions that villages were more unsafe for the elderly than living outside of a retirement village.

  11. #1616
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    Quote Originally Posted by Bjauck View Post
    Villages had already introduced their own CoronaVirus responses some time prior to the government’s plan. However, Fair enough, I may well be being too cynical.

    My recollection is that it was down-ramping of retirement villages in general as being a more risky place (in epidemics) for independent unit living by the elderly, as opposed to living in homes in the community.

    My opinion based on from what I have heard, is that Whether in lockdown or not, the elderly in retirement villages have more facilities and village security measures to insure social distancing is possible.

    I think the pivotal moment when down-ramping stopped was when the opportunity arose for purchase of shares at sufficiently deflated prices. Those purchasers may then have suddenly decided that would not give voice to their opinions that villages were more unsafe for the elderly than living outside of a retirement village.
    We also need to remember the context over the last few weeks has been changing rapidly as we start to understand the implications of the virus and the measures companies in the sector have been putting in place. The idea that it may be safer for the residents to be in such places as opposed to out in the general community wasn't really commonly accepted 3 or 4 weeks ago. In retrospect, I can see how investors may have been giving these companies a wide birth on the face value of the situation at hand.

    Sentiment has evolved somewhat since then as we've started to appreciate that it's probably safer for residents in the villages and also the revenue streams are generally a lot safer than a good chunk of other sectors.

    Still, when you consider what's happening in one or two Christchurch homes and the constantly evolving state of this virus situation, there is still plenty of scope for investor nervousness. The next two weeks will be telling.

  12. #1617
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    Quote Originally Posted by Cyclical View Post
    ...Still, when you consider what's happening in one or two Christchurch homes and the constantly evolving state of this virus situation, there is still plenty of scope for investor nervousness. The next two weeks will be telling.
    Sure many, in the absence of any evidence, were quite happy to level FUD - fear uncertainty and doubt - on the retirement villages. Quite the contrary was evident at the time.

    If you are referring to those in rest home and hospital care, then of course there is always the possibility of infection and contagion. As there is in public hospitals. But what alternatives exist for those who cannot afford a posse of private nurses and carers, if they need rest home or hospital level care? Let us hope that the stockpilers of PPE have not cause a shortage of PPE for those that actually need it.

  13. #1618
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    Thanks crighton..great post.Re the 30 % lose...i.e $210 is that a maximum or confirmed.Re properties going up in price..mmm..I cannot see it in the immediate future.That "mug" comment ..Im not so sure about that and the figure of $600 figure I have doubts about that too.Yes I understand the weekly figure is about $500 pw ($25k py)...I understand that circumstances differ,,but does the pension cover that ?.Again great post go well mate

  14. #1619
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    Another good article in the herald a bout this sector. Heres a teaser to encourage folks to take up the $64 for 8 weeks. Charts and comparisons between all listed companies.

    "Nonetheless, economic slowdown or not, the growth in population of over-75s in both New Zealand and Victoria (Australia) will continue, underpinning longer-term growth in unit development and sales.In 30 years, the number of New Zealand over-75s will have increased from 330,000 today to around 850,000, with even greater growth in that age group forecast for Victoria."
    Oliver Mander: Retirement village blues will fade away

  15. #1620
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    OK after 1 year in the village you lose 10%,after 2 you lose 20% after 3 or more years you lose 30% of your original buy in price.That applies to all of us,most of the units are the same in size etc & they now sell around the $600k & the price is assessed by a valuation by an outside company so you can see how inflation has increased the price of these units [we sold our 5 bedroom house 11 years ago for $525k,it would be over 1m now,so its all relative].The weekly fee for us is $130,people moving in today pay just over $150 pw,the fee is fixed for the duration of your stay & one pension more than covers this cost.For that fee it covers house insurance,water & property rates,rubbish collection,maintenance of your unit & the village amenities,gardening & lawnmowing,emergency call buttons in your unit,with 24hour nurse on site.Facilities include billiard & 8 ball table,lounge with all the sky channels on large tv,bowling green,putting green,petanque court,crochet & heated swimming pool & hot tub.The most important thing is security,the gates are locked at night & we have a night watchman.So mug was not the right word to use,as its more like a holiday camp.At present under the lock down,we are a bubble & required to also be unit bubbles,no mixing with the others,we can walk around the village but must be at least 2m apart.The staff do all our shopping & drop at our door & collect pharmacy stuff,the nurses ring everyone in the village at least twice a week to check we are OK.When you live here you have to be able to look after yourself,when you cannot you leave for a resthome [thats the places that are having problems you will have seen in the news].Hope that clarifies things a bit for you.Happy Easter.This was in answer to troyvdh,I did not know how to do a reply.
    Last edited by crighton100; 12-04-2020 at 11:50 AM.

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