MET - Metlifecare - one for the fundies?

[nztx]

A Very Good analysis there - Beagle

[clip]

Reasonable yes, although I do doubt it given that the IC will most likely be 70+ of age due to entry requirements, and this demographic tends to be classed as 'vulnerable people' given that many have complicated medical histories or compromised immune systems. From memory, even at old level 2 and 3 alert levels vulnerable people were instructed to stay at home. I think it's unlikely for that to change. Maybe a possibility through video calling and viewing through a virtual tour?

I work in real estate industry (technology manager for a real estate company) and we are putting together systems in place for tenants to view properties and for listings etc. Pretty much exactly video calling and virtual tours, so yes that could and should be used for showing properties in retirement villages

[Beagle]

Great post there Beagle ..but you didn’t answer by question (important one from a risk perspective)

What’s the trigger for you to fall out of love with MET and kick them out of the kennel

I'm comfortable long term, (not expecting great things this year for obvious reasons). I really like the sector, the business model of all the operators is extremely tax efficient, and the demographic trends are undeniable.

I never wanted to sell SUM but the board never took on board my insistence over many years they needed to move to a fixed weekly fees for life model, in line with the rest of the sector and over the years they simply haven't been able to sell the units they've built. In my opinion the board have made a very poor call on this matter and its really hurting the company. I have also come to have real doubts about Julian's ability to work with Councils and key stakeholders to get developments done in a timely manner. The no growth thing when the company was priced for strong ongoing growth went down with the market like a lead balloon and was the trigger to find a better opportunity in this sector elsewhere.

I really do have a very strong desire to have really meaningful exposure to this sector long term and this provides the best opportunity (by a very long way), at current pricing. I would be happy to buy ARV if it gets down to NTA-V. Other than that I can't tell you what future trigger may impact my investment decisions because...well, that's in the future. I don't think the share price is going to rise back to NTA of $7 anytime soon and I'm quite comfortable with that.

An investment of 100,000 shares in MET is ostensibly the same as buying a nice retirement unit worth $700,000, for just $405,000. Covid 19 almost beaten here or not quite yet, that's a deal that's simply too good not to accept. Thing is, I have calculated 100,000 shares actually (with the interest free resident loans), gives you all the future benefit with resident and other gearing, (over 58% gearing the vast majority of which is free resident loans) of all future tax free capital gains from ~ $1.7m worth of property.. and that's the hidden gem of this retirement sector right there and that's why I like this sector and the business model.

Finally, this extract from MET announcement of 20 March 2020 should be noted

Metlifecare has not observed any material impact on its retirement village unit sales or admissions to residential aged care homes to date and does not expect the pandemic to have a disproportionate effect on Metlifecare.

[winner69]

Hey Winner me ol mate, you reckon $1 a week is a good deal for a trail 4 subscription to get access behind the paywall (Sorry mate, I couldn't resist)

They keep sending me emails to one address I have pleading for money ....even more pleads I get from Jacinda

Please, we need your support. Please please etc

Must be going broke or something ...probably Mike’s fault

Beagle - you probably enjoy Mike’s pieces?

[allfromacell]

This is very odd. Surely trading at 50% of net tangible property assets cannot go on forever??!!

Who are NZ Retirement Villages? Why would they be content with management and directors that deliver destruction of shareholder value while praising themselves for their "excellent performance against a challenging back drop"

!! ??

Meanwhile Ryman trades at 200% net tangible property assets and humbly credits their performance due to good service and consistent and simple operating model.

Will be interesting to wee outcome of the strategic review. Hopefully some improvement in liquidity and possibly some value will start to be realised....

This is a post from the first page of this thread in 2011. Perhaps trading at a significant discount to NTA can go on for another 10 years?

[Beagle]

Yeah, was $2 a share, (about half NTA) and very shortly thereafter there was an attempted takeover at $3.90...history never repeats, or does it ?
https://www.nzherald.co.nz/business/...ectid=10761913

[Raz]

Hey Beagle me old mate. We all know you are a trader (won’t use the word punter) and not an investor per se.

We all know that you fall head over heels in love with a company but you tend to fall out of love very quickly and kick them out of your kennel.

So a question

With MET what is the trigger that causes them not to be ‘deep value’ any more and you give them the boot.



Disc: taking a punt essentially because the share price sunk really low and there’s still a chance the takeover might happen or another offer might be made ...but I have no faith whatsoever in the current Board and management extracting any ‘great value’ out of this dog

Ha who needs enemies with friends like that alright! A punt is all there is to go for really when you have so much time on your hands and everything else has moved on up, say go for AIR with no practical operation on the up swing or could invest in a SME and have you hands full...then that is a losing play here in NZ with illusionary Government support...its okay if you are offered a Trump grant, direct cash.. however that is USA not here... so take a punt on MET is just as constructive...

[Scrunch]

This is a post from the first page of this thread in 2011. Perhaps trading at a significant discount to NTA can go on for another 10 years?

Discounts to NTA can exist for very long periods (as can premiums's to NTA). For example MCK has has maintained a decent sized discount to NTA across 2012 to 2019 and probably before this as well.

If you go back a little bit further than Beagle has in his good-growth statistics, MET growth metrics start looking a bit shaky. MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). So from a long-term perspective its been well deserving of its dog reputation.

Unlike SUM/RYM, MET never made it to new high's following the GFC (The June 2007 share price was $8.25).

The really key question is, Is today's version of MET (including its management team) better/different to the version that destroyed value and existed 10 years ago. Beagle has given some reasons to consider. Are they strong enough to revalue the company to near NTA? The jury is out on that one.

Disc - was a holder and sold out a few months ago. Didn't rebuy quickly in the low $3's as I thought the takeover speculators bailing out would push the price even lower.

[winner69]

If you go back a little bit further than Beagle has in his good-growth statistics, MET growth metrics start looking a bit shaky. MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). [/B]So from a long-term perspective its been well deserving of its dog reputation.[/B]

Now now Scrunch ...that’s in the past



....but dogs like tigers don’t change

[nztx]

How many other potential interested suitors were there for MET again ?

Arguably, I dont see too much of the value in MET has disappeared during C-19 either