MET - Metlifecare - one for the fundies?

[BlackPeter]

I bought recently on the basis that this stock is very cheap for this sector with its intrinsic favourable demographics and my expectation that the new management ably supported by Infratil's expertise would drive the growth in new developments a lot harder than what's been the case in the past. They have an unleveraged balance sheet and are in excellent shape to expand their development profile, this was also an important factor for me. Looks like this is going to plan nicely.

Agreed; Good to see their increased focus on growth ... and nice to have one retirement village provider we both can agree on ...

Discl: hold;

[macduffy]

An update on their investments in the sector from Infratil.

http://www.infratil.com/assets/Uploa...&utm_term=here

[Beagle]

Thanks. Very good acquisition that Aussie one. Makes SUM and to a lesser extent RYM look significantly overpriced.

[Onion]

An update on their investments in the sector from Infratil.

http://www.infratil.com/assets/Uploa...&utm_term=here

That is the clearest description of a financial investment, and particularly the retirement accommodation industry, that I can recall reading. Credit to Infratil for putting the effort into such communications.

[BlackPeter]

Thanks. Very good acquisition that Aussie one. Makes SUM and to a lesser extent RYM look significantly overpriced.

Hi Roger,

not sure whether I understand. Based on which data in this report would you see SUM more overpriced than RYM? I agree that the book values of both their units look expensive compared to the Retirement Australia units (at 175k per unit - though you probably need as well to compare what you get for this money - not all units are made equal).

According the the IFT report the book value of a RYM unit is at 800k and the book value of a SUM unit at 400k. This compares to MET units at 270k, but than MET has as well a significantly older housing stock than SUM and probably RYM (not sure about the latter - don't follow them that much). So - unless the RYM unit is really 2 times more worth than the SUM unit (what I doubt), SUM is less overpriced than RYM, but both are per unit more expensive than MET. Right?

BTW - I did out of curiosity the same calculation for INA (not part of the IFT report), and their book value per unit is only 114k. Now - this is cheap

[Harvey Specter]

According the the IFT report the book value of a RYM unit is at 800k and the book value of a SUM unit at 400k. This compares to MET units at 270k,

Cherry picking a metric that looks good for them is a bit of an issue. Would also have been good to see other metrics as well as I am sure ath isn't the main one they looked at when deciding to buy retire Australia.

[Beagle]

Hi BP

I was referring too the acquisition IFT made which was IIRC at circa 18 times eps, a very similar forward metric MET trade on. Sorry don't have time for a fulsome debate today but I would say that one could make the case that RYM is N.Z. preeminent growth stock with a very long and distinguished track record of consistent EPS growth and therefore deserves to trade on a price multiple to the sector.

Much is made of MET's older portfolio but the last broker report I saw IIRC said the average age was 19 years, (no big deal if maintenance is being professionally done), but the key here is huge embedded value with much of their portfolio in Auckland and the Bay of Plenty...obviously arguably extremely popular retirement locations.

[BlackPeter]

A bumper result from MET: revenue: $101.5m (slightly above expectations), profit $122.6m (you just must love these rises in property values), but even underlying earnings (I know, Roger ...) up by 13,9% to $52.4m.

https://www.nzx.com/files/attachments/219358.pdf

And still better - the share was yesterday at market close still available at a Chinese worries discount, though suspect the price might change today. Make this a PE of 10 for a company with a CAGR of 9.8%. Looks like a bargain?

Discl: happy holder;

[Beagle]

Yes, first impressions looks good BP. NTA $4.29 a share means you're paying zero premium to invest in this growth company. Sound long term value.
Will leave further analysis for later. Too busy on AIR.

[percy]

A bumper result from MET: revenue: $101.5m (slightly above expectations), profit $122.6m (you just must love these rises in property values), but even underlying earnings (I know, Roger ...) up by 13,9% to $52.4m.

https://www.nzx.com/files/attachments/219358.pdf

And still better - the share was yesterday at market close still available at a Chinese worries discount, though suspect the price might change today. Make this a PE of 10 for a company with a CAGR of 9.8%. Looks like a bargain?

Discl: happy holder;

Did not look too flash to me.