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04-09-2015, 10:37 AM
#321
I've had a review of my portfolio in light of what I consider to be a bear market. Stocks that don't have either a strong and sustainable dividend yield or immediate (FY16) prospects for strong earnings growth have been culled.
While I think this is a sound company on undemanding fundamentals it is disappointing that they have set their development target margin so low at 15% and then said Fy16 is likely to undershoot this target.
I think the newly appointed development team need to do some soul searching on their projected medium term development margins and get more ruthless / efficient with their product procurement strategies.
For the present time I have decided to exit recently and will watch the sector from the side-lines. RYM also got the chop.
The whole sector (excl MET) is priced far too highly on a fundamental basis for my liking and the likelihood of some meaningful PE contraction in this bear market is very high IMO. The fact that dividend yields are so incredibly low and generally unimputed means unless you are getting SP growth you're better off investing elsewhere. This is something of a call on the Auckland housing market too, to which
I am already exposed though our home ownership and in other ways. The Auckland market has got FAR too high and I expect pricing to come back towards historical norms, (about 6 times average household income), over time. $600,000 average values make sense for this attractive city, $800,000+ is silly stuff. Some retracement of these grossly inflated prices will not be good for RYM, SUM or MET.
Last edited by Beagle; 04-09-2015 at 10:43 AM.
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04-09-2015, 10:43 AM
#322
Retirement stocks have certainly taken a beating of late but remain a good long term hold, I've still got Ryman albeit running at a reasonable paper loss currently, Met faces higher maintenance costs going forward than Rym and Sum and their main focus on Auckland may go against them eventually as well.
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04-09-2015, 10:49 AM
#323
Quite a bit of conversation is heard around the traps up here of people thinking of selling their $1m+ Mcmansion. / (cold old small cramped central Auckland house) and moving out of town.
Even Whangarei being mentioned lately, warmer climate and cheap as chips.
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04-09-2015, 11:05 AM
#324
Originally Posted by Roger
Quite a bit of conversation is heard around the traps up here of people thinking of selling their $1m+ Mcmansion. / (cold old small cramped central Auckland house) and moving out of town.
Even Whangarei being mentioned lately, warmer climate and cheap as chips.
There is an article on that in the current issue of whatever they call the accounting magazine now.
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04-09-2015, 12:00 PM
#325
Its happening already. Lots of house sales compared with recent years up around Kerikeri.
I am one of those migrants. There is a lot to like in the Far North.
Originally Posted by Roger
Quite a bit of conversation is heard around the traps up here of people thinking of selling their $1m+ Mcmansion. / (cold old small cramped central Auckland house) and moving out of town.
Even Whangarei being mentioned lately, warmer climate and cheap as chips.
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04-09-2015, 01:21 PM
#326
Doesn't this phenomenon happen every property cycle? Auckland has a property boom, then it spreads around the rest of the country, driven in part by Auckland folk realising their new property wealth either to return to their home area or to move or retire elsewhere with extra cash wealth. I think long term studies have been done - sorry no reference - that over the boom-bust cycles Auckland house prices increase on average annually by an extra 1% over and above the average national property price change. So, if past patterns continue, perhaps the rest of the country still has some catching up to do in this current cycle...
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04-09-2015, 01:36 PM
#327
Junior Member
Recently read an article regarding retirement homes in the USA having a 20% drop in the last decade due to the ease and affordability of home care. Perhaps something similar could happen here as immigration keeps flowing and automation takes its toll on lower skilled work opportunities.
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07-09-2015, 04:18 PM
#328
Pay a $1 and get what?
I see that at $4.18 MET is now trading at less than NTA ($4.29) and less than what I sold out for last year.
'Mildly surprised' kind of sums it up.
Best Wishes
Paper Tiger
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07-09-2015, 06:20 PM
#329
It does look cheap - doesn't it? Given that the recent fall was in sync with SUM and RYM, do I not think that we have here a MET specific problem.
However - markets might assume that less foreign capital is now flowing into NZ (Chinese have less money to spend) and rumour has it that Auckland house prices just stabilized. This might mean less pressure on the housing market and probably as well less pressure (or incentive) for elderlies to sell their houses and move into a retirement home.
Not sure, whether it works that way (and certainly not that fast - in reality there would need to be many months lag time for people to make these decisions), but this could be an explanation for the dip in market sentiment.
Maybe a good time for you to come back to NZ ?
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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07-09-2015, 06:52 PM
#330
Maybe holders are moving from Growth to Income shares in these volatile climes.
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