Where to invest?

[LAC]

I think SEK has potential for some good growth pending weather and disease (or fire)

[malus]

Any new leads for things that will go well this year? Hopefully I'll have some money coming my way in the next few months, so that'd be good to invest.

Currently the only thing that looks promising is VHP as a long term or SCL as a short term ready for when they announce that profit went up 10% at the end of 2016 due to larger apples and business growth, etc.

Sometimes the NZX feel like such a small playground compared to the foreign markets

Was going to buy 10,000 units in 2004 (then called Calan Health Care Props I think)... unfortunately I was using Bill Garlick's Access Brokerage at the time... I placed the order and Access fell over... fortunately funds were still sitting with BNZ who refused to pass them over to the receivers. Eventually, 6 months later after a High Court case and favourable decision the funds came back and I bought RBD instead.

Any how just looked at how VHP has preformed over that time using Sharesight. I would have had a compounding return of 11%pa (incls capital appreciation + dividends)... so steady reliable long term, but as I think Percy mentioned not having management in house eats into capital appreciation. LVR - loan to value - is good 32.9% (most unit property trusts have a more conservative LVR now than back in 2007/8), WACC - weighted ave cost of capital - 5.32% and WALT - Weighted Average Lease Term - v good at 17yrs reflecting the sector they are in - healthcare, long term use of properties. 80% of properties in Aussie, 20% NZ. All important facet of course with property in is location... haven't looked closely at this, but assume like recent Boulcott purchase they are well located for future health care needs. Be interesting to have closer look at directors?

So, likely a steady performer and a good place to park capital instead of the bank

Interestingly, RBD over the same period gave me 17% compounding return, but a much less steady ride along the way!!

[percy]

Malus.
If you were investing $10,000 tomorrow and you had to chose between RBD and VHP which would you buy?
2188 RBD @ $ 4.57 or 4878 VHP @ $2.05.?

[BeeBop]

[QUOTE=malus;610644]Was going to buy 10,000 units in 2004 (then called Calan Health Care Props I think)... unfortunately I was using Bill Garlick's Access Brokerage at the time... I placed the order and Access fell over... fortunately funds were still sitting with BNZ who refused to pass them over to the receivers. Eventually, 6 months later after a High Court case and favourable decision the funds came back and I bought RBD instead.

Access Brokerage!!! We squeaked out of that safe JUST. Got our 60k out about 1 or 2 days before everything was frozen - bought our house at auction just after getting our money out...still have the property now in central Auckland. Had we not had our money out we wouldn't have been able to bid!

[Joshuatree]

2004 good god man !! Bebop thats a great escape story!!How much has your house gone up % wise since. Good as lotto without the risk? Im pouring another glass to celebrate your escape to riches story and I'm sure craic already has.

[malus]

Malus.
If you were investing $10,000 tomorrow and you had to chose between RBD and VHP which would you buy?
2188 RBD @ $ 4.57 or 4878 VHP @ $2.05.?

That's a very good question Percy, I'll need to think about the reply. Off to bed now and away early tomorrow tramping ... will give you my thoughts on Thursday.

[malus]

[QUOTE=BeeBop;610650]

Was going to buy 10,000 units in 2004 (then called Calan Health Care Props I think)... unfortunately I was using Bill Garlick's Access Brokerage at the time... I placed the order and Access fell over... fortunately funds were still sitting with BNZ who refused to pass them over to the receivers. Eventually, 6 months later after a High Court case and favourable decision the funds came back and I bought RBD instead.

Access Brokerage!!! We squeaked out of that safe JUST. Got our 60k out about 1 or 2 days before everything was frozen - bought our house at auction just after getting our money out...still have the property now in central Auckland. Had we not had our money out we wouldn't have been able to bid!

Help! Great escape alright Behop!

[malus]

Malus.
If you were investing $10,000 tomorrow and you had to chose between RBD and VHP which would you buy?
2188 RBD @ $ 4.57 or 4878 VHP @ $2.05.?

VHP - question is if I paid $2.05 now, as a long term holder, say 10 years, would I get an 11% return (or better) compounding?

At present annual dividend is 8.1cents per share, around 4%pa and no imputation credits, whereas in Sept 2004 I would have paid $0.84 a share with annual dividend of 3.17cents per share, 3.8%pa (4.78%pa with imputation credit). I assume imputation credits have all but disappeared recently due to adjustments related to where tax is declared... ie Australia or NZ and they won't be back.

Observation - had I bought in Sept 2004 at $0.84, over time the company would have grown for me and would have paid a compounding dividend return of around 6%pa, with capital value expanding to give a total 11%pa compounding return. Note: without a request for more capital from shareholders.

Recently the Trust reported a half year $19m net distributable income and I assume its, second half is likely to be similar, so full year say $38m... 11cents per share... 5.3%pa based on current share price.

I see this as a typical unit property trust investment, steady over time as long as it continues to be well governed and managed... with results similar to the past 10 years and in a sector that is growing. I currently wouldn't pay more than $2.05 per share and preferably less.

RBD - the question again, if I pay $4.57 per share now, as a long term holder, again, say 10 years, would I get 17% return (or better) compounding.

When I bought in 2004 I liked the dividend yield at the time, and over the time I have owned them that yield has been around 11% compounding on what I paid for the shares, the rest being capital improvement, again without me having to put extra capital in. (Albeit there were rocky times for shareholders when the business was turned around from its foray into Victoria Pizza Hutt and refocused on its NZ brands).

I like the return on capital and on assets achieved by the Company, most recently 33% on capital and 16% on assets. Margin is typical of retail around 6%, but the customers all pay cash and it's matter of tight management of the rest the business to get shareholder results... good governance and management... I agree with you Percy, go Russell!

What I would have to pay now for RBD has risen with the announced Australian acquisition and associated risks... All the cons well covered on the RBD thread.

The answer Percy is, if I was conservative and happy to take a lower return for less risk VHP would likely appeal (better than in the bank with reasonable expectation of liquidity), on the other hand if I was prepared to take on higher risk for potentially higher reward the RBD option is likely more appealing... however, I usually make it rule to avoid purchasing just after an acquisition announcement... sometimes hype runs away with the share price.

So continuing happy holder of RBD

However, would now likely to put my $10,000 with RYM. If I had done so in 2004, I would have a capital gain of $95,000 and dividends of $10,000 and compounding annual gain of 26%! RBD has been good, but in hindsight I could have backed a better one and did back worse!

[percy]

Thank you Malus for your excellent analysts of the question I asked you.
I actually brought RBD yesterday as I think KFC is what they know,and the NSW acquisition is KFC,and is a great beachhead to Australia..
Yes RYM has certainly performed, and I see SUM is very strong at present.A sector with big tailwinds.
Yet over the past year there have been some very poor performers.Luckily I do not own any of them;FBU-14.32%.STU-21%.SML-1.72%.SKT-21.01%.TWR-26.52%.CEN-28.55%.
Goes to prove time spent researching pays big dividends.
ps.Trust your tramp went well.I am busy lugging books.!!

[malus]

Thank you Malus for your excellent analysts of the question I asked you.
I actually brought RBD yesterday as I think KFC is what they know,and the NSW acquisition is KFC,and is a great beachhead to Australia..
Yes RYM has certainly performed, and I see SUM is very strong at present.A sector with big tailwinds.
Yet over the past year there have been some very poor performers.Luckily I do not own any of them;FBU-14.32%.STU-21%.SML-1.72%.SKT-21.01%.TWR-26.52%.CEN-28.55%.
Goes to prove time spent researching pays big dividends.
ps.Trust your tramp went well.I am busy lugging books.!!

"Goes to prove time spent researching pays big dividends." 100% agree Percy. Beautiful day tramping in the Marlborough Sounds while the passive income continued to churn for me!