OCA - Oceania Group - retirement villages

[Maverick]

Hopefully not Winner 'making up' numbers again, or OCA counting their H1 sold RV's as sold units? Whatever, an investor in an RV buys into the development growth and the dosh that flows from that, however long that takes, it's not and has never been about making $ from care. Right now all of the RV's are imo counterintuitively slowing down their development based on some fabricated perception that balance sheets are distressed (they're not, except maybe RYM overcooked it). All of them are subject to market sentiment re SP, whether right or wrong. Look through it, these are very successful property development companies with outstanding business models. The SP will look after itself, maybe just not in the timeframe you hoped for.

I'm seeing friends of mine reaching capitulation, hard core OCA believers, AND acting on it. Its hard to watch but easy to understand.

I have always closely watched and monitored sales , margins, prices , especially as high end apartments are a new product and what OCAs future profits are based on ( as you say , care is not the core driver) . After years of watching these sales to minute detail, learning the patterns from uncountable site visits, this last result has me worried...all metrics are holding up until now very well, except sales ...maybe we are at the oversupply stage??? If that's the case then its time to take the a bleeding nose and dig elsewhere.

But if its not , and turns out we are just in a property sales downturn then the outcome from this binary decision ...to sell or hold... leads to incredibly different outcomes. ( the third option is to BUY but who has any money left to do that?)

I`m not prepared to look past poor sales if they are not justified. Things wont come right if there is oversupply then the ultimate financial outcome will be tough.

However...for me, from everything I look at, I dont not see oversupply nor product issues. From the data , I still see enough demand to carry this industry on its merry way.

I love your positivity Baa baa and appreciate it during these dark days. I cant give you another rep point sorry, you deserve it.

While I do agree with you that's its going to work out just fine ( eventually when interest rates fall and property sales resume even at their current prices ) I completely understand others who want to stop the pain and just go fishing like the good old days before we ever understood what an ORA was.

For us to feel better , we dont need to see the SP rise to $1.20 , we just need it to start going up however slowly instead of down . I personally believe that cant be too faraway given the inevitable fall of interest rates that are certainly going to happen given the seriousness of economic pain now out there.

BTW, your presentient comment on "counterintuitively slowly down production" is just ensuring future demand demand will outstrip supply.

[Rawz]

Good post Mav. Feel for OCA holders. It’s been a tough ride but not long to go. Capitulation is generally the last obstacle a SP goes through before the rise.

[Baa_Baa]

I'm seeing friends of mine reaching capitulation, hard core OCA believers, AND acting on it. Its hard to watch but easy to understand.

I have always closely watched and monitored sales , margins, prices , especially as high end apartments are a new product and what OCAs future profits are based on ( as you say , care is not the core driver) . After years of watching these sales to minute detail, learning the patterns from uncountable site visits, this last result has me worried...all metrics are holding up until now very well, except sales ...maybe we are at the oversupply stage??? If that's the case then its time to take the a bleeding nose and dig elsewhere.

But if its not , and turns out we are just in a property sales downturn then the outcome from this binary decision ...to sell or hold... leads to incredibly different outcomes. ( the third option is to BUY but who has any money left to do that?)

I`m not prepared to look past poor sales if they are not justified. Things wont come right if there is oversupply then the ultimate financial outcome will be tough.

However...for me, from everything I look at, I dont not see oversupply nor product issues. From the data , I still see enough demand to carry this industry on its merry way.

I love your positivity Baa baa and appreciate it during these dark days. I cant give you another rep point sorry, you deserve it.

While I do agree with you that's its going to work out just fine ( eventually when interest rates fall and property sales resume even at their current prices ) I completely understand others who want to stop the pain and just go fishing like the good old days before we ever understood what an ORA was.

For us to feel better , we dont need to see the SP rise to $1.20 , we just need it to start going up however slowly instead of down . I personally believe that cant be too faraway given the inevitable fall of interest rates that are certainly going to happen given the seriousness of economic pain now out there.

BTW, your presentient comment on "counterintuitively slowly down production" is just ensuring future demand demand will outstrip supply.

I know it's hard Mav, but of all the stocks I've ever held, only a very tiny few have ever made a loss, usually from some unexpected event like a buy out at below my holding costs. I hope that doesn't happen with OCA but I've stayed the course and lowered my average holding price enough that an unforeseen event probably won't eventuate into a loss. I'd still be p1ssed off if that happened though.

The investment thesis imo is still sound, reasonable and achievable, it's just a matter of timing and many of us have been caught out because our timing has been overwhelmed by events beyond our or OCA's control, even the whole sector's control.

I've said before that I have never intended to sell my investment in OCA, or the other RV's that I have. They're not 5-minute wonders looking for a capital gain and boom, we sell for a massive profit and pat ourselves on the back for being so astute. They have always been a property development play and long term, which is subject to market fluctuations. And lo and behold, we have to contend now with a market downturn not seen since 2008/9 GFC.

Farking brilliant, who would have expected that? Repeated ongoing kicks in the teeth, it's no wonder some investors are punch drunk. But I question their motivation for investing in this sector in the first place. Maybe some investors have missed the point, this is and has never been a 5-minute wonder to untold capital gains riches. Alongside that, they're all, the RV's are sh1tty dividends payers, so that's never been a reason for investing in them. They are all pure property development players in a niche market of RV's, and that market is not immune to sentiment, which is bloody awful at the moment.

I have time and patience to wait for that to turn around, it will, the property market and development in particular is very cyclical, none of our RV's are distressed enough to be likened to a mainstream developer who has or is stressed on their residential or commercial developments. All RV's are bigger than that, they're far better positioned to weather the storms that the current market presents.

Sure, it's tough for shareholders, none of this was foreseen. But no way I'm going to capitulate into even a small a loss when it's obvious for anyone who has even the basic understanding of financials, that OCA is profitable, it is not distressed, it has many levers to balance the perceptions, and has enormous tailwinds to support its occupancy, and growth if they choose to continue to do so.

Patience is a b1tch, especially with investing!