OCA - Oceania Group - retirement villages

[Beagle]

I think we're on for another challenging year in the market with headwinds of high inflation, rising 10 year bond rates, Omricon and probable subsequent variants, a rising official cash rate and central banks around the world reducing stimulus and increasing interest rates.

Ongoing issues with general staff shortages, difficulties getting and retaining skilled nurses and caregivers and a flat or declining real estate market present are specific challenges to this sector with OCA most vulnerable with staff because of its high level care model. I think most or probably all of this is already in the share price at $1.30 but you cannot discount the possibility that this could ostensibly track sideways for quite a while while we wait for headwinds to abate.

Long term hold and years of patience will likely bring its rewards. In the meantime the dividend yield is probably about the same as you'd get on residential property but this is at about a 13% discount to my estimate of current NAV and work involved with this one is a LOT less than residential property.

That's my read on things. HOLD.

[RTM]

maybe a dumb question but, given I am already down 14% on this share, and we all generally accept it may go down more before it gets better …. Wouldn’t it be a good idea to sell now, keep the cash ready, and then buy back in once omi has done its damage and thus have more shares than now as the business and share prices looks to recover?

Nope…not a dumb question. Generally I am a long term holder and will just add to many stocks on price drops. Retirement villages were ~10 % of our portfolio, I reduced to 5% a year or so ago because of risk that I see in the sector. Mainly, COVID, Regulatory and stagnant or decreasing real estate prices. On top of that we are retired and the dividends are modest.

I am considering exiting the sector completely based on the Omicron risk. I guess it’s going to get out into our community and I imagine that it may hit the retirement villages hard. Not quite sure what I will do at this stage.

I would rebuy at around $1.00.
For what it’s worth.

[bottomfeeder]

Panic over - I see share price back to 130

Now 120 is only a distant dream

Now that it's been below 1.30, that it is back to 1.30 it looks like up to me. But it isn't. $1.30 =is a very low SP for OCA, considering the stage the company is at. Will Omicron be bad, probably. Will it affect staffing capabilities at OCA resthome, no doubt. The real question is how long. South Africa has judged the outbreak as shortlived for some reason, as well as other countries. In several countries cases are on the wane. Hopefully that will happen here. Then we can get down to normal business and a 1.70 SP.

[Waltzing]

"I would rebuy at around $1.00."

that assumes that running costs are going hit the P&L big time and the MR B reminder that they havnt been able to get the margin up on their unit sales?

Feeling like this is a KIP story in the making but surely not.

[bottomfeeder]

download.jpg

I am overweight in OCA and I think I am comfortable with it. But I need the SP to get back to $1.70.

[Louloubell]

I need it to go to $2.50 in order to facilitate my desired life style. 😎

[BlackPeter]

download.jpg

I am overweight in OCA and I think I am comfortable with it. But I need the SP to get back to $1.70.

$1.70? When was it that high? ... I only can see an ATH at $1.60.

[Joshuatree]

I think we're on for another challenging year in the market with headwinds of high inflation, rising 10 year bond rates, Omricon and probable subsequent variants, a rising official cash rate and central banks around the world reducing stimulus and increasing interest rates.

Ongoing issues with general staff shortages, difficulties getting and retaining skilled nurses and caregivers and a flat or declining real estate market present are specific challenges to this sector with OCA most vulnerable with staff because of its high level care model. I think most or probably all of this is already in the share price at $1.30 but you cannot discount the possibility that this could ostensibly track sideways for quite a while while we wait for headwinds to abate.

Long term hold and years of patience will likely bring its rewards. In the meantime the dividend yield is probably about the same as you'd get on residential property but this is at about a 13% discount to my estimate of current NAV and work involved with this one is a LOT less than residential property.

That's my read on things. HOLD.

Good post.Ive been out for a while for the those reasons .Getting and retaining staff (care givers)getting desperate for some ,I'm hearing.A big song and dance was made about a wage rise recently for staff on the front line,8c an hour!!? And the staff are being ,pressured to work harder and harder by management and nurses,with no time off given for very valid family and other reasons.They feel used and bullied and not respected,why should they stay.

[BlackPeter]

Good post.Ive been out for a while for the those reasons .Getting and retaining staff (care givers)getting desperate for some ,I'm hearing.A big song and dance was made about a wage rise recently for staff on the front line,8c an hour!!? And the staff are being ,pressured to work harder and harder by management and nurses,with no time off given for very valid family and other reasons.They feel used and bullied and not respected,why should they stay.

Could you please clarify about which particular OCA retirement village you talk in your example and what the hourly wages are (given you seem to know the last 8 cents).

[forest]

Joshuatree, the NZX notices tells us that directors and other insiders are adding OCA shares to their portfolios.
They do that by dividend reinvestment.
On top of that Chair Elizabeth Coutts, directors Sally Evans, Peter Dufaur and Gregory Tomlinson have been buying on market recently.
One would think the insiders buying together with EBITDA increasing 19.6% in the last financial halve year is a positive and holding is likely more profitable than sitting on the sideline.