OCA - Oceania Group - retirement villages

[Waltzing]

By the time you get through all the notes of revaluations the income and gains are a nightmare to bother with unless this is the only stock your following.

Its a cost accounting exercise when you get to note 3.2. You need to be a professional ACA with experience in Cost Accounting.

[Ferg]

My definition of a growth stock is a company that grows realised eps consistently. No point growing in size if you're not growing eps.

I suppose that is one way of looking at it. Although such a definition excludes businesses the general market would consider growth businesses who do not yet make a profit. We could list plenty of examples. You would know that as businesses grow they have growing pains in terms of getting the funding right - I don't see OCA being exempt from that. Keep in mind OCA has increased ILU capacity 43% in 4.5 years and care suites 251% in the same time period. That is what has provided the growth in NTA. When disclosed planned increases in ILU capacity of 71% and care suite capacity of 90% above current capacity is combined with historic growth in capacity and NTA, I'm not surprised some people view this as a growth stock.

[limmy]

Sorry, what does ILU stand for ?

[Rawz]

Independent living units ?

[Beagle]

I suppose that is one way of looking at it. Although such a definition excludes businesses the general market would consider growth businesses who do not yet make a profit. We could list plenty of examples. You would know that as businesses grow they have growing pains in terms of getting the funding right - I don't see OCA being exempt from that. Keep in mind OCA has increased ILU capacity 43% in 4.5 years and care suites 251% in the same time period. That is what has provided the growth in NTA. When disclosed planned increases in ILU capacity of 71% and care suite capacity of 90% above current capacity is combined with historic growth in capacity and NTA, I'm not surprised some people view this as a growth stock.

How much of their NTA growth has simply been because of house price growth in the last 5 years ?
https://www.interest.co.nz/charts/re...an-price-reinz $535k to $890k = 66%.
Share price only up 30%. Maybe the share price is simply front running a ~ 20% decline in house prices in the next 12-24 months ?

[Ferg]

Independent living units ?

Correct. That includes villas and apartments.

[limmy]

Thanks Rawz and Ferg. As of this month, I'm now invested in OCA. I've been wanting to own some OCA after cashing up from the privatisation of MET a couple of years ago. I'm now back to owning 3 companies within the RV sector. (the other two being RYM and SUM) Good long term hold. I'll continue to buy some more OCA as I can see its potential. Their current NTA is 1.27, and at around a dollar, the share price represents good value. Likewise, with a PE ratio of only 7, and Div Yield around 4% we can't really go wrong in the medium to long term, can we ?

Correct. That includes villas and apartments.

[winner69]

I have been looking at the exact same thing. This is what I am seeing from FY16-H1FY22. Percentages to the right show how the nett capex of $770m to date was funded. ILU capacity built & acquired since the beginning of FY16 is 602 excluding decommissions and conversions. Plus nett care suite capacity has increased by a similar figure since the end of FY17. Combine that with future pipeline activity and I see this as a growth business. The question for me is whether future ORA receipts are enough to cover expansion plans.

Attachment 13741

That Operating Cash Flow line on the spreadsheet looks a bit sick the last few years

[Rawz]

Thanks Rawz and Ferg. As of this month, I'm now invested in OCA. I've been wanting to own some OCA after cashing up from the privatisation of MET a couple of years ago. I'm now back to owning 3 companies within the RV sector. (the other two being RYM and SUM) Good long term hold. I'll continue to buy some more OCA as I can see its potential. Their current NTA is 1.27, and at around a dollar, the share price represents good value. Likewise, with a PE ratio of only 7, and Div Yield around 4% we can't really go wrong in the medium to long term, can we ?

Agree.... cant really go wrong in the long term.

Fairly solid base around $1-$1.09 right now..

[Ferg]

How much of their NTA growth has simply been because of house price growth in the last 5 years ?

Very little given NTA is driven primarily by the valuation of facilities which is based on forecast ORA receipts subjected to discount factors less unsold stock. That value is ultimately driven by supply and demand. Admittedly supply and demand for the various OCA facilities is a subset of the wider property market but as you know the "property market" is not a single market. I think you previously posted that OCA were too cheap relative to the market - so would that give them some insulation from a wider correction?