OCA - Oceania Group - retirement villages

[winner69]

Probably getting these two sites at a 'good price'

They booked a $8.5m gain on Waterford assets when they loaded them on to the Oceania books

Pretty cool eh

[winner69]

Things seem to be getting exciting

I sense money moving from SUM (down 2% today) into a reinvigorated OCA (up 4% plus)

[LoungeLizzard]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

[couta1]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

Its a long term hold with some positive news for future growth going forward announced, wouldn't agree with you on your safer places comment, what is safer in these uncertain times than an essential sector with 10 yr tailwinds?

[LoungeLizzard]

Its a long term hold with some positive news for future growth going forward announced, wouldn't agree with you on your safer places comment, what is safer in these uncertain times than an essential sector with 10 yr tailwinds?

Horses for courses. If you are happy with the sector to be in the doldrums for the next few years, and with inflation at 7% (and climbing) for your real return to be in the negative over that time, then good luck. There are stocks in the banking, energy, telecommunications sectors who offer a much better return whilst being just as secure.

[couta1]

Horses for courses. If you are happy with the sector to be in the doldrums for the next few years, and with inflation at 7% (and climbing) for your real return to be in the negative over that time, then good luck. There are stocks in the banking, energy, telecommunications sectors who offer a much better return whilst being just as secure.

Five years is crystal ball stuff, inflation can seem out of control yet can also be tamed in a relatively short space of time. Whoops I see you said a few yrs not five but my comment still stands.

[Beagle]

People are getting a little carried away in regarding this acquisition as some sort of game changer. The underlying issues - high overheads, low margins, poor management, - are all still there, as are the macro economic issues of covid, inflation/interest rates, declining property market, increased building costs etc. Expanding operations at this time when the core of the business needs attention isn't a good idea in my opinion and it smacks of smoke and mirrors to draw in the gullible and to (temporarily) arrest the decline in the SP. Arvida did the same thing recently in by buying the Arena villages. It got people excited (including me) initially, but the SP has continued to decline because of the same issues that OCA are facing. There are safer places, with better yields, to park your funds.

The ARV acquisition involved issuing heaps of new shares at a substantial premium to NTA and OCA is trading at a significant discount to last years NTA, (we'll know the new NTA on 20 May). In addition this was debt funded. Look, I agree its not a panacea for all the challenges I've articulated very clearly that OCA are facing but it does confirm, (3 acquisitions now), a change in direction for OCA towards more independent living units and I think that's a very important trend change, and to be honest one I was really looking for. I want the company to dilute down its heavy focus on care and they are doing that and moving in the right direction.

Its not a one or the other thing as far as I am concerned, as always a balanced portfolio of well diversified assets gives the optimum risk reward portfolio.
I've moved up to 5% allocation to OCA at these discounted level's which feels about right to me. I think it was a very meaningful acquisition and the step up in build rate to 300 units per annum is also great to see and they still have $290m for more acquisitions.

[LoungeLizzard]

Five years is crystal ball stuff, inflation can seem out of control yet can also be tamed in a relatively short space of time. Whoops I see you said a few yrs not five but my comment still stands.

My angle is that we are a time where preservation of capital is key. I'm not sure that OCA offers that guarantee - it's SP is on the down escalator and it's not stopping for long at any of the floors. And it's gross yield (4.3%) isn't enough to offset inflation which is here to stay at pretty elevated levels for some time. There's no compelling reason to get on the escalator until it starts going up. TA isn't showing that the bottom floor has been reached and the macroeconomic picture is so fuzzy that even TA isn't that helpful. My gut instinct is to wait it out and wait for a genuine upturn, independent of false flags like todays announcement. I wouldn't be overly surprised if next week the SP is back in the mid-90's, and the mood of this thread turns sour again.

[winner69]

Acquisition even mentioned by RNZ

Taking Simon Henry out if the news

https://www.rnz.co.nz/news/business/...ement-villages

[couta1]

My angle is that we are a time where preservation of capital is key. I'm not sure that OCA offers that guarantee - it's SP is on the down escalator and it's not stopping for long at any of the floors. And it's gross yield (4.3%) isn't enough to offset inflation which is here to stay at pretty elevated levels for some time. There's no compelling reason to get on the escalator until it starts going up. TA isn't showing that the bottom floor has been reached and the macroeconomic picture is so fuzzy that even TA isn't that helpful. My gut instinct is to wait it out and wait for a genuine upturn, independent of false flags like todays announcement. I wouldn't be overly surprised if next week the SP is back in the mid-90's, and the mood of this thread turns sour again.

My reasonable sized holding has an avg buy of about $1.40 so I won't do anything either except sit it out, agree about the mood turning with the sp for some but not all of us. I'm not thinking the sp would drop back to that level with the result being next week.