OCA - Oceania Group - retirement villages

[Bjauck]

What's your point and what does it have to do with OCA? You implied (maybe said in a way) that the NZX is a dog market, when it's not at all for specific shares, it's only a dog if one has a market index, or the shares that the market currently thinks are worth less than they might be through the eyes of a value investor.

But that must surely be the definition of opportunity, seeing value in underpriced shares, and getting some, or some more? If you value a market and its shares by the share price that the market affords it, then you will miss any opportunity to get some, or get rid of some, when the time seems right to do so.

I think that your generalism on this was the undoing of your argument. As far as OCA is concerned, imho it would be wise to ask oneself whether now or around now is a good value investment, be it to get some, or accumulate a few more. I'm in the later having gone overweight OCA. It's cheap, cheap as, and in a year or two from now I expect to be proven right, by the market who right now are mis-pricing OCA, to our advantage.

Carpe Diem.

You really are making a mountain out of the mole hill that was my post in response to the OP. I misread the OP’s “cos” thinking they meant because. No I did not imply that the NZX is a “dog” market. I am sorry if you inferred that. I am overweight NZ shares currently. As a market I certainly don’t think it has gone up like “crazy” either. It is a stock pickers’ market.

I agree there are some good opportunities as a result of what may may be current mis-pricing. I too have accumulated OCA shares recently.

Carpe ius diem?

[Antipodean]

Not sure why $200 million will need to be wiped. 8% reduction seems pretty steep considering already accounted for much of the previous years market rate falls.
CBRE Limited and Colliers Limited are used regularly for independent valuations of property assets.

...Oceania has over $2.5 billion of assets and, of these, more than 90% of its total assets at 31 March 2023 were property assets carried at fair value as assessed by CBRE Limited and Colliers Limited.

Also worth noting in the same document they advised no need for a capital raise and even headroom for growth if required.

[Daytr]

Not sure why $200 million will need to be wiped. 8% reduction seems pretty steep considering already accounted for much of the previous years market rate falls.
CBRE Limited and Colliers Limited are used regularly for independent valuations of property assets.




Also worth noting in the same document they advised no need for a capital raise and even headroom for growth if required.

Does anyone buy REINZ figures that the housing market is up 5 - 6% in the last quarter or so? Short term data can be misleading.

I would suggest just more houses in a higher price brackets sold in the last months than the previous 12 months.

Prices in the same bracket i don't think have increased at all, they may well have decreased. Sales volume and auction clearances have been poor whilst listings have grown substantially.

[Antipodean]

Didn't mention REINZ - agree their data should always be investigated further.

OCA have a history of more modest increases due to property valudation (FY 23 ~0.5% and FY 22 ~2.0%) so I'm not worried about a sudden revaluation down of their assets - my assertion is that is already accounted for.

We need EPS growth and sales volumes.

[Balance]

Yes roughly.

The investment properties are recorded at fair value by an independent auditor.

I suggest you have a chat with a valuer like CBRE or one of the RVs to find out how they actually value RVs, which are then included in the RVs' accounts.

What I can tell you is that they use a combination of income capitalisation and discounted cash flow (yes, cash flow).

No weighting is given to comparative sales as valuation with RVs is underpinned by the specific strength of the Leases and Tenant covenant, and not the bricks and mortar.

[winner69]

I suggest you have a chat with a valuer like CBRE or one of the RVs to find out how they actually value RVs, which are then included in the RVs' accounts.

What I can tell you is that they use a combination of income capitalisation and discounted cash flow (yes, cash flow).

No weighting is given to comparative sales as valuation with RVs is underpinned by the specific strength of the Leases and Tenant covenant, and not the bricks and mortar.

I’ll repeat it mate …. Yes indeed, cash flows are used in determining the valuations

[Daytr]

I’ll repeat it mate …. Yes indeed, cash flows are used in determining the valuations

What would the cashflows be if they stopped expanding and just completed their existing builds and sold them even for a 10% profit and collected the DMF on resales?

As they are reinvesting profits from new sales & resales into more assets, the increase asset valuation surely does need to be considered.

This is why I get a valuation of around 99c & over time that should grow as long as they continue to make profits from sales & keep operationally at least break even or more.

[Balance]

What would the cashflows be if they stopped expanding and just completed their existing builds and sold them even for a 10% profit and collected the DMF on resales?

As they are reinvesting profits from new sales & resales into more assets, the increase asset valuation surely does need to be considered.

This is why I get a valuation of around 99c & over time that should grow as long as they continue to make profits from sales & keep operationally at least break even or more.

Valuation is an art rather than a science, it is often said. Nothing could be truer imo!

A discounted cashflow valuation takes into consideration a multitude of factors - principal one being cost of capital and the discount rate. A 1% movement there can have have a marked impact on valuation, especially with interest rates where they have been and where they are now.

Then there are the risk factors which are notoriously difficult to quantify and build into the discount rate.

Finally, the short term (1 to 5 years) free cashflows have a proportionally bigger impact than the terminal cashflows (>10 years).

From the above, it can be assessed that the short term (5 years) heavy capital expenditure and ongoing underlying operating losses have the greater impact on the valuation of OCA than say, a mature entity.

As my ex-boss used to coach us young rookies in the game, always ask yourself how long is a piece of string!

[winner69]

Warriors win again. Warrior’s fans getting even more excited. As one fan said ‘we’re on roll, early in the season but no way is this not our year’. Up the Wahs

Oceania fans seem to be getting slightly more excited as well. Cash rolling in from more sales to please the analysts …and the market. Sentiment is changing and share price will end the year well over a buck

The stars are aligning, both are destined to do great things this year. Where one goes the other goes

This is our year

UP THE WAHS

[Balance]

Warriors win again. Warrior’s fans getting even more excited. As one fan said ‘we’re on roll, early in the season but no way is this not our year’. Up the Wahs

Oceania fans seem to be getting slightly more excited as well. Cash rolling in from more sales to please the analysts …and the market. Sentiment is changing and share price will end the year well over a buck

The stars are aligning, both are destined to do great things this year. Where one goes the other goes

This is our year

UP THE WAHS

Absolutely W69!

Here’s to 65c tomorrow!

Cannot wait!

Dis. Invested during index selldown at 59c.