OCA - Oceania Group - retirement villages

[winner69]

I've just freed up some funds. Was going to take a pretty (very) high risk bet on SKT but think it would be wiser to place most of the funds here.

Disc - Hold of both.

Forbar say 'high risk' here alpha .....but heck they have to say something to make out what they talking about ..... only risk is not getting to 2 bucks next year

[Beagle]

Didn't stay very long.

Looks like a pretty clear run after 1.40 to me

all blue sky after 140

Like 150 and then we’ll say 160 and then $1.70 and in expectation of this boomer result in January it’ll be over 2 bucks

I couldn't agree more. The analysts are only just starting to get to grips with this one. Maverick and I have been laboring away at it for years...and as mentioned earlier, I am expecting some big upgrades after they report in late January.

My revised price target 12 months from now is $2.16 but it might get there sooner !

[thegreatestben]

I've got a good chunk with ANZ and thought about departing with them to take on some more OCA and PEB. Think I should hold them through the upcoming results announcement after waiting all this time though.

[winner69]

I've got a good chunk with ANZ and thought about departing with them to take on some more OCA and PEB. Think I should hold them through the upcoming results announcement after waiting all this time though.

Shouldn't try to sway you but ................

[thegreatestben]

I do have a lot of OCA already

[winner69]

Who came up with INFLECTION in respect of OCA first?

Seems to have first mentioned on ST on July 23rd

Everybody now including guru broker analysts with CFA after their name are using it now

Must be that time

[Beagle]

Was nearly $1.40 not that long ago ...about last Xmas

Things look brighter now

So it’s back to 130/140 when MET money comes through

That’ll be good

Yes I did. See post #6118 (last sentence above). Not explicitly said by them that the last quarter was a loss but they did keep referencing 9 months so the overall sense is this is a very satisfactory result for what ostensibly amounts to 9 months of profitable operations.

Note change of balance date next year to 31 March 2021 (ten months next year). They expect their 217 new units to be completed within that 10 month period. My VERY PRELIMINARY thinking is FY21 will be in the range of $50-55m for the ten month period, (annualised rate of approx. $60-66m). I expect annualised underlying earnings of circa 10 cps. Forward PE at $1.00 is about 10.

Makes for an interesting comparison with my estimate of forward underlying PE for SUM of 19-20 and ARV, (premilitary thinking 15-16).

OCA is a slow burner but has reached the point of inflection where ~ 50% of its units are premium and I always said that was the right time to invest for the long term. As they roll out the remaining 20% of premium care suites, beds and premium apartments and start to generate recurring DMF revenues from the ORA model I think we can look forward to steady growth in the years ahead.

Steady growth does not normally go with a forward PE of just 10, especially in this sort of ultra low interest rate environment when even a no growth stock should command a PE of at least 11.5 in my opinion.

I remain comfortable with my 1 year price target of $1.38. Happy long term holder. OCA is being priced as a no growth stock...time will tell if this is correct or not but I think the pathway to profit growth is clear enough to see in the years ahead.

23 July as you noted Winner. I have upgraded underlying earnings expectations since then to 10 cps for the ten months to 31/3/21, (annualized, 12cps, some 50% higher than Forbar's latest estimate)

You have done very well with your prophetic post from around the same time, well done Sir !

I think there's a real chance this could be $2+ sometime in 2021, possibly quite early in the year

[Mrbuyit]

Approaching a new ATH, the last drp at ~98c certainly seems like a bargain now. Part of me is sad that the next accumiltion won't be so cheap..
This run reminds me of the Xmas run last year but I'm holding about 5x what I had then, in part due to the conviction of holders that contribute to this thread and the bunch of time it traded well below nta..
My first purchase at $1.16 in September 2018 would bee looking relatively sad if it were not for some aggressive dca in the last ~6 months.. Thanks to those that have taken thier time to share views and give a deeper explanation of the growth prospects / process.

[winner69]

Brief Notes - We upgrade Oceania Healthcare (OCA) to OUTPERFORM with a target price of NZ$1.65 (from NZ$1.10). We believe OCA's higheraverage charges and focus on care suites over traditional care is a key beneficiary of the current buoyant market environment forresidential homes and high demand for care. We believe OCA to be at an inflection point with its transition from traditional careoperator towards a premium operator charging through deferred management fees (DMF) and re-sale gains. We expect OCA toalmost double annuity earnings over the coming three years and deliver the highest cash recovery of new capex in the sector. ShouldOCA deliver on our expectations and the buoyant market continue, we see substantial further upside medium term.The worst is behind us, time to look aheadOCA has had, by some margin, the worst development of all the aged care operators over the last four years; annuity earnings havedeclined by almost 30% and only 50% of capex has been recovered in the form of new sales. This has been a deliberate strategy byOCA to de-commission one third of its existing care beds to replace them with (fewer) care suites and ILUs. This has, in our view, beena high risk, high reward, strategy that looks to be paying off. The care suite model substantially improves capex recovery, cashconversion of annuity earnings and DMF. The risk primarily relates to demand; will the product work? We are of the view that the "usecase" for care suites is strong, however, it is a relatively untested product in New Zealand. The early signs are positive, but OCA is, inour view, a high risk, high reward stock.

Guru broker analyst using terms like annuity earnings is awesome

I think Oceania use the term annuity-like earnings in several presos.

Maybe I'm a drunk monkey as well as I dont totally comprehend but annuity-like earnings sounds like something that keeps on keeping

In simple language what are these annuity-like earnings

[Greekwatchdog]

Winner I think the drunk Monkeys have mostly sobered up and those that aren't are still stuck in AA class. Soon they will be all clear..