OCA - Oceania Group - retirement villages

[Joh13]

Hi all,

I just want to say a big thank you to Beagle and Maverick for the information they contribute to this OCA thread it really is invaluable.

I've been a holder of OCA since 2017 and have built up a sizeable position around 800k shares with an average price in the late 70c range, and will continue to add to the position when opportunities arise. In all I think OCA has a lot of further growing to do and will provide at least a solid dividend every year, the EPS growth is just an added bonus.

Just wanted to thank everyone else as well, the forum is top quality.

Joh13

[Maverick]

Hi all,

I just want to say a big thank you to Beagle and Maverick for the information they contribute to this OCA thread it really is invaluable.

I've been a holder of OCA since 2017 and have built up a sizeable position around 800k shares with an average price in the late 70c range, and will continue to add to the position when opportunities arise. In all I think OCA has a lot of further growing to do and will provide at least a solid dividend every year, the EPS growth is just an added bonus.

Just wanted to thank everyone else as well, the forum is top quality.

Joh13

well shucks Joh, I really appreciate the "thanks" and I'm sure Beagle does too.

Thats an impressive pile you've got there too mate. Imagine quadrupling that over 6 - 8 years ....hmmm....no more workie workie for you.

[Beagle]

I know you bought early. What's wrong with being slightly overweight.. 17% isnt a lot. Must be somewhere else your looking to park money beagle?

See post #13982 on page 700 in the HGH thread on 18 November. That was a very emphatic post wherein I made it very clear I thought HGH was an outstanding opportunity around $1.35. ITs still very good value at today's closing price of $1.56 in my opinion.
Doesn't hurt to spread one's nest egg around amongst a number of outstanding opportunities

Thanks Joh13 and welcome to the forum.

[Teatree]

Of course the other option is to top up the rest of the portfolio

[RTM]

Beagle do you the percentage that you bought the shares at or the market value to determine how you balance your holdings?

You only use the % you bought the shares at when the current value has seen it has grow past your maximum % in your portfolio and you see good things ahead and you need to justify keeping them. I've had a few in that category....however recent meltdown has corrected things somewhat.

[Mudfish]

Right, I don't say much on here but thought I would have a go at articulating my understandings to at least help me clarify my own thinking about OCA as a medium to long term investment.

Firstly, thanks to all, especially Maverick and Beagle for all the freely shared information. Top quality stuff.

As has been said many times, the SP won't really get cracking until OCA shows significant profit growth. This coming first half year report 2021 in January will be critical in the short term to the SP. If it does well, off we go as OCA's model will be seen to be correct and working. If the report is pretty average, it's back to the long term waiting game. I personally believe, this is a fantastic long term share and in 5 years time, will prove a great divi stock that I will likely never sell. However, I also am keen to see it fire up and get going in the short term so am keen to explore the possibilities of how this coming report may look.

Here's my attempt:

Earl has stated, June-July-August sales are 26% up on the same 3 months last year. To me in a very crude way without getting hung up on DMF's, resale margins, PAC fees, etc etc etc, this can be extrapolated as 26% more profit on the bottom line. Very simple thinking I know.
- 24.6m (last years 6 months profit) /2 to get to 3 months = 12.3m
- 12.3m x 26% = 3.198m (that's simple 26% extra profit for June-July-August)
- 12.3m +3.198m = 15.498m (profit )
-15.498m x2 = 30.996m gives the whole 6 month period. Round down to 30m to be conservative.

Therefore the profit is 30m - up from 24.6m same time last year. I'm making assumptions here that the sales rates continue to be strong through the entire 6 months. I can't see any reason why this is not so. 30m gives a EPS of 4.81cps (annualised to 9.62cps - crude and simple thinking again)

Therefore:
PE of 13.5, SP=$130
14.5, SP=$140
15.5, SP=$150 ( I think things should be sitting now but understand the market needs to see the proof)
16.6, SP=$160

Add some more thoughts to this

-If I take your thoughts of 25-30m Beagle (you are much better at this than me) and apply midway at 27.5m. This gives annualised EPS of 8.82cps. At a PE of 15, that's a SP of $1.33.
- Maverick's (also much better than me at this) very specific 32.8m prediciton gives 10.52 EPS. At a PE of 15, that's
SP of $1.58
- Earl's statement of " we are at the point of inflection" is significant in its self. He didn't need to say that.
- Credit Suisse rates OCA at $1.30. Forsyth and Barr rates it at $1.65. Maverick believes they have made some
mistakes and will need to rethink after January. Time will tell, but even if they are right, SP should be between $1.30
and $1.65.
- House prices have boomed recently.
- The light's on at the end of the tunnel regarding Covid risk.

In conclusion, right now there appears to be plenty of indicators pointing towards excellent, if not fabulous growth that will be seen in January. Then the cat will be out of the bag and the market will choose how high to push the PE and of course the SP. If the report is not as good as I/we hope, it's certainly not a disaster but more waiting required.

For the record, I own loads of these shares and intend to hold for a very long time expecting them to become a great little set and forget divi stock in the years to come. Feel free to rip my post apart and destroy my thoughts as you wish.

[trader_jackson]

Right, I don't say much on here but thought I would have a go at articulating my understandings to at least help me clarify my own thinking about OCA as a medium to long term investment.

Firstly, thanks to all, especially Maverick and Beagle for all the freely shared information. Top quality stuff.

As has been said many times, the SP won't really get cracking until OCA shows significant profit growth. This coming first half year report 2021 in January will be critical in the short term to the SP. If it does well, off we go as OCA's model will be seen to be correct and working. If the report is pretty average, it's back to the long term waiting game. I personally believe, this is a fantastic long term share and in 5 years time, will prove a great divi stock that I will likely never sell. However, I also am keen to see it fire up and get going in the short term so am keen to explore the possibilities of how this coming report may look.

Here's my attempt:

Earl has stated, June-July-August sales are 26% up on the same 3 months last year. To me in a very crude way without getting hung up on DMF's, resale margins, PAC fees, etc etc etc, this can be extrapolated as 26% more profit on the bottom line. Very simple thinking I know.
- 24.6m (last years 6 months profit) /2 to get to 3 months = 12.3m
- 12.3m x 26% = 3.198m (that's simple 26% extra profit for June-July-August)
- 12.3m +3.198m = 15.498m (profit )
-15.498m x2 = 30.996m gives the whole 6 month period. Round down to 30m to be conservative.

Therefore the profit is 30m - up from 24.6m same time last year. I'm making assumptions here that the sales rates continue to be strong through the entire 6 months. I can't see any reason why this is not so. 30m gives a EPS of 4.81cps (annualised to 9.62cps - crude and simple thinking again)

Therefore:
PE of 13.5, SP=$130
14.5, SP=$140
15.5, SP=$150 ( I think things should be sitting now but understand the market needs to see the proof)
16.6, SP=$160

Add some more thoughts to this

-If I take your thoughts of 25-30m Beagle (you are much better at this than me) and apply midway at 27.5m. This gives annualised EPS of 8.82cps. At a PE of 15, that's a SP of $1.33.
- Maverick's (also much better than me at this) very specific 32.8m prediciton gives 10.52 EPS. At a PE of 15, that's
SP of $1.58
- Earl's statement of " we are at the point of inflection" is significant in its self. He didn't need to say that.
- Credit Suisse rates OCA at $1.30. Forsyth and Barr rates it at $1.65. Maverick believes they have made some
mistakes and will need to rethink after January. Time will tell, but even if they are right, SP should be between $1.30
and $1.65.
- House prices have boomed recently.
- The light's on at the end of the tunnel regarding Covid risk.

In conclusion, right now there appears to be plenty of indicators pointing towards excellent, if not fabulous growth that will be seen in January. Then the cat will be out of the bag and the market will choose how high to push the PE and of course the SP. If the report is not as good as I/we hope, it's certainly not a disaster but more waiting required.

For the record, I own loads of these shares and intend to hold for a very long time expecting them to become a great little set and forget divi stock in the years to come. Feel free to rip my post apart and destroy my thoughts as you wish.

I would very much like to see a $150 share price right now!!

[Beagle]

Thanks for your post mudfish.
KPMG did a huge report in relation to the MET takeover and noted the sector average PE is 18. No reason why OCA's PE won't rerate to that average over the due course of time as they prove they can grow eps.

[Mudfish]

Thanks for your post mudfish.
KPMG did a huge report in relation to the MET takeover and noted the sector average PE is 18. No reason why OCA's PE won't rerate to that average over the due course of time as they prove they can grow eps.

Hey, cheers Beagle for info. Using a PE of 18 makes the mathematics and SP go crazy with massive upsides. I was actually too nervous to use higher than 15 as it just seems far too good to be true. Makes a man wonder........

[Maverick]

As has been said many times, the SP won't really get cracking until OCA shows significant profit growth. This coming first half year report 2021 in January will be critical in the short term to the SP. If it does well, off we go as OCA's model will be seen to be correct and working. If the report is pretty average, it's back to the long term waiting game. I personally believe, this is a fantastic long term share and in 5 years time, will prove a great divi stock that I will likely never sell. However, I also am keen to see it fire up and get going in the short term so am keen to explore the possibilities of how this coming report may look.

Here's my attempt:

Earl has stated, June-July-August sales are 26% up on the same 3 months last year. To me in a very crude way without getting hung up on DMF's, resale margins, PAC fees, etc etc etc, this can be extrapolated as 26% more profit on the bottom line. Very simple thinking I know.
- 24.6m (last years 6 months profit) /2 to get to 3 months = 12.3m
- 12.3m x 26% = 3.198m (that's simple 26% extra profit for June-July-August)
- 12.3m +3.198m = 15.498m (profit )
-15.498m x2 = 30.996m gives the whole 6 month period. Round down to 30m to be conservative.

Therefore the profit is 30m - up from 24.6m same time last year. I'm making assumptions here that the sales rates continue to be strong through the entire 6 months. I can't see any reason why this is not so. 30m gives a EPS of 4.81cps (annualised to 9.62cps - crude and simple thinking again)

Therefore:
PE of 13.5, SP=$130
14.5, SP=$140
15.5, SP=$150 ( I think things should be sitting now but understand the market needs to see the proof)
16.6, SP=$160

Add some more thoughts to this

-If I take your thoughts of 25-30m Beagle (you are much better at this than me) and apply midway at 27.5m. This gives annualised EPS of 8.82cps. At a PE of 15, that's a SP of $1.33.
- Maverick's (also much better than me at this) very specific 32.8m prediciton gives 10.52 EPS. At a PE of 15, that's
SP of $1.58
- Earl's statement of " we are at the point of inflection" is significant in its self. He didn't need to say that.
- Credit Suisse rates OCA at $1.30. Forsyth and Barr rates it at $1.65. Maverick believes they have made some
mistakes and will need to rethink after January. Time will tell, but even if they are right, SP should be between $1.30
and $1.65.
- House prices have boomed recently.
- The light's on at the end of the tunnel regarding Covid risk.

In conclusion, right now there appears to be plenty of indicators pointing towards excellent, if not fabulous growth that will be seen in January. Then the cat will be out of the bag and the market will choose how high to push the PE and of course the SP. If the report is not as good as I/we hope, it's certainly not a disaster but more waiting required.

That's an excellent post Mudfish,
Great to see a lot of good thinking going on there.
Earl said SALES where up 26% and I think that should be only applied to the "new sales" or " new sales profit "of last HY , not "overall profit" as you have applied it to. Last years HY "new sales profit "was $17.7 m for the 6 months.
I have assumed that Earl`s comment on "sales" means NEW Sales (not resales) and is the total $value of sales, not volume units sold. Gee this gets messy when you think about it too hard.

I've recently looked up the sales by REINZ in Auckland for the following 3 months and those are even stronger than the 3 months Earl speaks of.
Whatever it exactly all means has got be very good.

I think your short term expectations of a share price around $1.50-$1.55 is spot on.

PE of 18 one day...definitely.