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11-12-2020, 10:07 AM
#7491
Truly astounding latest property stats
HPI at NOVEMBER up 3% from October and 9% in last 3 months
https://reinz.co.nz/Media/Default/St...er%202020.docx
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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11-12-2020, 10:41 AM
#7492
Member
Originally Posted by Mudfish
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........
If utility stocks such as Meridian and Mercury trade at PE of circa 41x and 44x respectively (admittedly based on historical EPS), then why shouldn't the likes of OCA trade at 18?? Matter of time one would think?
Yield not materially different (MEL ~2.5%, MCY 2.3% based on current SP and historical dividend vs OCA ~2.6%. Difference here being, as have said previously, I like that OCA pays dividend from net OCF ($0.0161 OCF/share, $0.04 dividend/share), whereas utilities often pay dividend through cash reserves or debt raised (CEN being worst, $0.059 OCF/share, $0.39 dividend/share), so question sustainability of that yield, even if it is good in interim. All numbers there trailing / historical aside from SP.
While operate in different sectors, large similarities as well - big balance sheet / large fixed asset base, ability to leverage this, relatively reliable cashflow, wider demographic and economic trends support etc.
Last edited by wagwan; 11-12-2020 at 10:45 AM.
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11-12-2020, 10:52 AM
#7493
Full REINZ report is here https://reinz.co.nz/Media/Default/St...ber%202020.pdf
PE of 18, (the sector average) is only a matter of time.
Last edited by Beagle; 11-12-2020 at 10:53 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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11-12-2020, 11:18 AM
#7494
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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11-12-2020, 11:23 AM
#7495
Junior Member
Originally Posted by winner69
Winner, should do wonders for the revaluation gain for 1H21. Looking at the FY20 report, change in fair value of investment property for the:
12 month period ending May 2019 was a gain of 46.6 mil, while the REINZ May 2019 HPI was up 1.8% nationwide for the 12 month period;
12 month period ending May 2020 was a loss of 21.7mil, while the REINZ May 2020 HPI was up 7.9% nationwide for the 12 month period.
We now also know that REINZ October 2020 HPI: +7.7% nationwide (3 months), and November up another 3%.
As others have mentioned on this forum already, May 2020 revals were based on CBRE's April 2020 forecast. If last year's numbers are something to go by which was a relatively flat year in the property market, expect to see a big upward revaluation in 1H21 when residential properties are going gangbusters.
Price to NTA (as at 8/12/20):
RYM: 3.06
SUM: 2.22
ARV: 1.27
OCA: 1.37
Reversing last years loss of 21.7mil + a gain of 50mil in 1H21 (being conservative) should increase NTA by 10 cents per share easily. This puts OCA at a price to NTA of 1.24. Perhaps my estimate of 70mil revaluation is too conservative...
Disc: OCA is 20% of my portfolio
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11-12-2020, 12:52 PM
#7496
22nd Jan half year due. Lock it in..
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11-12-2020, 04:14 PM
#7497
UBS report just out initiating coverage with a BUY. Price target $1.50 and calling it that underlying profit should double from FY20 to FY24.
Projecting underlying earnings per share of 18 cps in FY25 and general expectation that we will see multiple expansion up to the medium for the sector, just over 18.
Market always a forward looking animal so my medium term expectation is that sometime late in 2024, My medium term forecast is that 4 years from now the shares will be trading on a forward PE of ~ 18 expecting ~ 18 cps in earnings = expected price range of $3.00 - $3.50.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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11-12-2020, 05:57 PM
#7498
Member
Originally Posted by Beagle
UBS report just out initiating coverage with a BUY. Price target $1.50 and calling it that underlying profit should double from FY20 to FY24.
Projecting underlying earnings per share of 18 cps in FY25 and general expectation that we will see multiple expansion up to the medium for the sector, just over 18.
Market always a forward looking animal so my medium term expectation is that sometime late in 2024, My medium term forecast is that 4 years from now the shares will be trading on a forward PE of ~ 18 expecting ~ 18 cps in earnings = expected price range of $3.00 - $3.50.
This is awesome thank you Beagle; I’m in this one for next 5 years; my projection is a medium 29m on result Jan 22nd. If PE goes to 18 on this share then look out. Real estate Market is still red hot; so those developments that are upcoming look very very very good for future pipeline.
Appreciate everyone that puts up their workings on here; Mudfish your maths is so damn similar to mine so thank you. And Mavs and Beagles are way above what I can do but appears to be a very good long bet and thank you all contributors
Happy holder on this one GL all.
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11-12-2020, 06:33 PM
#7499
Originally Posted by Beagle
UBS report just out initiating coverage with a BUY. Price target $1.50 and calling it that underlying profit should double from FY20 to FY24.
Projecting underlying earnings per share of 18 cps in FY25 and general expectation that we will see multiple expansion up to the medium for the sector, just over 18.
Market always a forward looking animal so my medium term expectation is that sometime late in 2024, My medium term forecast is that 4 years from now the shares will be trading on a forward PE of ~ 18 expecting ~ 18 cps in earnings = expected price range of $3.00 - $3.50.
Love your $3.00-$3.50 expectations - thought you might have stretched it $4.00 though
Good thing if that happens SUM will be $29-$33 and will have continued to outperform OCA
Seems I cant lose as a bob each way at the moment (hedging my bets the experts say)
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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11-12-2020, 07:06 PM
#7500
Originally Posted by winner69
Love your $3.00-$3.50 expectations - thought you might have stretched it $4.00 though
Good thing if that happens SUM will be $29-$33 and will have continued to outperform OCA
Seems I cant lose as a bob each way at the moment (hedging my bets the experts say)
Have to look at the development pipeline as well, all that stuff that's already consented, it's complicated trying to factor in the 'onboarding' of new developments but imo over the next five years OCA will significantly close the gap on all metrics against RYM and SUM. Haven't given much thought to ARV.
Anyway, it's not a race, the whole sector looks to be a good option for investors over the long term. I think it's too easy get too focused on the excitement of the next big capital gain which tends to de-focus on accumulating something we might have no intention of ever selling.
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