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06-01-2021, 11:55 AM
#7601
Originally Posted by Curly
Yep, $1.50 here we come.
What comes after $1.50? ...seeing $1.50 is really a non-event and not that exciting
Even a modest PE gives expectations of $2 plus
Last edited by winner69; 06-01-2021 at 11:58 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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06-01-2021, 11:58 AM
#7602
You'd think a big re rate from the Pro's with $2 in front..
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06-01-2021, 12:03 PM
#7603
You could be right. But I guess it all boils down to why one chooses to invest in a company such as OCA. I originally had no intention of ever investing in a retirement company, because the whole concept of wealthy people selling their expensive homes to buy into a ridiculously priced villa or apartment - doesn’t sit well with my personal philosophy and feelings about aged care. But when I started reading up on OCA I felt they were more aligned with them than any of the others. I guess my feeling is that if they continue to focus on providing excellent care options, the demand for those services will always be there. They will always have guaranteed income for care - sure, it may not be where they make their biggest profits, but as long as they’re making something, the real estate side of the business will make up for it. Remember too that many of their care clients down the track, will no doubt come across from the independent living side of the business. That alone is a huge selling point for newcomers looking for a villa or apartment. Peace of mind that their future care/hospital/dementia needs can be guaranteed, must surely be a positive thing.
It is worth mentioning too, that “care” is much more than hospital beds, personal cares, medications etc. “Care” is about being genuinely interested in and concerned for residents as people. It is about emotional connection and friendship. Just as an example - one of our residents died this morning. She had been unwell for over a month. She has no family in NZ and her only living son is in the UK, in lockdown. We set up a roster of staff to sit with her 24/7 last night, so that she would not be alone when she died, and so she would have “family” with her. Not part of our job description and not paid, but we had so many staff put their hands up to help, that we could have covered at least the next 2 or 3 days if needed. In the 2 years I have been in my job, not one resident has gone to hospice to die. Every one of them wants to die at home, within the care of us, their “family.”
Originally Posted by Bjauck
What a great service you provide. I hope you are right and that care subsidies will continue to cover all the costs - and the increasing higher needs costs of those even in rest home level care - involved.
I fear however that even this Labour government is more concerned for the protection of residential real estate owners’ capital gains than in protecting the returns for those who provide good care for the increasing numbers of people requiring such high level care. For that reason I think that perhaps an investment in a retirement company with more of its assets in land ownership and the provision of ORAs (as opposed to investment in the provision of care) may still provide greater investment returns for its investors.
Disc. This is my opinion. Definitely DYOR. I have approximately equal value shareholdings in OCA and SUM; smaller holding in ARV.
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06-01-2021, 12:45 PM
#7604
Member
This is awesome Justakiwi. Thank you for sharing. I love Oceania’s attitude towards extremely high quality care. Just reading through their annual reports has really shown me that these directors strive for absolute perfection from the purchasing of land, consenting process, building, design right through to the care and innovation on the “people” side of the business. I certainly believe I am investing in an extremely high quality company with above average management.
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06-01-2021, 03:38 PM
#7605
Member
Originally Posted by value_investor
Is the care side still being less and less profitable as we go? This is a big part of their thesis for being different and would worry me..
Hi, can anyone explain the reasoning behind the reduction in care profitability? I can’t seem to find anything in the annual reports referring to their care based plan reducing in profitability. Sorry for stupid question, thanks
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06-01-2021, 08:46 PM
#7606
Originally Posted by YoungBull
Hi, can anyone explain the reasoning behind the reduction in care profitability? I can’t seem to find anything in the annual reports referring to their care based plan reducing in profitability. Sorry for stupid question, thanks
Isn't it a case of the govt subsidy not keeping up with increasing costs to the retirement sector in providing the care?
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06-01-2021, 09:49 PM
#7607
We await the result with bated breath and since MR M last left the building we will have to go do some serious reading.
Last edited by Waltzing; 06-01-2021 at 09:52 PM.
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07-01-2021, 03:23 PM
#7608
Member
Originally Posted by Waltzingironmansinlgescul
We await the result with bated breath and since MR M last left the building we will have to go do some serious reading.
This is what Mr M wrote exactly one month ago today. (My emphasis)
Originally Posted by Maverick
Thought it was about time for a contribution just to stay “on the team” while we all standby awaiting the 1HY result.
I thought some here might be interested in some of the numbers I'm personally expecting then;
EPS 5.35c (PCP 4.0c) +33%
Care profit $12.8m (PCP$9.6m)+33%
Village profit $39m(PCP33.2M)+17%
Overheads, depreciation and interest cost $19.3m(PCP$19.1m)+1%
Overall underlying profit $32.8m (PCP $24.6m) +33%
I've withdrawn my full year expectations as I want to see how the 1HY goes first. This post covid property craze is too wild at this point.
Significant changes since last 1HY 2020 have been;
-Macquarie overhang is now gone,
-Property has gone up 15%, depending on the measurement used.
-Sales rates of caresuites and ILUs are now substantially more proven.
-Capital gains tax, NZ and USA elections are all done .
-Interest rates and term deposits are substantially lower.
-The development pipeline has advanced a full year
-Care profits are now past the point of inflection by Beagle, my calcs and according to Earl.(unproven to the market yet though).
-MET is gone.
-Covid cost and disruption came and went -touch wood.
Interestingly, last year's share price after the HY19 result, was about where today's price is. If my numbers are in the ballpark (obviously they won't be perfect but I believe they will be close) and considering the list of years changes above ,then the SP is considerably undervalued in comparison to back then.
If OCA was indeed worth $1.30 then then it's worth a heck of a lot more now no matter how deep or shallow one's research is. I have the greatest confidence that anyone buying or holding at this price will have purchased a fabulous earner both in the short and long term.
(Am I ramping ? I don't particularly care, I'm personally all about the EPS growth not the SP.)
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08-01-2021, 10:55 AM
#7609
Originally Posted by YoungBull
Hi, can anyone explain the reasoning behind the reduction in care profitability? I can’t seem to find anything in the annual reports referring to their care based plan reducing in profitability. Sorry for stupid question, thanks
if your investing in OCA you should focus mainly on the property development margins , the care side of the business will never make a huge contribution to profit.
one step ahead of the herd
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08-01-2021, 11:17 AM
#7610
Originally Posted by bull....
if your investing in OCA you should focus mainly on the property development margins , the care side of the business will never make a huge contribution to profit.
The care side of the business ensures the development side continues and has a sort of backstop to a slowing of "churn". If the development side of retirement villages, meets a certain amount of saturation, we might find the care side start increasing in value throughout the whole industry.
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