OCA - Oceania Group - retirement villages

[Scrunch]

Looks like retail investors might get an advantage over the institutions in the recent placement. Shares issued in the retail offer are at the lower on the institutional placement ($1.30), or a 2.5% discount to the volume weighted average price in the 5 trading days leading up to and including the closing date (12 April). If for example that VWAP price was today's closing price of $1.28 the new shares issued to retail investors would be at 0.975 x $1.28 = $1.248. If my memory serves me correctly NAV (NTA + all work in progress and some other minor stuff) was $1.24 as at the interim report date of 30/11/2020.

I will follow the share price action and volumes as I think they could be fair buying, (notwithstanding the recent tax bomb) for those taking a long term perspective at around NAV of $1.24 and make a decision right on the final deadline date.

As at 30 November 2020 net assets inclusive of $10m of intangibles were $652.1m. There were 626.3m shares on issue. That is not an NAV of $1.24. Its a net assets per share of $1.04 (or $1.02 per share if the intangibles are deducted). Work in progress is already part of a net assets calculation, but yes the future development margin (future profits) on the WIP will not yet be reflected in this balance.

[Beagle]

As at 30 November 2020 net assets inclusive of $10m of intangibles were $652.1m. There were 626.3m shares on issue. That is not an NAV of $1.24. Its a net assets per share of $1.04 (or $1.02 per share if the intangibles are deducted). Work in progress is already part of a net assets calculation, but yes the future development margin (future profits) on the WIP will not yet be reflected in this balance.

http://nzx-prod-s7fsd7f98s.s3-websit...547/339147.pdf See page 22.
I'll probably get more dislikes for this but I wouldn't be entirely surprised to see it down at NTA of $1.02 again. The shares would be very sound buying for the long term at that level. I think that's unlikely but once a downtrend is in place, (which clearly it is now from $1.60), you never know...the downtrend is not over until it is over, (as confirmed as far as I am concerned with a break up through the 100 day MA).

Those practicing selective hearing from their mates will hear what they want to hear but the independently reported anecdotal evidence is already there and building (literally by the day) that fresh investor money coming to the market has reduced substantially and as another feedback example the CEO of Mike Pero was on TV 3's breakfast show this morning talking about market appraisals by investors looking to sell as being at a "significantly increased" level. One good thing he did mention was that its likely the market will stratify more. You classic investor first home / investor unit will be significantly more affected than other segments of the market.

I remain very cautious on the near term share price prospects for this sector.

[Bjauck]

http://nzx-prod-s7fsd7f98s.s3-websit...547/339147.pdf See page 22.
I'll probably get more dislikes for this but I wouldn't be entirely surprised to see it down at NTA of $1.02 again. The shares would be very sound buying for the long term at that level. I think that's unlikely but once a downtrend is in place, (which clearly it is now from $1.60), you never know...the downtrend is not over until it is over, (as confirmed as far as I am concerned with a break up through the 100 day MA).

Those practicing selective hearing from their mates will hear what they want to hear but the independently reported anecdotal evidence is already there and building (literally by the day) that fresh investor money coming to the market has reduced substantially and as another feedback example the CEO of Mike Pero was on TV 3's breakfast show this morning talking about market appraisals by investors looking to sell as being at a "significantly increased" level. One good thing he did mention was that its likely the market will stratify more. You classic investor first home / investor unit will be significantly more affected than other segments of the market.

I remain very cautious on the near term share price prospects for this sector.

I have a large holding in OCA. I hope not but I fear we are still on another downhill undershoot section of this SP rollercoaster...I have hung on (luckily) before without jumping off.

[mike2020]

I have a large holding in OCA. I hope not but I fear we are still on another downhill undershoot section of this SP rollercoaster...I have hung on (luckily) before without jumping off.

While Mr B is right about where we are I think it is entirely sentiment and he is a prime example. No dislikes here Mr B I understand where you are at completely and no one knows what comes next. Id buy again if it goes under a dollar but I have a smaller long term hold and my biggest mistakes have been exiting rather than holding.

[Beagle]

Thanks mike but I think its more than sentiment. Without the DTB, (dirty tax bomb), its clear house prices would have accelerated at a much faster pace but now, at best we will see a significant moderation in the rate of growth which undermines the future pricing of OCA units and materially impacts their development and resale margins and ability to grow earnings in the medium term. That's what the market is in the process of repricing, (the lower growth prospects), not just sentiment.

If we start to see market evidence of average house prices reducing, (first full month of impact will be April and reported in early May) that could further exacerbate concerns in this sector regarding earnings growth expectations. I doubt many investors are in this purely for the quite modest unimputed dividend yield...but at ~ $1 the yield isn't too shabby.
For calendar year 2021 (at least), I expect this to underperform the market so remain with a very modest 3% portfolio allocation.

[Rawz]

Wow Beagle $1 sp?? Tell me that is an April fools joke.......

[Beagle]

Wow Beagle $1 sp?? Tell me that is an April fools joke.......

https://www.sunlive.co.nz/blogs/1548...2R3geA37r80LbE

https://www.oneroof.co.nz/news/39190

[bull....]

timber comes to mind. 1.30 was big support

timber. tried but couldnt get back above the 1.30 now big resistance ..... timber timber

[Beagle]

Tide seems to have turned against this sector. Real prospect of house price decreases leading to lower development and resale margins in addition to care costs increasing much faster than the rate at which the Govt will fund them. Reduced further today. Now down to ~ 2% portfolio allocation. The possibility of a $1 share price in due course as house prices turn south is not an April fools joke.

[Entrep]

$1 has always been a magnet for this share