OCA - Oceania Group - retirement villages

[blackcap]

I guess OCA could sell a village at above NTA value and then buyback its shares which are trading at below NTA?

Doesn't that apply to all of the property companies out there at the moment? Most are trading at heavy discounts to NTA. My initial reaction is that the asset valuation is suspect? Or is the market wrong?

[winner69]

Or just stick to their knitting.
The biggest issue they face is they run operationally at a loss.
This is why I don't buy into the NTA, where do you value a loss making asset?

Summarising daytr and blackcap post I see the share price as NTA less (degree of suspect valuations) less (present value of operational losses) …and maybe less a value attributed to a company specific negative sentiment.

[allfromacell]

Summarising daytr and blackcap post I see the share price as NTA less (degree of suspect valuations) less (present value of operational losses) …and maybe less a value attributed to a company specific negative sentiment.

Which is why I pose the question, perhaps you can eat NTA after all?

If the market is valuing the business at under half NTA and it's possible to sell the assets at book value, maybe it's not so silly to actually start selling bits off.

[allfromacell]

What would that achieve for shareholders, selling the sliver (killing the golden goose) and buying back the stock?

Increasing every financial metric per share.

[winner69]

Increasing every financial metric per share.

…in the hope the share price will increase eh (like same PE on higher EPS) …but many studies have shown this hardly ever happens

Biggest beneficiaries are often management who have bonuses based on EPS or TSR … they think buybacks are cool.