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  1. #6951
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    Great, thanks for that. Appreciated.

  2. #6952
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by James108 View Post
    A large part of the development cost is also capitalised (I.e roads, communal areas) and does not appear as part of the development margin in the income statement. I treat the “development margin” with a bit of caution as it does NOT mean that if all the units sell on a $100m development at 30% margin you now have $130m.
    Quite right mate. The real money is not in the development margin for the issue of the first license to occupy, its in the reissue of the second, third, fourth and so on new license's to occupy down the track. In many ways the first occupants get the best deal with brand spanking new communal living area's to enjoy.
    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

  3. #6953
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    Tax position on refurbishments cost?

  4. #6954
    …just try’n to manage expectations… Maverick's Avatar
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    Quote Originally Posted by James108 View Post
    A large part of the development cost is also capitalised (I.e roads, communal areas) and does not appear as part of the development margin in the income statement. I treat the “development margin” with a bit of caution as it does NOT mean that if all the units sell on a $100m development at 30% margin you now have $130m.
    Ahhhhh.....so that's why they don't bother with building swimming pools

  5. #6955
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Waltzingironmansinlgescul View Post
    Tax position on refurbishments cost?
    Tax deductible.
    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

  6. #6956
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    Thank you Mr B. Just double checking.

  7. #6957
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    It strikes me that it would be a good idea for people to [re]read the full year financial statements, very definitely including the notes (especially 3), and get a grip on investment property versus property, plant & equipement and the different tax treatments thereof.

    You should also spot when a road is included in the development margin and when it is not and other exciting things to improve your understanding.

    Careful analysis of the Presentation materials is also encouraged but UNDER NO CIRCUMSTANCES WHATSOEVER should you attempt to make sense of Note 5 of the financials. For that path leads to madness:
    om mani peme hum

  8. #6958
    …just try’n to manage expectations… Maverick's Avatar
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    Quote Originally Posted by Maverick View Post
    I'm kind of glad the share price fell a bit before the weekend. There is something “grounding “ about it so rational thinking can resume for the 2 day holiday.


    There is no doubt that the rapid SP rise was solely on the back of public recent reratings by 2 analysts (out of 3) . “4 traders” website has the 3 OCA analysts average target price now of $1.40. It seems highly likely that the 3rd analyst will upgrade too when he gets to it.


    I have been lucky enough to have been sent both of those reports from a friend here. After spending a couple of days on the Credit Suisse report I see 2 clear mistakes (the rest of the report is excellent) they have made which produces a significant undershoot in their underlying expectations.
    This gets technical but “a must” to understand for any serious OCA investor….


    First, they have used an assumed ILU price of $720ish by averaging an apartment ($1100ish) and a villa ($480k ish). Problem with this is OCA’s pipeline is 90% apartments and only 10 % villas. See the issue? This makes a massive difference to the bottom line as income from new sales and future annuity like DMFs are seriously understated.


    Second, is to do with the forward assumed resale price % increases. Here they have again averaged the historical resale returns of a care suit (10%) and a ILU(29%) to come up with 19%. What they have missed is the care suits churn every 2.5 years so , apples for apples , care suits actually should be adjusted to 30% resale margin to line up with a 7 year ILU churn. Or better still , actually treat care suits as a completely indepenadant bunch of numbers on their workings.

    In a nut shell, thats 3 out of the 4 income streams where these incorrect assumptions are coming up short . The 4th income stream is DHB care fees, I don't think we should ever expect any income growth coming from there.

    Respectfully, I suggest Credit Suisse have tried to condense the OCA numbers so they fit into an existing SUM or RYM template which doesn't account for OCA’s complex different weightings of high and low value offerings, all the while churning at different rates.


    Forsyth have made almost exactly the same assumptions as CS and their net result is similar to Credit Suisse.


    However what we all can agree on together, is that there is about 15% CAGR in profit in the next 3 years (neither 2 project further than this). It's just that I start from a much higher 2021 base and I am even more bullish with the CAGR. Id like to add Beagles latest earning numbers here are almost identical to mine and for the record we both work independently.


    So I'm saying the latest analyst figures are quite wrong to the underside. These minor errors may seem small buried somewhere in a spreadsheet but produces a result significant under shooting on the bottom line.This tells me that the story is still not understood properly even by the larger broking houses.


    I fully respect the analysts composing these reports . So for clarity , my comment about “ drunk monkeys“ the other day which has taken some traction here was never pointed at them for a moment. We all do agree on all the other well laid out stuff.
    While they will be much smarter than myself, I can say am right on this and they are wrong only because personally I have all day to fully focus specifically on a just few companies I'm interested in. These poor fellas will have to spread themselves thin all over the place under a ton of pressure and deadlines. No swanning around the country doing site visits for them!

    However ,the share price is moved by their words , not lil’ ol’ Mavericks or Beagles butfrankly, what difference does a short term shareprice fluctuation make to a non- trader anyway?


    Late January is judgement day when I'm saying there will be a seriously major uplift in underlying profit well ahead of any expectations to date.
    My conviction on these statements and stock (covid withstanding) is such that if I am proved to be wrong I should be expected to "turn in my wings."
    Well , it seems the 3rd analyst upgraded his recommendation over the weekend. We now have had all 3 recently upgrade their ratings to "outperform, buy and buy". It's worth a couple of minutes checking the scale on "4 traders " website under consensus. It really is a sight to behold for us long sufferers here.
    The little arrow has now shifted from the middle "hold " area to the extreme end of the " buy" indicator. All in 2 weeks.

    Good luck with the SP pull back your team were hoping for now Waltzing man...that's a heck of a current to be rowing against after this.

    Back to the real stuff (FA).... If anybody's has access to the 3rd analysts workings I would really appreciate a pointer to where I can find it. Cheers.
    Last edited by Maverick; 19-10-2020 at 07:49 AM.

  9. #6959
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    Quote Originally Posted by Maverick View Post
    Well , it seems the 3rd analyst upgraded his recommendation over the weekend. We now have had all 3 recently upgrade their ratings to "outperform, buy and buy". It's worth a couple of minutes checking the scale on "4 traders " website under consensus. It really is a sight to behold for us long sufferers.
    The little arrow has now shifted from the middle "hold " area to the extreme end of the " buy" indicator. All in 2 weeks.

    If anybody's has access to the 3rd analysts workings I would really appreciate a pointer to where I can find it. Cheers.
    Thanks for all your posts Maverick. The analysts public releases are catching up with how things have turned out - Henny Penny's sky did not fall down after all!

  10. #6960
    ShareTrader Legend Beagle's Avatar
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    https://www.marketscreener.com/quote...268/consensus/

    Analysts are starting to wake up to the growth ahead. As mentioned last week, I predict major upgrades from them all after the interim results in late January 2021.

    I do not think they are fully comprehending that the valuers wrote down unsold units at balance date especially harshly due to their perception of values at that date.
    There is 10 cps in earnings in just selling down stock at balance date at prices assumed by OCA, (not at the values that may be prevailing in the market at present), which is up from 8 cps as at the interim result last year, an extra $2 cps or $12m in extra earnings.

    I remain comfortable with my estimate of earnings for the 10 months ended 31 March 2020 of 10 cps, (annualized 12 cps), well north of even the most optimistic analyst. I see the split being approx $35m underlying profit in the first half and $25m in the second period.

    I think the analysts are spread pretty thin and don't have the time to do the really detailed analysis like some professional investors do.
    Last edited by Beagle; 19-10-2020 at 08:03 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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