OCA - Oceania Group - retirement villages

[fish]

Anecdotal accounts on the MET thread of high end housing selling like hot cakes at a serious premium to pre covid prices auger well for OCA in the future as a lot of their units in Auckland are at the higher end, e.g. Meadowbank and the Sands).

Coutts tells me I might have overcooked my security cost estimate yesterday...generally didn't run security through the night.

The 30 June window for Australian Institutions keen to book tax losses for the Australian 2020 tax year on some / all of their stake they bought from Macquarie at $1.20 has now closed so hopefully we should see some easing of selling pressure from tomorrow onwards.

Thanks for the explaination.
I can see lots of other positives for the SP-NZ population-5 million and rising,lower interest rates likely to be long-lasting,MET SP rising,Ryman result etc.
Feels oversold and like you looking forward to July .

[Paradox]

Some advice sought please. I've completed the first iteration of financial statement analysis to get the valuation and set the following parameters. is it too much/little? The outlook is for 5-years.

riskfree rate (T-Bill) - 3.5%
Market Risk premium - 7%
Equity Beta 1.2 (in 2019 it was 1.1)

So, cost of capital is 11.90%

[Bjauck]

There is nothing new about lockdowns. Every winter there are lockdowns in a few NZ rest homes because of norovirus. The safety of the residents overrides the rights of visitors to visit during an infection. Wouldn’t you be upset if your family member was infected by an unwell visitor?
...

I am referring to the rights of the resident patient and next of kin, not to the "right" of visitors to just pop in for a casual visit to a resident. Of course every facility should always minimise the risk of spreading infections and viruses.

Preventing next of kin and those holding power of attorney from access to the very ill and those at end of life is serious denial. Provided they use PPE and other precautions taken, I see no reason for such a denial.

[Beagle]

Some advice sought please. I've completed the first iteration of financial statement analysis to get the valuation and set the following parameters. is it too much/little? The outlook is for 5-years.

riskfree rate (T-Bill) - 3.5%
Market Risk premium - 7%
Equity Beta 1.2 (in 2019 it was 1.1)

So, cost of capital is 11.90%

Risk free rate is the 10 year Govt stock rate - I suggest you use 1%.
Market risk premium has traditionally been 6% as far back as Adam was a boy.

[winner69]

Bastardisation of a thread on the old twitter (bored analyst banter) -

is Value investing is buying what you think is $1.20 for 90 cents?

And then complaining why everyone else doesn’t think your 90 cents is worth $1.20

No value investing is buying what you think is worth $1.20 for 90 cents but it turns out you bought something worth 70 cents.

[winner69]

Risk free rate is the 10 year Govt stock rate - I suggest you use 1%.
Market risk premium has traditionally been 6% as far back as Adam was a boy.

MRP varies over time so saying it’s been 6% since Adam as a boy not quite right.

These days a lot of real investment managers and finance people are add an additional risk premium, especially in the short term, to take account of the inherent uncertainty in future outcomes. They keep this specific additional risk premium as a separate item so they can assess what impact it has.

[Waltzing]

im waiting for .65 then ... highly unlikely ... but then i would not have though this whole WWP was a likely.

[Beagle]

Likewise you could argue with interest rates at 200 year lows a market risk premium of 6% is no longer warranted especially given TRINA, (there really is no alternative to stocks).

What else are you going to do, buy corporate bonds or bank term deposits at 1.8% ?

Back to OCA, I wonder what EQT will offer for OCA when they have finished the MET takeover and look to combine these companies and reap maybe $10m per annum in synergies ? $1.30 ?

[Beagle]

im waiting for .65 then ... highly unlikely ... but then i would not have though this whole WWP was a likely.

I wouldn't hold your breath mate and I might be ahead of you in the queue

[Waltzing]

yes CNBC gave us TRINA about a month ago? well the burn from the virus in the states is out of control and we may see some big sells off that simple force the market down.

since the only stock we sold in the march sell off was AIR.. im sure you are ahead of us in the queue which we are not in yet. We only now have one portfolio holding a small amount. We sold most at 1.04.