ARV - Arvida Retirement Villages

[Bjauck]

Today's "Australian" newspaper has run a significant article stating that 7 in 10 nursing homes in that country are currently running at a loss, concluding that the future of Australia's residential aged-care system under critical threat and noting that occupancy rates are also falling.

Given the length of time the sector has been underfunded there is a need for "structural change".

My own view is that Government cannot fix this issue, especially given the inexorable demographic tides, and that society will have to accept that ordinary people will need to contribute significantly more than at present from their own resources towards supported living in aged care. Reduction in subsidy will need to be accompanied by deregulation and a lessening of control over these facilities, whatever the consequences of that are.

There is scope to increase taxes and to introduce new ones. However in NZ that is politically unpalatable at present.

What do you suggest in addition to the current asset and income testing for the subsidy? Do you think that the partner, of a person in care, should sell their family home to pay for their partner's care?

By reducing regulation of facilities are you accepting that some old folk will have to live in squalor?

[nztx]

Well - they could tax the Retirement Operators on Fair Value gains in their Reports, if they seek
to include it as a Revenue (and effectively are operating as Property Developers)

Taxes then paid by the Sector's listed companies = Imputation credits attached on any dividends

Happier days for Holders of Shares in the sector

What's not to like about that adjustment ?

Nothing like a bit of getting the Sector back to the same level on the level taxpaying playfield as other taxpayers
and their investors who have to play on the rules set down for all


A very real taxing risk if Ardern & 'Shoot from the Hip for the Cash' Robbo manage to stumble
or fumble their way back in, in late 2023. No Sector is safe from these clueless clowns

[bull....]

new lows tomorrow ?

[nztx]

new lows tomorrow ?

111 pennies close today .. why not more of the same in line with times ?


Div not all that exciting in rising interest times, no Imp credits, Market pressures
and an economy turning to **** .. best stay a safe distance away IMO

to think this came down from 1.60 approx a year back, and still declining with
nothing really exciting on the horizon for the company, sector or economy.

I know where my dough is staying

[BlackPeter]

111 pennies close today .. why not more of the same in line with times ?


Div not all that exciting in rising interest times, no Imp credits, Market pressures
and an economy turning to **** .. best stay a safe distance away IMO

to think this came down from 1.60 approx a year back, and still declining with
nothing really exciting on the horizon for the company, sector or economy.

I know where my dough is staying

Just to put that into a perspective: If people would put in the effort of looking at industrie trends instead of beating up arbitrarily some randomly selected stock (though nice difference it is here ARV vs the usual suspect OCA) , than they would see that over the last year ARV performed pretty much in the middle of the pack of the retirement industry.

Same as OCA, roughly 15% worse than SUM and roughly 15% better than Ryman.

I guess the much more interesting question is - when will the retirement industry bottom out, or are we already there? This question is obviously closely related to : When will real estate bottom out? In my view - this year it will be ... and it might be a good time to start placing ones bets.

But hey - obviously we can keep beating up stocks until the cows come home.

[bull....]

Just to put that into a perspective: If people would put in the effort of looking at industrie trends instead of beating up arbitrarily some randomly selected stock (though nice difference it is here ARV vs the usual suspect OCA) , than they would see that over the last year ARV performed pretty much in the middle of the pack of the retirement industry.

Same as OCA, roughly 15% worse than SUM and roughly 15% better than Ryman.

I guess the much more interesting question is - when will the retirement industry bottom out, or are we already there? This question is obviously closely related to : When will real estate bottom out? In my view - this year it will be ... and it might be a good time to start placing ones bets.

But hey - obviously we can keep beating up stocks until the cows come home.

industry trend's ...
falling margin's
lower quality build's
smaller pie to supply too
more competition
more regulation
etc etc

not so appealing outlook

[bull....]

had to revisit some of my thoughts on the sector following hipkins comments and the big rebound in the sector over the last week. also the fact it didnt make a new low ( which some consider bullish )
considering the other stocks in the sector are up double digits % wise last week/ytd all except arv im wondering if there is a reason for this or is this a geniune play on arv playing catchup to the others in the sector ?

if arv were to catch up to rises of the others in sector it would need to jump to 1.25 - 1.30 to match the sector rise , if the sector keeps rising it would need to go higher.
if arv fails to rise at all you might have to question why ?

[trader_jackson]

had to revisit some of my thoughts on the sector following hipkins comments and the big rebound in the sector over the last week. also the fact it didnt make a new low ( which some consider bullish )
considering the other stocks in the sector are up double digits % wise last week/ytd all except arv im wondering if there is a reason for this or is this a geniune play on arv playing catchup to the others in the sector ?

if arv were to catch up to rises of the others in sector it would need to jump to 1.25 - 1.30 to match the sector rise , if the sector keeps rising it would need to go higher.
if arv fails to rise at all you might have to question why ?

Indeed you have to question why, but you also have to look at the past - being the most undervalued stock of the listed retirement operators on every metric, and one of the most undervalued stocks on the entire NZX, is nothing new for ARV - in the past it can last for months before Mr Market catches on... given ARV's impressive track record, including most recently having the best results of the listed retirement sector by quite some margin, it is certainly surprising to see it is 'back to its old ways' as of right now, but this should 'fix itself' in due course (as it has done in the past where there are these unusual "lulls", also known as "buying opportunities"), which in this case means (ceteris paribus) a 10% or so uplift from the current $1.19 should be easily expected quite soon... unless of course there is something material that ARV is not disclosing in which case that would be extremely serious and the NZX should investigate.

[troyvdh]

Trader....that is indeed an heroic post...I could go on...
My mother resides in one.
The care ..staff are out standing...I was a nurse for over 4 decades...(psychiatric).

[ronaldson]

Bjauck - I hadn't realised you had responded (#1471 above) to my earlier post. There is an article in today's NZ Herald titled " Aged Care Crisis: The soaring costs hitting kiwi families " well worth a thoughtful read.

I don't think taxation will fix this. And the ratio of working taxpayers to each elderly person is well known to be moving in significantly the wrong direction, not to mention the many competing demands.

Do I think the partner of someone in care should sell the family home to pay for that care? Yes, that's preferable to the taxpayer directly subsidising those who stand to inherit in due course, which is in essence what occurs. And there are options such as reverse mortgages, downsizing, and so on which can mitigate the impact.

By reducing regulation am I accepting some folk will live in squalor? Well, the problem is that economics is dictating a failure to build new beds and/or adequately maintain existing ones. The public statement by Ryman that it will no longer provide additional spare capacity at its facilities is a real canary for the sector. And care suites require a capital contribution and need payment over and above available subsidy. And there is ample evidence that charities running rest homes have already cried " enough". So what options will remain to cope with the inevitable rising numbers?

You will get what you can pay for. And families/next of kin will have to do more. And folk will have to age " in place " until they absolutely cannot do that. And don't under any circumstances get dementia!