ARV - Arvida Retirement Villages

[Maverick]

Thanks Forest and Beagle for your help on the weighted average number of shares, that does makes sense and seems fair.That also then raises the point that the HY1 profit is some form of average between the before and after of the 2 village were digested as well. So my trusty spreadsheets are now a bit muddied with lots of unknowns.

So comparing previous periods are now vague for this period, albeit no fault of ARV. That includes margins, volumes, sale and resale prices (because how much has the additional villages influenced these figures?)

So standing back a bit, their underlying profit EPS growth is inline with my earlier expectations of 17.5% from PCP which did not include the 2 additions - (actual was 16%). So going well there. I'm impressed with how fast ARV can sell their offerings and the 2% empty stock and occupancy rates seems to be as good as it gets in the industry. This bodes well for all participants suggesting the industry is still going gangbusters. Unless ARV is just the best player, doing the best job, that does everything so much better than everyone else.

Overall , IMO, this is an excellent report and ARV are right where they should be.

My only issue is not with the company but its` share price relative to its peers.
I would personally give a fairly young growth company as this a PE of 15-17 which it is already. Its just that you've got SUM (with loads more history) on a forward PE of about 15-16, and MET about 11 (reflecting large remedial costs for the next 3 years or so, and a proportionally slower build rate). RYM - PE 24ish?(I don't bother with as it seems to be it in its own special league) and then there is OCA at about 13 (because its so young and everybody hates it - but the tide seems to be turning). So while ARV is priced about right IMO , all the others offer even better value.

[Beagle]

Excellent post MAV and sums the situation up very well.

My assessment of the sector for short term performance in the next year is :-
MET
SUM
ARV
OCA
RYM

If holding for 2-3 years
SUM,
MET
ARV
RYM
OCA

Long term, If holding for 5 years plus, (and you must buy today) my assessment is
SUM
OCA
MET
ARV
RYM

Above is my assessment as at today's date and is subject to regular review.

[winner69]

Got to be impressed that portfolio Embedded Value is now $371m.

Must mean something ....good things in the future no doubt

But then it’s only an indicator of the potential future cash flows from realised resale gains and deferred management fees so has a lot of guess / assumptions in the calculation.

[Beagle]

How much is that on a per unit basis ?

[winner69]

I take it Infratil still own Retire Australia

Rumour had it they were going to hock it off

[winner69]

How much is that on a per unit basis ?

A Dorothy Dixer eh ....so answer is prob not as high as METs number


.but then ARV don’t have as many units in Auckland

[macduffy]

DCF's are simply a discounting model of future cash flows, inextricably tied to earnings so they're all discounting future earning into today's net present value.

I wonder how many DCF's of a few years ago used anything like today's interest rates in their calculations?

[couta1]

Excellent post MAV and sums the situation up very well.

My assessment of the sector for short term performance in the next year is :-
MET
SUM
ARV
OCA
RYM

If holding for 2-3 years
SUM,
MET
ARV
RYM
OCA

Long term, If holding for 5 years plus, (and you must buy today) my assessment is
SUM
OCA
MET
ARV
RYM

Above is my assessment as at today's date and is subject to regular review.

Lol you say RYM Massively overvalued and I see it's at or near the bottom of your 3 lists yet it is and will always be worth roughly double SUM which is at or near the top of your 3 lists so the moral of the story is the list rankings mean, well, not much.

[Beagle]

Lol you say RYM overvalued and I see it's at or near the bottom of your 3 lists yet it is and will always be worth roughly double SUM which is at or near the top of your 3 lists so the moral of the story is the list rankings mean, well, not much.

I back my opinion with real analysis and plenty of my capital, enough said.

[couta1]

I back my opinion with real analysis and plenty of my capital, enough said.

Every dog needs to be given a bit of stick from time to time.