Say you have a house in Auckland that increased in value from 1/2 mill to 1 mill over the last year
You haven’t sold so your underlying profit is zilch / zero
But your profit over the last year is 1/2 mill .....and your assets are worth 1/2 mill than a year go
Why use underlying profit?
But I can't go out and spend that half a million increase? So my underlying profit might as well be 0... it is no use to me now, if anything I will just have to pay more rates... a cash money outflow straight to Phil & Co's bank account
But I can't go out and spend that half a million increase? So my underlying profit might as well be 0... it is no use to me now, if anything I will just have to pay more rates... a cash money outflow straight to Phil & Co's bank account
Why 'use' what you can't use?
But you worth 1/2 mill more and if I was going to buy you out wouldn't you want at least 1 mill ......put that in context of an ARV share valuation why real profits / book value / cash flows are a better guide to valuing them
Underlying profits a good measure of how they are doing operationally on a year by year basis
Don't think you will be convinced that underling profit multiples aren't really such a good thing
Last edited by winner69; 23-11-2017 at 02:09 PM.
”When investors are euphoric, they are incapable of recognising euphoria itself “
But you worth 1/2 mill more and if I was going to buy you out wouldn't you want at least 1 mill ......put that in context of an ARV share valuation why real profits / book value / cash flows are a better guide to valuing them
Underlying profits a good measure of how they are doing operationally on a year by year basis
Don't think you will be convinced that underling profit multiples aren't really such a good thing
You're right, I am not convinced underling profit multiples aren't really such a good thing... but I am convinced we will see a very strong 2nd half... market isn't convinced of anything by the looks of it which is weird because they are lapping up RYM's result
However, I would accept a $2.50 takeover offer for ARV or PEB
You're right, I am not convinced underling profit multiples aren't really such a good thing... but I am convinced we will see a very strong 2nd half... market isn't convinced of anything by the looks of it which is weird because they are lapping up RYM's result
However, I would accept a $2.50 takeover offer for ARV or PEB
You have to be impressed with Ryman’s $202m NPAT though - 8% ahead of last year when ARV was down
Wonder why revaluations at ARV were so much less than last year when it looks like they have more properties?
Last edited by winner69; 23-11-2017 at 02:32 PM.
”When investors are euphoric, they are incapable of recognising euphoria itself “
You have to be impressed with Ryman’s $202m NPAT though - 8% ahead of last year when ARV was down
Wonder why revaluations at ARV were so much less than last year when it looks like they have more properties?
I think we will see a 'significant' lift in the fair value of completed investment properties and development land (and cash flows), once a full valuation is undertaken at the end of the year (which will include significantly more delivered properties - about 99% of the years deliveries in fact)
Time will tell
Last edited by trader_jackson; 23-11-2017 at 04:23 PM.
$1.20... the highest price in a month... Mr Market must be beginning to read throuh the interim report.
Clearly Mr Market has not read much of it because if it did, the share price would be much higher than $1.20
Last edited by trader_jackson; 23-11-2017 at 07:29 PM.
But you worth 1/2 mill more and if I was going to buy you out wouldn't you want at least 1 mill ......put that in context of an ARV share valuation why real profits / book value / cash flows are a better guide to valuing them
Underlying profits a good measure of how they are doing operationally on a year by year basis
Don't think you will be convinced that underling profit multiples aren't really such a good thing
A profit is not a profit until its realized. The situation you describe is referred too in the industry as embedded value. You can get a good handle on forecasting future underlying profits from resales by looking at total embedded value in the balance sheet at any point in time and dividing by about 7 to give an indication based on historical churn rates of what the expected realization will be in the year ahead.
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
A profit is not a profit until its realized. The situation you describe is referred too in the industry as embedded value. You can get a good handle on forecasting future underlying profits from resales by looking at total embedded value in the balance sheet at any point in time and dividing by about 7 to give an indication based on historical churn rates of what the expected realization will be in the year ahead.
I obviously don’t explain things very well
So is today’s ‘valuation’ (company worth) dependent upon this embedded value?
Nobody has answered my query as to what this ‘net implied value increased to $1.17 a share’ statement means.
”When investors are euphoric, they are incapable of recognising euphoria itself “
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