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  1. #481
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    Quote Originally Posted by winner69 View Post
    Seems priced about right at the moment then

    FY19 EPS at 9.0 cents is only 8% more than FY18 ..... not much growth is it (SUM likely to be ~20%) and you think they deserve the same PE as SUM if not RYM (at least that what's I assume)
    What is RYM growing their EPS at again?
    The dividend (not peanuts) makes up for it somewhat for me anyway
    Growth picking up in 2020 and into 2021, a 250% increased in units/beds to be delivered in 2020 and thats without considering over 600 units/beds in planning, but yet to be consented. Meanwhile, growth probably continuing to slow for sum others... I wouldn't be surprised if in 2021 and/or 2022 we see a similar EPS growth rate for arvida as the almighty summerset
    bold call by me, nearly as bold as when I called arvida the fastest growing share price a few years back
    Last edited by trader_jackson; 15-03-2018 at 07:08 PM.

  2. #482
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by trader_jackson View Post
    Forsyth's thoughts:
    (1H 18 underlying EPS of 3.7c) 2H 18 underlying EPS of 4.6 cps = 8.3cps FY 18 - 14.3 underlying PE
    FY19 underlying EPS 9.0 - FY19 forward PE of 13.2 (for comparision: RYM is at 22.0, SUM at 16.6, Metlife at 14.5 and OCA at 13.1)

    Implied book value of NZ$1.19 and I won't even go into cash dividend yields too much as you already guessed it: ARV is on top (yes, even 7% higher cash dividend yield than OCA at 99c...)

    Disclosure: I have put in an order for more ARV shares, despite having 'too many' already.
    Seeing this reach $1.60 sometime in the next year would not even been remotely surprising to me.
    Forbar's EPS estimates look fairly reasonable to me. There's not nearly as much empirical evidence to work through and development margins are really an unknown at this stage but after a number of assumptions and estimates I arrived at $32-34m underlying profit this year, approx. 8.2 cps at the top end.
    I'm not 100% convinced all the increased wage settlement rates will be recovered and see this as a key risk.
    Forbar would have spent a ton more time on this than me so my preliminary thinking to form a first impression is simply to accept their earnings estimates which gives underlying earnings growth in the high single figures this year and next.

    Forward PE on EPS of 8.3 is 14.3. I have SUM with a proven track record of EPS growth averaging 45% per annum since listing on a forward PE for 2018 of 15.2. which is only a very small multiple premium for such an incredibly attractive well proven track record of growth.

    In my opinion OCA most closely resembles ARV's business model and they recently confirmed they're on track to meet IPO guidance of 8.42 cps so on 99 cents this puts them on a forward PE of just 11.75. I think SUM's business model is less susceptible to wage cost pressures due to their predominant independent living model.

    Other observations. I think OCA have a significantly higher percentage of consented developments in the pipeline and there's more potential for PE expansion with OCA than ARV due to its present lower multiple. I think OCA could surprise, as could ARV but its early days to make a call on either of these relatively new companies.

    I think the slightly higher PE of SUM is well worth paying a premium for considering their six year track record of growing earnings at frankly what has been an astonishing pace.
    My first glance impression is I think ARV have a lot to prove with their development model before the market can accord them a higher PE.
    In the meantime I see it as a slow and steady player and shareholders are likely to enjoy a ~ 5.5% gross dividend yield in the year ahead and high single digit Underlying earnings growth. Trading at slightly under asset backing, (adjusted asset backing as at 30 Sept 2017 was $1.19) its probably a pretty reasonable hold for the medium term but I have a significant investment in SUM and OCA neither of which I would reduce to add to ARV based on my first impressions.

    I remain of the view that RYM's PE is expensive but is probably warranted relative to ARV, less so relative to SUM and OCA....well that's my 2 cents worth and good luck to holders. P.S. I don't like MET and have little confidence in their management or their development model. Further, I think they will find the remediation cost to existing buildings will FAR exceed the costs they've publicly estimated so a significant discount to NTA is well and truly warranted with them.
    Last edited by Beagle; 15-03-2018 at 08:48 PM.
    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. #483
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    Quote Originally Posted by Beagle View Post
    Forbar's EPS estimates look fairly reasonable to me. There's not nearly as much empirical evidence to work through and development margins are really an unknown at this stage but after a number of assumptions and estimates I arrived at $32-34m underlying profit this year, approx. 8.2 cps at the top end.
    I'm not 100% convinced all the increased wage settlement rates will be recovered and see this as a key risk.
    Forbar would have spent a ton more time on this than me so my preliminary thinking to form a first impression is simply to accept their earnings estimates which gives underlying earnings growth in the high single figures this year and next.

    Forward PE on EPS of 8.3 is 14.3. I have SUM with a proven track record of EPS growth averaging 45% per annum since listing on a forward PE for 2018 of 15.2. which is only a very small multiple premium for such an incredibly attractive well proven track record of growth.

    In my opinion OCA most closely resembles ARV's business model and they recently confirmed they're on track to meet IPO guidance of 8.42 cps so on 99 cents this puts them on a forward PE of just 11.75. I think SUM's business model is less susceptible to wage cost pressures due to their predominant independent living model.

    Other observations. I think OCA have a significantly higher percentage of consented developments in the pipeline and there's more potential for PE expansion with OCA than ARV due to its present lower multiple. I think OCA could surprise, as could ARV but its early days to make a call on either of these relatively new companies.

    I think the slightly higher PE of SUM is well worth paying a premium for considering their six year track record of growing earnings at frankly what has been an astonishing pace.
    My first glance impression is I think ARV have a lot to prove with their development model before the market can accord them a higher PE.
    In the meantime I see it as a slow and steady player and shareholders are likely to enjoy a ~ 5.5% gross dividend yield in the year ahead and high single digit Underlying earnings growth. Trading at slightly under asset backing, (adjusted asset backing as at 30 Sept 2017 was $1.19) its probably a pretty reasonable hold for the medium term but I have a significant investment in SUM and OCA neither of which I would reduce to add to ARV based on my first impressions.
    Interesting thoughts that are appreciated. Agree ARV (and OCA really) have a bit of proving to do with their development model - ARV are, in my view, already beginning to prove they can integrate other villages and develop well - although the latter is in early stages. I would also not be selling OCA for ARV (maybe, at current levels, a bit of SUM - if I was a holder - as I see SUM's growth rate dramatically slowing as they try 'catch up' in the 'care department')

    In my 'high level' view, over time, villages like ARV and OCA, with the full continuum of care, will become more attractive than the 'big prisons' that is RYM, SUM and MET (MET especially in my view) and therefore people will be willing to pay a higher amount (eg in care fees or to purchase a unit), hence offsetting the relatively higher cost of smaller, more niche villages, with a far greater continuum of care. Time will ultimately tell if this 'high level' view of mine is right or not.

  4. #484
    ShareTrader Legend Beagle's Avatar
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    Yes I see SUM's growth rate at 20-25% this year compared to 44% last year. 2019 could surprise to the upside with an increase in build rate.
    From a TA perspective SUM is a compelling hold as it is from a FA perspective based on the substantially superior growth rate.
    I prefer to hold stocks where FA and TA indicators are in sync.

    The saving grace with ARV and I think its most attractive aspect is the relatively high nearly fully imputed dividend yield at I would estimate about 5.5% gross this coming year. This yield is something I would see as very safe considering 70% of their earnings are from their care model. Effectively shareholders are being paid a pretty good apparently quite safe yield to participate in a company with reasonable growth prospects operating in a sector with strong demographic tailwinds for the next 20-30 years and this on a fairly reasonable PE multiple. This company's characteristics could have strong appeal to retired investors in my opinion.

    Summing up. All things considered I think ARV is a pretty good investment proposition. I think the list of companies in the NZX50 that offer a less compelling proposition is fairly long one but doesn't include OCA or SUM. I'm focusing on higher growth companies but I can see some attraction with ARV so will keep an eye on it.
    Last edited by Beagle; 15-03-2018 at 09:09 PM.
    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

  5. #485
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    Ive taken a position in ARV now, at the price SUM others are currently at, I can't see the point in buying, as I see no more, or less upside going forward than ARV and OCA.

  6. #486
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    Brought more at $1.19 today, taking my holding from L to XL
    $1.19 is a 'funny' price for me... on 20 May 2016 I 'went big' into HBL at the same price for similar reasons: solid growth, solid dividend, good industry dynamics, good management, and fairly conservative.
    Similar to ARV lately, the share price then with HBL had kinda stagnated for the past year and a half before (and relatively soon after May) steadily climbing well over the $2 mark.
    Here's hoping ARV starts that same solid and steady climb.
    and starts to give HBL a run for its money
    Last edited by trader_jackson; 16-03-2018 at 08:04 PM.

  7. #487
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    Up again today - $1.23 now
    Maybe $1.19 was really just too cheap

  8. #488
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    Quote Originally Posted by trader_jackson View Post
    Up again today - $1.23 now
    Maybe $1.19 was really just too cheap
    Be $1.30 AGAIN this week I reckon

    Don't forget it hit $1.39 once so not heading into uncharted waters ......once it gets to $1.40 all blue sky ahead ....and then it will finally catch up with HBL

    No worries here ....there's little that can go wrong .....top management, bedding down acquisitions not yet price in, strong development pipeline and all that sort of stuff
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #489
    Speedy Az winner69's Avatar
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    t_j --- you need to keep on buying if you want the price to go up

    No point buying at 119 and then stopping .... ARV needs the likes of to keep on buying to build momentum
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  10. #490
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    Quote Originally Posted by winner69 View Post
    t_j --- you need to keep on buying if you want the price to go up

    No point buying at 119 and then stopping .... ARV needs the likes of to keep on buying to build momentum
    I bought some on his behalf at close.

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