OCA - Oceania Group - retirement villages

[kiora]

I have lots of shares and it is 93% of my port-- actually one of two.
Here is my last week's pic of the browns bay beach front const site if someone wants to have a look.
https://ibb.co/k2Awzd

Wow,we must be there soon.How many cranes in the landscape?

[tuaman]

Wow,we must be there soon.How many cranes in the landscape?

Hi I only saw one huge crane in front and lots of workers-more than 20, I guess.
This is a small vid around the site. It was very noisy so I took off the sound.

https://vimeo.com/274811367

[Beagle]

Holding about 6% of my portfolio in this one and happy to accumulate some more on future weakness, if any. I really would like some more.

[value_investor]

I bought a small position quite recently, and I'm sitting at 6% of my total portfolio. I like the company and the direction it is in but my only concern is that it is very young. I don't know enough about management and their qualities in reaching their targets and guidance etc.

So far its been very good, and I could see myself accumulating more as time goes. It could be a great value play going forward especially if RYM and SUM become outside the realm of value plays. RYM is already there.

[dabsman]

I hold a good chunk of these. I bought at IPO and a lot more in the days after. Don't discount Ryman. I think the next few years will be massive for Ryman and I think 15% will be a walk in the park. Australia is a big big big land...

[Beagle]

I bought a small position quite recently, and I'm sitting at 6% of my total portfolio. I like the company and the direction it is in but my only concern is that it is very young. I don't know enough about management and their qualities in reaching their targets and guidance etc.

So far its been very good, and I could see myself accumulating more as time goes. It could be a great value play going forward especially if RYM and SUM become outside the realm of value plays. RYM is already there.

Well said. That's why I'm also sitting back in the saddle a bit at 6%...could easily buy more but I feel its early days to go "all in" on a full sized position. Currently on a trailing PE of just 12.9 if they meet guidance of 8.42 cps so still appears cheap at $1.09 on a trailing sector comparison PE basis. On a forward PE basis this is how I think thing could pan out over the next few years, (cut and pasted from another forum I posted in today when asked where I see the PE going)

I think there's quite a number of factors to consider in thinking about where the PE multiple might go.
1. The sector as a whole has considerable tailwinds.
2. OCA has earned a stellar reputation as a late stage service provider.
3. The business model for this sector is very tax efficient.I would add that I think this factor should not be underestimated and that in conjunction with the company keeping all the capital gain from the resale of units previously occupied by residents is a HUGE factor in driving wealth generation for shareholders and makes the whole sector extremely attractive. Fir this reason I think all companies in this sector trading under the market average PE are probably good value and considering RYM's track record of growth its also a sound hold.
4. The market average PE is about 19-20.
5. The sector average is somewhere in the late teens, I need to do some more analysis on this.
6. SUM's forward PE according to Winner on that other forum averaged in the mid 20's in the early years, (very high growth) but has settled at a forward PE at present of 16.6 but it took six years of strong average growth to get there. It could be presently being held back by a perception that real estate per se has peaked and their development margin may also have peaked.
7. RYM's forward PE is current about 25 but they have earned that based on arguably the longest period of high growth on the NZX of any company so I think their PE will remain the outlier for the foreseeable future.
8. The major shareholder's stake coming off escrow on the first day after the annual results next month is definitely holding back this share at the moment.
9. The business model of Arvida most closely resembles OCA and last time I looked at that stock it was on a PE in the mid teens
10. It takes time for the market to get comfortable with a relatively new listing.

In my opinion we will get a lot more clarity on the answer to your question as the passage of time reveals the companies credibility. If they meet or slightly exceed forecast 8.42 cps underlying profit for FY18 and the outlook looks good and if they post solid underlying EPS growth for FY19 and the outlook continues to look sound I believe we could see them gradually tracking up into the early and eventually mid teens in terms of PE over the next few years. Earnings growth and meeting forecasts and doing what they say they will do is what matters.

If they build credibility nicely over the next few years and build earnings we could see them on a PE of 15-16 in a few years time and if they can grow EPS to 13-14 cps over that timeframe then we could see the SP double over the next 4-5 years, perhaps sooner.

I think this one definitely has scope for market and sector outperformance but unfortunately like most things, (especially as this is only a recent listing) we have to wait and see how they go. Mannagement and directors have a good amount of skin in the game so their interests are aligned and they're motivated.

I have them on a forward dividend yield gross of 5.5% so one of the nice things about an investment in this one as opposed to most others in the sector is you're being paid quite well to enjoy future growth. I think therein lies a most attractive feature on OCA.

[peat]

I like the company and the direction it is in but my only concern is that it is very young. I don't know enough about management and their qualities in reaching their targets and guidance etc.

The calibre of the board is very high
The Chair Elizabeth Coutts received Officer of the NZ Order of Merit for her services to governance in 2016
She has an extensive history
http://http://www.lizcoutts.co.nz/

I heard good things about the accountants on the board as well.

[BlackPeter]

The calibre of the board is very high
The Chair Elizabeth Coutts received Officer of the NZ Order of Merit for her services to governance in 2016
She has an extensive history
http://http://www.lizcoutts.co.nz/

I heard good things about the accountants on the board as well.

Not a reflection on Elizabeth, but remember that CBL's board was composed of a Sir and a knight as well. I do see these rewards often as a significant risk factor indicating that the holder is most likely well past their "use before" date. Remember - even if they deserved the title in the first place for whatever they did (some did, others didn't) - past performance does not predict future returns ...

At best these titles are meaningless when assessing the composition of a board.

[warren]

[QUOTE=BlackPeter;718297]Not a reflection on Elizabeth, but remember that CBL's board was composed of a Sir and a knight as well. I do see these rewards often as a significant risk factor indicating that the holder is most likely well past their "use before" date. Remember - even if they deserved the title in the first place for whatever they did (some did, others

Hello Blackpeter.
While I agree with you in part, especially NZ Boards full of "well connected types" with anything BUT a lifetime in the actual Industry and limited to a token share in the game and very keen for the Directors income! (as they have actually created little themselves). But examples from amazing businesses don't agree with you.. Steve Jobs USA (Apple, Pixar, Apple), Graham Avery (NZ) Adis Press, Sileni Wines, Adis Press. Henry Ford (USA). Gerard Adriaan Heinken (Holland). John Rockerfeller (USA), Alfred Pritchard Sloan (USA). Douglas MacArthur (USA) and the genius of Inchon!
Forget use by dates; search out business geniuses but its not easy. They all have a huge share of the firm, a lifetime in that industry and SUCCESS. They generally don't work on salary and they are usually quiet, often being introverts with enormous slices of the action and age doesn't weary them. I think Liz will join their ranks.

[value_investor]

These things can happen, just in recent memory:

- The group managing director of CBL won the Entrepreneur of the year award 2017 https://www.ey.com/nz/en/about-us/en...ur-of-the-year

- Ralph Norris overseeing huge losses at Fletcher and running away with his tail between his legs at Fletcher
https://www.stuff.co.nz/business/ind...r-ralph-norris

- Steel and Tube's very high profile move downwards (after touting a very experienced and successful team)
https://www.stuff.co.nz/business/104...-turned-corner

I haven't been burned before but just reasoning myself for my decision above of not going all in just yet on this one. I'll keep accumulating as I see more and more positive signs. I think that accountability at the top is very myopic, when the company does well its the management, when the company does poorly its because of ____ factor and not poor management.