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26-11-2018, 11:09 PM
#2261
Maybe there are headwinds, but retirement stocks are the best way to spread a little cash in real estate, if you don't have any diversification there... which is why i kept a small parcel of sum.
To justify my opinion, residential investment is unattractive as the govt has deemed landlords as evil and tenants as underdog angels. More tenant rights, less landlord rights to come, pricing pressure, etc. REITs seem to perform poorly compared to other stocks, possibly due to value coming out in dividends and management fees? Retirement stocks could be viewed as commercial property with a sound business model occupying, with constant demand throughout all stages of the economy. Notably all of the above are effected by property prices.
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26-11-2018, 11:32 PM
#2262
Ryman has been their proven go to first pick stock for conservative managed portfolios for a loong time . They have a hold on it atm with a 1 year t/p nearly $1 lower.
“Our preferred exposure is Ryman Healthcare which is the industry standard operator with a continuum of care model.”
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27-11-2018, 08:26 AM
#2263
Originally Posted by Lewylewylewy
Maybe there are headwinds, but retirement stocks are the best way to spread a little cash in real estate, if you don't have any diversification there... which is why i kept a small parcel of sum.
To justify my opinion, residential investment is unattractive as the govt has deemed landlords as evil and tenants as underdog angels. More tenant rights, less landlord rights to come, pricing pressure, etc.....
A sweeping claim. Just because NZ may introduce increased security for good tenants (to a standard currently found in many other OECD nations) is only accepting the fact that many NZ families have been priced out of home ownership yet still require a secure home in which to raise children. It is hardly demonising all Landlords or sanctifying all tenants!
Introducing tax reforms affecting residential land may affect prices more.
However I agree that the retirement stocks are a good way to have exposure to managed residential real estate.
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27-11-2018, 10:40 AM
#2264
Gosh Hello Bjauck---a sensible voice of reason and practical NZ commonsense in yourself has appeared. Wow I am impressed. I lived in Hamburg ---- full tenant rights there to protect German families and give them a secure affordable base to raise their children (the next generation of German citizens). After all the next generation that will run the economy including aged care looking after me, must have precedent over a landlord class. That must be as obvious as night follows day in a sensible society. Any rate, I continue to really like OCA, I like its outstanding performance-- so far. I like its managers and I love the full care independent units that, in desperation, we stumbled across with a very infirm loved one. $1.15 a bargain.
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27-11-2018, 11:03 AM
#2265
A bargain at $1.15 you mean or for your loved one?
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28-11-2018, 07:18 PM
#2266
Originally Posted by Snow Leopard
The 2018 accounts show quiet clearly that at the EBIT level and allowing for the 'change in fair value of investment property' that OCA is profitable...
...to the tune of about $10.5M a year.
However normalising for the 'impairment of property, plant & equipment' line indicates a drop of over $5M between 2017 and 2018. Could be a concern but I will be looking at the HY2019 (and beyond) results with interest on that one rather than worrying now.
How much of a price that people are prepared to pay for occupation rights going forward and the correlation between that and NZ housing prices is yet to be determined for OCA.
That is something else to look forward too.
That $10.5m ebit isn’t much is it snow leopard. Isn’t that essentially the ebit generated from care (looking after people).
Just shows you whatever some say the real value in this sector is building and selling units
I still struggle to grasp the idea that OCA because of its high weighting to care based activities makes it a more defensive investment during a period of a property slowdown than SUM or RYM .....when it makes stuff all from looking after people
But at times I am rather dim and as some say I don’t always see the big picture
The half year financials could be interesting.
Last edited by winner69; 28-11-2018 at 07:35 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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28-11-2018, 08:00 PM
#2267
Originally Posted by winner69
That $10.5m ebit isn’t much is it snow leopard. Isn’t that essentially the ebit generated from care (looking after people).
Just shows you whatever some say the real value in this sector is building and selling units
I still struggle to grasp the idea that OCA because of its high weighting to care based activities makes it a more defensive investment during a period of a property slowdown than SUM or RYM .....when it makes stuff all from looking after people
But at times I am rather dim and as some say I don’t always see the big picture
The half year financials could be interesting.
Care is needs based and is NOT affected by a property slowdown, add to that the focus that OCA has on care suites and you get a more defensive business model in the event of a property slowdown. With the average cost of a care suite at around 226k, it would have to be a property armageddon before there would be any entrance hindrance. PS-Even smaller sized OCA facilities with care suites added make good profits otherwise you need scale(80 beds plus) for a normal care centre to run reasonable profits.
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28-11-2018, 08:27 PM
#2268
Originally Posted by couta1
Care is needs based and is NOT affected by a property slowdown, add to that the focus that OCA has on care suites and you get a more defensive business model in the event of a property slowdown. With the average cost of a care suite at around 226k, it would have to be a property armageddon before there would be any entrance hindrance. PS-Even smaller sized OCA facilities with care suites added make good profits otherwise you need scale(80 beds plus) for a normal care centre to run reasonable profits.
Thanks for clearly stating the distinction, it makes sense. Though being listed and as you know the market is ignorant and schizophrenic, won't OCA just be lumped into the basket of all aged care providers when push comes to shove and fall or rise on sector sentiment? I reckon these business model nuances will be overlooked if there was a systemic sector effect. Anyway this is in the long term portfolio for me, so doesn't matter too much what happens to the SP unless it goes bust.
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28-11-2018, 08:37 PM
#2269
Originally Posted by winner69
The half year financials could be interesting.
Gotta be better than that dog of a stock ARV...
No worries, everybody says OCA is better so I look forward to seeing OCA smash ARV (who in turn smashed RYM)
Last edited by trader_jackson; 28-11-2018 at 08:38 PM.
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28-11-2018, 10:36 PM
#2270
Originally Posted by couta1
Care is needs based and is NOT affected by a property slowdown, add to that the focus that OCA has on care suites and you get a more defensive business model in the event of a property slowdown. With the average cost of a care suite at around 226k, it would have to be a property armageddon before there would be any entrance hindrance. PS-Even smaller sized OCA facilities with care suites added make good profits otherwise you need scale(80 beds plus) for a normal care centre to run reasonable profits.
Hi Couta.We know care facilities are low margin with the govt subsidies leaving slim profits indeed. Are the care suites higher margin and privately funded making more profits, is this the main point of difference to SUM etc?
I did ask SUM CFO Scott Scoular today at a presentation about care facilities today and how important they were to their model.The answer i got wasn't really clear except to agree they are low margin they have ratio of 1 to 5 and not that important for profits,was my interpretation.
Also he suggested house prices need to drop by $150,000 before they impact profits.
An int chart showed the 75 plus age group in NZ climbing fast but peaking 2037-42 with quite drop off thereon.
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