OCA - Oceania Healthcare

[winner (n)]

Another day, another multi year low, now 80 cents.  Test of the IPO price of 79 cents coming up either tomorrow or next week I reckon.
 

If yahoo is right on first day trading it opened at 82 had a high of 83 and closed at 79

Day 2 opened at 80 closed at 79

Day 3 open 79 closed at 78 DAy 4 closed at 82 and until covid panic stayed above 80

[BlackPeter]

Another day, another multi year low, now 80 cents.  Test of the IPO price of 79 cents coming up either tomorrow or next week I reckon.
 

Come on, this is pretty weak stuff. Don't disappoint us and tell us when they will break through the all -time low of 38 cents, we expect no less from you .

[Basil]

Could quite easily overshoot on the downside below my assessed fair value of 64 cents but I think another visit below 40 cents is very unlikely.
Sorry, I can't help my obsession with slow motion train wrecks...

[Basil]

Hello and welcome to everyone from the other place.

In response to Beagle's question and as BlackPeter has touched on, I fully expect OCA to outperform the NZX over the next 2-3 years.  As to how that compares to SUM? I haven't done the numbers....but it would be great to see both outperform along with a few others in various property industries that have been over-sold lately.

Curious how you are feeling about it now Ferg ? 

[Ferg]

I believe that was posted late June 2022 so we still have between 21 and 33 months for this to play out.

I don't get fixated on daily price movements, other than to take advantage of price weaknesses given I try to be a contrarian investor.  I'm not a trader.  Plus given my work commitments, I can't put the time into tracking daily/hourly SP movements across multiple companies.

How do I feel about the SP?  Honestly I feel great about it.  As previously discussed, given I kept plenty of powder dry and divested a number of holdings some time ago, I can choose to accumulate at prices below what I deem to be fair value.  I was discussing this exact point with a learned investor this evening.  I'm actually more worried about other investments right now - OCA is neither my highest position nor the one that keeps me up at night.

However, the work I have put into understanding OCA allows me to assess the level of risk with which I am comfortable.  Insofar as my ability to say if the latest SP movements relative to the NZX is a temporary aberration or a sign of something else - I'm not going to pretend I understand sentiment.   

As the late Dr Isaac Asimov says in his book 'The Last Question':
"There is as yet insufficient data for a meaningful answer."
I recommend reading it - it's a light hearted short story on entropy and how to solve the issue of stars running out of energy.

[Basil]

Yes as noted in the quote 25 June, just over 4 months ago.  Each to their own approach I agree 100% but it's been an interesting 4 months with ARV and RYM effectively saying we're getting crushed with care costs.
The gazetted increase for Govt funding was 5.5% from memory and I would think OCA's care costs are continuing to rise at 10% plus, as they did last year.

Really disappointed in a poll the other day to see Labour still ahead of National.
Can you imagine for a second if they get back in for a third term and the radical underfunding of care gets far worse ?  Another 3 years of socialist co governance extremism and I'd be happy to sell everything and invest the whole lot overseas.

For me, I'm glad I sold some of my OCA at $1.58, most of the rest at $1.40 just over a year ago and cleaned the rest our about 6 months ago at an average of $1.04.   

Probably another 20-25% downside to the whole retirement village sector I reckon.  My core thesis is the housing market is in a slow motion car crash and it rubs off in a major way on retirement village companies.  https://www.newshub.co.nz/home/money/2022/11/economists-issue-warning-after-financial-stability-report-paints-grim-picture-of-nz-economy-as-interest-rates-skyrocket-house-prices-plummet.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+4+November+2022

I'll watch the technical's and see what happens.   I might be tempted a bit if it gets down into the very low 60 cent range.

[winner (n)]

Curious how you are feeling about it now Ferg ?  You've done a lot of work on this for what ?  Since that post on 25 June OCA is down ~ 17.5% and the NZX50 is up approx 2% as is SUM itself, OCA almost a 20% under-performance by comparison.  A short-term aberration or something more enduring, what say you ?

OCA not as bad as My Food Bag - they down 25% in same period

[winner (n)]

Some punters love Fibonacci numbers

So using closing prices the big low was 50 cents (the touted 38 cents was intraday) and the share price climbed to $1.60

Since then all down hill .... price has gone past the 23.6% retracement from that $1.60 high ..... and the 38.2% retracement ..... and the 50.0% retracement (which was at $1.06) .... and the 61.8% retracement

Next stop maybe the 78.6% retracement at 74 cents

Nature often a good indicator of what can happen

[winner (n)]

hey basil ---- you forgot to mention all the new capital that's been injected since the IPO

Inc the DRP about $130m

Average price of all  shares issued in IPO and since is 91 cents

[winner (n)]

Ouch...that paints it in even a worse light.

Even the insiders are hurting

Our Liz has heaps at average of $1.05

She's about $423,000 under water ..... but at last she's had those juicy Director fees to soften the blue

Probably can't even average down at the moment - might have to wait until after the results announcment

[winner (n)]

Just noticed that dividends haven't been keeping up with inflation over last 5 years

They've been - cents

2018   4.70
2019   4.70
2020   3.50
2021   3.40
2022   4.40

Suppose if Underlying Earnings haven't grown you can't increase dividends

Hope Brent conjures something up and says Interim Dividend is at least 2.5 cents (LY 2.1 cents)

But then with the huge cash burn they have they really shouldn't be paying a dividend in the first place

[winner (n)]

Hadn't really looked at their segment (care/village) reporting over the years

Just had a look at what they've reported as Care Underlying EBITDA over the years - Underlying EBITDA seems to be the preferred profit measure they use for segment reporting

Jeez, Care Underlying EBITDA has been trending down since they listed - reported $31.9m in FY17 - FY22 was only $20.3m - yep about 30% less now than 5 years ago.

Revenues up 6% pa (including the much touted increase in premium fees) but expenses have gone up 9% pa - that's no way to run a business

Not good but then I fully expect to be told I 'just don't get it'

Wonder what's happened in soon to be reported half year

[Waltzing]

While practising travel packing, staying in hotels close to airports,swimming in hotel pools and preparing for the bording of air liners we missed this gem....

 "below fair value of 64"

has anyone crossed posted this to that other place where the thought police live?

where are the emoji's  ....?

[Left Field]

Interesting that OCA threads on both NZ Forums contain the most posts in recent years...

Many words, many hours of discussion, many hours of justifications.......

However, quantity does not equate quality.

A classic dividend trap IMO.

[Raven]

Ahhhh.... If only the company capitalization was related to forum emotion... boom times