OCA - Oceania Healthcare

[winner (n)]

Good work Plata ... well thought out but I think you (and others) are wasting time and effort in even attempting such exercises

Why - I think even Oceania don't know the real answer ,,,and if they do they go out of their way to make the numbers as obtuse as they can

[winner (n)]

I still can't believe that they only had 61 new sales in first half year

Thats 40 less than same period last year and half the number they sold in pcp2021

They were even selling more new ORAs in 2018

The numbers don't seem to reconcile with the words and images in their reports.

[Basil]

Rather than working with averages if you are serious about wanting to be invested in OCA and are concerned about how the care suite sales process is going, (61 total new sales in the last half is pathetic Winner, I couldn't agree more), I'd recommend giving the CFO a call.

I know the number 450 I heard on the May call is correct, I heard it with my own ears and it was repeated twice.  (The only reason I said I was 99% sure is I was being polite to Maverick as he didn't listen in and wanted to get his own confirmation, which he subsequently declined to share because he claimed his conversation with the CFO was "private").

My view is OCA will remain the runt of the litter in this sector and give bottom quartile performance for many years to come because there are systemic unfixable issues with their business model and legacy issues of poor quality villages that will dog them for a very long time.  OCA's focus on modest margin care means investors in this company will always be "swimming against the tide" compared to the rest of the sector.

I going to conclude my commentary on OCA for now by observing one salient fact.  There was only one poster on here or the other place that correctly called a flat result.  Everyone else and every analyst was forecasting earnings growth. 

[Crackity]

I going to conclude my commentary on OCA for now by observing one salient fact.  There was only one poster on here or the other place that correctly called a flat result.  Everyone else and every analyst was forecasting earnings growth. 

Sounds like a smart poster - do we know them?

[winner (n)]

Sounds like a smart poster - do we know them?

My mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'

He added 'Much of the financial education of the last 10 years has focused on making investors more rational. That is the wrong approach. Human beings will never be rational. The goal is not to be rational; the goal is to profit off the irrationality of others. People are smart; large groups of people are stupid. This creates opportunities. Lots and lots of opportunities.'

[Crackity]

My mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'

Interesting article by the Secret Broker today alluding to similar sentiment....

https://stockhead.com.au/the-secret-broker/the-secret-broker-eat-sleep-buy-cheap-repeat/

[Plata]

I know the number 450 I heard on the May call is correct, I heard it with my own ears and it was repeated twice.  (The only reason I said I was 99% sure is I was being polite to Maverick as he didn't listen in and wanted to get his own confirmation, which he subsequently declined to share because he claimed his conversation with the CFO was "private").

How do you reconcile that with the 200+ million in ORA contracted value? Does that not imply the suites that have sold have done so at a very steep average price? Perhaps only the ones in Auckland and other city centres with much higher average prices are selling?

I don't hold these or intend to due to macro trends so not gonna call the execs. I just did the math as a learning experience to try read between the lines from a company that seems to enjoy hiding information.

[Basil]

Plata - You don't need to reconcile information you heard straight from the horse's mouth.

Crackity - You know who 😉

Next job is analysis of KPG and then ARV result.    Might as well go fishing where you're more likely to land something rewarding.

[Waltzing]

"KPG and then ARV"

and we're off  ......

https://www.youtube.com/watch?v=jUavm_JgTuc

[Ricky Bobby]

Plata - You don't need to reconcile information you heard straight from the horse's mouth.

Crackity - You know who 😉

Next job is analysis of KPG and then ARV result.    Might as well go fishing where you're more likely to land something rewarding.

Still holding KPG?..

[Basil]

Still holding KPG?..

Yeap, holding a few for the yield.   

[Basil]

Another commentator in the other place reckoned the pay funding round might add $1.5m in revenue in 2H.  Was described as "Cream"  Hmmm Cream usually a euphemism for returns over and above what one would expect, like money for nothing.  So does that adjective stack up ?

If this extra money all flowed through to shareholders, (it never does with OCA), that's another 0.2 cps in earnings so it means they might be able to maintain their FY23 final dividend at the same level as last year instead of cutting it 0.2 cents per share like this time.  That would be good because instead of shareholders dividends being down 17% in real terms for this divvy, (10% dividend cut plus 7% inflation) it might only be down 7%, (inflation) for the final divvy.

The fly in the ointment is once you run that extra income through the OCA head office administration "system" and the care services eat up their costs maybe almost none of it gets through to shareholders and they may still be 17% worse off with their income again at final divvy time.  Gosh, with income to shareholders dropping so much just as well shareholders can count on capital gains going forward...opps, no, sorry, the NTA and NAV are also going backwards.

Interestingly they listed in 2017 with a total of 50 sites, (page 6) https://images.oceaniahealthcare.co.nz/wp-content/uploads/2020/10/26121409/oca-results-presentation-fy17.pdf  Of those 50 sites 15 have now been identified as being third rate duds, with 5 previously sold and a further 10 villages now classified as held for sale.

Nearly a third of all sites when they listed have now been classified as having insufficient potential to be held for ongoing operation or development.
Begs the question of whether investors we sold a "Pup" ?  Not a mention of all the dog's held for sale but so much positive rhetoric about 1 new site the Helier.

[Whacc]

My mate Jarred says 'Earnings don't matter. Fundamental analysis does not matter. What matters is how people feel about a stock.'

He added 'Much of the financial education of the last 10 years has focused on making investors more rational. That is the wrong approach. Human beings will never be rational. The goal is not to be rational; the goal is to profit off the irrationality of others. People are smart; large groups of people are stupid. This creates opportunities. Lots and lots of opportunities.'

That's been the basis of Finance for at least the last 90 years since Benjamin Graham.

Sounds like your mate Jarred has a case of Dunning-Kruger.

[Crackity]

Which at least is better than having a case of Freddy Krueger

[winner (n)]

Of the 3 in the sector who have reported last week or so who tells the best story

Probably Oceania - there Interim Report had 74 pages - Arvida and Ryman 32 and 34 respectively

Oceania wins hands down - the thickest Interim Report by far