SUM Summerset Group

[winner (n)]

Funny comparison.

What is the point of comparing NTA per share if the share prices are widely differing?

Much better to own a company with $1.50 NTA and $1 share price, rather than a company with $10 NTA and a $10 share price (assuming NTA is your thing).

If they would have wanted to convey anything meaningful, they would have normalised these NTA's by the respective share price;

You'd have to say the chart to the right is pretty impressive ...... 'peers' charts wouldn't look as good.

[winner (n)]

Yes Net debt (+$226m to $1.3B) and gearing (+310bps to 35.5%) something to watch.

I think that chart while they put up was an attempt to show the 35.5% relative to 'peers' ....ARV at 30.5% / OCA at 36.6% / RYM at 33.1%.

'Peers' presumably are as at March so possibly higher by now.

[Shareguy]

Was not long ago that Fishers were big cheerleaders of Summerset.

https://www.nzx.com/announcements/417448

[Basil]

I think they are making a big mistake selling SUM down.  I've had a look at all their stocks in the Kingfish portfolio and them and IFT are the last 2 I'd be selling if I was managing it.  It's hard to retail confidence in them when they do things like this.  If they replace it with OCA I'm definitely selling out lol

[BlackPeter]

I think they are making a big mistake selling SUM down.  I've had a look at all their stocks in the Kingfish portfolio and them and IFT are the last 2 I'd be selling if I was managing it.  It's hard to retail confidence in them when they do things like this.  If they replace it with OCA I'm definitely selling out lol

I guess it all depends what you want to get out of your fund. If you want them to confirm your current view of the world, then yes, you are right. If it is however making money, than I could see the logic of replacing SUM with OCA.

The thing with SUM is - good company, but fully priced. As well - SUM is selling a cruise experience, nice to have, but not essential. Not so flash if bad times are knocking on the door, clients just might delay their "cruise" for a handful of years.

OCA on the other hand sells a needs based service. If you need it, you need it, no matter what - and the share trades currently at a significant discount compared with SUM, no matter what your favorite gauge might be.

The only serious issue I would have with OCA is the terrible shareholder commmunication, but I suppose that big shareholders like Fisher Funds well might get preferrential treatment in that regard. Actually - it might be good for FF as well as for OCA, if they buy in ;

And not just for the potentially better shareholder communication. Don't forget ... big funds can't wait and watch TA for their buying decisions, because they make the trends. They need to buy when they see the right fundamantals.

[Basil]

Discount to NTA is irrelevant and a red herring.  Assets are only worth what they can earn and blind freddy can see which company has been growing earnings and which hasn't.  Enough said, there is no comparison.  A classic case of chalk and cheese.

[winner (n)]

Fisher selling usually a good sign for punters .....like good buying when fishers sell

Maybe Fishers have subscribed to BPs theory that OCA will take off now they've listed for 6 years and passed the inflection point ....just like SUM did when they apparently passed an inflection after being listed for 5 years

[Basil]

Not sure I ever recall SUM having a so-called inflection point.   Went back in my portfolio spreadsheets and my records show I held them on 31 March 2017, just over 5 years after listing and the price was $5.17, nearly four times the IPO price in 5 years and a few months.  My contention is simply this.  SUM business model's work very well indeed and some others are saddled with so many fundamental issues they struggle, on and on and on...

One of the key differences as I see it is SUM were growing earnings really well even in the early years but OCA...oh dear.
Share prices tend to follow eps which is why OCA is stuck where it is.

[Whome]

Last weekend appeared to be a turning point in the number of people attending open homes  for residential houses, at least in the area where I live in Auckland East. A lot of Sold stickers now on signs, a high count of open home signs on each main intersection, half a dozen cars outside each open home - a turn around from just a month ago. Expect to see a considerable lift in next months REINZ sales stats. Some of those home sales will be boomers going into RV units. Discl. Holding SUM in anticipation of an improving RV market.

[Minimoke]

Last weekend appeared to be a turning point in the number of people attending open homes  for residential houses, at least in the area where I live in Auckland East. A lot of Sold stickers now on signs, a high count of open home signs on each main intersection, half a dozen cars outside each open home - a turn around from just a month ago. Expect to see a considerable lift in next months REINZ sales stats. Some of those home sales will be boomers going into RV units. Discl. Holding SUM in anticipation of an improving RV market.

Spring has arrived. Real estate normally gets a boost. Makes it easier to sell the family home and buy a SUM property

[KW]

There are two temporary factors operating to boost the real estate market at the moment. 
1.  The 200,000 immigrants that got gifted permanent residency by Jacinda last year are buying homes.  They apparently account for 60% of First Home Buyers and are using the Kainga Ora 5% deposit and Govt guaranteed mortgage scheme to buy. 
2.  Permanent residents who arrived in the second half of last year when the borders reopened have now completed their 12 months of residency and are eligible to buy a house.  

The first factor will fizzle out eventually, and the second factor will depend on just how many are still coming in to NZ. 

[KW]

"The majority of home buyers accessing the government's First Home Loan scheme are new arrivals to New Zealand, mortgage brokers have told OneRoof.
Harcourts Mount Roskill business owner Nick Kochhar says that of the first-home buyers active in his area, more than 60% would be new residents with First Home Loan approvals."

https://www.oneroof.co.nz/news/first-home-loan-scheme-is-open-to-abuse-claims-first-home-buyer-advocate-44090

And we were on track to have a negative immigration loss this year, but July saw a big influx.  August was negative again though.  "Official" statistics are a computer model, that is 16 months out of date.  It is not passenger arrival and departure data (which is where I get my data)  Even the numbers they are quoting are based on the immigration figures from last year, when the borders reopened.  We won't be past including that huge bump until we get to January 2024. 

[KW]

Total applications received   106,421
Total number of people included   217,626
Applications approved and visas issued   102,118
People approved and issued visas   207,793

Thats 207,793 people who got gifted permanent residency by Jacinda.  And thats direct data from the Immigration Dept.

https://www.immigration.govt.nz/new-zealand-visas/waiting-for-a-visa/how-long-it-takes-to-process-your-visa-application/2021-resident-visa-processing-times

And the housing market data is relevant to retirement villages.  As those oldies have to sell their house to someone in order to buy a RV.  Got nothing to do with politics.  Which is why its  not in the politics thread.  A change in Govt will not change either of the two points I made. 

[winner (n)]

Totally relevant to this thread BP this immigration stuff

Annualised house price growth of 8.7% at the moment ....the sorts of renewed price pressures one might expect to see when record net immigration hits smack into a tight market.

Increasing sales volume and increasing property prices all good for Summerset  over next year or so.

[Ferg]

And we were on track to have a negative immigration loss this year, but July saw a big influx.  August was negative again though.  "Official" statistics are a computer model, that is 16 months out of date.  It is not passenger arrival and departure data (which is where I get my data)

Interesting data that is relevant to the housing market, and easy to find.  So far in 2023 we have had a nett loss of 38k NZ citizens and a nett gain of 43k non-NZ citizens for a nett overall gain of 5k.  A recent international sporting event may have increased the number of visitors in July which reversed the nett population losses observed in Mar, Apr, May & Jun.