In my last article I concluded that Summerset was fair value at a little less than NZD$11, but suggested that there might be better prices to buy in at. I stand by that and the stock market seems to have agreed.
The price has ambled slightly north of $11 currently and i just wanted to share my opinion of why that might be, without doing a full analysis:
The outlook for the risk free rate (financial instruments attached to the OCR, such as repaying mortgages or lending debt) is looking lower, or in the case of mortgages is lower;
A lower OCR makes the company's debt cheaper and their investment in growth more favourable;
Anticipation as time passes and we're getting closer to the next sales results announcement, which notably, will be absolutely pivotal for the share price;
Ryman (a large competitor) has removed its highly competitive price structure and also increased its prices. Supply and demand would suggest that Summerset should claim a larger percentage of the market, going forward.
Are Summerset a good buy right now? I don't know, I'd have to redo my analysis. As usual, I'd love to hear your thoughts.
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My Thoughts On Summerset (ASX:SNZ & NZX:SUM)
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In my last article I concluded that Summerset was fair value at a little less than NZD$11, but suggested that there might be better prices to buy in at. I stand by that and the stock market seems to have agreed.
The price has ambled slightly north of $11 currently and i just wanted to share my opinion of why that might be, without doing a full analysis:
The outlook for the risk free rate (financial instruments attached to the OCR, such as repaying mortgages or lending debt) is looking lower, or in the case of mortgages is lower;
A lower OCR makes the company's debt cheaper and their investment in growth more favourable;
Anticipation as time passes and we're getting closer to the next sales results announcement, which notably, will be absolutely pivotal for the share price;
Ryman (a large competitor) has removed its highly competitive price structure and also increased its prices. Supply and demand would suggest that Summerset should claim a larger percentage of the market, going forward.
Are Summerset a good buy right now? I don't know, I'd have to redo my analysis. As usual, I'd love to hear your thoughts.