Wednesday, June 23, 2010

Ryman Healthcare: Big Sellers & Buyers

The huge pre-market trade of nearly 33 million Ryman Healthcare Ltd [RYM.NZ] shares yesterday is an interesting move for a number of reasons.

The seller is believed to be a Canadian deceased estate (WSJ and Scoop.co.nz) which held around 6.5% of the retirement villages outstanding shares and the buyers are institutional investors. The shares traded $1.97, at a considerable discount to the previous days close of $2.12.

From the top 5 Ryman shareholders listed in the 2009 RYM Annual Report as at June 2009, number 5 is the most likely seller:

1 Emerald Capital Limited 69,117,275 13.82%
2 Ngai Tahu Equities Limited 40,000,000 8.00%
3 K J Hickman, J Hickman, J W D Ryder & J A Callaghan 1 35,834,955 7.17%
4 Tea Custodians Limited 2 25,889,975 5.18%
5 833763 Alberta Incorporated 24,950,000 4.99%

The purchasers are probably more interesting than the seller though. Institutional investors have largely ignored this stock over the last 2 years and the stock was trading at a low of around $1.14 (from memory) in May 2009 (see chart below) and has been trading at a considerable discount for many months before a recent overall market move northwards. This is typical of institutions though, buying because a share price is going up rather than seeing the value of the company apart from the share price. Interesting that they are buying now and not a lower levels. Clearly they see upside in company prospects and expect the share price to go north as a result.

I expect a good long-term performance, always have, but my interest was piqued last year.


The company scored a 19% lift in 2010 full year profit, out last month, and this has been the modus operandi in terms of growth for the last ten years.

With an announcement yesterday that RYM are going to spend $100 million on a retirement centre in Tauranga and a number of other developments across the country proposed or being built, the growth of this company looks set continue.

I am surprised that they were not already a player in Tauranga, the retirement capital of New Zealand, but this move will help them get a foothold in the most lucrative retirement area in the country with much potential for further development.

I might retire there myself sometime in the future, on the proceeds from my shareholding in RYM.


Disclosure : I own RYM shares in the Share Investor Portfolio


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