TRA - Turners Automotive Group [previously TNR - Turners Limited]

[Brain]

I have been reading the heartland thread as well as this one. my understanding of finance companies and banks is limitted but my guess is that between the two the heartland bank offers much better prospects than Dorchester. Would Percy , PT and Snoopy agree with that?

Brain

[Snow Leopard]

I have been reading the heartland thread as well as this one. my understanding of finance companies and banks is limitted but my guess is that between the two the heartland bank offers much better prospects than Dorchester. Would Percy , PT and Snoopy agree with that?

Brain

Read this post and this other post to derive you view of my view.

My major problem with DPC remains the liquidity being to low to buy a minimum amount, but otherwise I think it is OK.
(Mind you, I would also like to see increased liquidity with HNZ)

Best Wishes
Paper Tiger

[percy]

I have been reading the heartland thread as well as this one. my understanding of finance companies and banks is limitted but my guess is that between the two the heartland bank offers much better prospects than Dorchester. Would Percy , PT and Snoopy agree with that?

Brain

Hi Brain.
I don't think I would be the right person to answer your question.I feel I know Heartland well,and my posts on Heartland thread have been correct.My post 3446 on that thread sums up how I feel.As each bit of good news comes out I have brought more shares.
Yet on this DPC thread I am a "weak link". I have tried to understand DPC,but do feel I have failed.I have found noodles' posts on this thread, No.938 and No.941 show I still do not understand DPC.
That said, I would think you would do well investing in either.Sorry I can't be of more help.

[noodles]

I have been reading the heartland thread as well as this one. my understanding of finance companies and banks is limitted but my guess is that between the two the heartland bank offers much better prospects than Dorchester. Would Percy , PT and Snoopy agree with that?

Brain

Brian,
This is how I see the 2 companies:
1. HNZ on a FY15 pe under 10. This tells me the market is not pricing in any growth. The HER business may be that catalyst for growth. I hope so as I hold a meaningful amount in HNZ
2. DPC is on a FY15 tax adjusted pe of around 15. So a moderate amount of growth is already priced in. I have a small holding in DPC. Small enough that I won't care if the price drops.

Being a value investor, I prefer HNZ because there is not much downside. DPC on the other hand, can't miss a beat with the earnings or they will be punished.

DPC may have more potential for growth, but I like to hold stocks where I can sleep well at night.

[Snoopy]

I have been reading the Heartland thread as well as this one. my understanding of finance companies and banks is limited but my guess is that between the two the Heartland bank offers much better prospects than Dorchester. Would Percy , PT and Snoopy agree with that?

Without wishing to start a flame war, I will stick to what is indisputable.

When Heartland made a significant acquisition they had to go back to their shareholders for more money. When Dorchester made a significant acquisition they opened their war chest of cash and just bought it.

Dorchester currently operates a higher margin business than Heartland.

Pay $1 for Heartland shares and you get around $1 worth of underlying assets.
Pay $1 for Dorchester shares and you get only 30c worth of underlying assets.

One line summary: Dorchester is the better run business as of now (EOFY2014). But Heartland looks to be, superficially at least, the better value buy.

SNOOPY

discl: hold neither, still evaluating both

[noodles]

Without wishing to start a flame war, I will stick to what is indisputable.

When Heartland made a significant acquisition they had to go back to their shareholders for more money. When Dorchester made a significant acquisition they opened their war chest of cash and just bought it.

Ok, you started the war;-) Where did that war chest of cash come from? A massive capital raising along with option redemption. How is that different from Heartland? At least HNZ shareholders are in the money on their capital raising.

[blackcap]

Ok, you started the war;-) Where did that war chest of cash come from? A massive capital raising along with option redemption. How is that different from Heartland? At least HNZ shareholders are in the money on their capital raising.

Can I join the war too I would counter your strike and say that "most" DPC shareholders who participated in the capital restructuring would also be in the money. Except maybe the instos who paid 25 cents recently. (Not saying old debenture holders are in the money because they are still worse off).
But if we go back pre capital restructuring I would venture to say most DPC shareholders are still well behind the 8 ball. But till now Byrnes et al seem to know what they are doing and are hitting targets and showing that they are not in rash acquisition mode but are prepared to pay a little to get a lot.
Do not know enough about HNZ to be able to comment on them.

[Snoopy]

Ok, you started the war;-) Where did that war chest of cash come from? A massive capital raising along with option redemption. How is that different from Heartland? At least HNZ shareholders are in the money on their capital raising.

I stated my judgement position as at EOFY2014. You are right noodles, in that DPC has raised more shareholder funds in proportion to their EOFY2013 position than Heartland did in this current year. But we are talking about investing in either Heartland or Dorchester (or both!) now, not at EOFY2103.

The key difference I saw was that Dorchester raised their new capital first, then made the acquisition of Oxford. Heartland on the other hand announced the acquisition of Sentinal, then went to shareholders to raise the money.

I don't really like raising money in advance for some nebulous purchase as a rule (trust us we know what we are doing!). But by waiting until Dorchester was recapitalised, the acquisition announced, then buying in, there is now an avenue to get around my dislike of this practice. Dorchester have stated they have enough money now to fund even more acquisitions without calling on shareholders again. Heartland cannot say the same.

SNOOPY

[noodles]

But till now Byrnes et al seem to know what they are doing and are hitting targets and showing that they are not in rash acquisition mode but are prepared to pay a little to get a lot.

Yes, he has delivered up till now. He has made some aggressive targets and exceeded them. FY16 targets are very aggressive.

[blackcap]

Yes, he has delivered up till now. He has made some aggressive targets and exceeded them. FY16 targets are very aggressive.

Agreed targets are aggressive and I have been scathing in the past on this stock as you may well know not seeing how DPC could justify a share price of above 30 cents at the time with a forward profit of less than $6m. But since then (about 2 years ago) acquisitions have "magically" alleviated the pressure on attaining targeted earnings and have actually increased these greatly. We need to remember that the recent acquisition of Oxford was on a low PE and will help to getting the $15m target in 2 years. That (forward looking) puts DPC on a PE of 8.3 (15/493 =3 cps) If and it is still a big if DPC attains the profit of $15m and posts a 1 cent dividend I wonder what the share price will be?