Quote Originally Posted by Lizard View Post
AGM presentation now out. Unlike last year, they actually provided some firm profit guidance, indicating first half will come in at $1.8-$2.2m NPAT - around twice the $996k booked in prior year. Looks well on track for the full year range I'd estimated of $2.5-$3.9m.

Has attracted a few buyers, but still pretty thin on depth. Last sale at 52.5cps, and wearing a tricksy 10% spread.
Result out last night and came in pretty much as forecast. No obvious fish hooks except that cashflow didn't match profit due to inventory creep. Looking back, it seems inventory has often been higher at the end of first half, so perhaps seasonal factors involved. (The fact they haven't activated the DRP for the $1m in dividends suggests cashflow probably better post-Christmas?)

Value metrics are now pretty much unbeatable - particular if second-half is assumed to match first half (and there's no obvious reason why it wouldn't at this point). First half dividend of 3.5cps puts the rolling 12-month yield at 11% plus franking - likely to be higher.

Makes it on my (very short) list of Graham-Newman "Working Capital Bargains" where Current Assets less Total Liabilities are greater than market cap. Only the third one I've ever come across (and the last two worked well).

And before someone says "the chart is going nowhere", I'd just suggest that it probably will after the next 1m shares have been traded - given HNG selling for non-AMO related reasons as covered here:

http://www.sharetrader.co.nz/showpos...4&postcount=11

For anyone thinking of buying, I'd suggest you don't bid above 50cps - HNG currently seems willing to sell down to any bids at that level. It is perhaps also desirable to wait until the next 500k shares have gone through the market before buying, so as not to have to wait in the trade too long for the overhang to clear - at current rates it could still take another 3-6 months for HNG to exit, although I suspect this result/dividend will hurry things along a bit.