HGH - Heartland Group Holdings

[winner69]

A cartoon from interest.co.nz yesterday (bastardised of course)

http://www.interest.co.nz/opinion/73005/matt-nolan-takes-look-income-inequality-nz-including-what-we-can-tell-about-why-it-the

[winner69]

One of the features of the recent profit announcements of the big 4 banks increased profitability in nz was their being able to reduce impairment provisions, ie less bad and overdue debt.

Jeez, I hadn't factored that sort of stuff in to my Hnz profit forecast for this year

Heartland sure is in a sweet spot at the moment

[Beagle]

Sure are mate. Its been a big 3 weeks since the ASM with the SP up from $1.01 to $1.10. Market is starting to wake up to the official forecast being VERY conservative.

[Beagle]

KCF010 - Here's an example of what HNZ could do to bolster its ROE. Kiwibank issued capital notes that I presume meet the Reserve Bank's requirements for capital at 6.61%.
The current super low interest rate environment provides an ideal opportunity for HNZ to follow suit. Note this $100m tranche issued at 6.61% currently trades at well under 6%.
Looking through the NZDX market this morning there's nothing of substance there paying more than 6% so I reckon they could get a long term issue away, say $100m at very close to 6% and then do a buy-back of shares !! Get on to it I reckon.

P.S. Yes, confirmed to meet Basel 111 capital requirements, currently trading at only 5.75%.

Percy, you know management well, do you want to get on to sending them an e.mail and suggesting this.

Here's the original media release


GENERAL: KCF: Kiwi Capital Funding Limited announces Capital Note offer 08:57a.m.

KCF
05/05/2014 08:57
GENERAL

REL: 0857 HRS Kiwi Capital Funding Limited

GENERAL: KCF: Kiwi Capital Funding Limited announces Capital Note offer

MEDIA RELEASE

5 May 2014

KIWI CAPITAL FUNDING LIMITED ANNOUNCES CAPITAL NOTE OFFER

Kiwi Capital Funding Limited (KCFL) has today announced an offer of up to
$100 million of unsecured subordinated Capital Notes to the New Zealand
public. Proceeds of the offer of Capital Notes will be used to invest in
convertible subordinated bonds to be issued by Kiwibank (a related company of
KCFL), which will help Kiwibank meet its regulatory capital requirements
under the Reserve Bank's Basel III framework.

The Capital Notes have a maturity date of 15 July 2024 but may be called, if
certain conditions are met, by KCFL from 15 July 2019 and earlier for tax or
regulatory reasons. The Capital Notes have a credit rating of BB+ from
Standard & Poor's, reflecting their subordination and loss absorption
features.

Interest is scheduled to be paid semi-annually on the Capital Notes.* The
Margin and interest rate for the first five years until 15 July 2019 will be
set following a bookbuild on Wednesday 14 May 2014 and announced on or before
the Opening Date.

The Offer is expected to open on Thursday 15 May 2014 and close on Tuesday 3
June 2014 at 5pm. Interested investors should contact one of the Joint Lead
Managers to the offer (listed below) or their usual financial adviser to
request a copy of KCFL's Investment Statement for the Capital Notes.


HNZ don't need to re-invent the wheel here, just copy it at say 6.25% and I reckon a $100m offer would fly out the door.

[Harvey Specter]

Kiwibank has a higher credit rating and an implied govt guarantee (despite explicit statements from the govt) but I do agree. As their credit rating improves, as it has been, their cost of funds should drop, increasing their returns.

[percy]

KCF010 - Here's an example of what HNZ could do to bolster its ROE. Kiwibank issued capital notes that I presume meet the Reserve Bank's requirements for capital at 6.61%.
The current super low interest rate environment provides an ideal opportunity for HNZ to follow suit. Note this $100m tranche issued at 6.61% currently trades at well under 6%.
Looking through the NZDX market this morning there's nothing of substance there paying more than 6% so I reckon they could get a long term issue away, say $100m at very close to 6% and then do a buy-back of shares !! Get on to it I reckon.

P.S. Yes, confirmed to meet Basel 111 capital requirements, currently trading at only 5.75%.

Percy, you know management well, do you want to get on to sending them an e.mail and suggesting this.

Here's the original media release



HNZ don't need to re-invent the wheel here, just copy it at say 6.25% and I reckon a $100m offer would fly out the door.

I must have missed something?
Heartland pay under 5% for deposits.
They have a very high equity ratio.
They talk of a possible return of capital or a buy back.
So appear they do not require further capital.


HOWEVER I do expect they will renew or replace MTFHCs[perpetual bonds] when they takeover Motor Trade Finance.!!!! lol.

[Beagle]

I must have missed something?
Heartland pay under 5% for deposits.
They have a very high equity ratio.
They talk of a possible return of capital or a buy back.
So appear they do not require further capital.


HOWEVER I do expect they will renew or replace MTFHCs when they takeover Motor Trade Finance.!!!! lol.

Keeping a high capital ratio is important for an ever improving credit rating. One way of doing this is by issuing capital notes like Kiwibank's offer which is rated as capital in terms of the reserve banks capital adequacy ratio is concerned.
Issue capital notes at 6.25%, buy back 100m of shares and bingo you get a huge bounce in EPS in the remaining shares :) This sort of transaction would be seriously EPS accretive OR they could use some of the capital raised through the capital notes issue to fund other EPS accretive acquisitions or a combination of both.

One fly in the ointment as Harvey has pointed out is Kiwibank have a higher credit rating which enabled them to get this capital note issue filled. Perhaps HNZ needs to pay a little more than 6.61% or given that the Kiwibank issue now trades at 5.75% perhaps a capital notes issue at around 6.25-6.50% is now plausible ?

[winner69]

That Q1 disclosure thing put out this morning indicates healthy interest margins continue, maybe even higher than last year.

And they say home equity release Q1 profit after tax $1.2m - annual run rate $5m. But need to pump it up a bit for the acquisition to become eps accretive as promised and to get that 10% on the extra equity

[winner69]

Home equity release contributed $1.2m in Q1 ....lets say at least $5m for year

HNZ made $36m last ( little bit from her stuff) so adding the $5m to that gives $41m base for FY15

They try to kid us profit will be $42m ....so they only going to make $1m more in real terms

Done more than that in first quarter ....means going backwards for rest of year

Looks like a sell or that Jeff is really really having us all on.

[percy]

You may wish to sell,
however I find myself
"well positioned." !!!! lol.

[Beagle]

I'm "well positioned" now too :) No interest in selling. Relax W69, they'll be $1.20 soon enough and then $1.30 and so on.

[noodles]

Home equity release contributed $1.2m in Q1 ....lets say at least $5m for year


I think have you highlighted an issue. Most likely it is due to the marketing and process costs of getting the lending in HER up and going again. You would hope that the 1st quarter was not an average quarter.

[winner69]

I think have you highlighted an issue. Most likely it is due to the marketing and process costs of getting the lending in HER up and going again. You would hope that the 1st quarter was not an average quarter.

I did say at least $5m .....of course it will be more.

Besides all these back of an envelope calculations my bible is a full blown financial model with lots of stuff in it.

In that I have her contributing $8m ...and that's allowing for millions of marketing money

Makes a mockery o heir $42m guidance. My fear is that they may be managing to that.

[Beagle]

I did say at least $5m .....of course it will be more.

Besides all these back of an envelope calculations my bible is a full blown financial model with lots of stuff in it.

In that I have her contributing $8m ...and that's allowing for millions of marketing money

Makes a mockery o heir $42m guidance. My fear is that they may. Managing to that.

Relax mate $1.11 already...I have some spare blood pressure pills if you need them :D

[janner]

And I sold a 100K due to being over weight at 8??. cents. Grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr...

Still " Well positioned " though percy :-))))))

[percy]

And I sold a 100K due to being over weight at 8??. cents. Grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr...

Still " Well positioned " though percy :-))))))

I would say you are "very well positioned" by the fact you lowered your average buy price.
Just sit back and enjoy your cheaper ride.

[h2so4]

Makes a mockery o heir $42m guidance. My fear is that they may be managing to that.

Wont affect the sp seems to me that shareholders are awake to this. Or at least some of them.:)

[percy]

Wont affect the sp seems to me that shareholders are awake to this. Or at least some of them.:)

Yes I think Winner69 and Roger,[who both must sleep with the light on,so they are wide awake all the time] must be in the market buying more today.
SP at time of posting $1.13.

[Beagle]

Always sleep with one eye open like Dolphins :sneaky2:

[winner69]

Hey Roger - you said HNZ should be on a PE of 12 to 13 .... so lets say 12.6 to split the difference

FY15 guidance $42m is 9.0 cents a share

PE 12.6 gives share price of $1.14

Nearly there

[Master98]

Hey Roger - you said HNZ should be on a PE of 12 to 13 .... so lets say 12.6 to split the difference

FY15 guidance $42m is 9.0 cents a share

PE 12.6 gives share price of $1.14

Nearly there

I have a strong feeling that FY15 earnings will be $44m, PE12.6 will give sp near $1.19.

[winner69]

OMG....wtf is going on with HNZ

Well up the losers board .....not as bad as Mowbrays or Cavalier but jeez worse than Pumpkin Patch

And closing week n Nelson is a bad omen .....cricket world in mourning (RIP Phil) .....and Blackcaps up against it paying Pakistan.

[winner69]

OMG....wtf is going on with HNZ

Well up the losers board .....not as bad as Mowbrays or Cavalier but jeez worse than Pumpkin Patch

And closing week n Nelson is a bad omen .....cricket world in mourning (RIP Phil) .....and Blackcaps up against it paying Pakistan.

OMG it just got worse .....110 ....and even worse than Cacalier

At least not as bad as Blis ..that would have been disasterous

[winner69]

Did HNZ go ex divie or something

[percy]

It is no longer a case of "the end is nigh",it has happened!!!! lol.

[Beagle]

Unusual volatility in HNZ last two days. Up 3 down 4. It got a bit ahead of itself that's all W69. Don't forget it was only $1.06 last week. No cause for concern.
Sticking with my $1.20 core valuation by mid 2015 (10 cents EPS x PE of 12), with all the risk to the upside with possible EPS accretive acquisition(s).
Not the only one to get ahead of itself and a good clip around the ears, see RYM and KIP SP drops today.

[Beagle]

OMG it just got worse .....110 ....and even worse than Cacalier

At least not as bad as Blis ..that would have been disasterous

May I be so bold as to venture you're feeling more comfortable today with your HNZ shares mate :D Did someone mention that we're well positioned :lol:

[winner69]

After he distress and anxiety of last Friday when the HNZ shareprice collapsed to 110 I have taken the advice of Mr Taleb who pointed out that the more you look at the prices there will be just as many distressing moments as joyous moments, so only look at once a week or month

Has it stopped free falling yet?

I know cheating but took HNZ off the watchlist for a while

[winner69]

UDC making heaps
http://www.interest.co.nz/business/73177/anzs-udc-finance-posts-20-rise-annual-profit-lending-especially-forestry-sector-and-n

Best bits -

Price told interest.co.nz UDC's strong lending growth has continued into its new financial year.

UDC's cost to income ratio fell to 27.3% from 31.6% the previous year with costs up 1%.

So for HNZ growth, better interest margins, making more with little extra costs PLUS $6m from HER will take 2014 earnings of $36 m to $42m .....yeah right .....closer to $50m surely

[percy]

Thanks for the link Winner69.
I have found how UDC does is a good indicator as to how Heartland is/are performing.
Yes the $42mil is certainly looking a "very modest" target.
The last three broker's research I have seen have had a target price/ valuation of $1.00 for Heartland,yet the sp is tracking at around $1.10 to $1.15 .????
Whether brokers will update their research before the half year result,which is due at the end of February,or not, we will have to wait and see?
On the charts the sp is well above the 50day EMA $1.04,and the 200 day EMA 96 cents,so the strong uptrend is confirmed.

[Beagle]

Just a reminder that I posted a while back with a Reuters link to confirm. Average analysts 2015 forecast is for EPS of 9.95 cps which equates to $47m. Its common knowledge that the official guidance of $42 - $45m is extremely conservative and most of the analysts are well and truly on to it. Since the ASM at the end of October the SP is up from $1.00 to $1.15 which is a very strong move in just over 1 month reflecting the strong start to the year Q1 of $11m and the market recognition forecasting is too low. I expect an official upgrade when they release H1 results. We are well positioned :)

[tim23]

Roger - do you think they are a takeover target?

[percy]

More questions for Roger.
I read AMP want to get into banking.The banks are selling insurance related products,so AMP see owning a bank, giving them the right channels for their insurance products.
The question Roger,do you think AMP should start a "greenfields" bank, or would they be better off buying Heartland Bank?
And if so,what do you think would be a fair price for them to pay?

[Beagle]

Roger - do you think they are a takeover target?
Shell rumoured to be looking at having a crack at BP and with record low rates for M&A funding so anything is possible.
I don't see any competition issues for the regulator with the number of registered banks in N.Z. now and certainly HNZ's fundamentals and the synergies an acquirer could bring to bear make it a highly attractive opportunity that would almost certainly be EPS accretive to another bank.
Share register is fairly open
1 Harrogate Trustee Limited 44,378,352 9.58% 2 Brett Wilson & Stephen Gunning 43,000,000 9.28% 3 Accident Compensation Corporation 34,106,452 7.36% 4 Oceania & Eastern Limited 12,289,728 2.65% 5 Cogent Nominees Limited 11,623,439 2.51% 6 Philip Maurice Carter 9,500,000 2.05 7 FNZ Custodians Limited 8,604,368 1.86 8 HSBC Nominees (New Zealand) Limited 7,953,205 1.72 9 New Zealand Permanent Trustees Limited 7,100,000 1.53 10 Leveraged Equities Finance Limited 6,898,066 1.49 11 National Nominees New Zealand Limited 6,203,882 1.34 12 JPMORGAN Chase Bank 6,139,591 1.33 13 Investment Custodial Services Limited 5,912,329 1.28 14 New Zealand Superannuation Fund Nominees Limited 5,441,482 1.17 15 Citibank Nominees (NZ) Limited 5,364,331 1.16 16 Heartland Trust 5,108,707 1.1 17 Tea Custodians Limited 5,082,064 1.1 18 Investment Custodial Services Limited 4,982,396 1.08 19 Jarden Custodians Limited 4,500,000 0.97 20 Forsyth Barr Custodians Limited 3,827,915 0.83 TOTAL FOR TOP 20 HOLDERS 238,016,307 51.38

Sorry if this cut and paste from the annual report doesn't come out in the right format, hope you get the general idea.


More questions for Roger.
I read AMP want to get into banking.The banks are selling insurance related products,so AMP see owning a bank, giving them the right channels for their insurance products.
The question Roger,do you think AMP should start a "greenfields" bank, or would they be better off buying Heartland Bank?

And if so,what do you think would be a fair price for them to pay?

Mate I was hoping you'd field the first question not add to it lol. With the recent entry by the Chineese bank and them looking to build business i'd say there's little doubt AMP would be better to buy HNZ. There would be good synergies between the two organisations and excellent opportunities to cross sell products and services.
I think an acquirer could try and make a case at around $1.40 - $1.50 equating to a 2015 PE of 14-15. I probably wouldn't sell but you never know they might be able to get significant traction at that level.

I really hope this doesn't happen as I see really good things in the years ahead for HNZ and would FAR rather have this as a core part of my long term portfolio than take a quick buck after HNZ being bought out by a greedy foreign owned bank. The other thing to keep in mind is how long before it gets into that price range without a takeover offer ? If they come out with a 2016 forecast of 12 cps or thereabouts late next year after the 2015 highly successful result you've only got to expand the PE to 12.5 to see a price at potentially the top end of that range this time next year. (12 cents x 12.5 PE = $1.50). I'd far rather see HNZ do the acquiring :)

[percy]

Thank you for your well thought out reply.
Like you I have made Heartland a large % of my portfolio.
I am proud to have shares in a NZ owned and operated bank that will benefit New Zealanders,and like you would rather see HNZ doing the acquiring. .

[percy]

Well I am still enjoying "the best job" in NZ,have had another great year,and looking forward to next year,with a good amount of books already invoiced for February..
However, age must be catching up with me.I forgot my bank customer ID number and could not sign in.Spent 10 minutes looking up old diaries,but could not find it written down anywhere.A trip to the loo cleared the mind, and the number came back to me.Have written it down somewhere ,I think? lol.

[SwampRat]

I know there are millions of neurons in our guts, but...

[Beagle]

You need a sense of humour around here luv otherwise you're bound to get ratty, pardon the pun :)

[BlackPeter]

http://www.nbr.co.nz/article/failed-businesswoman-tied-folded-adult-entertainment-company-cs-p-166279?utm_source=newsletter&utm_medium=email&utm_campaign=NBR%2520Last%2520Call

... I think I read about the case already earlier and from memory the 2.4M have been already in the "impaired" basket. However reading this article it sounds like they can completely write it off.


Creditors are owed $3.4 million, which receivers – who found stock and invoices had been overstated – say will not be paid. Secured creditor Heartland Bank, through its subsidiary Marac Finance, is still owed $2.376 million. Inland Revenue is owed $85,000 and Customs is owed $16,000.

Just wondering - is the business environment already that bad that Heartland (or Marac) have a need to deal with (and lose money of) such "colourful" personalities?

[winner69]

The way the Rubicon and Tenon shareprices have gone ballistic since the head honchos have said the market just doesnt just reflect the real value in the shareprice I think Jeff should come and say the same about Heartland

Problem the longer he sticks with his ridiculous $42m guidance it is a bit hard for him to tell the market they are stupid - but just imagine if he did come out this week and said 'half year is looking like $24m so we really need to say $42m is ridiculous and the full year will be in the $50m to $48m range'

That'll put a rocket under the shareprice.

But I am only dreaming ......if they have $42m in ther heads $42m it is and we will manage. To that number

[Tony Two Gloves]

Any concerns about the lending these guys are doing in the used vehicle market through their I-Finance arm? A few colleagues in this arena are amazed at what these guys are approving and wondering if it will come back to bite them in 6 - 12 months....

[kizame]

Any concerns about the lending these guys are doing in the used vehicle market through their I-Finance arm? A few colleagues in this arena are amazed at what these guys are approving and wondering if it will come back to bite them in 6 - 12 months....
Any Ideas what the interest rate on the loans are,I remember dorchester through senate finance were charging 29% a few years ago.

[Joshuatree]

Wow that came out of left field and waaay offf topic. Opening a can of worms there mate but thats for another thread.

[winner69]

Simon ambles into Jeff's office

Here's the numbers to the end of November Jeff

Good, what they look like Simon

Friggen good Jeff (no girls at Heartland so he can swear when excited)

How good then Simon

Well Jeff, bottom line running at $4m a month and what's friggen exciting is each month is better than the month before.

SIMON, thats not good news. I promised $42m for the year and quick sums says 12 times 4 is $46m (that is what years of experience in banking teaches you)

But that's the numbers Jeff

Well Simon, do something about them. Play around with the provisions, change the discount rates on some of your valuation models. Just do something - $20m for half year it has to be. No more no less. Get that Simon.

But Jeff, I have already friggen done that and its still friggen $4m a month, like friggen $20m for 5 months (see Simon is a bean counter and can do simple sums)

What do I do then Simon?

Probably best to keep your mouth shut Jeff

But then again Jeff there's talk of us being taken over. A guy called Tim suggested AMP need us to fulfil their friggen wet dreams. What a laugh - dreamers eh

So Simon, wouldn't a real high share price put them off even thinking about taking us over (as Jeff quickly switches into strategic thinking mode)

Sure friggen would Jeff. Would need to pay heaps more then

OK Simon, I'll think I'll come out and announce an earnings upgrade - let's say $48m to $50m.

And Jeff if those friggen dreamers AMP come up with an offer we still enough in the bottom drawer to do another upgrade ans say the offer Is just friggen opportunistic.

Good thinking, Simon. I always knew you accountant guys were always conservative and had heaps stashed away for a when needed.

And Jeff, don't forget the huge payouts we get if taken over. That's a friggen incentive in its own right eh Jeff (total speculation that bit)

[Harvey Specter]

I hope Jeffs maths is better than that. 12 x 4 is 48. Not 46.

It's even worse (better?) than they think!

[Beagle]

I hope Jeffs maths is better than that. 12 x 4 is 48. Not 46.

It's even worse (better?) than they think!
+ EPS accretive acquisition(s). I wonder what happens to the SP when that big seller gets tired of flopping up 100K parcel's on the sell side at $1.15 or runs out of shares or when they go away for a holiday at Christmas:t_up:

So we're all agreed then, $1.30 by the end of the month :D

[winner69]

I hope Jeffs maths is better than that. 12 x 4 is 48. Not 46.

It's even worse (better?) than they think!

I did add "that's what years of experience in banking teaches you"

Maths don't matter to Jeff, that is why he has Simon

Spose I need to improve my efforts at cynical wit

[mis chief]

Wow that came out of left field and waaay offf topic. Opening a can of worms there mate but thats for another thread.

Maybe you didn't see Roger's reply to Janner, in Roger's own words, "Constructive, intelligent and on topic posts are appreciated by all, on the other hand..." Roger's reply definitely came into 'the other hand' bracket. Someone must have suggested he delete it, but it was read by some. It was the type of post ST can do without, with a poor choice of words at the end. Summed up, it was arrogant.

[Beagle]

Simon ambles into Jeff's office

Here's the numbers to the end of November Jeff

Good, what they look like Simon

Friggen good Jeff (no girls at Heartland so he can swear when excited)

How good then Simon

Well Jeff, bottom line running at $4m a month and what's friggen exciting is each month is better than the month before.

SIMON, thats not good news. I promised $42m for the year and quick sums says 12 times 4 is $46m (that is what years of experience in banking teaches you)

But that's the numbers Jeff

Well Simon, do something about them. Play around with the provisions, change the discount rates on some of your valuation models. Just do something - $20m for half year it has to be. No more no less. Get that Simon.

But Jeff, I have already friggen done that and its still friggen $4m a month, like friggen $20m for 5 months (see Simon is a bean counter and can do simple sums)

What do I do then Simon?

Probably best to keep your mouth shut Jeff

But then again Jeff there's talk of us being taken over. A guy called Tim suggested AMP need us to fulfil their friggen wet dreams. What a laugh - dreamers eh

So Simon, wouldn't a real high share price put them off even thinking about taking us over (as Jeff quickly switches into strategic thinking mode)

Sure friggen would Jeff. Would need to pay heaps more then

OK Simon, I'll think I'll come out and announce an earnings upgrade - let's say $48m to $50m.

And Jeff if those friggen dreamers AMP come up with an offer we still enough in the bottom drawer to do another upgrade ans say the offer Is just friggen opportunistic.

Good thinking, Simon. I always knew you accountant guys were always conservative and had heaps stashed away for a when needed.

And Jeff, don't forget the huge payouts we get if taken over. That's a friggen incentive in its own right eh Jeff (total speculation that bit)

Its refreshing to see some good intelligence displayed along with wit and humour on this page mate.

[Kiwi]

+ EPS accretive acquisition(s). I wonder what happens to the SP when that big seller gets tired of flopping up 100K parcel's on the sell side at $1.15 or runs out of shares or when they go away for a holiday at Christmas:t_up:

So we're all agreed then, $1.30 by the end of the month :D

Yep, $1.30 + by Christmas.
What should AMP be paying?

[Beagle]

Two bucks a piece and they can have mine :)

[winner69]

Two bucks a piece and they can have mine :)

and for AMP that would be cheap as ....from a strategic point of view

Save them heaps of time and a bank straight away

Lets say $2.50 eh

[Jay]

Why not round it up to $3.00
In all seriousness though - Could be a goer for AMP - depends on how much they are prepared to pay, still must be a lot cheaper than starting from scratch.

[Beagle]

Why not round it up to $3.00
In all seriousness though - Could be a goer for AMP - depends on how much they are prepared to pay, still must be a lot cheaper than starting from scratch.

Agreed and seriously they could have a go at $1.50 or thereabouts and make a case that on a 2015 PE of 16 times the official mid-point of forecast range which equates to 9.33 cents per share that's a more fulsome PE than most of the regional banks in Australia and also the major banks. Jeff would then need to come clean with how well the company is presently trading and update 2015 guidance...it would make for a good scrap that's for sure, (not that I'm wishing for it to happen), as by my reckoning once 2016 guidance comes out late next year it'll be within a bulls roar of $1.50 anyway and heading towards $2.00 sometime in 2016 or 2017. Why give those future potential gains to AMP ? In the news it looks like the big Aussie banks are in the gun for some really serious capital raising. Cap rates are too low at around 8.3% on average, no problem with HNZ at 14% :)
http://www.smh.com.au/business/banks-brace-for-28-billion-hit-20141207-1221dd.html

[hummerh40]

Seller side looking pretty thin

[Beagle]

Percy, Winner69 and I could list some at $2.00 and give AMP a target to hit. I did, just for fun :D

[iceman]

Percy, Winner69 and I could list some at $2.00 and give AMP a target to hit. I did, just for fun :D

You are playing with fire !! Better be quick to remove it when AMP announces takeover offer at $2.50 :p

[Bobdn]

I bought 12,000 at 1.15 from the sale of some chorus shares. I'm easily led ;)

[percy]

Percy, Winner69 and I could list some at $2.00 and give AMP a target to hit. I did, just for fun :D

Fun??? Fun???
This is getting to be very serious fun.
I am loving it.,,,,,,$1.17...
Making those dividend reinvestment shares look great value too!!!

[Beagle]

Fun??? Fun???
This is getting to be very serious fun.
I am loving it.,,,,,,$1.17...
Making those dividend reinvestment shares look great value too!!!

Especially the ones I got accidentally when I'd forgotten I'd previously enrolled :lol:
Great way to start the week, we might have to pay ourselves a Christmas bonus this year :)

[BFG]

I had someone say to me the other day "why didn't I buy @ 82 like I was going to?"

I then retorted with "why didn't I hold on past 75!!!"

Too young and dumb still, maybe one day I'll learn that Buffett is rich for a reason.

Guessing all you oldies need Depends on the Xmas list thid year eh? "Well positioned" you certainly are!

Congrats all ;)

[percy]

I had someone say to me the other day "why didn't I buy @ 82 like I was going to?"

I then retorted with "why didn't I hold on past 75!!!"

Too young and dumb still, maybe one day I'll learn that Buffett is rich for a reason.

Guessing all you oldies need Depends on the Xmas list thid year eh? "Well positioned" you certainly are!

Congrats all ;)

All of us "oldies" need to work hard, and use all of our street cunning, to keep up, or ahead of you young clever, tech savvy guys.I think most of us are "well positioned "to learn new tricks from you guys. lol.

[penn]

So many happy campers! Don't we usually get the tail of a cyclone about now?
http://seniorshousing.co.nz/core/reverse-mortgage-sector-now-in-steady-decline-2/
we will only get wet not blown away.

[percy]

So many happy campers! Don't we usually get the tail of a cyclone about now?
http://seniorshousing.co.nz/core/reverse-mortgage-sector-now-in-steady-decline-2/
we will only get wet not blown away.

The reverse mortgage sector has been in decline since GFC.Lack of funding,and lack of major reputable lenders slowed the sector down.
Funding and reputable lenders are now returning to the sector.We are seeing the likes of ASB,SBS and Heartland offering reverse mortgages.
We know it is in Governments' interest to keep "oldies" in their own home,mainly for their health,so govt depts. are offering more help and services to achieve this.
The fast growing aging population means Reverse Equity Loans [REL] business will grow accordingly.

[janner]

The reverse mortgage sector has been in decline since GFC.Lack of funding,and lack of major reputable lenders slowed the sector down.
Funding and reputable lenders are now returning to the sector.We are seeing the likes of ASB,SBS and Heartland offering reverse mortgages.
We know it is in Governments' interest to keep "oldies" in their own home,mainly for their health,so govt depts. are offering more help and services to achieve this.
The fast growing aging population means Reverse Equity Loans [REL] business will grow accordingly.


Being... " Very well positioned ".. I am not going to need one :-)))

Nice boat to be in aye percy ??

Now where was that Christmas menu ??

[percy]

Being... " Very well positioned ".. I am not going to need one :-)))

Nice boat to be in aye percy ??

Now where was that Christmas menu ??

I don't think many "well positioned" Sharetraders will ever need a REL.However, it is disappointing to see just how many people reach retirement age with either a mortgage and no savings,or mortgage free and no savings.So there will be growing demand for RELs [reverse equity loans].
Whatever is on your Christmas menu I hope you and your family enjoy it.
I have tried to make my picks for next year's competition easy for you to beat. !!! lol

[Snow Leopard]

Just popped in to say that I am as happy as with HNZ and just regret only buying lots at 55c, 70c, ....

Best Wishes
Paper Tiger

[percy]

Just popped in to say that I am as happy as with HNZ and just regret only buying lots at 55c, 70c, ....

Best Wishes
Paper Tiger
From memory you were well overweight with your HNZ,so well done.!

[winner69]

Simon and Jeff at work ....this weeks announcement all ready to go

[Beagle]

Simon and Jeff at work ....this weeks announcement all ready to go

LOL. You looking for an even bigger Christmas bonus mate :)

[percy]

Simon and Jeff at work ....this weeks announcement all ready to go

Naughty.!!!
But I love it.!! lol.

[Baa_Baa]

An impressive November for HNZ, though the price chart is now well over-bought, with price rising against declining volume, this rally is thinning out. An interesting pattern has also emerged during 2014, where the breakouts (up) have on each occasion retraced fully before resuming the up trend.

The current rally could of course continue as there is a massive gap to fill back up to the breakdown in 2010 and HNZ is in clear air at these prices. If not, support at $1.13, $1.1 and $1.04 may present good buying or accumulation opportunity. Breakdown below $1.04 appears unlikely.

6580

[Beagle]

No question there's been a big run-up since ASM on 31 October but that's what happens when they announce a Q1 of $11m and it becomes obvious to even "blind freddy" their official 2015 forecast is extremely conservative.
Technically it may be in slightly over-bought territory, I would concede that as the run up has been very fast but fundamentally on a 2015 PE of only 11.6 times at $1.16, (consensus average analyst EPS is 9.95 cps) I think its arguably the best value stock on the NZX when viewed in the context of their track record, past growth and future growth prospects. I'll buy-up large on any meaningful pull-back. I think astute investors have been getting themselves "well positioned" for 2015 and beyond.

[iceman]

W69 will be happy with the announcement of a female Director that appears well qualified for the task.

[Beagle]

W69 will be happy with the announcement of a female Director that appears well qualified for the task.

Probably offline celebrating the new diversity with oysters and chips down by the seaside or working on a new cartoon with a higher profit number in it :D

[percy]

W69 will be happy with the announcement of a female Director that appears well qualified for the task.

Yes welcome to Deborah Taylor.
I think it is pleasing to see she brought 50,000 shares.
Not insignificant.

[Beagle]

Yes welcome to Deborah Taylor.
I think it is pleasing to see she brought 50,000 shares.
Not insignificant.

Yep, some directors will try and tell you they like to be truly independent by not owning any shares. This rubbish never washes with me because I truly believe that the vast majority of people act in their own best interests and its always best if directors have a meaningful stake so they're effectively paddling their own canoe for the benifet of the rest of us...(i.e. interests properly aligned not just turning up for a directors cheque each month.) I hope she buys some more to keep up with Percy and I :)

[h2so4]

I hope she buys some more to keep up with Percy and I :)

Get out of here.

[Beagle]

Get out of here.

Settle down.

[Jim]

Settle down.

I agree with you Rod

[winner69]

Yes welcome to Deborah Taylor.
I think it is pleasing to see she brought 50,000 shares.
Not insignificant.

Uses Jane instead of Deborah as her name

Well connected women and good choice for Heartland. Has a lot of experience as well.

Hope she now teaches the old boys that diversity is a good thing and we see more 'diverse' management teams across Heartland in the future.

[percy]

Uses Jane instead of Deborah as her name

Well connected women and good choice for Heartland. Has a lot of experience as well.

Hope she now teaches the old boys that diversity is a good thing and we see more 'diverse' management teams across Heartland in the future.
Why would anyone with such a lovely name Deborah, want to be known as Jane.??????
The old boys have done an excellent job laying the foundations for others more "diversified" to build on.

[winner69]

Percy, maybe Jane is just a plain Jane .....might use Deborah round her beloved ones

Hope the old boys who have done this 'excellent job in laying the foundations' don't now just hold back and rest on their laurels. Guidance of $42m suggests they might be.

A good women hopefully will stir them up a bit

[bunter]

The old boys have done an excellent job laying the foundations for others more "diversified" to build on.
Or rend asunder, as at PPL, and TEL (1999-2007)

This person is a member of globalwomen.org.nz which seeks to 'promote diverse leadership'. I hope the appointment works out.

[winner69]

Or rend asunder, as at PPL, and TEL (1999-2007)

This person is a member of globalwomen.org.nz which seeks to 'promote diverse leadership'. I hope the appointment works out.

bunter - you seem to be anti-woman, shame on you

[bunter]

Pro-merit.
Heartland might have made an appointment based on chromosomes rather than quality.
Gender should be irrelevant.
I hope the new appointee makes a contribution proportionate to her knowledge and experience of banking.

[winner69]

Pro-merit.



Heartland might have made an appointment based on chromosomes rather than quality.
Gender should be irrelevant.
I hope the new appointee makes a contribution proportionate to her knowledge and experience of banking.

Nice one .......but you seem rather biased and not particularly confident this Jane is gong to be any good for Hertland.

[winner69]

I'm sure Jane will add value to Board activities

Its not just commercial and banking experience that is important it is the new and different perspectives and insights from a market/consumer/customer point of view that can be of real value as they set future strategy.

Besides law, accounting and all those things I see Jane's resume says she is an expert on company valuations. Maybe she did her homework and worked out that HNZ is really worth $1.50 so I better be part of that.....with the rider that '$1,50 without me but with a bit of extra diversity of thought that I bring that $1.50 is really $1.75'

[percy]

I'm sure Jane will add value to Board activities

Its not just commercial and banking experience that is important it is the new and different perspectives and insights from a market/consumer/customer point of view that can be of real value as they set future strategy.

Besides law, accounting and all those things I see Jane's resume says she is an expert on company valuations. Maybe she did her homework and worked out that HNZ is really worth $1.50 so I better be part of that.....with the rider that '$1,50 without me but with a bit of extra diversity of thought that I bring that $1.50 is really $1.75'

Maybe I could get to like the name Jane.??

[RTM]

I really hope she does. I am looking forward to getting some Maori's, Chinese, Samoans, Tongans, Indians and Koreans on the board as well. We really do need to make sure that the board represents New Zealand's diversity.

FFS !


I'm sure Jane will add value to Board activities

Its not just commercial and banking experience that is important it is the new and different perspectives and insights from a market/consumer/customer point of view that can be of real value as they set future strategy.

Besides law, accounting and all those things I see Jane's resume says she is an expert on company valuations. Maybe she did her homework and worked out that HNZ is really worth $1.50 so I better be part of that.....with the rider that '$1,50 without me but with a bit of extra diversity of thought that I bring that $1.50 is really $1.75'

[bunter]

Nice one .......but you seem rather biased and not particularly confident this Jane is gong to be any good for Hertland.

She bought HNZ shares - maybe we can agree that's a good thing.

Meantime, HNZ is dropped from my stockpicking contest team. Off the bench comes HBY, and this fine looking board http://www.hellabyholdings.co.nz/Board.php

A jet plane says HBY outperforms HNZ in 2015.

[Beagle]

She bought HNZ shares - maybe we can agree that's a good thing.

Meantime, HNZ is dropped from my stockpicking contest team. Off the bench comes HBY, and this fine looking board http://www.hellabyholdings.co.nz/Board.php

A jet plane says HBY outperforms HNZ in 2015.

I disagree and would like to join the bet on W69's side but I just need to clear up whether we're talking about a Jet plane lolly or a real jet :D
I would hasten to add that I'm in favour of appointing directors strictly on merit and nothing else.

[winner69]

She bought HNZ shares - maybe we can agree that's a good thing.

Meantime, HNZ is dropped from my stockpicking contest team. Off the bench comes HBY, and this fine looking board http://www.hellabyholdings.co.nz/Board.php

A jet plane says HBY outperforms HNZ in 2015.

I thought you were going to point me to this impressive looking Board that seems to do bloody well and has shareholders interests at heart ....but thy cant even keep their website running
https://www.nzog.com/

[Longhaul]

I would hasten to add that I'm in favour of appointing directors strictly on merit and nothing else.

Maybe there is merit in diversity?

[Harvey Specter]

I would hasten to add that I'm in favour of appointing directors strictly on merit and nothing else.Completely agree. Because to say otherwise is to say that Women aren't as good as men.

The only exception would be where a womans unique skills/knowledge/experience would be beneficial (ie. for a womans clothing company).

So we can all assume that Jane had the filled the required skill/knowledge/experience that the board was looking for which in HNZ case, would have absolutely nothing to do with being female.

[Beagle]

I'm sure Jane will add value to Board activities

Its not just commercial and banking experience that is important it is the new and different perspectives and insights from a market/consumer/customer point of view that can be of real value as they set future strategy.

Besides law, accounting and all those things I see Jane's resume says she is an expert on company valuations. Maybe she did her homework and worked out that HNZ is really worth $1.50 so I better be part of that.....with the rider that '$1,50 without me but with a bit of extra diversity of thought that I bring that $1.50 is really $1.75'

LOL you're a character.
Agreed Harvey.

[winner69]

Apparently Jeff has already left the building for the Christmas break

So no profit upgrade until late January then

Maybe I have it all wrong and the lack of people wanting to borrow is inhibiting growth with the result that $42m is going to be it for the year. Bugger

Anyway all the best for the Festive season Jeff ..... come back refreshed in case you have to face up to grumpy shareholders in the new year

[Beagle]

Don't worry mate. A bit of consolidation after a 15% run-up to $1.15 in one and a half months since the ASM is a healthy thing. VWAP basically $1.14 today, some silly mug chucked a few thousand out at the close at $1.13...probably because they were mid-way through Xmas shopping and realised their credit card would be declined if they didn't top it up before Xmas LOL.
We are well positioned for 2015 :t_up:

[h2so4]

Do you think Jane will be putting in extra hours over the break, or is it enough that she is a woman?

[vorno]

Do you have an updated fair value for us Percy? I believe your last one was around 1.14?

[percy]

Just a reminder that I posted a while back with a Reuters link to confirm. Average analysts 2015 forecast is for EPS of 9.95 cps which equates to $47m. Its common knowledge that the official guidance of $42 - $45m is extremely conservative and most of the analysts are well and truly on to it. Since the ASM at the end of October the SP is up from $1.00 to $1.15 which is a very strong move in just over 1 month reflecting the strong start to the year Q1 of $11m and the market recognition forecasting is too low. I expect an official upgrade when they release H1 results. We are well positioned :)
Vorno.You asked me for an updated fair value.
I do not see anything has changed since Roger's post.
Be well aware Roger,Winner69 and myself, have target prices of between $1.20 and $1.60,while three respected NZ brokers are at $1.00..
I refer you to page 18 of the ASM presentation where Heartland compared ratio with their Australian peers.1.9 times NTA gives a share price of over $1.60.I think that is attainable,but not sure when.

[Beagle]

Bendigo and Adelaide Bank ticker code BEN and Bank of Queensland BOQ both on a 2015 PE in the mid fifteens.
HNZ with its conservative capital ratio worth at least a 2015 PE of 12 so $1.20 now and I expect 20% EPS growth as we head into the 2016 FY year so late 2015 with 2016 guidance out I see $1.44, Nov / Dec 2015 (12 x 12 eps). Add in projected fully imputed dividends of 7.5 cps, gross 10.41 cents (7.5 / 0.72) and upside for 2015 is for 30 cents capital growth and 10.41 cents dividends, total 40.41 cents / 114 = 35% total projected shareholder return. All on a PE of 12...if we get PE expansion because the market attributes greater satisfaction with HNZ's track record, a takeover from AMP or someone else or EPS accretive acquisition(s) there's clearly more upside. This and AIR my top two picks for 2015 backed up with being my top two positions. Both companies growing strongly on very modest PE multiples.

[winner69]

Do you think Jane will be putting in extra hours over the break, or is it enough that she is a woman?

Jane will no doubt be working on a few things as to how Heartland can become even greater after, as Percy says, getting things set up for the future.

Jane will probably pop into any of their outlets she might pass in her travels to get a feel for how the grassroots feel about things and over the wines at the BBQ be asking real people (consumers) what Heartland can do for them.

Jane is only woman on Heartland NZ board even though there is a Nicola on the Heartland Bank board. Hope they get the chance to work together as both have heaps to offer.

H2so4, you seem as sexist as bunter and a few others. Shame on you both.

[bunter]

Jane will probably pop into any of their outlets she might pass in her travels to get a feel for how the grassroots feel about things and over the wines at the BBQ be asking real people (consumers) what Heartland can do for them.
Jane is only woman on Heartland NZ board even though there is a Nicola on the Heartland Bank board. Hope they get the chance to work together as both have heaps to offer.
H2so4, you seem as sexist as bunter and a few others. Shame on you both.

Jane was a top law student. She's now a barrister and accountant with an interest in corporate governance.

And her contribution to HNZ will be limited to chats at BBQs and inspecting some HNZ branches? The kind of stuff women are far better at than men, right?

Exactly who is being sexist here?

[winner69]

Jane was a top law student. She's now a barrister and accountant with an interest in corporate governance.

And her contribution to HNZ will be limited to chats at BBQs and inspecting some HNZ branches? The kind of stuff women are far better at than men, right?

Exactly who is being sexist here?

Could be useful in serving up the sandwiches (maybe as a cost saving measure make them at home and bring them in for the boys) and cleaning up after the Board meetings then

[percy]

Reminds me of the first Ebos agm I attended in 1991.
It was held in the company's board room.
The directors and about 8 or 10 shareholders.
After the meeting a serving hatch opened up and the then chairman,Jamie Maddren,poked his head through it and asked "would anyone like a cup of tea"?
Don't think Geoff Ricketts would be up to it!!!

[winner69]

Bugger - MASSIVE SELL SIGNAL

Some 40% of the punters in the stock picking competition have picked HNZ (see skids post on that thread) It is the TOP pick so far and I don't want to mention the other popular ones

We are well and truly stuffed now

[Jantar]

HNZ is the only one of the top 10 that I have in my selection. I see it as a steady growth potential and a good backstop to another of my choices that, if it rises at all, will make a massive gain.

[h2so4]

Could be useful in serving up the sandwiches (maybe as a cost saving measure make them at home and bring them in for the boys) and cleaning up after the Board meetings then

I guess BBQs and beer drinking will be a thing of the past.:(

[NZSilver]

http://www.stuff.co.nz/business/industries/64412496/banks-on-track-for-another-good-year

[nextbigthing]

1) I read somewhere that a criticism of HNZ was that it wasn't scalable enough. Many on this thread think it has great growth opportunities ahead. Where specifically do you see this growth?

2) What don't you like about this stock? Is anybody not a fan? Why not?

Cheers,
NBT

[percy]

Scalable? We have seen Heartland takeover PGW Finance, and Sentinel REL business.PGW Finance gives Heartland a large foot print in rural lending,while Reverse Equity Loan business is a substantial business, with excellent growth prospects with NZ's aging population.Growth will most probably be driven by further acquisitions.Most likely are Motor Trade Finance,and/or parts of GE Finance.
I have no cause to dislike Heartland.They say what they intend to do,and do it.They keep their word.

[Beagle]

NBT See post #4138. Stock is of a 2015 consensus analyst PE of only 11.3 @ $1.13. The key to understanding the growth prospects for this stock is its successful acquisition history, the net interest margin which at nearly 5% is close to double its Australian banking peers and the excellent long term prospects in the retired sector with line of credit facilities on older folks homes.

Earnings build momentum over time so prospects for 2015 are comfortably better than (Q1 x 4)...its more like 11,12,13 and 14m. I think $50m is do-able for 2015.

Very cheap growth stock IMHO with considerable upside. I think there's a very good chance of a formal guidance upgrade in tandem with the half year result announcement in due course.

[dingoNZ]

Anyone have an idea when the interim result is due out? Sometime in late Feb based of the last few years

[Beagle]

Anyone have an idea when the interim result is due out? Sometime in late Feb based of the last few years

That's your best guide right there. AFAIK they haven't announced a specific date.
NBT - Not many left at $1.14 on the sell side. Better be quick mate.

[nextbigthing]

NBT - Not many left at $1.14 on the sell side. Better be quick mate.

I'm just hunting down Putin's number. I'm going to ask him to do something stupid but not too stupid so I can buy in the dip :D

[percy]

That's your best guide right there. AFAIK they haven't announced a specific date.
NBT - Not many left at $1.14 on the sell side. Better be quick mate.

At present there is one seller with 30,705 shares for sale at $1.14, while there are 9 buyers wanting 336,789 in total shares at $1.13.Poised?

[Jantar]

At present there is one seller with 30,705 shares for sale at $1.14, while there are 9 buyers wanting 336,789 in total shares at $1.13.Poised?
Where do we see the number of shares wanted or on offer? It doesn't seem obvius on the NZSX site.

[percy]

Where do we see the number of shares wanted or on offer? It doesn't seem obvius on the NZSX site.

Depth is available to ANZ Securities and ASB Securities clients.

[Jantar]

Depth is available to ANZ Securities and ASB Securities clients.
Thanks for that. I have never looked at that part of ANZ before. Always good to learn something new.

[Grimy]

Not many left at $1.14 on the sell side. Better be quick mate.
I topped up with a few more at 1.14 today. I haven't got that many, but average is still .90c so quite happy.

[noodles]

1) I read somewhere that a criticism of HNZ was that it wasn't scalable enough. Many on this thread think it has great growth opportunities ahead. Where specifically do you see this growth?

2) What don't you like about this stock? Is anybody not a fan? Why not?

Cheers,
NBT
I own Heartland. I think it is a hold at the moment. I am surprised it is trading so high given that analysts have target values of around $1. Yield hunters don't care about about earnings I suppose. The jury is still out on the success of the HER business.

Triggers for rerate or me to buy more:
1. earnings accretive acquisitions
2. ROE > 10%
3. Growth in HER
4. Other Capital Management initiatives (buy back/ special dividend)

Risks:
- (long term) Peer to peer lending (they do have an interest in Harmony, but I'm not sure that mitigates the risk)
- (short term) DPC have already flagged that the Auckland car lending market is getting very aggressive (reduced margins). Their Marac business may be suffering

Percy has been very right about the excellent characteristics of management and I suggest you read his posts to get a positive view on the company.

I do not believe that Roger and Winner69 will be correct in their profit assumptions. I'm quite happy to be wrong and will likely be buying if we get any forecast upgrades of the magnitude that they predict.

[winner69]

Good post noodles, even though you doubt my and Rogers forecast.

Those forecasts are all based on Heartland continuing to achieve what they said they will do. Percy is right, they always do.

Take for instance achieving 10% ROE. Equity will be about $470m so to do what they said is $47m NPAT. Anything less is EPIC FAIL. Not achieving what they said they will do.

Off course they could do some clever stuff like a capital return and achieve 10% ROE on a say $44m NPAT. To me still an EPIC FAIL. Financial engineering to achieve a result would be disappointing and to me a broken promise.

Sticking with close to $50m NPAT .....after all that is what achieving what they said they would do comes up with. Otherwise all those speeches and pretty presentations have just been rhetoric to give themselves and some punters the warm fuzzies.

[percy]

With my open mind view of diversity, I am not prejudice as to how Heartland achieve the 10% ROE.
Any form of financial engineering gladly accepted.A nice share buy back will give me a larger slice of the cake.!
Bring it on.!!! lol.

[noodles]

With my open mind view of diversity, I am not prejudice as to how Heartland achieve the 10% ROE.
Any form of financial engineering gladly accepted.A nice share buy back will give me a larger slice of the cake.!
Bring it on.!!! lol.

Peter Lynch would say go for the buyback. He calls acquisitions "deworsification".

[winner69]

With my open mind view of diversity, I am not prejudice as to how Heartland achieve the 10% ROE.
Any form of financial engineering gladly accepted.A nice share buy back will give me a larger slice of the cake.!
Bring it on.!!! lol.

Ha ha

But does it always work out better for shareholders who think they have a bigger slice of the cake?

[percy]

Ha ha

But does it always work out better for shareholders who think they have a bigger slice of the cake?

Whom am I to argue with Peter Lynch????!!!!!!!!!!!!! lol.

[Beagle]

Noodles - Thanks for expressing your view.
My view is based on
1. Interest margins at HNZ are nearly double the sector average.
2. HNZ are known to be looking at parts of the GE book
3. HNZ are in acquisition mode
4. Very low interest rates are here for the foreseeable future which is assistive to some continued margin expansion
5. Lower fuel prices are assistive to consumers in terms of lowering delinquency rates AND boosting credit demand, (people feel better about their financial situation...want a better car e.t.c.)
6. $11m Q1 result when spending a lot on advertising for the HER re-boot
7. Average analyst forecast is 9.95 cents EPS - 11.3 2015 PE is very cheap for a bank, especially one growing EPS
8. Low interest rates have allowed considerable market PE expansion so 11.3 is both very cheap relative to its peers, (Australian regional banks), most of whom are trading on about 15 and relative to the market average
9. Gross dividend yield estimated at 8.6% , based on my estimate of dividends of 7 cps this year fully imputed (7 / .72) 9.72 cents gross
10. PE's are really stretched in N.Z. with the vast majority of stocks looking either over-priced or fully priced. HNZ isn't one of them.

Risks
1, Some exposure to the dairy sector
2. Escrow period for vendor of HER business ends in April and they are known to want to sell their stake.


I think these two factors are presently holding the stock back a bit.

[nextbigthing]

I see from the Annual Meeting, 31 October 2014 notes, on page 22 they state NPAT forecast 2015 is $42-45M and on p23 this forecast is based on 'business as usual' and does not include new initiatives and acquisitions. ANZ tells me the total issue is 467M shares.

$45M / 467M shares = 9.64CPS (using $45M as the Q1 report suggests things are looking ok so use higher guidance).

9.64CPS / 113 shareprice = 8.5% return if business is as usual. Not too bad given this is only 'usual' and there's potential upside through acquisitions and new initiatives.

Taking Motor vehicle finance as an acquisition example, from http://www.mtf.co.nz/pdf/investors/2014_MTF_Annual_report.pdf their profit is roughly $6M from equity of approx $80M giving a 7.5% return. How would they work this takeover? In terms price paid, funding it and making sure it added to the ROE (return on equity). Any ideas?

Also, has anyone heard of any 'new initiatives?' Have they given anything away at AGM's etc? Any ideas?

NBT

[percy]

nextbigthing.
MTF equity.I think you are including $40mil of perpetual bonds as equity?
There are 23,073,229 MTF shares on issue.They have been trading on sharemart for approx. 95cents.
They can only be owned by "originators" ie MTF franchise holders or car dealers who discount their finance deals via MTF.

[nextbigthing]

Risks

2. Escrow period for vendor of HER business ends in April and they are known to want to sell their stake.


I think these two factors are presently holding the stock back a bit.

Note 30 in the 2014 Annual report, 43M shares! That's a lot of sell pressure!

[winner69]

Note 30 in the 2014 Annual report, 43M shares! That's a lot of sell pressure!

Roger and I are waiting ..... we are open to negotiations to take the lot

[h2so4]

Roger and I are waiting ..... we are open to negotiations to take the lot
Get out of here!

[dingoNZ]

I am sure institutional investors would be happy to snap em' up

[Beagle]

Roger and I are waiting ..... we are open to negotiations to take the lot

:lol: We might need a small loan to assist with this from....let me see...I know, HNZ :D
NBT, but seriously I don't see this size parcel as an issue...most likely they'll do an institutional placement by book-build while the shares go into a trading halt.
I think this overhang is already factored into the price. Once its removed and there's more institutional support and we have the !H results in the ledger and a profit upgrade even Vladimir Putin won't be able to save you from paying north of the current price :)

[RTM]

Ha ha

But does it always work out better for shareholders who think they have a bigger slice of the cake?

Seems to work quite well with Apple. Their buyback is massive tho.

[winner69]

With my open mind view of diversity, I am not prejudice as to how Heartland achieve the 10% ROE.
Any form of financial engineering gladly accepted.A nice share buy back will give me a larger slice of the cake.!
Bring it on.!!! lol.

But will the cake be getting bigger?

[percy]

But will the cake be getting bigger?

The quality of the cake certainly will be,and the capacity to add extra icing, in the form of increasing dividends, will be savored by shareholders.!!!!
Quality rather than quantity is how I prefer my cake!! lol.
Disclosure.Love cake with icing.

[iceman]

If I am not mistaken, you are saying that you are so well positioned with HNZ that you are poised to keep your cake and eat it too ?


The quality of the cake certainly will be,and the capacity to add extra icing, in the form of increasing dividends, will be savored by shareholders.!!!!
Quality rather than quantity is how I prefer my cake!! lol.
Disclosure.Love cake with icing.

[percy]

If I am not mistaken, you are saying that you are so well positioned with HNZ that you are poised to keep your cake and eat it too ?

Iceman you must be a mind reader;my thoughts exactly!!!! lol.

[janner]

perc..

Please do not be so Cocksure..

May I quote Robbie Burns and his Af gang astray .. ( not good at Gaelic )..

Quite happy to just sit and be well positioned :-))

[Bjauck]

perc..

Please do not be so Cocksure..

May I quote Robbie Burns and his Af gang astray .. ( not good at Gaelic )..

Quite happy to just sit and be well positioned :-))

I think Burns, a Scottish lowlander, wrote in both standard English and Scots (an anglo-saxon "English" dialect) but not in Gaelic The quote is "best-laid schemes o' mice an' men gang aft a-gley".
I am likewise sitting "pretty"...hopefully!

[percy]

I think Burns, a Scottish lowlander, wrote in both standard English and Scots (an anglo-saxon "English" dialect) but not in Gaelic The quote is "best-laid schemes o' mice an' men gang aft a-gley".
I am likewise sitting "pretty"...hopefully!

Well thank you very much Bjauck and Janner,but I feel to reflect how we Heartland shareholders feel,change the last word so the quote ;
I am likewise sitting "pretty" ACTUALLY.!!!! lol

[Beagle]

Good old Uncle Percy gives great advice on how to be well positioned. His positioning advice worked a real treat for me at the ASM :)

[zigzag]

You two make a great duet. You sing in perfect harmoney.

[Harvey Specter]

Are we going to be able to tell from the annual how much they paid for their 10% in Harmoney.

Sounds like their 10% has now been diluted (to about 8.3%) as ~20% has been issued for $10m. Values Heartlands share at just over $4m

Trade me taking the lions share with 15% at $7.7m: http://www.sharechat.co.nz/article/446e4153/trade-me-takes-15-stake-in-harmoney-for-7-7-million.html?

Not sure why they are interested (other than it being a growing tech business) and whether there are any synergies for them?

[dingoNZ]

Are we going to be able to tell from the annual how much they paid for their 10% in Harmoney.

Sounds like their 10% has now been diluted (to about 8.3%) as ~20% has been issued for $10m. Values Heartlands share at just over $4m

Trade me taking the lions share with 15% at $7.7m: http://www.sharechat.co.nz/article/446e4153/trade-me-takes-15-stake-in-harmoney-for-7-7-million.html?

Not sure why they are interested (other than it being a growing tech business) and whether there are any synergies for them?

TME growth is very limited, I see an opportunity for them to build it up and incorpoate it into their current model such as they have already with life insurance etc. Win/Win for both Harmoney due to exposure and fro TME. IMO its expensive though, cost them 7.7m for 15%, values Harmoney at almost $52.

[Harvey Specter]

TME growth is very limited, I see an opportunity for them to build it up and incorpoate it into their current model such as they have already with life insurance etc. Win/Win for both Harmoney due to exposure and fro TME. IMO its expensive though, cost them 7.7m for 15%, values Harmoney at almost $52.Interesting move by TME. Are they trying to move away from an online marketplace to a more diversified tech company.

[Harvey Specter]

Harmoney have annouced they also took part in the round to maintain their 10% holding.

[Master98]

Are we going to be able to tell from the annual how much they paid for their 10% in Harmoney.

Sounds like their 10% has now been diluted (to about 8.3%) as ~20% has been issued for $10m. Values Heartlands share at just over $4m

Trade me taking the lions share with 15% at $7.7m: http://www.sharechat.co.nz/article/446e4153/trade-me-takes-15-stake-in-harmoney-for-7-7-million.html?

Not sure why they are interested (other than it being a growing tech business) and whether there are any synergies for them?

From this announcement HNZ has increased their investment in Harmoney to maintain 10% holding, HNZ "Following the capital raise, Heartland will have invested approximately $3.5m in Harmoney which mean "current implied value of Heartland’s investment in Harmoney is in excess of $5.0m".

[Harvey Specter]

From this announcement HNZ has increased their investment in Harmoney to maintain 10% holding, HNZ "Following the capital raise, Heartland will have invested approximately $3.5m in Harmoney which mean "current implied value of Heartland’s investment in Harmoney is in excess of $5.0m".My maths are probably off but it looks like they invested an extra $800k now to maintain their 10% which means their original investment was ~$2.6m valuing it at $26m. nice 60% increase in less than 6 months.

[bunter]

"Based on the investment made by Trade Me, the current implied value of Heartland’s investment in Harmoney is in excess of $5.0m. Following the capital raise, Heartland will have invested approximately $3.5m in Harmoney"

5.2m actually.

So there's a 1.7m paper profit - I wonder if HNZ will bring this to account?

[Harvey Specter]

"Based on the investment made by Trade Me, the current implied value of Heartland’s investment in Harmoney is in excess of $5.0m. Following the capital raise, Heartland will have invested approximately $3.5m in Harmoney"

5.2m actually.

So there's a 1.7m paper profit - I wonder if HNZ will bring this to account?Not under IFRS I dont think. They have to take an impairment if it goes down, otherwise it gets held at cost.

[Toasty]

Now that I own Harmoney I thought I had better support it. Placed first $500 test investments yesterday. Ridiculously easy to set up and a nice easy interface to allow you to assess the loans. Disturbingly like paying a game actually. It would be quite easy to get absorbed in the numbers and forget that you are committing real money that will be out in the market for 36 to 60 months.

Feels nice to add a slightly different income (hopefully) stream to the work, share and property pile. Will just build this up slowly as results allow.

Disc: happy HNZ holder and DRP receiver....

[noodles]

RBNZ Reduces Regulatory Capital Requirements for Heartland


https://www.nzx.com/companies/HNZ/announcements/259739

This can only be seen as positive. Allows the company to consider acquisitions/buybacks/special dividends without having to raise capital.

However, that does not seem to be the intention from management...
"Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level."

[forest]

8:35am, 14 Jan 2015 | GENERAL
NZX Release

RBNZ Reduces Regulatory Capital Requirements for Heartland Bank

14 January 2015

Heartland New Zealand Limited (NZX: HNZ) advises that the Reserve Bank of New Zealand has determined to reduce the regulatory capital requirements for HNZ subsidiary, Heartland Bank Limited (Heartland Bank) to be in line with those of the other New Zealand banks.

Heartland Bank was granted bank registration in December 2012 with its conditions of registration requiring it to maintain higher levels of regulatory capital than its bank peers. Heartland Bank’s conditions of registration will be amended on 31 January 2015 to reflect its new regulatory capital ratios being:

- Total capital ratio not less than 8%
- Tier 1 capital ratio not less than 6%
- Common equity tier 1 capital ratio not less than 4.5%
- Buffer ratio 2.5%

Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level.

- Ends -

For further information please contact:

Jeff Greenslade
Managing Director
Heartland New Zealand Limited
DDI 09 927 9149

[Harvey Specter]

RBNZ Reduces Regulatory Capital Requirements for Heartland


https://www.nzx.com/companies/HNZ/announcements/259739

This can only be seen as positive. Allows the company to consider acquisitions/buybacks/special dividends without having to raise capital.

However, that does not seem to be the intention from management...
"Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level."I think this deserves a

BOOM!

Snoopy - This was one of your issues wasn't it. Consider it solved.

[dingoNZ]

Look at the market the offer at $1.13 has disappeared and the bid @ $1.12 become very heavy. I suspect we will see the price shift north today!

Disc: Happy holder

[Beagle]

RBNZ Reduces Regulatory Capital Requirements for Heartland


https://www.nzx.com/companies/HNZ/announcements/259739

This can only be seen as positive. Allows the company to consider acquisitions/buybacks/special dividends without having to raise capital.

However, that does not seem to be the intention from management...
"Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level."

I agree. Its nice to see a level playing field.

[winner69]

Does this bit Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level mean no financial engineering to get ROE up to 10%. In other words no buybacks/capital return

If so that's good

[percy]

Very interesting development when you consider The Reserve Bank of Australia is looking to raise capital ratios for their banks?
Heartland of course does not face the same issues as the Australian Banks;European funding more expensive with falling A$,rising unemployment,over valued property market,mining and retailing woes.
And don't we just love the fully imputed dividends.!

[Harvey Specter]

Does this bit Although Heartland Bank holds capital in excess of regulatory minimums, there is no current intention to reduce the amount of capital held at the bank level mean no financial engineering to get ROE up to 10%. "no current intentions" but means they could fund an acquisition easier or just use the lower minimums to have a bigger headroom and reduce the risk of hitting them (which I think was Snoopys concern).

[Beagle]

The average cap rate for Aussie banks is around mid 8's percent so with HNZ at 14% you could easily make the case that HNZ are over capitalised !!
I think the Reserve Bank of Australia are taking about international norms of around 10%.

The thing is this change means HNZ are extremely "well positioned" to make an acquisition by simply writing a cheque.

N.Z. Banks profits expected to continue to rise
http://a.msn.com/r/2/AA87Sj0?a=0&m=en-nz

[noodles]

The average cap rate for Aussie banks is around mid 8's percent so with HNZ at 14% you could easily make the case that HNZ are over capitalised !!
I think the Reserve Bank of Australia are taking about international norms of around 10%.

The thing is this change means HNZ are extremely "well positioned" to make an acquisition by simply writing a cheque.

N.Z. Banks profits expected to continue to rise
http://a.msn.com/r/2/AA87Sj0?a=0&m=en-nz
Sounds like that capital is going to be used for growth (according to Jeff) . "We intend to grow"
http://podcast.radionz.co.nz/business/bus-srpt-20150115-0828-reserve_bank_reduces_the_amount_of_capital_for_hea rtland-048.mp3

[winner69]

Sounds like that capital is going to be used for growth (according to Jeff) . "We intend to grow"
http://podcast.radionz.co.nz/business/bus-srpt-20150115-0828-reserve_bank_reduces_the_amount_of_capital_for_hea rtland-048.mp3

So no more bigger slice of the cake for Percy

[SCOTTY]

So no more bigger slice of the cake for Percy

Same slice. Bigger cake = happy Percy :)

[Beagle]

Same slice. Bigger cake = happy Percy :)

Quite right but also Percy and other astute investors automatically enlarge their slice size with their dividend reinvestment program and are looking for a HUGE regular feed when they retire :)

[brend]

Quite right but also Percy and other astute investors automatically enlarge their slice size with their dividend reinvestment program and are looking for a HUGE regular feed when they retire :)

Is the DRP still open? recently bought

[dingoNZ]

Yessir it indeed is :)

[winner69]

WOW - read this on the ANZ thread

By this measure, Heartland is already outperforming UDC on an underlying business basis

[winner69]

Same slice. Bigger cake = happy Percy :)

But Percy wanted a bigger slice of a bigger pie ....and more icing as well

[percy]

Bigger cake,or bigger slice of existing cake,does not concern me.Just keep adding to the icing.The quality of the cake is improving all the time.
So any acquisition that is earnings accretive is fine with me.
Reduced Reserve Bank capital ratio means Heartland have the capacity to increase lending with their existing capital.This extra lending will help to increase HNZ's ROE ratio to 11% or more.
All this means Heartland are doing what they say they will do.More runs on the board will help HNZ share price even further, as the market becomes aware of their achievements.

[Beagle]

Explains the changes a little more thoroughly.
http://www.interest.co.nz/news/73562/rbnz-reduces-heartland-banks-regulatory-capital-requirements-bringing-them-line-other-ban

[bunter]

Generally the recent sharp fall in long term term deposit interest rates (http://www.interest.co.nz/chart/investing/term-deposit-rates) is very bullish for all company valuations, plus 15% IMO, and it's surprising there hasn't been more, um, interest in it here. Maybe if the papers report it.

Anyway - anyone have any thoughts on what low interest rates will do for HNZ profits specifically?

More client borrowing and higher profits maybe?

[Snoopy]

"no current intentions" but means they could fund an acquisition easier or just use the lower minimums to have a bigger headroom and reduce the risk of hitting them (which I think was Snoopys concern).

My main concern with Heartland has always been shortage of capital Harvey. The amount of capital that must be held as required by the reserve bank has gone down. So yes, I see that as a big change. It means the likelihood of a cash issue is significantly reduced.

Interestingly Geoff says he won't be returning capital to shareholders. So I guess that might be code for 'making an acquisition'? If he does so, a small capital raising could still be on the cards. But a small capital raising might be welcome by shareholders?

SNOOPY

[winner69]

Generally the recent sharp fall in long term term deposit interest rates (http://www.interest.co.nz/chart/investing/term-deposit-rates) is very bullish for all company valuations, plus 15% IMO, and it's surprising there hasn't been more, um, interest in it here. Maybe if the papers report it.

Anyway - anyone have any thoughts on what low intere bst rates will do for HNZ profits specifically?

More client borrowing and higher profits maybe?

Both positives and negatives but Heartland will do OK no matter what

Deposit rates were this low in late 2013 and 2014 was a great year for Heartland eh

Probably get even more yield hunters into the market which will help the shareprice. As Percy says its better to own the bank than put money in it. Sage advice that

You buying HNZ big time then bunter?

[winner69]

Heartland have hardly been chasing term deposits lately anyway ...probably have far too much cash already.

[Beagle]

Both positives and negatives but Heartland will do OK no matter what

Deposit rates were this low in late 2013 and 2014 was a great year for Heartland eh

Probably get even more yield hunters into the market which will help the shareprice. As Percy says its better to own the bank than put money in it. Sage advice that
You buying HNZ big time then bunter?

I call that being on the right side of the ledger :) My thoughts are that lower interest rates will prevail for considerably longer than anyone realistically anticipates, (it wouldn't surprise me in the slightest if we have very low interest rates for many, many years to come), and that will be assistive to HNZ's net interest margin.

[bunter]

Both positives and negatives but Heartland will do OK no matter what

Deposit rates were this low in late 2013 and 2014 was a great year for Heartland eh

You buying HNZ big time then bunter?

My second largest holding, double the average position size, but not buying now - not since April 14.

Current bunter-valuation is 1.88. Hmmm.

[percy]

It is with pleasure, I announce the new President of The Heartland Rampers R Us Society is Bunter.
On behalf of all HNZRRUs, may I congratulate Bunter,and look forward with anticipation to his forceful and profitable leadership.

[winner69]

It is with pleasure, I announce the new President of The Heartland Rampers R Us Society is Bunter.
On behalf of all HNZRRUs, may I congratulate Bunter,and look forward with anticipation to his forceful and profitable leadership.

Just think is 188 and PE of 14 gives EPS just over 13 cents

That's a reasonable forecast for FY16

Maybe bunter on the ball with his valuation ...... esp as deposit rates are falling fast amd punters will want a decent dividend

[percy]

Just think is 188 and PE of 14 gives EPS just over 13 cents

That's a reasonable forecast for FY16

Maybe bunter on the ball with his valuation ...... esp as deposit rates are falling fast amd punters will want a decent dividend

Winner69 for Vice President.!!!!!
EPS up from 11cps to 13cents is 18% growth,so PE of 14 maybe a little modest?
Come on Roger.You do want to be on the committee?

[winner69]

Winner69 for Vice President.!!!!!
EPS up from 11cps to 13cents is 18% growth,so PE of 14 maybe a little modest?
Come on Roger.You do want to be on the committee?

Even more than 13 cents mate when that eps accretive acquisition comes through

How much make out of GE or that Motor outfit? Heaps along with synergies and could even borrow to do that instead of asking us for some cash

[percy]

Even more than 13 cents mate when that eps accretive acquisition comes through

How much make out of GE or that Motor outfit? Heaps along with synergies and could even borrow to do that instead of asking us for some cash

Bunter and you have certainly got me revising my projections.!
Earnings accretive acquisition with synergies.Exciting future.

[janner]

Bunter and you have certainly got me revising my projections.!
Earnings accretive acquisition with synergies.Exciting future.

May I suggest percy..

Your next purchase should be a packet of incontinence pants ???..

Becoming far to exciting for old folks like us :-)))

[percy]

May I suggest percy..

Your next purchase should be a packet of incontinence pants ???..

Becoming far to exciting for old folks like us :-)))

I don't think "a" packet would be enough????!!!!!!!! lol.

[winner69]

So we agree bunters 188 is not outrageous as implies 13 cents eps in FY16 say

That would be only be a 11% ROE and Jeff wants to do better doesn't he

Maybe 2 bucks bunter?

[airedale]

Hmm, there is a touch of "irrational exuberance" about on this fine sunny day. I think it is time for Dr Snoopy to manage our expectations.

[Beagle]

Winner69 for Vice President.!!!!!
EPS up from 11cps to 13cents is 18% growth,so PE of 14 maybe a little modest?
Come on Roger.You do want to be on the committee?

Crikey this rampersareus club makes me a bit giddy....might be the vertigo of such lofty expectations or the hangover from last night...reaching for his trusty abacus. Better put me down as the independent treasurer...I think I'll set the first years membership fees as...let me see...we all have to shout each other a of round of beers when we next meet up....hmmm so as membership grows so does the fun...hmmm that could be a problem if membership really grows...NO wait a minute, legend has it Forest is very good at driving drunk investors home after ASM's so we'll all be okay :D

Now moving on to the second order of business...what's the EPS for 2015. Brokers have this as 9.9 cps but coverage is so poor I think they all put their junior analysts fresh out of diapers on this so us trusty seasoned professional investors know far better and this thing builds like a snowball over time. Any old fool or old accountant even, can do the maths $11m Q1, $12m Q2, $13m Q3 and $14mQ4. Quite obviously those silly analysts have never heard of a trusty abacus. So that's sorted then, we have $50m for 2015 giving about 11 cps. I wonder where that puts the SP in mid 2015 with talk of acquisitions, buy-backs, synergies, special divvy's, maybe even the possibility of a takeover...opps sorry I digress.

Third order of business 2016 profit. Lets see. $15m for Q1 $16m for Q2..., does anyone else see this secret growth pattern :) ...(this is easy isn't it, we hardly even need a treasurer on this committee, sshhh i'd better not tell the other committee members that, opps did I really say that out loud)..so we have $66m for 2016 and on only 420m shares, (the stupid idiots who sold that lucrative HER business were even more stupid to allow the company to buy back their shares back in mid 2015), so this gives 15.71 cps. Now let me see...what's a fair PE ?...some of those banks in Aussie are on 15, that's seems fair to me.
So we're all good for 15 x 15.71 cps = $2.35 by mid 2016. Opps, does that run me a risk of being appointed Chairman :lol:

[bunter]

Hmm, there is a touch of "irrational exuberance" about on this fine sunny day.

HNZ went up 39% in the year ending Friday. Add a 5c FI div and you have a 49% ROI, after tax, assuming you're not a trader.

Who's to say it won't do the same in the coming year?

A year ago the system valuation was 1.28 - laughable then, reasonable now.

re: 1.88 valuation... it just went up, from 1.52, because of the sharp fall in 5 yr deposit rates.
It assumes a long-term dividend growth of 12% (which is relatively high).

This valuation system is likely to be wildly wrong sometimes.
It's skewed towards high yielding stocks.
It can give valuations that are well above or well below market. I like that about it.

[winner69]

Crikey this rampersareus club makes me a bit giddy....might be the vertigo of such lofty expectations or the hangover from last night...reaching for his trusty abacus. Better put me down as the independent treasurer...I think I'll set the first years membership fees as...let me see...we all have to shout each other a of round of beers when we next meet up....hmmm so as membership grows so does the fun...hmmm that could be a problem if membership really grows...NO wait a minute, legend has it Forest is very good at driving drunk investors home after ASM's so we'll all be okay :D

Now moving on to the second order of business...what's the EPS for 2015. Brokers have this as 9.9 cps but coverage is so poor I think they all put their junior analysts fresh out of diapers on this so us trusty seasoned professional investors know far better and this thing builds like a snowball over time. Any old fool or old accountant even, can do the maths $11m Q1, $12m Q2, $13m Q3 and $14mQ4. Quite obviously those silly analysts have never heard of a trusty abacus. So that's sorted then, we have $50m for 2015 giving about 11 cps. I wonder where that puts the SP in mid 2015 with talk of acquisitions, buy-backs, synergies, special divvy's, maybe even the possibility of a takeover...opps sorry I digress.

Third order of business 2016 profit. Lets see. $15m for Q1 $16m for Q2..., does anyone else see this secret growth pattern :) ...(this is easy isn't it, we hardly even need a treasurer on this committee, sshhh i'd better not tell the other committee members that, opps did I really say that out loud)..so we have $66m for 2016 and on only 420m shares, (the stupid idiots who sold that lucrative HER business were even more stupid to allow the company to buy back their shares back in mid 2015), so this gives 15.71 cps. Now let me see...what's a fair PE ?...some of those banks in Aussie are on 15, that's seems fair to me.
So we're all good for 15 x 15.71 cps = $2.35 by mid 2016. Opps, does that run me a risk of being appointed Chairman :lol:

All the numbers make sense though eh Roger

The only thing that can wrong with these sums is if they buy something by issuing shares like they did with Seniors. Bad move but hopefully lesson learnt

[bunter]

So we're all good for 15 x 15.71 cps = $2.35 by mid 2016. Opps, does that run me a risk of being appointed Chairman :lol:
Happy to hand over - my valuation's far too conservative for this position.

[Beagle]

All the numbers make sense though eh Roger

The only thing that can wrong with these sums is if they buy something by issuing shares like they did with Seniors. Bad move but hopefully lesson learnt

Many a true thing is said in jest :)

[kizame]

All the numbers make sense though eh Roger

The only thing that can wrong with these sums is if they buy something by issuing shares like they did with Seniors. Bad move but hopefully lesson learnt

Ahh But is it a lesson learnt and by whom?
Companies really like buying and paying at least partly by issuing shares,this has been a bit of a sore point with me over the years,as its great for the company(the directors only really care about the company not shareholders)IMOP.
So even though you would love an earnings accreditive (sp) aquisition without the addition of millions of new shares issued to prior business owners,this at least on past performance may not likely be the case.
Also if they issue shares as payment does this not allow them to maintain a higher equity ratio?
advice on this would be super.

[Beagle]

In my opinion its all about being earnings accretive whether they pay for any potential acquisition partially with shares or not. Obviously with the new lower capital adequacy requirements announced by RBNZ they have considerable headroom to grow their business organically or by simply writing a cheque for a bolt on acquisition but they'll probably want to play it a little conservatively to maintain and over time improve their credit rating. What was that old Mainland cheese advertisement theme again...oh yeah that's right "good things take time"

[percy]

In my opinion its all about being earnings accretive whether they pay for any potential acquisition partially with shares or not. Obviously with the new lower capital adequacy requirements announced by RBNZ they have considerable headroom to grow their business organically or by simply writing a cheque for a bolt on acquisition but they'll probably want to play it a little conservatively to maintain and over time improve their credit rating. What was that old Mainland cheese advertisement theme again...oh yeah that's right "good things take time"

Yes exactly right,it is eps accretive acquisitions that add to ROE that are worthwhile.
A company with a PE of 10 buying a company with a PE of 5 works well.
HNZ have a record of successful acquisitions.

[kizame]

In my opinion its all about being earnings accretive whether they pay for any potential acquisition partially with shares or not. Obviously with the new lower capital adequacy requirements announced by RBNZ they have considerable headroom to grow their business organically or by simply writing a cheque for a bolt on acquisition but they'll probably want to play it a little conservatively to maintain and over time improve their credit rating. What was that old Mainland cheese advertisement theme again...oh yeah that's right "good things take time"

Thanks Roger. Still though, even if the aquisition is earnings accretive,if they pay for that buy with a good percentage of shares,that waters down your holding and thus a lot of share price appreciation,as with the HER business. Also if those shares come to market after a year, another drag on the shareprice.

[winner69]

Bunter .....look what you have done to the shareprice

Not ramping were you , just a honest well thought out valuation wasn't it

Nice

What's your next tip?

[Beagle]

Thanks Roger. Still though, even if the aquisition is earnings accretive,if they pay for that buy with a good percentage of shares,that waters down your holding and thus a lot of share price appreciation,as with the HER business. Also if those shares come to market after a year, another drag on the shareprice.

Yep the directors copped a little bit of flak at the ASM over that mainly in respect of the fact that small shareholders hadn't been given the opportunity to subscribe for new shares as part of the HER acquisition.
Directors explained that certain transaction require swift execution and sometimes things need to be progressed in the most expeditious manner possible but they went on to concede that they'd taken on board comments received and would make best endeavours to accommodate shareholders in the future. SP is up 19% since the ASM at the end of October and is well aware of HER vendors intentions regarding pending sell-down so I'm not sure you're concerns regarding a drag on SP are a reality or more a perception. Also SP appreciation since the deal was done has substantially outstripped the NZX50 so its hard to make the argument that this hasn't been seen by the market to be a desirable acquisition with significant earnings growth potential over time. Personally I have no qualms whatsoever over the HER acquisition or the manner it was executed or the stock over-hang. Plenty of institutions ready to soak up a meaningful stake in an organised placement in due course, in my opinion. I see further institutional support in due course as a good thing.

[kizame]

Thanks Roger, its good to put stuff out there and get good feedback.
It's a good company,with the potential to be a great company,and I think it will only be a bit more water under the bridge till that is achieved.

[bunter]

Bunter .....look what you have done to the shareprice
Not ramping were you , just a honest well thought out valuation wasn't it
Nice
What's your next tip?

HLG!
Also PGW is due to announce soon.

Here are 18 more
TSR - forecast total shareholder return
Val rank = valuation ranking, low = undervalued
Overall rank - average of TSR and VAL rank
% UV/OV - percent undervalued or overvalued
Sentiment - % MA 50 is above MA 200
Growth - my guess of long term growth.

Disclaimer - subject to change. Can be way wrong.






Stocks
TSR Rank
ValRank
OvrlRank
%UV/OV
fTSR
Sntmnt
Sent30
Growth%


pgw.nz
1
1
1
215.1%
20.4%
11.9%

9.0%


scl.nz
4
2
2
130.5%
16.5%
-0.8%

8.5%


HNZ.NZ
2
7
3
73.5%
17.9%
15.7%

14.0%


hlg.nz
8
3
4
118.3%
15.8%
4.9%

8.0%


CNU.NZ
7
9
5
71.4%
16.3%
25.8%

5.0%


vil.nz
14
6
6
76.5%
15.3%
10.8%

10.0%


hby.nz
17
4
8
83.0%
14.9%
9.2%

9.0%


ANZ.ax
10
11
8
66.6%
15.6%
-0.5%

11.0%


RBD.NZ
6
15
8
55.3%
16.3%
11.3%

12.5%


bgr.nz
5
17
10
49.2%
16.5%
10.3%

13.0%


WBC.ax
11
12
11.5
66.2%
15.6%
-0.4%

11.0%


thl.nz
15
8
11.5
71.6%
15.1%
27.8%

10.0%


IFT.NZ
3
21
13
28.8%
16.7%
19.0%

14.0%


awf.nz
16
10
14
67.4%
15.0%
1.3%

10.0%


GNE.NZ
25
5
15
77.3%
12.9%
8.2%

6.0%


nzr.nz
18
13
16
59.8%
14.7%
17.5%

10.0%


SKL.NZ
20
14
17
59.5%
13.7%
-7.7%

8.5%


AIR.NZ
13
24
18
23.0%
15.4%
16.4%

12.5%


STU.NZ
22
19
19
46.9%
13.6%
0.3%

9.0%

[Wolf]

HLG!
Also PGW is due to announce soon.

Here are 18 more
TSR - forecast total shareholder return
Val rank = valuation ranking, low = undervalued
Overall rank - average of TSR and VAL rank
% UV/OV - percent undervalued or overvalued
Sentiment - % MA 50 is above MA 200
Growth - my guess of long term growth.

Disclaimer - subject to change. Can be way wrong.


Hey Bunter for your model how do you determine value and what is long term for you?

[dingoNZ]

Wow - that spread $1.20 - $1.50

[iceman]

I wonder if we may get a chance at buying UDC soon !

http://www.afr.com/p/business/companies/anz_readies_for_esanda_auction_loans_xiA7KFkruDPaF TVq5QO6YO

And this from interest.co.nz this morning :
In Australia, ANZ is preparing to sell off its giant Esanda vehicle and equipment asset lender. Where that will leave their New Zealand UDC is unsure, although UDC is not part of the Esanda move. But no doubt the Melbourne thinking that is driving the Esanda changes will dominate how ANZ sees UDC.

[Beagle]

Chris Lee gave HNZ are positive mention in his latest newsletter too.

[777]

Chris Lee gave HNZ are positive mention in his latest newsletter too.

Not sure that is a positive,

[Beagle]

Not sure that is a positive,

It was only a brief comment regarding the fact that RBNZ had reduced the capital requirements. He reckoned it was positive for loan growth.

[Baa_Baa]

Wow - that spread $1.20 - $1.50

Very interesting development, and weighted 5:1 buyers to sellers. Emptied the piggy bank and upweighted HNZ to equal my energy stocks. That's me max'd out. I do like the consistent technical price action as well, a nice breakout and money flowing.

[Baa_Baa]

It was only a brief comment regarding the fact that RBNZ had reduced the capital requirements. He reckoned it was positive for loan growth.

Michael Warrington's writings, Chris Lee editorial.

I particularly liked his reference to being proven to be a well run bank that can operate off lower capital requirements, which he says is significant for HNZ. He goes on to suspect reallocation of capital to lending growth and that should make for happy shareholders if successful.

Despite some polarised views of Mr Lee, I've always had the highest regard for his market insights and his newsletters are an important staple read, imho. Its easy to sign up here ... http://www.chrislee.co.nz/mailing-lists

[Baa_Baa]

Wow - that spread $1.20 - $1.50

Now $1.20 - $1.45 and those $1.20's are thinning out quickly, halved in 10 minutes or so.

[winner69]

Yes exactly right,it is eps accretive acquisitions that add to ROE that are worthwhile.
A company with a PE of 10 buying a company with a PE of 5 works well.
HNZ have a record of successful acquisitions.

Hope the next acquisition is on a lower PE than the Seniors one was eh percy

[bunter]

Hey Bunter for your model how do you determine value and what is long term for you?

Work out the present day value of the next 10 years' estimated dividends.
Divide this by current share price.

50% = fairly valued, *relative to money in the bank at 5%*.

50% means the share half pays for itself after 10 years. It's an arbitrary figure.

In long term interest rates change significantly, the system adjusts the valuation.

Long term = 10 years.

The model has faults.

[iceman]

Current asking price 145 !

[pierre]

121 now. Always someone to spoil the party! Still, great to see the steady upwards trend.

[winner69]

Roger, at this rate Jeff will need to come clean won't he

Be almighty share price collapse if he sticks with his $42m story

[Beagle]

Roger, at this rate Jeff will need to come clean won't he

Be almighty share price collapse if he sticks with his $42m story

Banks are renowned for being conservative mate. Official guidance of $42 - $45m may get upgraded when they announce their half year results next month or in my view there's almost an equal chance of them simply reiterating exisiting guidance with the usual sort of comment that we are well positioned to meet ...

Not worried either way, good things take time. Go onto the Mainland cheese website and you'll see that a good vintage cheese takes 24 months to mature. Just imagine how tasty the SP will be 24 months from now. Based on mid point of official forecast = circa 9.3 cps which would have the stock on a PE of 13 which isn't expensive so there's no reason for the SP to make any untoward correction unless the result next month significantly under-shoots market expectations which I rate as an extremely unlikely possibility.
I think there's every reason to be confident. Onwards and upwards !! HNZ remains a very cheap growth stock.

[gv1]

HNZ remains a very cheap growth stock.[/QUOTE]

Me thinks too..loaded as well past few days.

[Snow Leopard]

Well thank you guys for your blatant ramping :D.


Best Wishes
Paper Tiger

[percy]

Hope the next acquisition is on a lower PE than the Seniors one was eh percy

Well I was pleased they brought the REL business.I think it is a great fit for Heartland.Better margins than normal home loans,and a sector that I see has strong growth prospects with NZ's aging property owning population.Buying the established business saved them years of trying to build a business from scratch.

[Beagle]

Well thank you guys for your blatant ramping :D.


Best Wishes
Paper Tiger

But wait there's more LOL. Was it really so silly for me to talk about $2+ on the weekend ?

Lets value the stock using the extremely well regarded Benjamin Graham formula of V = EPS x (8.5 + 2g)
According to Reuters http://www.reuters.com/finance/stocks/analyst?symbol=HNZ.NZ - Consensus analysts forecasted 2015 EPS is 9.95 cps, consensus long term growth is 15%, (note historical growth last couple of years has been much higher) and using those numbers we get 9.95 x 38.5 = $3.83 !!
Like I said, HNZ is a very cheap growth stock. Surely this new valuation gets me the position of Chairman of the rampersrus club :D

[winner69]

But wait there's more LOL. Was it really so silly for me to talk about $2+ on the weekend ?

Lets value the stock using the extremely well regarded Benjamin Graham formula of V = EPS x (8.5 + 2g)
According to Reuters http://www.reuters.com/finance/stocks/analyst?symbol=HNZ.NZ - Consensus analysts forecasted 2015 EPS is 9.95 cps, consensus long term growth is 15%, (note historical growth last couple of years has been much higher) and using those numbers we get 9.95 x 38.5 = $3.83 !!
Like I said, HNZ is a very cheap growth stock.

Whichever way you look at it Roger isn't 2 bucks on the card by Christmas.

$50m NPAT this year and then say a poor year in 2016 and only $55m NPAT and still people will be excited.

And heck another acquisition must be on the way, more growth and don't forget those synergies to put more icing on the cake

All makes sense

[gv1]

Like I said, HNZ is a very cheap growth stock. Surely this new valuation gets me the position of Chairman of the rampersrus club :D[/QUOTE]


Naa, Warren Buffet of sharetrader.

[Beagle]

Like I said, HNZ is a very cheap growth stock. Surely this new valuation gets me the position of Chairman of the rampersrus club :D


Naa, Warren Buffet of sharetrader.[/QUOTE]

LOL Warren Buffett is reported as saying Benjamin Graham's book is the greatest investment book of all time. Maybe that formula isn't so silly after all :)
Even if we use a long term growth rate of 10% which seems very reasonable and use trailing EPS as stipulated in that formula we get 9 x 28.5 = $2.56 intrinsic value.
Even using my tight arsed accountants approach to buying growth... value formula of V = eps x (8.5 + 1g) I see it as a strong buy up to $1.66. I guess it all depends where one sees the long term growth potential and that's where high margin aspects of the HER come into play. Also worth noting the net interest margin of HNZ is circa double that of the average Aussie bank. I reckon that might come in handy when it comes to future EPS growth :)

[dingoNZ]

Naa, Warren Buffet of sharetrader.

LOL Warren Buffett is reported as saying Benjamin Graham's book is the greatest investment book of all time. Maybe that formula isn't so silly after all :)[/QUOTE]


Great book but very dated and in parts hard to read.

Glad I topped up recently at $1.14, up 6.1% already since the start of the year!! :D

[gv1]

Naa, Warren Buffet of sharetrader.

LOL Warren Buffett is reported as saying Benjamin Graham's book is the greatest investment book of all time. Maybe that formula isn't so silly after all :)
Even if we use a long term growth rate of 10% which seems very reasonable and use trailing EPS as stipulated in that formula we get 9 x 28.5 = $2.56 intrinsic value.[/QUOTE]

Spot on. Cheers mate.

[winner69]

Isn't the market totally irrational at times. Like still to recognise real value

But as MAC reminds us on other threads the market eventually recognises intrinsic value, or something like that

C'mon 2 bucks by Christmas

[dingoNZ]

Sentiment > Fundamentals at the best of times, as irrational as that is.

[winner69]

Naa, Warren Buffet of sharetrader.

LOL Warren Buffett is reported as saying Benjamin Graham's book is the greatest investment book of all time. Maybe that formula isn't so silly after all :)
Even if we use a long term growth rate of 10% which seems very reasonable and use trailing EPS as stipulated in that formula we get 9 x 28.5 = $2.56 intrinsic value.
Even using my tight arsed accountants approach to buying growth... value formula of V = eps x (8.5 + 1g) I see it as a strong buy up to $1.66. I guess it all depends where one sees the long term growth potential and that's where high margin aspects of the HER come into play. Also worth noting the net interest margin of HNZ is circa double that of the average Aussie bank. I reckon that might come in handy when it comes to future EPS growth :)

Like that 256 mate

Heartland offering 4.5% for 12 months term deposit ...3% after tax.

Heartland divie this year 8 cents ......jeez instead of taking the term deposit buy shares ....all the way to 256 ....and be heaps better off, same yield and what a capital gain.

Spooky though Ben comes up with 256 and dvidends support that 256

Where's the equity risk premium you might say? Globally punters don't need a premium, that's how markets are priced anyway.

Why put money in the bank when you can own it and get rich

[Snoopy]

This 'minimum capital requirement' has been discussed on this thread before. See post 2990, the interest.co.nz reference quoted by Captain Dan. You are correct PT, the 'minimum capital requirement' (for the Bank) remains at 12%.

"Since January 1 this year banks also require a buffer ratio for common equity tier one capital of at least 2.5%. This buffer ratio is described by the Reserve Bank as a counter-cyclical capital buffer that can be applied in times of excessive credit growth. It's part of the Reserve Bank's version of the global Basel III bank capital adequacy standards, which have been endorsed by the G20. Heartland isn't required to maintain this buffer."

My 14.5% equated to 12% + 2.5% (the buffer). I now see that Heartland has an exemption regarding this buffer.


The Basel III requirements have previously not effected the Banking Group's minimum capital requirements as the Banking Group’s Conditions of Registration prescribe minimum capital requoirements higher than Basal III requirements. On January 14th 2015 , the Reserve Bank has consented to the reduction of its regulatory capital requirements, bringing them in line with other New Zealand registered banks.

Today I want to update the Heartland New Zealand banking covenants in relation to the for the June 30th 2014 quarter (corresponding to the EOFY).

The document I am referencing is the:

"Heartland Bank Disclosure Statement for the year ended 30th June 2014"

Note 39 (p63), contains the information on capital adequacy.

All Tier 1 capital for Heartland is shareholder equity.

Heartland's 2018 Subordinated Bonds (the Bonds) constitute Tier 2 Capital of the Banking Group. The Bonds had an issue period from 12 July 2013 to 15 December 2013 and have a maturity date of 15 Decembe 2018.

The information supplied is as follows:

Common Equity Tier 1 ratio: ( RBNZ minimum of 4.5% + 2.5% buffer)
Total Tier 1 ratio: ( RBNZ minimum of 6.0% + 2.5% buffer)
Total Tier 1 & 2 ratio: ( RBNZ minimum of 8.0% + 2.5% buffer)

As of September 30 2014, Heartland had a common equity tier 1 ratio, as a percentage of total risk weighted exposures, of 13.99%, tier 1 capital ratio of 13.99%, and total capital ratio of 14.09%. Its buffer ratio was then 1.99%

Note 39 contains detailed notes on just how the Heartland NZ capital is made up. If you use that information and use it to calculate the above ratios, based on a loan book with net loans and advances of $1,985.119m (from the balance sheet) I calculate the above ratios as follows:

Common Equity Tier 1 ratio: $334.981m/$1,985.119m = 16.9%
Total Tier 1 ratio: $334.981m/$1,985.119m = 16.9%
Total Tier 1 & 2 ratio: $337.487m/$1,985.119m = 17.0%

Risk weighted exposure (scaling of the loan book) as per note 39f gives a slightly different result.

Common Equity Tier 1 ratio: $334.981m/$2,344.744m = 14.3%
Total Tier 1 ratio: $334.981m/$2,344.744m = 14.3%
Total Tier 1 & 2 ratio: $337.487m/$2,344.744m = 14.4%

Why the difference between the two calculations? That is because the Tier 1 and Tier 2 capital figures have been 'risk adjusted' before they went into the second calculation. The risk adjustment is done because the expected capital recovery from loans should they go bad is different among the different classes of loans (corporate, sovereign, bank, retail mortgages and other retail).

SNOOPY

PS Tabulated version of above results



30/06/2014 (quote)30/06/2014 (risk adj)RBNZ Required (FY2015)


Common Equity Tier 1 Ratio16.914.34.5+2.5


Total Tier 1 Ratio16.914.36.0+2.5


Total Tier 1&2 Ratio17.014.48.0+2.5

[Beagle]

Like that 256 mate

Heartland offering 4.5% for 12 months term deposit ...3% after tax.

Heartland divie this year 8 cents ......jeez instead of taking the term deposit buy shares ....all the way to 256 ....and be heaps better off, same yield and what a capital gain.

Spooky though Ben comes up with 256 and dvidends support that 256

Where's the equity risk premium you might say? Globally punters don't need a premium, that's how markets are priced anyway.

Why put money in the bank when you can own it and get rich

Exactly !!!

[percy]

HALLELUJAH.
Closed at $1.20.
Cause for a Hallelujah!!!!!!!

[janner]

HALLELUJAH.
Closed at $1.20.
Cause for a Hallelujah!!!!!!!

Keep that packet of Treasures close percy :-))))

It is all .. Up.. Up .. And .. AWAY.. From here !!..

[janner]

My prediction .. For what it is worth..

Another consolidation stretch.. .. Followed by another " Burst ".

[Baa_Baa]

My prediction .. For what it is worth..

Another consolidation stretch.. .. Followed by another " Burst ".

It's a bit early to call a peak, based on the past year anyway, which has a well defined technical pattern. Have a look at the movements 1. Trough to Peak, and 2. Peak to Peak. This run-up has only just broken out from the recent $1.18 high of Dec 12. If the broad pattern holds, it could go a lot further before 'consolidation' sets in. That and the ramparama fest of course, you will have noted the minimum price target of $1.66 .. I think.

[winner69]

What a few days and a record close of 120. Wow

Good news Snoopy appears to have given Heartland a clean bill of health. Enough good capital cover to sink a ship

We have had valuations ranging from $1.66 and $1.88 and $2,00 and guru intrinsic value numbers of $3.66 and $2.56. Spooky as it was the $2.56 number gives a dividend yield the same as their 1 year term deposit rate.

An upgrade imminent and H1 results in a few weeks will just make those valuations look real - at least the $1.66 one in the short term.

Just remember what MAC and Sparky kept reminding us - the market will eventually recognise true value

With all due respect to Baa Baa plenty more to come over the next few weeks. That will be the consolidation period but I reckin well on the way to 2 bucks by Christmas

[janner]

It's a bit early to call a peak, based on the past year anyway, which has a well defined technical pattern. Have a look at the movements 1. Trough to Peak, and 2. Peak to Peak. This run-up has only just broken out from the recent $1.18 high of Dec 12. If the broad pattern holds, it could go a lot further before 'consolidation' sets in. That and the ramparama fest of course, you will have noted the minimum price target of $1.66 .. I think.

Minimum 1.66 ..

That is what dreams are made of ..

Of course I believe it will reach that.. But not tomorrow ..

Disc. Holding .. ;-)) Well positioned Eh !!. percy . ??

[percy]

My prediction .. For what it is worth..

Another consolidation stretch.. .. Followed by another " Burst ".

Janner,
What are you talking about?
Heartland share price or my incontinence challenges??????
"Poised" seems more appropriate !!!!! lol.

[Baa_Baa]

The 5-year monthly price chart, provides additional perspective. Enjoy.

6686

[winner69]

The 5-year monthly price chart, provides additional perspective. Enjoy.

6686

At least you had the foresight to have the y axis go over 3 bucks!!!!

[Baa_Baa]

At least you had the foresight to have the y axis go over 3 bucks!!!!

Such a charitable reply W69, thanks .. um, at least I think you're being nice, are you? I've been charting and timing my investments for about 20 years. These nice simple ones are for general consumption.

[kizame]

Such a charitable reply W69, thanks .. um, at least I think you're being nice, are you? I've been charting and timing my investments for about 20 years. These nice simple ones are for general consumption.

Crikey mate! You must have been hand plotting those things,as I did when i first got into it.Then I bought a PC and Metastock,man have things changed.

[Baa_Baa]

Crikey mate! You must have been hand plotting those things,as I did when i first got into it.Then I bought a PC and Metastock,man have things changed.

Lol .. yes, showing my age huh? P&F charts were invented for plotting by hand. They still work just as well on a PC, better in many cases than all the nowadays fancy stuff. But hey, even if the analysis is ****e, the fancy charts are always a work of art.
:cool:

Anyways, we better stick to HNZ on this thread. It's going to do very well, by all accounts, and the charts give me confidence to act.

[winner69]

Such a charitable reply W69, thanks .. um, at least I think you're being nice, are you? I've been charting and timing my investments for about 20 years. These nice simple ones are for general consumption.

Of course I was being nice. Should have said -

Great charts mate and glad you thinking of what is going to happen by having the y axis well over 3 bucks

Forgiven?

[Baa_Baa]

Of course I was being nice. Should have said -

Great charts mate and glad you thinking of what is going to happen by having the y axis well over 3 bucks

Forgiven?

Hey no worries W69, I'm just trying navigate the incredibly talented commentary here, add some value myself, and filter out the dross. So I'll just say woo hoo HNZ, I'm glad to be aboard this ride and my thanks goes to the FA's, who on this occasion are significantly more bullish than anything the TA's or my charts can dream up, even if the charts are bullish.
;) LOL.

[Gunny]

Can someone please explain the unexciting forecast and share price forecast numbers / statements being used by the financial times for Heartland. (www.markets.ft.com)

They seem not to be excited at all. They also seem to be plain wrong on the forecasted share price or I must be stuffing something up (which wouldn't be the first time).

I first thought that maybe the forecasts were in $US against $NZ actual share price but the numbers don't add up. Also tried to compare to AIR to figure it and still???.


I look forward to being educated / enlightened by the experts here.

Gunny

[Beagle]

Of course I was being nice. Should have said -

Great charts mate and glad you thinking of what is going to happen by having the y axis well over 3 bucks

Forgiven?

Gotta be gentle with the young-un's eh mate :)

Gunny - I can't even open that website so sorry I can't help you other than to point you to the Reuters coverage which is what I use for stocks when looking at consensus analyst forecasted EPS, sales e.t.c.
http://www.reuters.com/finance/stocks/overview?symbol=HNZ.NZ

I don't think analyst coverage on this stock is especially insightful. Read back through the thread. I did a comparitive review of HNZ v the smaller regional banks in Aust. Based on consensus analyst forecast EPS of 9.95 cents for 2015 HNZ is cheap by comparitive measures.
Its also growing faster than most of the Aussie banks and dividends are fully imputed. Factor in the Aussie banks are about to have their wings clipped with new regulatory increased capital requirements, HNZ has just been granted the tailwind of reduced capital requirements and HNZ's net interest margin at a fraction under 5% is close to double the Australian banks and you begin to get the picture.

[Gunny]

http://markets.ft.com/RESEARCH/Markets/Company-Search?searchField=&country=NZ&secType=WSOD.E

See if this works.
I agree, I don't place too much on their coverage either and agree HNZ is undervalued. In fact I am personally over weight on HNZ as a percentage of my total holdings and have been for some time although has paid off and expect this to continue, prepared to take the risk.

My issue is I wonder if possible buyers (overseas) are using ft for their guidance, and if so is this sending the wrong message to potential shareholders and a flow on upward price pressure. Probably over thinking it, just annoyed me, don't like to see flash formal sites with what looks like wrong info.

Will sit back, chill (hard to do in the Caribbean) and watch the up up and away.

Gunny

[Bjauck]

http://markets.ft.com/RESEARCH/Markets/Company-Search?searchField=&country=NZ&secType=WSOD.E

See if this works.
I agree, I don't place too much on their coverage either and agree HNZ is undervalued. In fact I am personally over weight on HNZ as a percentage of my total holdings and have been for some time although has paid off and expect this to continue, prepared to take the risk.

My issue is I wonder if possible buyers (overseas) are using ft for their guidance, and if so is this sending the wrong message to potential shareholders and a flow on upward price pressure. Probably over thinking it, just annoyed me, don't like to see flash formal sites with what looks like wrong info.

Will sit back, chill (hard to do in the Caribbean) and watch the up up and away.

Gunny
I would doubt that many overseas private investors, who may perhaps rely on the Financial Times site, would contemplate Heartland Bank as investment. It has to be said, until recently not many private NZ-based investors would have ranked Heartland high in their portfolio*. This is not to say that HNZ is not a good company for NZ and other investors. For overseas investors however, they would be investing in a small company in a very small sharemaket. High worth overseas investors and institutional investors who would contemplate a mid-size NZ company would more likely have other sources for research.

*In mid-2012 when I asked my broker from a large firm about HNZ it was not covered by the research team. The firm had no position and he suggested an alternative. I did not take his advice!

[blockhead]

A fair few being dribbled in @ $1.20 today, sp might soften by days end.

[Harvey Specter]

*In mid-2012 when I asked my broker from a large firm about HNZ it was not covered by the research team. The firm had no position and he suggested an alternative. I did not take his advice!My father was advised against it too by his large broker. Luckily he took my advice.