HGH - Heartland Group Holdings

[sb9]

It's a shame that it has come to this to see both Percy and Roger get banned. Enjoyed both of their perspectives on different stocks. Hope they're back soon, both will be missed until then.

[Chinesekiwi]

Thanks Karen - I agree with you.

I'm a novice and I learn from people who have vastly more knowledge - thank you for sharing that knowledge with us. I am still learning so don't post as what to say?!!

I read Percy too as I consider him very interesting.

[Joshuatree]

Shame for you sb9?.Theyve been given a 3 day holiday, lucky them; come back fresher and better than before ; just like snapiti;grieve not ;how about doing some research eh;)

[sb9]

All good JT no worries at all ;)

[Xerof]

Er, I'm hearing technical infringement. Bit like McCaw's lineout move, got slightly offside...... more a 24 hr sinbin than a sending off.

Sleep well percy fans. Think roger's was a red card so might miss a game or two

[iceman]

Good post Karen. Percy has always been respectful and reasoned in his posts, despite some fairly low (personal) attacks recently. I believe he is being banned for pointing out something to the MOD by PM. That is simply ridiculous and he should be reinstated pronto.

[Xerof]

Oooooooh, thats tempting fate - bye bye kizame:D

yep, that's done already..sigh, some will never learn

[Joshuatree]

Hee yeah i was thinking Percy the halfback, and Roger the loose forward being binned for scrum collapse.:t_up:

[iceman]

percy will be back tomorrow
Roger will probably be back tomorrow

kizame may be back one day

Fair enough. I am sure it is a difficult at times

[RGR367]

percy will be back tomorrow
Roger will probably be back tomorrow

kizame may be back one day

Yeah, it's not easy especially with what they posted and you banned them for that?

[janner]

Percy has been banned?????

I joined ST several years ago, after reading various threads for many months, by which time I had assessed there were some very worthwhile posts which helped me a great deal, from people genuinely sharing their knowledge, which was, and still is, far superior to mine. In my first few years, I learned much, and learnt to take on board good knowledge from the likes of Percy, to name but one of about a dozen. Of that dozen, there are only about 4 left whom I still consider genuine posters.

Sadly, there are many more members now who seem only too happy to be as disruptive, disrespectful, in fact downright rude, as they can, without thought to the damage they cause. These types tend to jump the fence, depending on how a share price is rising, or falling. Posters who doggedly continue for years to put down a company or management are a comparatively recent phenomenon, and I have long since stopped reading some posters who do this. They remind me too much of talkback radio, which I had forced on me in a workplace years ago. I thought they were just a bunch of folk who liked the sound of their own voice, and kept banging away daily telling the same old story.

What concerns me greatly is that for any newcomers reading various threads, if they have little investor experience, they could well get burned badly by reading/following the freely given ‘advice’ given by a number posters, which is often without foundation. Being a prolific poster does not necessarily mean one knows all, but there is a real danger that someone from the outside looking in may take it that that is the case.

The ‘banned’ issue seems like a joke to me. If someone is banned, it might suggest that something heinous has been done, and therefore the ban may extend to a month or more, but normally when I think of a ban I think of it as permanent.

Having said that, I am already extremely disappointed that percy has received one of these infamous bans, and I would be even more so if he were not to return. He, along with a very few others, brings a measured voice of experience and reason to ST.

I just cannot believe that Percy would have posted something worthy of a ban. He has for some months now undergone some very unpleasant attacks by one poster in particular, and has stood up well to that, and not retaliated, although I would have thought he has every right to.

Perhaps when a member is banned the rest of the members should be given an explanation as to why, without the need to divulge details. It might save speculation.

I am very clear on one thing, Share Trader is not the wonderful sharing/learning platform it once was, which is a real shame.

Percy, I hope your ban is not permanent, and that you will return to continue to help people.

Hear Hear..

Thank you KW for your response to this ..

Banning is becoming far to frequent in my opinion..

[janner]

Percy has always been a leading light with his opinions..

Like them or not..

He has always come back with his reasons like them or not..

That is not in my opinion a reason to ban him or any one..

Having said that.. I did no read what he said..

But I have met him..

A genuine man.. who says what he believes ..

[Regi]

Haven't been on this forum for long but have already learnt a lot and enjoy reading both Percy and Roger's views... would've been a huge loss if it were permanent.

[percy]

BANNED.
Questioning,then pointing out the errors of STMOD ways resulted in me being banned.
So STMOD I apologise for my PM to you,and thank you for lifting the ban.Your job must be near impossible.
To all sharetraders who have posted here, and sent me personal emails,thank you for your kind words.
I now look forward to again trying to make a worthwhile contribution to this, and other threads.

[Leftfield]

Well said Karen…. we have lost too many good posters lately. They are missed. Maybe we need more care with moderation and some who get hurt need a bit of wise guidance so we don't lose them.

I joined ST several years ago, after reading various threads for many months, by which time I had assessed there were some very worthwhile posts which helped me a great deal, from people genuinely sharing their knowledge, which was, and still is, far superior to mine. In my first few years, I learned much, and learnt to take on board good knowledge from the likes of Percy, to name but one of about a dozen. Of that dozen, there are only about 4 left whom I still consider genuine posters.

Sadly, there are many more members now who seem only too happy to be as disruptive, disrespectful, in fact downright rude, as they can, without thought to the damage they cause. These types tend to jump the fence, depending on how a share price is rising, or falling. Posters who doggedly continue for years to put down a company or management are a comparatively recent phenomenon, and I have long since stopped reading some posters who do this. They remind me too much of talkback radio, which I had forced on me in a workplace years ago. I thought they were just a bunch of folk who liked the sound of their own voice, and kept banging away daily telling the same old story.

[Master98]

https://nzx.com/companies/HNZ/announcements/267674

HNZ do give me clearly indication:), buy signal.

[percy]

https://nzx.com/companies/HNZ/announcements/267674

HNZ do give me clearly indication:), buy signal.

Well I suppose I sometimes have an odd sense of humour.
Recent research has 2016 npat at $50mil,while today's HNZ announcement has $51mil plus.[HNZ deliver on what they say].
Well is the extra $1mil the saving they will make on a wage??? lol.

[Master98]

Well I suppose I sometimes have an odd sense of humour.
Recent research has 2016 npat at $50mil,while today's HNZ announcement has $51mil plus.[HNZ deliver on what they say].
Well is the extra $1mil the saving they will make on a wage??? lol.
welcome you back my old mate.:t_up:

[iceman]

Well I suppose I sometimes have an odd sense of humour.
Recent research has 2016 npat at $50mil,while today's HNZ announcement has $51mil plus.[HNZ deliver on what they say].
Well is the extra $1mil the saving they will make on a wage??? lol.

Looks like Jeff reads ST and has come out with an announcement to support you and clarify their fairly modest exposure to dairy !

[Joshuatree]

Yippee straight from the HEART:p. I would like to thank the non believers for that NZX announcement; it seems Heartland are responding directly to us lil bickering posters on here; some message; what a hot heart line; sun is out Mahana everyone.

[winner69]

Most of you guys treated me with derision when I said FY16 would be $56m minimum

Heartland will get there - guidance will be gradually tightened and $51-$55m will become $54-$56m middle of next year

Jeez hope $51m is the low ball be safe warm fuzzy number to keep the faith with the believers - not much more than $48m is it and probably wouldn't even return 10% ROE

[percy]

Yippee straight from the HEART:p. I would like to thank the non believers for that NZX announcement; it seems Heartland are responding directly to us lil bickering posters on here; some message; what a hot heart line; sun is out Mahana everyone.

Yes.!!! lol.
Always amazes me the sharemarket.
Two days ago I was looking like a proper twit.Fallen in love with HNZ and could not see reality.Complete tosser.!
Two days later,respected broker's research is known,and HNZ give an update which includes a 2016 npat projection.

[psychic]

Well I suppose I sometimes have an odd sense of humour.
Recent research has 2016 npat at $50mil,while today's HNZ announcement has $51mil plus.[HNZ deliver on what they say].
Well is the extra $1mil the saving they will make on a wage??? lol.

Yes - welcome back Percy. Laughed my head off when I read you of all posters had been sent to the naughty corner. I figured you would get a chuckle out of it.

To Heartland. I may be being naive, but the underlying message that they are here for the long haul and intend to support the rural sector in good and bad times will not be lost on people down on the farm.

[winner69]

Yes.!!! lol.
Always amazes me the sharemarket.
Two days ago I was looking like a proper twit.Fallen in love with HNZ and could not see reality.Complete tosser.!
Two days later,respected broker's research is known,and HNZ give an update which includes a 2016 npat projection.

Isn't really an announcement to set the world on fire is it mate. A bit so so really isn't it

Probably our expectations are poles apart, never mind

[karen1]

Over the piano was printed a notice: Please do not shoot the pianist. He is doing his best.
Oscar Wilde

My thanks also to those who showed their support for Percy and backed me. No surprises for me amongst the posters! Shows ST still has some genuine members who care less about the rise and fall of a share price and more about the company, and the chance to share knowledge and experience. After all, “Experience is a name men give to their mistakes.” Oscar Wilde

As sure as I am it’s a stunningly beautiful day here, I am also sure not one member is seeking to be part of “an exclusive old boys/girls club”, and all would, or should, agree that “as long as respect is shown to fellow posters” is a great mantra, and one all members should abide by.

If we are to take anything away from this, it is probably that some of us should think before we type, and some of us should think before hitting the b button. ST Mod, I wouldn’t want your job, but perhaps you were a bit immoderate here, judging by one or two comments.

“The one important thing I have learned over the years is the difference between taking one’s work seriously and taking one’s self seriously. The first is imperative and the second disastrous.” Dame Margot Fonteyn

I hope this experience has cleared the air for some folk, and that we can move along now in the vein of genuine knowledge sharing. “Inspiration is the impact of a fact on a prepared mind.” Louis Pasteur

Percy, good to see you in print again!

Wherever you are, have a great day, all of you.

[Joshuatree]

Isn't really an announcement to set the world on fire is it mate. A bit so so really isn't it

Probably our expectations are poles apart, never mind

Up 5c on open winner what expectations did you have; am int to know?cheers JT.

[couta1]

Isn't really an announcement to set the world on fire is it mate. A bit so so really isn't it

Probably our expectations are poles apart, never mind
Winner you really must find some new hobbies how about whipping up a couple of batches of scones and put those wooden spoons to good use.

[couta1]

MA200 soon to broken in a positive way:cool:

[winner69]

Winner you really must find some new hobbies how about whipping up a couple of batches of scones and put those wooden spoons to good use.

Funny you should say that couta - just taken a batch of cheese scones (with a bit of cayenne in to spice them up) out of the oven.

Mete bringing the coffees from the local

Will enjoy them

[noodles]

Yes.!!! lol.
Always amazes me the sharemarket.
Two days ago I was looking like a proper twit.Fallen in love with HNZ and could not see reality.Complete tosser.!
Two days later,respected broker's research is known,and HNZ give an update which includes a 2016 npat projection.
Percy. Nice buying at $1.13 .
It is a pity Roger is banned. I'm sure he would be keen to take back the "head in the sand" comments and re-access his position.

[winner69]

Up 5c on open winner what expectations did you have; am int to know?cheers JT.

If some are contented with a 6% increase in earnings for FY16 so be it.

My expectations, and others possibly, are higher than this. Expectations based on listening to the company rhetoric.

Expectations about the future ...not a 5 cent increase on opening.

[winner69]

Good timing by Craig's releasing that report yesterday

Might not be a BUY if they had waited until today

I have a feeling that Heartland were getting the jitters about the way the share price was going so made this so so announcement today. Like give the faithful some hugs and cuddles to say its all OK.

I still have heaps ...will wait until the accounts come out to see where things look like they are really heading before selling.

Coffee just arrived - out in the sun with the scones time

[ddrone]

If some are contented with a 6% increase in earnings for FY16 so be it.

My expectations, and others possibly, are higher than this. Expectations based on listening to the company rhetoric.

Expectations about the future ...not a 5 cent increase on opening.

Given the 26 week range of 112-142 isn't this just a healthy correction?

[Balance]

Good timing by Craig's releasing that report yesterday

Might not be a BUY if they had waited until today

I have a feeling that Heartland were getting the jitters about the way the share price was going so made this so so announcement today. Like give the faithful some hugs and cuddles to say its all OK.

I still have heaps ...will wait until the accounts come out to see where things look like they are really heading before selling.

Coffee just arrived - out in the sun with the scones time

Biggest issue is whether HNZ is successful in buying FP Finance. Needs a strong share price to undertake a $100m plus capital raising.

[stoploss]

Biggest issue is whether HNZ is successful in buying FP Finance. Needs a strong share price to undertake a $100m plus capital raising.


Franko do you know something the Board of directors doesn't ?????

https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=3899629

[Balance]

Franko do you know something the Board of directors doesn't ?????

https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=3899629

Operative words 'not currently'

[winner69]

Given the 26 week range of 112-142 isn't this just a healthy correction?

But we are all really happy today though

[noodles]

If some are contented with a 6% increase in earnings for FY16 so be it.

My expectations, and others possibly, are higher than this. Expectations based on listening to the company rhetoric.

Expectations about the future ...not a 5 cent increase on opening.

The mid range of their forecast is for 10% increase in NPAT

[winner69]

The mid range of their forecast is for 10% increase in NPAT

The upper end of their forecast is for a 15% increase in NPAT

[noodles]

The upper end of their forecast is for a 15% increase in NPAT
I think that given the economic backdrop, shareholders should be very pleased with that forecast. It is quite far out from the June 16, so it shows a lot of confidence.

[Joshuatree]

Yes it does give one more confidence .And as a holder atp its a relief after what were some pretty relentless negative views by Roger . Chartwise HNZ needs to rise further to increase my conviction.

[Marilyn Munroe]

Biggest issue is whether HNZ is successful in buying FP Finance. Needs a strong share price to undertake a $100m plus capital raising.

Yesterday's The Australian speculated under arm bowling outfit Flexi Group was in the hunt for
F & P Finance.

Bop boop de do
Marilyn

[Beagle]

Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?

There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.

7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.

One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?

The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.

At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?

Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?

The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.

It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.

Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.

I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.

Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.

I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.

The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.

It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.

Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.

What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.

P.S. In my view when robust debate is excessively moderated everyone is the loser.

[Joshuatree]

Third highest volume of shares of the year traded today re 1.6 million shares; a strong day for HNZ, phew:)).

[winner69]

Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?

There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.

7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.

One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?

The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.

At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?

Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?

The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.

It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.

Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.

I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.

Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.

I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.

The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.

It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.

Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.

What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.

P.S. In my view when robust debate is excessively moderated everyone is the loser.

Fantastic in depth post Roger.

I was thinking much the same but have been making scones all day, might make comment later

[psychic]

Welcome back Roger
61% LVR not too bad for Finance Company lending Roger? (I know they say Bank but..)
Better than a whole lot of HP deals on cars / laptops.
Not sure every sharemilker will fall over next three years, averages will be okay?

[Master98]

Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?

There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.

7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.

One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?

The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.

At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?

Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?

The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.

It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.

Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.

I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.

Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.

I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.

The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.

It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.

Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.

What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.

P.S. In my view when robust debate is excessively moderated everyone is the loser.

welcome you back Roger, do like read depth analysis on both side, do like listen different voice on this forum.

[iceman]

I am pleased you are back Roger. Your contribution, knowledge and amount of time you obviously can and do spend on research and share with us is very much valued. A robust debate of contrary views is healthy for all of us. But in my view we have seen in recent months too much personal bickering on many threads, that does not add much value to the debate. I hope all posters can refrain from that and stick to the issues of real interest and importance.

[couta1]

Fantastic in depth post Roger.

I was thinking much the same but have been making scones all day, might make comment later
Your arms must be getting tired by now winner from all that stirring, bet the scones tasted good.

[winner69]

Your arms must be getting tired by now winner from all that stirring, bet the scones tasted good.

Might try making apple turnovers tomorrow, seeing Scales is the flavour of the week

[noodles]

"It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong.
~ George Soros"


Whether Roger is right or wrong won't be known for a couple of years. But I am can now rest a lot easier knowing that Craigs and HNZ management agree the dairy impact is small.

Welcome back to the forum Roger.

[iceman]

Neil Roberts Founder and majority owner of Harmoney has stepped down from the Board but remains largest shareholder and CEO ! I wonder if he is finding it difficult to work within a structured Board or does this indicate some disagreements at Board level !

[mouse]

The Dairy Farm 61% LVR figure. Is that the percentage when the loan was granted? Or the % on present day values? Does anyone know? Plus I appreciate the $700 to $1,000 price by Roger for dairy cows at the works. It is a much higher residual value than I would have thought for loans that were under water. Other ideas please?

[janner]

welcome you back Roger, do like read depth analysis on both side, do like listen different voice on this forum.

Agree entirely ..

Quite entertaining as well as educational at times ..

[winner69]

In that Heartland announcement They said that 6% of loans are dairy related.

but i am puzzled as to why they added these sentences, especially the 2nd one - "The average loan to value ratio (LVR) for Heartland’s dairy exposures is 61%. However, it is important to note that LVRs are only one of the indicators of loan quality"

Do we interpret that as Heartland themselves think the 61% is a high/risky number but its all OK because other things are alright. If so why even mention all this as everybody was excited at being told the exposure was low.

One thing I have learned over many years announcements have to be read carefully to really try to understand what is being said.

Just adding to Rogers note - even if 5% of these dairy loans go bad that's a decent chunk of the $50m profit gone.

Not too much point debating dairy anymore. Those who believe are happy as so no problems. Those who have concerns manage the risk best they can. Whatever happens you can either praise or blame yourself, what you do is up to you.

I still hold until the annual accounts. I believe there is more risk with heartland than a while ago and will manage accordingly.

If anybody is interested have a look at sector analysis in recent accounts and track impairment expense under rural for the last 3 to 4 quarters.

Cricket about to start ....could be exciting

[Joshuatree]

Roger your mailbox is full .

Im holding till annual accounts too.

[Master98]

Just adding to Rogers note - even if 5% of these dairy loans go bad that's a decent chunk of the $50m profit gone.
copied from today market update:
"Heartland advises its preliminary forecast range for NPAT for the financial year ending 30 June 2016 is $51m - $55m. This includes an allowance for estimated impairments."
HNZ board must already have possible maximum impairments FY16 in their mind?

[Beagle]

Hmmm Why do I think this is a 'goodbye' note from Roger? Do hope that thought is wrong.
Cheers Roger, your posts have been welcome and useful.

da' fool

Just venting some frustration mate. It is nice to get a very warm welcome back from so many people and to see their kind thoughts expressed. Thank you folks. This helps restore my faith in human nature and nice to see that many people appreciate my honest and open communication style even if sometimes even I would acknowledge it is done in a confronting manner. Tact was never one of my strong suits and probably never will be lol.


In that Heartland announcement They said that 6% of loans are dairy related.

but i am puzzled as to why they added these sentences, especially the 2nd one - "The average loan to value ratio (LVR) for Heartland’s dairy exposures is 61%. However, it is important to note that LVRs are only one of the indicators of loan quality"

Do we interpret that as Heartland themselves think the 61% is a high/risky number but its all OK because other things are alright. If so why even mention all this as everybody was excited at being told the exposure was low.

One thing I have learned over many years announcements have to be read carefully to really try to understand what is being said.

Just adding to Rogers note - even if 5% of these dairy loans go bad that's a decent chunk of the $50m profit gone.

Not too much point debating dairy anymore. Those who believe are happy as so no problems. Those who have concerns manage the risk best they can. Whatever happens you can either praise or blame yourself, what you do is up to you.

I still hold until the annual accounts. I believe there is more risk with heartland than a while ago and will manage accordingly.

If anybody is interested have a look at sector analysis in recent accounts and track impairment expense under rural for the last 3 to 4 quarters.

Cricket about to start ....could be exciting


Fantastic in depth post Roger.

I was thinking much the same but have been making scones all day, might make comment later

Thanks for your support mate. A good friend in times of heavy weather is a real friend indeed. Years ago I read that 6% of passengers simply don't turn up for their flight, for some strange reason this doesn't seem to worry the airlines...I wonder why :)

Just adding a tiny titbit to yesterday's post. I am sure many of us have watched with morbid fascination on the business news and in particular CNBC the super slow motion track wreck that is the Greek fiasco.
Many of the expert international economists have lamented that really Greece has little to no chance of ever repaying the $320 billion owned to European banks and indeed cannot meet its interest and repayment schedules.
Further, the problem is really sheeting home to the European banks because if they don't offer further support they crystallise a substantial capital loss on the $320b currently advanced.

Over time this "toxic" or "zombie debt" as some commentators are referring too it as, simply balloons out to an even larger sum, perhaps as much as half a trillion dollars and the European banks simply hope the Greek economic reforms turn that pup of an economy into something capable of performing an herculean task of actually repaying some of it.

Surely I am not the only one who can see the parallel between this most unfortunate Greek situation and the one HNZ are in with their dairy loans ?


Might try making apple turnovers tomorrow, seeing Scales is the flavour of the week

Sure is, my biggest holding now.


I am pleased you are back Roger. Your contribution, knowledge and amount of time you obviously can and do spend on research and share with us is very much valued. A robust debate of contrary views is healthy for all of us. But in my view we have seen in recent months too much personal bickering on many threads, that does not add much value to the debate. I hope all posters can refrain from that and stick to the issues of real interest and importance.

Thanks mate. Sometimes I think if someone has an XXXXXL position in a stock there is potential for them to misinterpret robust debate as something of an attack and I suspect that's what's happened here with our mutual friend.

Noodles mate, you're quite right that we won't know the outcome for a couple of years but you can bet your last dollar Fitch will be watching closely, recall their recent comments on the dairy sector with thinly disguised hints about possible pending downgrades if this situation become dire and protracted. All the risks with HNZ's "very forward looking" forecast appear to be too the downside.
I remain perplexed with how the Directors think they can reliably estimate loan defaults so far ahead especially seeing as nobody has any real idea how protracted or how serious this dairy problem becomes.
I will leave you folks to consider for yourselves whether accurate estimations of default rates a year out are possible / plausible in this environment ? Maybe the pending Trans Pacific Partnership deal comes to the rescue and everyone gets a dairy miracle, let's hope so. Gotta feel for the dairy farmers, nobody thought it would get anywhere near this bad and its good that HNZ are arranging counselling and referring farmers to support groups and lending them even more money to get through. BNZ are running survivability workshops around the country and another bank are effectively pulling the financial support pin on unviable business operations...which bank is taking the prudent approach with their shareholders best interests at heart ?...that is the sixty four "million" dollar question that only time will answer.

[winner69]

Very commendable that Heartland (and other banks) are working with their dairy clients to help them over the tough times. That at least is an admission there is a problem.

Whatever interest will still be accruing. I for one will be closing reconciling the cash flow statements with the P&L.

The old capitalising interest trick eh Roger. Even handover was reporting solid profits until the end.

[Jantar]

........
Surely I am not the only one who can see the parallel between this most unfortunate Greek situation and the one HNZ are in with their dairy loans ?.......
Although there may appear to many similarities, there are far more differences.
The entire Greek economy is in trouble, and the vast majority of the loans are to the Greek government, not to the Greek people.

The dairy industry is not in trouble, just receiving reduced pay outs, and still within a statistical normal range. Loans are not to the industry, but to individual owners, each with their own set of circumstances.

Some dairy farmers converted their farms when pay-outs were well above average, and used this high projected income as a basis for their financial planning. Of these, some have converted farms in areas that are not suitable for dairying (like Central Otago or mid Canterbury) and these are the ones who will really struggle to make the conversion pay. But sharemilker Fred in Southland, who borrowed just to buy his stock, and is on a traditional farm which doesn't need pivot irrigators etc. is probably still keeping his head above water and will manage OK.

It is not as if ALL dairy will crash and default. So the banks could afford to let the less likely ones go under, sell the stock at meat prices, and still support those that are marginal or still successful.

[gv1]

Sorry Mate Roger, didn't realise you were banned, welcome back. Missed you here, your honest and reliable analysis. I have loaded on Scales for last two days.

[Beagle]

Winner - Handover - Love it...I have an interesting story to tell about how much pressure they put on people to reinvest towards the end...remind me to tell you sometime over a beer.
Jantar - I am not suggesting all of their loans to dairy farmers are in trouble, (note my cryptic reference to this being a $64 million dollar question). I was going to put $64,000 question but that hardly seemed appropriate in the circumstances. Within the normal statistical range, really ? When was the last time GDT auction prices were under $2,000 a tonne ? Some economists are whispering about a $3 pay-out level...how do you think dairy farmers with an average of 61% debt will cope with that nightmare ?

Thanks gv1. SCL now my biggest position. Superb, conservatively managed company with excellent growth prospects.

[psychic]

I may have missed this somewhere in the conversation, but dairy farmers now have an average 61% debt level?

[Beagle]

I may have missed this somewhere in the conversation, but dairy farmers now have an average 61% debt level?

HNZ's customers do and HNZ are taking an approach of supporting their clients through this and we all know what that does to the LVR

[psychic]

HNZ only say their loans to the specific security value is 61% don't they?

[winner69]

HNZ only say their loans to the specific security value is 61% don't they?

And lets not forget about the other things they look at to assess loan quality.

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11489246

I make no apology for posting this article in here as its clear that the level of possible future default on these circa $230m, (and increasing), loans will be a major determining factor in HNZ's future profitability.

[Jantar]

I make no apology for posting this article......
Hey, no need to apologise. It the free sharing of information and opinions that allow each of us to make our own decisions. Keep it up.

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11489246

I make no apology for posting this article in here as its clear that the level of possible future default on these circa $230m, (and increasing), loans will be a major determining factor in HNZ's future profitability.

TPPA not looking too flash for dairy either

[vorno]

TPPA not looking too flash for dairy either

Really? I thought one point of the TPPA was to breakdown barriers (tarrifs & the like) for our dairy exports.
(Semi-related, as selling milk helps pay for HNZ loans)

[winner69]

Really? I thought one point of the TPPA was to breakdown barriers (tarrifs & the like) for our dairy exports.
(Semi-related, as selling milk helps pay for HNZ loans)

http://www.stuff.co.nz/business/farming/dairy/70707583/dairy-deal-disastrous-as-tpp-talks-near-end

[IAK]

Really? I thought one point of the TPPA was to breakdown barriers (tarrifs & the like) for our dairy exports.
(Semi-related, as selling milk helps pay for HNZ loans)
Yeah right!

[Beagle]

http://www.stuff.co.nz/business/farming/dairy/70707583/dairy-deal-disastrous-as-tpp-talks-near-end

Crikey...it just goes from bad to worse doesn't it !! Just as well HNZ are providing counselling and support groups for their heavily indebted customers.

[winner69]

Crikey...it just goes from bad to worse doesn't it !! Just as well HNZ are providing counselling and support groups for their heavily indebted customers.

And valuers are saying farm prices will fall

http://www.interest.co.nz/rural-news/76817/qv-arm-rural-value-has-seen-definite-change-sentiment-after-latest-sharp-drop

[Master98]

And valuers are saying farm prices will fall

http://www.interest.co.nz/rural-news/76817/qv-arm-rural-value-has-seen-definite-change-sentiment-after-latest-sharp-drop
that's good as I am seriously thinking buying a farm for weekends and retirement.

[IAK]

Crikey...it just goes from bad to worse doesn't it !! Just as well HNZ are providing counselling and support groups for their heavily indebted customers.

And this (El Nino) isn't going to help either ...http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11490077

[percy]

Bit surprised today that no one has mentioned Craig's HNZ research which they further updated yesterday.
Maybe the headline says it all.? ;
"Positive market update,as expected dairy exposure small."

[Master98]

http://www.stuff.co.nz/business/70678453/heartland-new-zealand-will-update-on-dairy-loans-in-three-weeks
" A bit concerned there was potential for inequality of information," Greenslade said."We wanted to make sure everyone had the same numbers." That was the reason for the statements on its dairy loans.
"Then on the 18th (August) we are going to come out with our annual result and you will see a lot more detail," he said.
"We don't want to drip feed out bits and pieces and get inequality of information kind of thing. On the 18th there will be a lot more detail."

[Beagle]

And valuers are saying farm prices will fall

http://www.interest.co.nz/rural-news/76817/qv-arm-rural-value-has-seen-definite-change-sentiment-after-latest-sharp-drop

WOW - some of that makes truly alarming reading, especially this bit

However the latest auction, which resulted in yet another reduction, has prompted serious doubt in the market.”

He said the projected pay-out was now below the cost of production for most operators and there was now "anecdotal evidence of pressure on some farmers to sell before their financial situation deteriorates further".

“Purchasers are also holding off on making investment decisions until there is a clearer picture of what is happening in the global dairy market and are waiting for distressed sales to occur to see what happens in the rural property market as a result.”]
The problem for HNZ as I see it is that seeing as their customers are amongst the most indebted in the dairy industry, (I am still shocked by the 61% figure which will rapidly increase as loans and further financial support ids offered), how do they extricate themselves if dairy stays low ? LVR blows out further if and when we are looking at the potential for a very meaningful fall in dairy farm prices. Clearly we have the loan value moving up at a fair pace and the security value which appears to have the potential to head down at potentially an even quicker pace.

It won't take much for that LVR to blow out to a dramatically higher percentage than 61% if farm values start falling hard will it ! Then HNZ directors have a conundrum...how much support can you provide for customers when their LVR's might get into the 80's or 90% range or perish the thought, their loan is potentially higher than the realisable value of the asset's security !

How on earth is it possible to model potential loan defaults with any degree of accuracy in the prevailing highly unusual circumstances ? I think that preliminary FY16 forecast is highly vulnerable to re-estimation.

[Joshuatree]

Curious why you've posted at least 6 posts today Roger on a stock you don't own? You guys need a truce;sort this out for everyones sake and especially your own.

[K1W1G0LD]

Bit surprised today that no one has mentioned Craig's HNZ research which they further updated yesterday.
Maybe the headline says it all.? ;
"Positive market update,as expected dairy exposure small."

You're battling a gale of negativity (much of it unwarranted) on here Percy .
But you just have to look at HNZ proven track record since you first purchased you're shares, they know what they're doing and I suspect they'll continue to show that.
This is a GREAT longterm hold and HNZ with their current management will weather this storm and be stronger for it

[enzed staffy]

Curious why you've posted at least 6 posts today Roger on a stock you don't own? You guys need a truce;sort this out for everyones sake and especially your own.

its getting a bit boring - we get it Roger your not keen on HNZ. Thanks

[couta1]

Winner I think it's time you sold out of this stock and put your money somewhere else, you seem to be running with the hares and hunting with the hounds on this stock so what's the point of holding?

[Beagle]

Curious why you've posted at least 6 posts today Roger on a stock you don't own? You guys need a truce;sort this out for everyones sake and especially your own.

Its like watching a slow moving train wreck unfold in super slow motion. Its not aimed at Percy so no need for a truce. Opps that makes 7. Who counts others posts in a day anyway ????

So they're releasing lots more info on 18 August, that will be interesting.

[warthog]

Really? I thought one point of the TPPA was to breakdown barriers (tarrifs & the like) for our dairy exports.
(Semi-related, as selling milk helps pay for HNZ loans)

That is the most amusing thing the hog has read all week.

You don't seriously think that what the politicians and others are describing the TPP as are actually true do you? It has next to nothing to do with free trade.

Many countries around the world have long and painful histories behind their societies, traditions and ways of life. They have earned their freedoms, or their balance of freedom versus societal interests and other peoples' freedoms, and in most cases have paid for them with blood, sweat and deep sacrifices.

So how can anyone assume that these countries will expose themselves to heartless private interests from the largest and most violent countries in the world, and their supposed allies?

Of course, this is sold to the stupid and the gullible as some sort of level playing field, or moral free-trade crusade.

[Joshuatree]

I agree WH.This is what John key will be remembered for ;selling out his country.There is a faint hope he will come to his senses and not sign. This is his cecil the Lion.

[Joshuatree]

Its like watching a slow moving train wreck unfold in super slow motion. Its not aimed at Percy so no need for a truce. Opps that makes 7. Who counts others posts in a day anyway ????

So they're releasing lots more info on 18 August, that will be interesting.

Seriously Roger one needs to learn to Forgive and forget and move on. Holding Ill will is at great cost to the holder usually in the form of health problems.

[Beagle]

Seriously Roger one needs to learn to Forgive and forget and move on. Holding Ill will is at great cost to the holder usually in the form of health problems.

I don't know what you're on about. I don't hold any ill will towards anyone on here. Take health advice to Pm mate, not really on topic is it.

Lots of interesting articles and info on the dairy sector today in the news that merited discussion and debate. Sorry none of it is what you would have liked to have seen mate.

[percy]

http://www.stuff.co.nz/business/70678453/heartland-new-zealand-will-update-on-dairy-loans-in-three-weeks
" A bit concerned there was potential for inequality of information," Greenslade said."We wanted to make sure everyone had the same numbers." That was the reason for the statements on its dairy loans.
"Then on the 18th (August) we are going to come out with our annual result and you will see a lot more detail," he said.
"We don't want to drip feed out bits and pieces and get inequality of information kind of thing. On the 18th there will be a lot more detail."

Thanks for posting the link Master98.
I found this in the article interesting;"a couple of brokers had been doing analysis of HNZ".
We know one of them was Craig's, and their target price for HNZ is $1.30.
Now we must wait and find out who the other broker was, and what their target price will be,?
Will it be above,or below Craig's.?
We can only wait and see.!

[winner69]

Wow, what a momentous week its been in Heartland land this week on Sharetrader

Bannings have been prevalent, vigorous debates and a bit of flak between members to top it of.

Then there was that Craigs report that gave Heartland a clean bill of health. And then right on cue Heartland come out with a so so announcement, OK a relief announcement to many

A lot of noise over the week eh.

And noise it has been because the Heartland share price closed the week UNCHANGED for the week (same as Friday last week)

[winner69]

Winner I think it's time you sold out of this stock and put your money somewhere else, you seem to be running with the hares and hunting with the hounds on this stock so what's the point of holding?

Taking Greensleeves advice and waiting (as an equal) because " On the 18th there will be a lot more detail."

Might be good bits

[Xerof]

Very nice doji on the weekly....yum
Yes Winner, extremely noisy this week. I find if I have something to say, once is enough. Not pointing the chicken bone at you though mate

[janner]

Wow, what a momentous week its been in Heartland land this week on Sharetrader

Bannings have been prevalent, vigorous debates and a bit of flak between members to top it of.

Then there was that Craigs report that gave Heartland a clean bill of health. And then right on cue Heartland come out with a so so announcement, OK a relief announcement to many

A lot of noise over the week eh.

And noise it has been because the Heartland share price closed the week UNCHANGED for the week (same as Friday last week)

It is a long term holding IMHO..

Very satisfied with my returns so far..

A $1.18 at close.. More than doubled my investment..

[K1W1G0LD]

Old news now I know , but still makes interesting reading , quite bullish and No trainwreck.

Heartland Bank upgraded from 'hold' to 'buy'

Heartland Bank's outlook has been upgraded, despite a disappointing share price and rising concerns about the extent of exposure of the banking sector to the stuttering dairy sector.
Research by Craigs Investment Partners has upgraded Heartland (HNZ) stock from a ''hold'' to ''buy'' recommendation, due to high capital ratio forecasts and low exposure in its overall loan book to the dairy sector.

Craigs broker Peter McIntyre said because of concerns about the possible impact of declining dairy prices, HNZ's share price had fallen almost 20% since February - from $1.41 to $1.14 yesterday.

''While the down side risk is real, we believe the impact is probably overplayed,'' he said.

Fonterra's current season forecast sits at $5.25/kg,

with a revision to be released on Friday next week, while competitor Open Country Dairy last week forecast $3.65-$3.95. Hokitika-based Westland Milk products slashed its next season forecast yesterday, from an earlier range of $5.60-$6 down to $4.60-$5.

About 7% of HNZ's overall lending portfolio was exposed to the dairy sector and the average loan-to-value ratio was 60%, while in the banking sector in general the portfolio exposure is around 15%.

Mr McIntyre said Craigs had forecast a tier 1 capital ratio for HNZ for full-year 2016 of 12.3%, including a 3.8% buffer, against the minimum required of 6%, with 2.5% buffer.

''Heartland is in a better position now to ride out any increase in impairment expense from a temporary slowdown,'' Mr McIntyre said.

Earnings changes had been made for HNZ, to reflect the dairy slowdown, with after-tax profit downgrades for full-year 2016 down by 4% and 3.9% in 2017, Mr McIntyre said.

HNZ's rural loan book for full-year 2015 totals $480 million, of which 40%, or about $192million, is exposed to the dairy sector.

Mr McIntyre said HNZ's loan to value ratio was 60%, which implied the loans were secured against $330million of farm assets.

''The asset values would have to decline by 40% before the equity of HNZ's loans becomes an issue,'' Mr McIntyre said.

Mr McIntyre said the forecast tier 1 capital ratio of 12.3%, meant HNZ had a surplus capacity, more than $100million, from which it could absorb impaired loans, assist with organic growth and/or distribute to shareholders.

Mr McIntyre believed HNZ had made a ''subtle change'' in strategic direction, and was more likely to focus on the less capital-intensive organic growth of its lending, than on further acquisitions.

''Organic growth is less capital-intensive and lower risk, and should free up the surplus capital to fund dividend growth,'' Mr McIntyre said.

[winner69]

If Heartland into lending on tractors this won't help help with organic growth

http://www.stuff.co.nz/business/farming/agribusiness/70581366/tractor-sales-crash-price-rises-expected

Wind back growth expectations a bit next year maybe?

[tim23]

Wait till reverse equity loans start kicking in and don't forget Harmoney, nicely placed to grow nicely.

[winner69]

Wait till reverse equity loans start kicking in and don't forget Harmoney, nicely placed to grow nicely.

And if the Aussie owned banks discourage property investors by charging them higher interest rates that opens up opportunities for niche operators like Heartland

[Bjauck]

And if the Aussie owned banks discourage property investors by charging them higher interest rates that opens up opportunities for niche operators like Heartland

If it comes to the Big Banks in NZ trying to discourage property investors, maybe that could be because even they, who profit so much from such investors, believe that property investor long-term financial health relies on continuing capital profits (especially in Auckland). Capital appreciation which the Big Banks may no longer be thinking will continue with the same level of certainty as previously.

If higher interest rates for property investors stem from specific Reserve Bank or Government requirements then those requirements would extend to Heartland.

[Beagle]

About 7% of HNZ's overall lending portfolio was exposed to the dairy sector and the average loan-to-value ratio was 60%

Don't want to appear to be splitting hairs but its actually 7.6% as confirmed by the company this week which seems to imply that by quantum this means their total dairy loan advances are possibly 8.6% higher than Craigs analysis ? (7.6/7.0 = 1.086)

Disappointing that Craigs didn't try and analyse the loan book by security type, (what percentage is secured over land and buildings and what percentage over stock i.e. sharemilkers).

Maybe some commercial sensitivity on HNZ's part surrounding that ?

[winner69]

All I can work out from Craigs report is that they have not materially changes their financial forecasts and targets

They have added some additional commentary no doubt with a little help from the company

So the BUY only came about from a lower share price since when they said HOLD - not because they think Heartland is any better?

[Beagle]

All I can work out from Craigs report is that they have not materially changes their financial forecasts and targets

They have added some additional commentary no doubt with a little help from the company

So the BUY only came about from a lower share price since when they said HOLD - not because they think Heartland is any better?

That's bang on the money mate...ie. they think concerns over dairy are overdone and clearly if you disagree of think its even worse it's a hold or a sell. That link you posted on Friday contained some rather disturbing initial anecdotal evidence surrounding what appears to be the very early stages of a meaningful correction is farm prices and as mentioned earlier stock prices are under extreme pressure with the freezing works low prices the only viable option for many in terms of reducing stock.

The other report we had last week of one of the banks in Northland basically calling in loans on dairy farms they thought were uneconomic (with the dramatically lower pending pay-out), can only serve to exacerbate any early downward price pressure

Interesting we were offered a 58ha dairy farm in the Waikato in exchange for some Auckland sections we own as a trade on Friday. They wanted close to $70,000 Ha. My wife and I told the swap broker they were dreaming, go away, we're not interested. I suspect many buyers will be waiting for a serious correction in land prices before reconsidering making any move.

[tim23]

interesting Roger those sections must be worth some $ so they might also correct?

[Crackity]

interesting Roger those sections must be worth some $ so they might also correct?

Everyone knows Auckland property only goes up :)

lol

[iceman]

interesting Roger those sections must be worth some $ so they might also correct?

I'm sure HNZ would recklessly fund any shortfall ��

[winner69]

What was Heartland advertising on TV tonite during the news?

Just saw the end of it

Good they out touting for business .....need organic growthp

[winner69]

Greensleeves says "We don't want to drip feed out bits and pieces and get inequality of information kind of thing. On the 18th there will be a lot more detail."

Hope it's in English and not Maori ....should be both though if he doesn't want any 'inequality'

[Baa_Baa]

What was Heartland advertising on TV tonite during the news?

Just saw the end of it

Good they out touting for business .....need organic growthp

Clever Ad, targets the vulnerable oldies for the reverse mortgage loans. Is it really better than just selling their house, if they have to, and putting the excess dosh else where? Possibly a good thing for some, but heartbreaking for many to lose control of their home to a bank and know one day, if they are unfortunate to live long enough, they'll have no equity and have been right royally up the rear, especially if the live to really old age. At least there's the government subsidy for their rest home care if needed. You have to realise that when these oldies signed up for their first mortgage, not only was it near impossible to get a loan, and at outrageous interest, when they did it was at the behest of the banker who was a pillar of society, someone to be trusted, beyond reproach. Sad to have to give back what they wanted so desperately and paid for so heavily to a bank who made it all possible.

[couta1]

Clever Ad, targets the vulnerable oldies for the reverse mortgage loans. Is it really better than just selling their house, if they have to, and putting the excess dosh else where? Possibly a good thing for some, but heartbreaking for many to lose control of their home to a bank and know one day, if they are unfortunate to live long enough, they'll have no equity and have been right royally up the rear, especially if the live to really old age. At least there's the government subsidy for their rest home care if needed. You have to realise that when these oldies signed up for their first mortgage, not only was it near impossible to get a loan, and at outrageous interest, when they did it was at the behest of the banker who was a pillar of society, someone to be trusted, beyond reproach. Sad to have to give back what they wanted so desperately and paid for so heavily to a bank who made it all possible. I see a reverse mortgage as a good choice for those elderly that need the extra cash and at least they get to enjoy their hard earned cash themselves rather than leaving it to those that either don't deserve it and or the ungrateful. PS- Winner I don't really care what language they present the results in as long as its a forward thinking, adaptable and growth kinda language

[winner69]

Clever Ad, targets the vulnerable oldies for the reverse mortgage loans. Is it really better than just selling their house, if they have to, and putting the excess dosh else where? Possibly a good thing for some, but heartbreaking for many to lose control of their home to a bank and know one day, if they are unfortunate to live long enough, they'll have no equity and have been right royally up the rear, especially if the live to really old age. At least there's the government subsidy for their rest home care if needed. You have to realise that when these oldies signed up for their first mortgage, not only was it near impossible to get a loan, and at outrageous interest, when they did it was at the behest of the banker who was a pillar of society, someone to be trusted, beyond reproach. Sad to have to give back what they wanted so desperately and paid for so heavily to a bank who made it all possible.

But Heartland are the champions of 'socially responsible lending' and providing home equity release mortgages they are providing a community service.

We should be proud of our company.

[Beagle]

I'm sure HNZ would recklessly fund any shortfall ��

LOL we were asked to top up the deal with $2m cash which would have involved us getting into a 50 / 50 debt / equity arrangement on a dairy farm...like that was EVER going to happen after what I've written on this thread LOL.

Auckland property only ever goes up...luv it :D

[Baa_Baa]

I see a reverse mortgage as a good choice for those elderly that need the extra cash and at least they get to enjoy their hard earned cash themselves rather than leaving it to those that either don't deserve it and or the ungrateful. PS- Winner I don't really care what language they present the results in as long as its a forward thinking, adaptable and growth kinda language

It may be for some, but I think you're missing the point couta.

For the luxury of retaining their home which invariably is typically a good deal larger and more expensive than they need (family gone, husband/wife in firmed or deceased), and for as long as their equity provides for the reverse mortgage, they trade off their financial independence. Then comes the inevitable move out from the family home, which they had by definition tried to avoid with the reverse mortgage, with no equity which has gone to the bank, and the remainder of their life dependent on the government rest home subsidy. This can be many many years for some. Better might have been to just sell the house, invest the returns, and live in a more modest home until such time as they are committed to the aged care system.

This is not just a criticism of Heartland per se, it just irks that they target the oldies with advertising on the tired and worn out TV channels that they know the oldies are watching. That said, the banker who is a pillar of society is an also worn out concept.

[couta1]

Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic.

[percy]

Questions for you Baa Baa.
Great uncle Baa Baa is 75 years young.
He has a mortgage free property in Auckland with a market value of $1.1 mil.
The only income he has is super.
He would like to visit friends one last time in UK.
He loves where he lives.Near his doctor,his bank and supermarket.Loves his house and does not want to leave it.Prefers to live alone.
Borrowing approx $80,000 he can do up the bathroom,have his trip and some other things.
No bank will lend him $80,000 as he does not manage on his super.
So $80,000 at REL interest rate of say 8% is $6400 pa.
Now how much pa do you think his property is increasing in value pa.10% would be $110,000.pa
So staying in his house,not paying huge fees to trade down he is miles better off.
He lives to 90. Please compound how much better off he/estate will be by him staying put.!
As we can see old great uncle was where the Baa Baa family brains came from.
No reason why he can't keep on borrowing $1,000 a week or more.Maybe $2,000 a week?

[Baa_Baa]

Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic.

And with that you make my point, that why bother with a reverse mortgage giving ones equity and financial independence back to the bank, when one can as easily sell the home and invest the capital and maintain financial independence for as long as they live. Whether or not it is in a rest home. This is what galls me about Heartland's press on reverse mortgage loans, leveraging the TV channel and preying on the elderly much like a common utility company.

This may be lost on people who don't have EPA over an elder who has substantial equity in their home but offset by very limited income. Heartland offer a solution, but I don't think it is the best solution. And I dislike their advertising targeting the vulnerable elderly who cannot see past the days when their financial independence will have been sacrificed to the bank.

Banks don't offer these solutions for the betterment of their elderly customers, they do it because it is a profitable line of business. Question is then whether to sacrifice the financial independence of an elders estate or equity to the bank's underlying profit, or to do the best thing for the elder.

[SCOTTY]

Clever Ad, targets the vulnerable oldies for the reverse mortgage loans. Is it really better than just selling their house, if they have to, and putting the excess dosh else where? Possibly a good thing for some, but heartbreaking for many to lose control of their home to a bank and know one day, if they are unfortunate to live long enough, they'll have no equity and have been right royally up the rear, especially if the live to really old age. At least there's the government subsidy for their rest home care if needed. You have to realise that when these oldies signed up for their first mortgage, not only was it near impossible to get a loan, and at outrageous interest, when they did it was at the behest of the banker who was a pillar of society, someone to be trusted, beyond reproach. Sad to have to give back what they wanted so desperately and paid for so heavily to a bank who made it all possible.

Personally, I think that if I had to make the choice between a reverse mortgage or moving into a retirement village, I would choose the reverse mortgage. The retirement village guarantees a capital loss. Historically the family home has grown in value which should In part offset the cost of the HNZ reverse mortgage which has conservative maximum lending rates depending on the age of the borrower at the time of taking the reverse mortgage.

[Baa_Baa]

Questions for you Baa Baa.
Great uncle Baa Baa is 75 years young.
He has a mortgage free property in Auckland with a market value of $1.1 mil.
The only income he has is super.
He would like to visit friends one last time in UK.
He loves where he lives.Near his doctor,his bank and supermarket.Loves his house and does not want to leave it.Prefers to live alone.
Borrowing approx $80,000 he can do up the bathroom,have his trip and some other things.
No bank will lend him $80,000 as he does not manage on his super.
So $80,000 at REL interest rate of say 8% is $6400 pa.
Now how much pa do you think his property is increasing in value pa.10% would be $110,00.pa
So staying in his house,not paying huge fees to trade down he is miles better off.
He lives to 90. Please compound how much better off he/estate will be by him staying put.!
As we can see old great uncle was where the Baa Baa family brains came from.

Let's not get personal percy, the BaaBaa's are wooly creatures not known for their brains. Lucky great uncle BaaBaa has property in Auckland. He could be anywhere else and not be enjoying outrageous capital gains. Look, if it's best for him to stay at home and take a reverse equity mortgage with Heartland, then do it. But if it's not his decision anymore, whose is it and what is their motive to pandering to his desire to stay at home while pilfering away his equity on a reverse equity mortgage?

[Xerof]

Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic. speaking of iron clad trusts, rorts and inequality, are those wealthy people with no income in their own name still putting their kids through Uni on the Student Allowance (not loans) and accomo supplement, or has that been sorted out? I know of a couple of farming families who have done that - no respect from me, but then I suppose the Trusts won't make anything this year, so fair enough?

[couta1]

Of course the difference being Baa Baa is that those that choose a reverse equity mortgage to enjoy their money and spend it on what they so desire and then enter a care facility and obtain a residential care subsidy because they are below the asset threshold have truely enjoyed their money rather than just paying for a room which they now are able to live in for less than their pension(Which includes 24hr nursing care) and all thanks to their reverse equity mortgage, ain't that neat.

[Bjauck]

Of course the difference being Baa Baa is that those that choose a reverse equity mortgage to enjoy their money and spend it on what they so desire and then enter a care facility and obtain a residential care subsidy because they are below the asset threshold have truely enjoyed their money rather than just paying for a room which they now are able to live in for less than their pension(Which includes 24hr nursing care) and all thanks to their reverse equity mortgage, ain't that neat.
I think under the current subsidy scheme reverse mortgages could make sense for elderly couples to finance home improvements etc. If one partner needs care, the home is excluded from the means test for the care subsidy. So keep that old big property, get a reverse mortgage to remodel and renovate it.

In so many areas, in my opinion, the poor and the wealthy, with top advice and ironclad trusts & other schemes, get the state's help. The moderately wealthy miss out.

[winner69]

BUGGER, a really bad day today

Looks like the 50MA has crossed below the 200MA - a DEATH CROSS

But I seez nothin, nothin. It's all OK

[couta1]

BUGGER, a really bad day today

Looks like the 50MA has crossed below the 200MA - a DEATH CROSS

But I seez nothin, nothin. It's all OK Definitely time for you to sell you needn't wait to hear from Jeff.

[percy]

Wait for "the other" broker's research before adding or jumping ship W69.
So far we know Craig's are there at $1.30.
I have stated I think fair value is between $1.25 and $1.35.
But who is the other broker?
And what is their valuation?
Death Cross?
Golden Cross?
The excitement builds.!

[winner69]

When you seez nothin like a death cross you google things to find something that cheers you up


I like the current thinking that death cross is an outright bullish signal - apparently it is signaling any consolidation stage is over and things will start to go up again.

Whew, what a relief.

It's bad enough when HNZ is below the 200MA and I though Death Crosses were bad news ....but if somebody says it bullish I will believe him.

[percy]

When you seez nothin like a death cross you google things to find something that cheers you up


I like the current thinking that death cross is an outright bullish signal - apparently it is signaling any consolidation stage is over and things will start to go up again.

Whew, what a relief.

It's bad enough when HNZ is below the 200MA and I though Death Crosses were bad news ....but if somebody says it bullish I will believe him.
I remain "well positioned." !!

[winner69]

Definitely time for you to sell you needn't wait to hear from Jeff.

Have to hold on to August 18, been practising me Maori

Like the Zimbabweans last night were wondering what the Black Caps were promoting with their aotearoa logos on the shirts

[winner69]

See Michael Warrington still doing his regular ramping of Heartland.

Keep at it Michael, you a good guy.

chrisslee.co.nz

[couta1]

See Michael Warrington still doing his regular ramping of Heartland.

Keep at Michael, you a good guy.

chrisslee.co.nz Stop trying to scare me winner, Michael was a great Ramper and lover of Teamtalk a couple of years ago.

[winner69]

Stop trying to scare me winner, Michael was a great Ramper and lover of Teamtalk a couple of years ago.

He a proper Financial Advisor so you shouldn't be scared

[couta1]

He a proper Financial Advisor so you shouldn't be scared
Yeah I know I bought Teamtalk on his recommendation.

[Master98]

No worry couta, form a solid base around $1.19 is a right thing to do. SPK formed a solid base around $2.8 and now start flying.

[ziggy415]

Yeah I know I bought Teamtalk on his recommendation.
we need someone on this thread like "Franco" me thinks :t_up:

[couta1]

No worry couta, form a solid base around $1.19 is a right thing to do. SPK formed a solid base around $2.8 and now start flying. Yep happy to hold them both and find oneself coming into a favourable position.

[Xerof]

Winner, you crack me up....if you apply EMA's, not SMA's you will see nothin' :D

[winner69]

Winner, you crack me up....if you apply EMA's, not SMA's you will see nothin' :D

I am a simple person so SMA will do me fine - none of this exponential stuff for me, can't do those sums in me head.



And free Findata only does ema

[winner69]

Winner, you crack me up....if you apply EMA's, not SMA's you will see nothin' :D
Yahoo chart has red line crossing the blue line on Wednesday this week on EMA

[winner69]

All honky dory on the nz banking scene says Moody's

As heartland has the less exposure than most and is best in breed maybe a ratings upgrade Percy. Did Craig's mention that?

http://www.sharechat.co.nz/article/7a35b395/nz-banks-strong-enough-to-weather-downturn-dairy-price-slump-moody-s.html?utm_medium=email&utm_campaign=NZ+banks+strong+enough+to+weather+dow nturn+dairy+price+slump+Moodys&utm_content=NZ+banks+strong+enough+to+weather+down turn+dairy+price+slump+Moodys+CID_4623495fd201424b cb1393c9550a1778&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle7a35b395nz-banks-strong-enough-to-weather-downturn-dairy-price-slump-moody-shtml

[Xerof]

Yahoo chart has red line crossing the blue line on Wednesday this week on EMA Bigcharts doesn't, but hey, I got out on the open, to claim my share of CEN in the lolly scramble. Back in due course

[percy]

Bigcharts doesn't, but hey, I got out on the open, to claim my share of CEN in the lolly scramble. Back in due course

Well I missed all the fun.
6.30 am flight to Auckland to buy books, and home half an hour ago..
That CEN lolly scramble would have been fun.
I think I remain the only person on sharetrader without a cell phone..!!
HNZ is not moving back up as quickly as I thought.The latest research from First NZ Capital, with a target price of $1.40 and projected return,which includes divies of 27.5% has not been noted by the market. Quess everyone is too busy with the CEN lolly scramble.

[percy]

All honky dory on the nz banking scene says Moody's

As heartland has the less exposure than most and is best in breed maybe a ratings upgrade Percy. Did Craig's mention that?

http://www.sharechat.co.nz/article/7a35b395/nz-banks-strong-enough-to-weather-downturn-dairy-price-slump-moody-s.html?utm_medium=email&utm_campaign=NZ+banks+strong+enough+to+weather+dow nturn+dairy+price+slump+Moodys&utm_content=NZ+banks+strong+enough+to+weather+down turn+dairy+price+slump+Moodys+CID_4623495fd201424b cb1393c9550a1778&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle7a35b395nz-banks-strong-enough-to-weather-downturn-dairy-price-slump-moody-shtml

I don't think they mentioned it this time.Usually make me laugh by covering themselves,"upside risk".
I must admit to being happy with upside risk..!!In fact very happy.
Credit rerating for HNZ?..Why not? I think HNZ would like another rerate. I would think HNZ would not be talking capital management,until they have Fitch on board.I would expect The Reserve Bank is very happy with HNZ's performance.
We go back to what HNZ have said;"We want to be the best,not the biggest."
By the side.I noticed a lot of "for lease",,and "for sale" signs in the Northshore today.Surprised me.

[janner]

[QUOTE=winner69;584445]All honky dory on the nz banking scene says Moody's

As heartland has the less exposure than most and is best in breed maybe a ratings upgrade Percy. Did Craig's mention that?

69...

Bigoted I am ... Who is not ???

Racist is another story...

HONKY dory..

I most definitely am pedantic..

I really think you mean ...

H U nky Dory .. :-))

[Plutus]

Its not just about the quantum of exposure, but also the quality of exposure including their concentration risk. watching....

[winner69]

[
Bigoted I am ... Who is not ???

Racist is another story...

HONKY dory..

I most definitely am pedantic..

I really think you mean ...

H U nky Dory .. :-))

Sorry if you are offended janner ..... but honky dory seems all honky dory if the Urban Dictionary is anything to go by
http://www.urbandictionary.com/define.php?term=honky+dory


Top Definition

   

honky dory

Everything is a-ok. Its all good.

Originated by post WW II US Sailors on liberty in Yokosuka, Japan. The strip right outside the main gate to the US Naval Base was called (and still is) Honcho Dori (means book district street in Japanese). Times were wild and there was no better sailor port in the world at the time. This was bastardized to Honky Dory by the sailors and it came to mean if you came from Honky Dory then everything had to be good or 'honky dory'.

a: Do you still have piles in your ass?

b. No, I quit drinking that Budweiser piss and now everything is honky dory.

[Joshuatree]

So Hunky Dory means I'm Hot and Aok :t_up:for a 60 year old. Thats cool i

[Beagle]

http://www.4-traders.com/HEARTLAND-NEW-ZEALAND-LTD-11344518/consensus/

Yes it looks good according to the analysts with a consensus price target of $1.35...obviously research put out before yet another 10% in the GDT auction price overnight. (The tenth straight fall now) :eek2: Still this latest further severe fall quite obviously makes no difference as analysts appear completely unconcerned by HNZ's dairy customers who are leveraged to an average rate of 61% being able to repay, go figure ? I am not sure what brand of happy pills those analysts are taking but I want some !!.. and .I have a sneaky suspicion that many HNZ shareholders would be happy to see me on them permanently and in very large doses :lol:

All hunky dory then and I am sure the almost unbelievable collapse in the last few months in the dairy price will have no effect whatsoever on the customers who HNZ have loaned $200m in terms of their ability to repay and seeing its the afternoon its not too early for a Tui or even two.

[Longhaul]

This must be good news for HNZ - ASB stops offering reverse mortgages (http://www.interest.co.nz/business/76897/asb-stops-offering-reverse-mortgages-will-continue-serving-existing-customers).

Unless it's not such a lucrative niche as we would like to believe?

[Joshuatree]

Definitely a work in progress. Think the main problem is sons and daughters who want to inherit their parents house.:):(:mad ;::eek2:

[Harvey Specter]

This must be good news for HNZ - ASB stops offering reverse mortgages (http://www.interest.co.nz/business/76897/asb-stops-offering-reverse-mortgages-will-continue-serving-existing-customers).

Unless it's not such a lucrative niche as we would like to believe?total market size of $500m. ASB probably does new home loans of that each week in Herne Bay alone so why bother, even if the returns are great if the scale isn't.

[Plutus]

A Reverse Mortgage is not a nice product. The effect of compound interest at higher than mortgage rates, plus fees, is savage on owner equity. Doesn't seem much at the time.

[noodles]

A Reverse Mortgage is not a nice product. The effect of compound interest at higher than mortgage rates, plus fees, is savage on owner equity. Doesn't seem much at the time.
You are not seeing the human side. What about Mr Jones who desperately needs that operation, but doesn't want to wait 12 months in the public system waiting list. Heartland are providing a great service that only 2 banks now offer. Most banks can't be bothered with the long signup process.

What's more, Heartland guarantees you will always have your house (even if the loan is a high as the value).

[Plutus]

You are not seeing the human side. What about Mr Jones who desperately needs that operation, but doesn't want to wait 12 months in the public system waiting list. Heartland are providing a great service that only 2 banks now offer. Most banks can't be bothered with the long signup process.

What's more, Heartland guarantees you will always have your house (even if the loan is a high as the value).

All true. Worked with the product a few years ago and saw the human side; good and bad. On balance, just didn't like it.

[Joshuatree]

I like it when Oldies just want to stay at the house they've been in for a long time and are comfortable with the familiarity and memories, community , shops etc and they just want to stay until the end ,or a rest home. Asset rich but cash poor the Reverse mortgage has its place and human face for some.

[ziggy415]

All true. Worked with the product a few years ago and saw the human side; good and bad. On balance, just didn't like it.
I too was bit concerned with this product until some posters on this thread posted their thoughts.....if mum sold the house 2 years ago because she couldnt afford the upkeep after dad went into a rest home,that 1 million dollar house will now be worth 1.45 million.....if she had only reverse mortgaged she would be quids in....then she buys a half million dollar house where she doesnt really want to live and puts the xtra half million dollars in the bank then Mr tax man says you got too much money so now you have to fund hubbies rest home care till your down to $160,000......only works in high growth area like Auckland i guess......

[Beagle]

You are not seeing the human side. What about Mr Jones who desperately needs that operation, but doesn't want to wait 12 months in the public system waiting list. Heartland are providing a great service that only 2 banks now offer. Most banks can't be bothered with the long signup process.

What's more, Heartland guarantees you will always have your house (even if the loan is a high as the value).

I agree 100% and there's the long sign up process that compels people to get independent legal advice so I don't see where the problem is for either the bank or its customers with HER loans. I think HER is a good product for customers and HNZ andf the fact that there's one less player in the field is clearly a most welcome positive for HNZ.
OTOH it is very, very sad to hear talk on the main T.V. news bulletins last night and this morning of farmers considering walking off their farms.

[percy]

I too was bit concerned with this product until some posters on this thread posted their thoughts.....if mum sold the house 2 years ago because she couldnt afford the upkeep after dad went into a rest home,that 1 million dollar house will now be worth 1.45 million.....if she had only reverse mortgaged she would be quids in....then she buys a half million dollar house where she doesnt really want to live and puts the xtra half million dollars in the bank then Mr tax man says you got too much money so now you have to fund hubbies rest home care till your down to $160,000......only works in high growth area like Auckland i guess......

Spot on post.
No I found it worked even on a $500,000 home in ChCh too.

[couta1]

Bottom line is that REM allow people to turn their assett into cash and use it themselves rather than leaving it to someone else, have a nice day, off skiing now:cool:

[Beagle]

Bottom line is that REM allow people to turn their assett into cash and use it themselves rather than leaving it to someone else, (many of whom won't truly appreciate it anyway) have a nice day, off skiing now:cool:

Fixed that for you mate, have a great day :cool:

[winner69]

So

- its all about organic growth for the next few years
- increased earnings from this grow but mainly from efficiencies/productivity improvments
- so $48m this year and at beat $56m this year in NPAT
- keep paying out 70% in dividends (yes?)
- Book value at end of this year $0.99 and $1.03 next year
- Heartland presentations imply a share price of 1.2 times book value is about where it should be
- Craigs et al use this 1.2 factor a lot in their analysis
- Current performance and macro environment hardly warrants a rerating (say to a P/B of 1.4)
- This time next year Price/Book of 1.2 would give a share price of $1.24


OK for dividend lovers at this price but not very exciting is it

Can't wait until next week to see what Greensleeves says

[winner69]

Dairy might only be a few hundred million bucks and everybody seems comfortable that its all honky dory with Heartland and their dairy exposure but read pages 12 to 14 of this
http://tonyalexander.co.nz/wp-content/uploads/2015/08/BNZ-Survey-Results-August-20151.pdf

Real comments from real farmers today, so depressing. Surely some of those making comments are Heartland clients

Methinks bankers sitting in city offices just don't realise how bad it is .....or they are wondering how they are going to explain to shareholders there is a problem.

Remember a smallish % of dairy write offs = large % of expected Heartland profits

All cleared up next week when the numbers come out?

[Beagle]

Makes profoundly sobering reading and almost all respondents comments were before yet another 10% collapse in GDT price this week. Good that HNZ are referring their at risk customers to counselling services, (might save a few lives). Just announced by ANZ, $3b capital raise...bound to suck even more wind out of the lifeless sails of this sector.

[Joshuatree]

Who knows. for me its ahold atm certainly not a buy. S/P weakening again .If your conviction is not there maybe sell some to ease discomfort being all in.Int in Craigs excellent 3 monthly. News and views just out (subtitled Storm clouds gathering,Time to act)that HNZ doesn't get a mention at all, no, buy, increase, hold, reduce or sell.

[winner69]

There was an interesting contribution on interest.co.nz yesterday that basically said that for many dairy farms the increased milk productivity over the last years has actually cost farmers. The extra costs are more than the extra revenues - the folly of an industry using average costs instead of marginal costs concepts,

Methinks it is those farmers who have the excessive levels of debts

[Beagle]

As I have predicted for at least the last couple of months sharemilkers (one of the key customer groups HNZ have been targeting for loan growth), are in real trouble and the dairy price collapse is starting to force some of them out of business already, surely even far worse to come with the latest additional 10% GDT auction price fall this week.
http://www.radionz.co.nz/news/rural/280665/sharemilkers-starting-to-feel-price-pinch
How you forecast loan provisioning for the FY16 year (and therefore forecast net profit after same), I have no idea but HNZ are sure putting a brave face on this forecasting profit growth in this environment ! But does the market agree or see through this bravado ?
And this, make no mistake its very grim http://www.radionz.co.nz/news/rural/280506/farmers-expect-worst-after-price-plunge

[nextbigthing]

1) It's terrible for the sharemilkers etc involved and I hope they make it through ok.

2) I wonder if we'll see dairy farms converted back to sheep/beef/crop now?

3) HNZ writes off $52m, declares zero dividend, shareprice halves in short sighted panick (eg CNU), Sharetrader members band together and launch a successful takeover and proceed to buy large boats, cars, planes and Greece with the spoils.

[percy]

1) It's terrible for the sharemilkers etc involved and I hope they make it through ok.

2) I wonder if we'll see dairy farms converted back to sheep/beef/crop now?

3) HNZ writes off $52m, declares zero dividend, shareprice halves in short sighted panick (eg CNU), Sharetrader members band together and launch a successful takeover and proceed to buy large boats, cars, planes and Greece with the spoils.

Spot on.
Have another wine,and keep repeting the medicine.
Feel sorry for ANZ who have about $9 to $12 billion in the sector.

[mouse]

Spot on.
Have another wine,and keep repeting the medicine.
Feel sorry for ANZ who have about $9 to $12 billion in the sector.

And why not declare a zero dividend if there are zero profits? The GFC showed what can happen when the situation is not faced. It does seem to be the sharemilkers who will be worst hit. But NZ will also be hit too. A quarter?, of our exports gone south?

[couta1]

Just as well tourism is soon to displace dairy for its nett worth to NZ, did someone mention the overestimation of the value of dairy to our economy going forward, whoops I think I just did:cool:

[Xerof]

Quite right couta, we have got much more to our 'backbone' than in the past.

NBT, deconversions? Why not, being openly talked about right now. We used to pay wine growers to pull vines out during the glut. We rely on market forces to do the job these days. Bring it on

[percy]

Conversions? Deconversions?
Bit like dealing with a sharemonger.
Oh yes I think you should sell?
Oh yes I think you should buy?
Clipping the ticket whatever way the market goes.
Did sharemongers, bankers,convertors,and deconvertors all go to the same university,or were they self taught?

[Harvey Specter]

Maybe not de conversions but less intensification. Lower op costs and lower production but (hopefully) similar profit (given profit will be 0 this year).

Why stress the environment/workers/cows for no payoff.

[percy]

A weaker than expected profit from ANZ and its $3 billion capital raising have sparked a massive selloff of shares in the banking sector.
Pity HNZ has been tainted by the Australian banks,as it does not need to raise capital.
In fact, it has too much capital.

[winner69]

A weaker than expected profit from ANZ and its $3 billion capital raising have sparked a massive selloff of shares in the banking sector.
Pity HNZ has been tainted by the Australian banks,as it does not need to raise capital.
In fact, it has too much capital.

So DRP should be canned

Last lot ones under water any way

[percy]

So DRP should be canned

Last lot ones under water any way

I don't have an opinion on whether the DRP should be canned or not.
However, with director Greg Tomlinson recently adding to his holding at $1.30 he may have strong views.
Directors and management also have significant holdings,so canning the DRP looks a possibility.
Should it be canned, shareholders can then decide whether they want to use their dividend to buy more HNZ shares or not.
There are a lot of possibilities included canning the DRP and a share buy back.
We live in interesting times.
The 18th August announcement will certainly be of interest.

[iceman]

Directors and management also have significant holdings,so canning the DRP looks a possibility.
Should it be canned, shareholders can then decide whether they want to use their dividend to buy more HNZ shares or not.

But that's exactly what we can do with the DRP, decide whether we want the cash or shares. Keep the DRP I say and reward loyal shareholders with a small discount and fee free transaction, if they so desire..

[Beagle]

1) It's terrible for the sharemilkers etc involved and I hope they make it through ok.

2) I wonder if we'll see dairy farms converted back to sheep/beef/crop now?
3) HNZ writes off $52m, declares zero dividend, shareprice halves in short sighted panick (eg CNU), Sharetrader members band together and launch a successful takeover and proceed to buy large boats, cars, planes and Greece with the spoils.

I think we will. With much talk now of a world-wide milk glut with no end in sight, (milk tsunami anyone ?), and forecast pay-out of circa $3.50 and most economists seem to agree the break even price is circa $5.50 a kilo it seems to make sense that people revert to something that's profitable seeing as the prospects are so grim. Beef has been doing very well.

To me, (admittedly with no expertise on things dairy) it seems a shocking case of Fonterra executives asleep at the wheel while cruising along earning massive salaries. Where are the value add products and seeing as much of their product is simply sold at auction what do all those thousands of executives on $200,000 plus (and often vastly more than that), what exactly do they do for goodness sake ?

It seems to me the whole Fonterra business model in broken. Vote of no confidence in the board should be a given. Break the unwieldy thing up.
Meanwhile with dairy prices absolutely down the toilet why is it that consumers are still be asked to pay circa $4 for 2 litres of milk at the supermarket while in Australia and even England its much cheaper ? Fonterra aren't just milking cows are they, they're milking their dairy farmers and N.Z. consumers...put the bloody lot of them out to pasture and tell them to eat grass !

[percy]

But that's exactly what we can do with the DRP, decide whether we want the cash or shares. Keep the DRP I say and reward loyal shareholders with a small discount and fee free transaction, if they so desire..

Yes I agree with you.
Whatever way I somehow see us a being "well positioned." lol

[Joshuatree]

YESSS the DRP is my compulsory kiwisaver. Just love it when i see my shareholding has increased, a buzz.

[iceman]

YESSS the DRP is my compulsory kiwisaver. Just love it when i see my shareholding has increased, a buzz.

I hope you do with your SEK shares too JT. The buzz will be over there in a couple of weeks :)

[winner69]

OMG did I see $1.12 ...a six month low.

The downtrend continues ...another lower low even the 200MA has started going downhill.

Sold some more .....the ones I have left are now FREE ....yippee

[Beagle]

Well, well well, it seems the company's bravado in issuing a profit forecast for FY16 even before the audited results are released for FY15, (something I can't ever recall seeing for any company before), has done little to assuage market concerns. At $1.12 I'm 20 big ones better off having sold at $1.32 and I tried, I really did on here and by PM and e.mail to my mates to tell them the party was over but they all thought I was crazy and one even appears to have even taken umbrage and doesn't talk to me anymore...go figure ? I guess bad news sell newspapers but isn't popular on forums ?

[Joshuatree]

Glad to hear you relieving your discomfort here.Right thing for you:t_up:

[Beagle]

Pink put out an excellent album in 2001 titled Missundaztood - I know how she feels. I'd imagine she's banked a few profits lately too though which I am sure she also takes solace from.

Anyway...back to HNZ, the update on dairy loans on 18 August will be interesting...like many I am wondering where the bottom is.

[Hoop]

Agree...Just to add my lengthy 2c worth...

The MA200 indicator is just one tool of many for long term investors. It's a lagging indicator and triggers a sell signal often well after a downtrend pattern is already established, so many investors see this tool as irrelevant...My yesterdays chart (http://www.sharetrader.co.nz/showthread.php?8425-Heartland-New-Zealand-Ltd-%28HNZ%29/page379) shows the EMA200 (similar to MA200)recently being whipsawed, this is something that an less experienced TA disciplined long investors would hate and tempt that person to abandon the TA methodology...
However that person should see the MA200 for what it's purposes are and what it indicates..although the price/ma200 break is significant, its the slope of the ma200 line which matters.
A rule of thumb and one which unfortunately media thinks its Gospel is when the ma200 slope turns downwards it signals that this price weakness is not a bull market correction event but a cyclic reversal to Bear cycle.
Notice on my chart (http://www.sharetrader.co.nz/showthread.php?8425-Heartland-New-Zealand-Ltd-%28HNZ%29/page379) that the quicker and more sensitive EMA50 and EMA100 line slopes have developed a downtrend and for HNZ to get a downtrend ma200 slope more price decreases are needed....so HNZ not yet signaling a Bear cycle under the media's gospel.
Yes when the MA200 slopes downwards it could reflect a bear market cycle but when using any indicator there needs to be confirmations..

Other methods to confirm are:
1...a drop of >20%
2...The bull/bear support line is at 1.12 not marked on my chart.
3...many others

For the Optimists
My recent chart shows HNZ a pattern resembling a long term flagpole + the flag. Believe it or not this type of pattern is a bullish chart pattern..The pattern shows the irrational greed behaviour in the stampede to the top which quickly (fundamentally) overvalues the shareprice..This orderly downtrend result is investor rational reality being slightly more powerful than the irrational investors in denial and this rationality will bring the market back to where Mr Market now thinks it should be...perhaps we are nearly there at this level with the bull/bear line in sight at 1.12 ..perhaps not....who knows??...

TAers always tell investors 2 basic things... TA can not predict the future with certainty and "DO NOT rely on one indicator, or a single rule"...TA can be complex and incorporate many investor strategies, each with a set of tools, each with different entry and exit points when buying/selling shares. Because there are many TA strategy options there is often no right or wrong answer (TAers often at odds with each other) as those seemingly simple squiggly lines could just be a few tools in the toolbox of an very experienced TA investor using a very complex investment strategy.

However there are many much simpler/basic strategies which work reasonably well..The one I post on Sharetrader is a medium term "be patient and only act on confirming signals" strategy and is easy to understand and use.

For those investors that have patience weaknesses in their mental make up..my posted TA discipline would not be suited to them...Their better TA Strategy would be "Preemptive buy action at support areas" ...word of caution for those entering into HNZ now...preempting the market's future action is very risky....if using this risky strategy you must use the the "minimising risk" tools that comes with this disciplined strategy ... the most important of these tools is applying automatic stop/loss set just below the bull/bear line or atm lines or any other method such as analysing depth tables used by nonTAers...Automatic is underlined because its a must for most people...do not rely on your own judgements unless your mental strengths include abiding to rigid disciplines and/or highly experienced very successful investor with extremely good/proven "gut feel".

HNZ has fallen further to reach that all important bull/bear support line ..The depth today confirms this 112 line is hugely supported ( "at this moment" ) with 11 active buyers worth $165,952 at 112c...

[Longhaul]

...like many I am wondering where the bottom is.

Usually at the top of the legs. :p

[Derain]

HNZ has fallen further to reach that all important bull/bear support line ..The depth today confirms this 112 line is hugely supported ( "at this moment" ) with 11 active buyers worth $165,952 at 112c...

That support just got wiped out, not looking good :(

[Harvey Specter]

That support just got wiped out, not looking good :(Just like farmers profits. Milk price down to $3.85.

[winner69]

You are right again Hoop. That 112 is critical

However methinks HNZ will never, never, go below 112

The Plunge Team will come out and start buying. Just can't go below 112, just can't.

[winner69]

An hour or so to go today

CLOSE AT 114 I RECKON

Panic over

[Master98]

You are right again Hoop. That 112 is critical

However methinks HNZ will never, never, go below 112

The Plunge Team will come out and start buying. Just can't go below 112, just can't.

who said will never go below 112? 111 now, help!!!

[warthog]

who said will never go below 112? 111 now, help!!!

17k shares wanted @$1.11

So much for support!

Disc.: not a holder (yet)

[couta1]

who said will never go below 112? 111 now, help!!!
Take a deep breath and relax, just another bad market day in general where a lot of silly buggers lose a lot of money, I'd rather just look at a bigger red arrow, heaps of snow falling today on the Q/Town skifields so all good.

[Beagle]

Take a deep breath and relax, just another bad market day in general where a lot of silly buggers lose a lot of money, I'd rather just look at a bigger red arrow, heaps of snow falling today on the Q/Town skifields so all good.

Far more serious than that mate. Last year's pay-out was only $4.40 and now they're looking at $3.85. Sharemilkers with 61% debt, virtually none of them, can make money at these sort of payout's.
Even dairy farmers who own their land are leveraged to 61% are in real trouble. Worse, there is no sign of any light at the end of this tunnel, (deep mineshaft ?) and world-wide production is ramping up at the same time that demand appears to be falling. $200m advanced to 61% LVR to this sector.

HNZ should come clean, take some write-offs and heads need to roll that allowed average sector debt to ever got this high to a commodity sector with change-able fortunes in the first place. They should also recant their FY16 forecast and come clean and admit forecasting profit in this environment is impossible....but none of this will happen because just like the European banks that don't want to write-off their loans to Greece, taking a charge against these loans implies they made a mistake in the first place advancing them the money...and we can't have that when we're paid a seven figure salary can we !!

[warthog]

Far more serious than that mate. Last year's pay-out was only $4.40 and now they're looking at $3.85. Sharemilkers with 61% debt, virtually none of them, can make money at these sort of payout's.
Even dairy farmers who own their land are leveraged to 61% are in real trouble. Worse, there is no sign of any light at the end of this tunnel, (deep mineshaft ?) and world-wide production is ramping up at the same time that demand appears to be falling. $200m advanced to 61% LVR to this sector.

HNZ should come clean, take some write-offs and heads need to roll that allowed average sector debt to ever got this high to a commodity sector with change-able fortunes in the first place. They should also recant their FY16 forecast and come clean and admit forecasting profit in this environment is impossible....but none of this will happen because just like the European banks that don't want to write-off their loans to Greece, taking a charge against these loans implies they made a mistake in the first place advancing them the money...and we can't have that when we're paid a seven figure salary can we !!

You mean no new Audi A6 S-Line and trip to Disneyland (including the leather Disneyland jacket to prove they were there) for sharemilkers this year???

104k shares for sale at $1.12 … spot of downwards pressure.

Shocking, the hog says. Shocking!

[neyney2010]

now it's really fuked

[Marilyn Munroe]

You mean no new Audi A6 S-Line and trip to Disneyland (including the leather Disneyland jacket to prove they were there) for sharemilkers this year???

Shocking, the hog says. Shocking!

Just heard of a worker for a share milker, of European origin who is here on a work permit, who has been given four weeks notice.

He will try to find alternative work permit compatable work but is not optimistic. He fully expects to have to return to the EU.

Boop boop de do
Marilyn

[GTM 3442]

It's just a reminder of how little the New Zealand economy has changed over the twentieth century.

From 1900 - a predominantly urban country making a living from exporting commodities, New Zealand has, by 2015, evolved into a predominantly urban country making a living from exporting commodities.

Still a price-taker on the world stage.

And with the same reliance for capital on an overseas-controlled banking system.

Heartland, TSB, (and Kiwibank?) share the same disadvantages of (small) scale, so will feel more pain earlier.

Wondering if topping up at $0.95 would still make sense. . .

[Joshuatree]

now it's really fuked Ilooked fuked up and now see where you're at right? If so there is plenty of help available; they can help you to help yourself.

it means that some people think they are that worthless that they will settle for abusive love. they attract the people that treat them how they think they deserve to be treated. others may have their sense of self-worth so won’t settle for anything below what they deserve. how you view yourself is how you’re going to be treated is what it’s saying. so, if you think you deserve more for yourself, that’s what you’re going to get, but if you don’t think you’re a good person, you will settle for much less than you really do deserve. don’t depreciate yourself, because one day you’re going to find someone who will give you everything you deserve and more.

[couta1]

Roger I know dairy is in serious doo doo right now but the total extent of the effect of it on HNZ is pretty much unknown at this point and is dependant on many factors including how long the situation goes on and the resilience of the individual indebted farmer concerned, not a good day for the stock today but that's in the context of a pretty battered NZX and ASX and a good dose of panic selling but not on huge volume at 815k shares traded ( Average volume is 1.6 million)

[Beagle]

You mean no new Audi A6 S-Line and trip to Disneyland (including the leather Disneyland jacket to prove they were there) for sharemilkers this year???

104k shares for sale at $1.12 … spot of downwards pressure.

Shocking, the hog says. Shocking!

That three year old oilskin jacket has never looked so good.

Couta1 mate, 61% average loan to inflated asset value speaks for itself. That is surely right at the very uppermost debt level's of dairy farmers in N.Z.

[nextbigthing]

I see Fonterra are going to step in with $430M worth of loans to those in need.

I wonder if Heartland will qualify.

[Joshuatree]

Thats awesome that Fonterra are stepping up for their farmers.Maybe you guys should be on the Fonterra thread; there is one reactivated for you; You're welcome;)

[axe]

I see Fonterra are going to step in with $430M worth of loans to those in need.

I wonder if Heartland will qualify.

The loans will be going to farmers to help them to meet their obligations to the banks. Yeah I guess Heartland will qualify to benefit from this.

[trader_jackson]

I haven't commented on this thread before, but have been keeping a check on Heartland... I am just quite amazed how despite "continually positive" revisions to earnings, this share is now the same price as it was in January of this year!

Dairy does not have a huge effect on Heartland (really), but it is still nice to see Fonterra's announcement (short term factor). They else have the "seniors finance" which they seem to be a market leader in, and I think this will really take off over time (long term factor).

In conclusion, I think it is general market weakness, especially in banking stocks, that is pushing Heartland down... very seriously considering entering at price $1.10 (if market forces allow)

[Master98]

I haven't commented on this thread before, but have been keeping a check on Heartland... I am just quite amazed how despite "continually positive" revisions to earnings, this share is now the same price as it was in January of this year!

Dairy does not have a huge effect on Heartland (really), but it is still nice to see Fonterra's announcement (short term factor). They else have the "seniors finance" which they seem to be a market leader in, and I think this will really take off over time (long term factor).

In conclusion, I think it is general market weakness, especially in banking stocks, that is pushing Heartland down... very seriously considering entering at price $1.10 (if market forces allow)
most shares on NZX have ever been dipped to one year low, but HNZ still way over one year low 94c, so really not too bad.

[Hoop]

It seems Fonterra announcement blew HNZ 112 support out of the water and those $1.12 buyers ran for the hills...Amazing how quickly a strong support can weaken to nothing...eh?

So what is this 112 Bull /Bear line I keep mentioning?... Its better known as the Primary Support Line and when broken it marks the change of status for HNZ from Bull to Bear.

The prudent investor (if not already) switches strategies and now uses various Bear Market investment strategies for HNZ..The simplest strategy is staying "out". :)

For the Chartists :..While HNZ is in this bear zone (below 112c) We keep a close watch on any suspicious change of behaviour. The most well known of the Bear behaviours is the bear market correction commonly known as the sucker rally. (investors buy long at support and selling out near resistance).

EDIT:...As the 112c line is a Bear confirmation line as well as a support line..looking back to February 2015 to now there seems to have been two sucker rallies. This bear behaviour indicates HNZ had a cyclic reversal to bear starting February 2015. See my chart 28th July Post #5684 (http://www.sharetrader.co.nz/showthread.php?8425-Heartland-New-Zealand-Ltd-%28HNZ%29/page379)

[winner69]

That DEATH CROSS at 122 odd was a pretty good sell signal for long term holders

And 111 is even below the 300MA

[winner69]

Cows and calves were discouraged on this thread and diverted some where else

Ostriches were ostracised and got some individuals banned so not mentioned again

I think that there should not be any more talk of BEARS on this thread

It's not becoming of Heartland and its all a bit depressing.

Jeez the cricket is boring. Guptil out won't help

[winner69]

Mr P, a doyen and mentor to many on sharetrader, had a favourite phrase "The market giveth, but the market also taketh away"

The market has just taketh away 21% of what it once valued Heartland at. Maybe the market is going to taketh away even more.

Mr P, the doyen he was, always pleaded with us not to let the market taketh away what it had giveth us. Some have been wise and followed that advise (well done Roger for one). He was a good guy that Mr P ....and his charts.

[percy]

Cows and calves were discouraged on this thread and diverted some where else

Ostriches were ostracised and got some individuals banned so not mentioned again

I think that there should not be any more talk of BEARS on this thread

It's not becoming of Heartland and its all a bit depressing.

Jeez the cricket is boring. Guptil out won't help

You asked for something on Cows and Calves thread.
I have posted what you asked for.

[Baa_Baa]

Cows and calves were discouraged on this thread and diverted some where else

Ostriches were ostracised and got some individuals banned so not mentioned again

I think that there should not be any more talk of BEARS on this thread

It's not becoming of Heartland and its all a bit depressing.

When you're holding free shares W69, does it really matter what the SP does, if you're OK with long term yield (not withstanding social responsibility misgivings etc etc)? HNZ isn't going out of business for any of the reasons posters here like to freak out the holders with, the worst case scenario is that they'll fail to meet guidance and the SP wanes a bit further. Big deal, HNZ will still make profits and returns for shareholders. The worry is for shorter term buyers in above $1.12 still holding who thought they'd make a quick bob on the capital gains, not for freeholders, or those who are out already. If you're in the freehold group, or out, maybe we should all just button our lips, we're not welcome here anymore? Get it?

[winner69]

When you're holding free shares W69, does it really matter what the SP does, if you're OK with long term yield (not withstanding social responsibility misgivings etc etc)? HNZ isn't going out of business for any of the reasons posters here like to freak out the holders with, the worst case scenario is that they'll fail to meet guidance and the SP wanes a bit further. Big deal, HNZ will still make profits and returns for shareholders. The worry is for shorter term buyers in above $1.12 still holding who thought they'd make a quick bob on the capital gains, not for freeholders, or those who are out already. If you're in the freehold group, or out, maybe we should all just button our lips, we're not welcome here anymore? Get it?

I holding what left in the hope of increasing the unrealised gains, not for the dividend.

But if things keep turning to custard they will be sold

Agree with you. Heartland not going broke, maybe not even a temporary hiccup in earnings. Chances are it will make more next year than it did this year.

But it is market sentiment that we need to watch, and react to.

Was going to say more but better not.

[tim23]

Superb yield at this price - transfer of shares from the weak to the strong

[Baa_Baa]

I holding what left in the hope of increasing the unrealised gains, not for the dividend.

But if things keep turning to custard they will be sold

Agree with you. Heartland not going broke, maybe not even a temporary hiccup in earnings. Chances are it will make more next year than it did this year.

But it is market sentiment that we need to watch, and react to.

Was going to say more but better not.

Fair enough, do what you want, though if I had a pile of freehold HNZ shares I'd just put them in the proverbial 'bottom drawer' and go look for another freehold prospect. I am out, at a nice but modest profit, and I've resisted posting here until tonight because I think that the HNZ holders deserve a break from being harangued buy freeholders and non-holders about what may or may not happen to their shares. Let them make up their own minds. HNZ will eventually signal a buy opportunity and that's when we might pile into it again, but incessant bleating (a Baa word) isn't helping anyone. This is not just directed at you. This thread is dominated by people who suffer no consequence and have nothing to gain from their contributions, except maybe the cynical who wish for a lower re-entry price. JMHO of course. I'll go quiet again now, I've said my piece.

[Joshuatree]

I like your piece 1 and 2 BB sensible stuff.
w69 so much time on your hands mate; micro managing can a psychotic paranoid inducing lifestyle; get out into nature, take on winters elements (have all the gear); look at the early cheer and daffodils sprouting, i saw two tuis fighting today;spring is coming soon, go and donate your time to a charity etc live a little of the life that is being human. Here endth my sermon. Note to self ;do more of the same. Climbed Mt Maunganui today :t_up:.

[couta1]

Fair enough, do what you want, though if I had a pile of freehold HNZ shares I'd just put them in the proverbial 'bottom drawer' and go look for another freehold prospect. I am out, at a nice but modest profit, and I've resisted posting here until tonight because I think that the HNZ holders deserve a break from being harangued buy freeholders and non-holders about what may or may not happen to their shares. Let them make up their own minds. HNZ will eventually signal a buy opportunity and that's when we might pile into it again, but incessant bleating (a Baa word) isn't helping anyone. This is not just directed at you. This thread is dominated by people who suffer no consequence and have nothing to gain from their contributions, except maybe the cynical who wish for a lower re-entry price. JMHO of course. I'll go quiet again now, I've said my piece. Excellent post Baa Baa especially the bits about current holders versus non holders/free holders.

[percy]

Tainted by Australian Banks.
ANZ Bank's $3 billion capital raise has correctly spooked the market.The $3 billion is partly to meet regulatory requirements.
ALL Australian banks have to hold more capital to mitigate the risk of losses on home loans.!
ANZ's has further increased provisions by 13% mainly mining and agriculture.
So what has this to do with HNZ?
Capital.HNZ have excess capital.More than meets The Reserve Bank of NZ requirements,and possibility of share buy back.Capital return?
Australian home loans.HNZ's only exposure is via Australian REL loans.Not sure regulatory requirements.
Australian mining.HNZ have no exposure to this sector.
Dairying in NZ.From Craig's research 28/7/2015.HNZ's exposure to the slowing dairy sector IS NOT significant 7.6% of its total loan book.Craigs estimate other banks exposure is up to 15%.
HNZ announcement 30th July 2015.....2016 Estimated NPAT of $51mil to $55 mil.This includes allowance for estimated impairments.

Share prices follow earnings.....buy earnings growth.[steve fleming]. HNZ has earnings growth.
Share prices are driven by increasing dividends... HNZ are increasing dividends.
Banks have great capacity to pay increasing dividends.HNZ are a bank.


"In the land of the blind,the one-eyed man is king".


Back to ANZ and the other Australian Banks.......They have been very rewarding for investors,and will continue to be for the long term investor..

[horus1]

I own a fair amount of heartland shares, I lose count but over 500k. I'm holding and buying on weakness

[couta1]

As an aside HNZ will get a portion of that fonterra payout for any loans to dairy farmers it has that become impaired as has been stated that the payout would go to the banks at first instance.

[SCOTTY]

I own a fair amount of heartland shares, I lose count but over 500k. I'm holding and buying on weakness

I like the cut of your jib horus1. You don't sell your farm or business just because you have a bad year or two. Buy in gloom/sell in boom (if you must) ��

[winner69]

As an aside HNZ will get a portion of that fonterra payout for any loans to dairy farmers it has that become impaired as has been stated that the payout would go to the banks at first instance.

But surely ANZ and the other banks will get most of it

They are the ones in it up to the proverbial I'm led to believe. HNZ are well protected and have LOW exposure

[percy]

But surely ANZ and the other banks will get most of it

They are the ones in it up to the proverbial I'm led to believe. HNZ are well protected and have LOW exposure

You do not think Fonterra being a NZ company will pay the NZ Banks first.????
I guess also being a co-op The Co-Op Bank will be paid first?
May be more at stake tonight than just the Bledisloe cup..??? lol.

[Beagle]

I think its quite clear that most dairy farmers will be working very closely indeed with their banks and professional advisors. The extra 50 cents per kilo simply buys many dairy farmers some time.
Patriotic thinking surrounding where payments go will have absolutely nothing to do with it. Many "will be encouraged" to exit in a managed way. Other more ruthless / prudent ? banks will simply call in loan facilities.
Many bank managers have already told their dairy clients to put their chequebooks in the bottom drawer so the 50 cent Fonterra loan effectively goes straight to whichever bank the farmer banks with.
I find it ironic that Fontera call this a loan. If they cut their cloth to suit the current world-wide dairy situation they could probably pay 50 cents more per kilo properly.
I still believe if some part of a company is a diseased mutt, a full exploration of the extent and nature of the disease and its overall effects on the company's health by way of an open, honest and frank debate is a valuable thing for all and this old bloodhound won't wear a muzzle even if some others would like him too.

[winner69]

...........by way of an open, honest and frank debate is a valuable thing for all and this old bloodhound won't wear a muzzle even if some others would like him too.

Ha ha Roger - I think quite a few members told you and me to fuk off last night. They don't want nonholders and freewheelers posting here, upsets them apparently.

Conversely I find the same old repetitious stuff saying how good HNZ are that gets posted a bit boring. hardly anything new most of the time..

Obviously no muzzling you Roger .....getting told to fuk off is like a red rag to a bull to me anyway.

I think both sides of the story are important.

[NZSilver]

I think its quite clear that most dairy farmers will be working very closely indeed with their banks and professional advisors. The extra 50 cents per kilo simply buys many dairy farmers some time.
Patriotic thinking surrounding where payments go will have absolutely nothing to do with it. Many "will be encouraged" to exit in a managed way. Other more ruthless / prudent ? banks will simply call in loan facilities.
Many bank managers have already told their dairy clients to put their chequebooks in the bottom drawer so the 50 cent Fonterra loan effectively goes straight to whichever bank the farmer banks with.
I find it ironic that Fontera call this a loan. If they cut their cloth to suit the current world-wide dairy situation they could probably pay 50 cents more per kilo properly.
I still believe if some part of a company is a diseased mutt, a full exploration of the extent and nature of the disease and its overall effects on the company's health by way of an open, honest and frank debate is a valuable thing for all and this old bloodhound won't wear a muzzle even if some others would like him too.

Agree with you Roger, Fonterra costs have blown out, there is a disconnect between the company and its owners and it is ridiculous that it is headquartered in Auckland (why not in a dairy region!). Fonterra benefited from the high payout due to first mover advantage and being setup for milk powder production when china came along in the search for protein to feed its massively booming middle class, however other countiries are catching up. Yes there are issues that havnt helped ie - dairy ban in russia from europe but the fault cant lie solely on these issues.

The people I feel for are the young lower order share milkers and first year 50:50 share milkers with very little assets, probably large overdrafts and mortgages to get started and still having high fixed costs and having to work the very long hours, all this to end the year $10,000's - $100'000s in the the red. (now all of those high flying fonterra employees who have tripled over the last few years - without actually growing the business much get there big pay packets). People who own farms and have a high proportion of equity will be able to ride out the hard times for several years, except those with a high percentage of debt on their land. But I'm sure it will a fair few dairy farming operations back to a low cost structure resulting in NZ becoming very competitive again thus squeezing overseas competitors, reducing world supply and increasing the payout, as many operations have become very high cost with the good payout years. The low NZD will also help and hopefully the Russians might get some NZ cheese again in the near future when Putin and the west sort their differences!

[SCOTTY]

[QUOTE=winner69;585119]Ha ha Roger - I think quite a few members told you and me to fuk off last night. They don't want nonholders and freewheelers posting here, upsets them apparently.


No, not upset at all but grateful for improving the buying opportunities. - Lower the price - better the yield ��

[Xerof]

Solve Auckland's housing crisis - move Fonterra Head Office to Invercargill

[percy]

Success!! SUCCESS,success!!!!!
I finally worked out how to put people on my ignore list..
Working a treat..!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
PS.Great post Xerof.

[winner69]

Success!! SUCCESS,success!!!!!
I finally worked out how to put people on my ignore list..
Working a treat..!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
PS.Great post Xerof.

Betcha do a bit of cheating though

If you see this post probably have

[Beagle]

Ha ha Roger - I think quite a few members told you and me to fuk off last night. They don't want nonholders and freewheelers posting here, upsets them apparently.

Conversely I find the same old repetitious stuff saying how good HNZ are that gets posted a bit boring. hardly anything new most of the time..

Obviously no muzzling you Roger .....getting told to fuk off is like a red rag to a bull to me anyway.

I think both sides of the story are important.

Thanks mate, I couldn't agree more. Any good dog that loves his work and loves a good bark hates a muzzle, free spirited independent thinking ones, all the more so. Red rag to a bull to me too mate.


Agree with you Roger, Fonterra costs have blown out, there is a disconnect between the company and its owners and it is ridiculous that it is headquartered in Auckland (why not in a dairy region!). Fonterra benefited from the high payout due to first mover advantage and being setup for milk powder production when china came along in the search for protein to feed its massively booming middle class, however other countiries are catching up. Yes there are issues that havnt helped ie - dairy ban in russia from europe but the fault cant lie solely on these issues.

The people I feel for are the young lower order share milkers and first year 50:50 share milkers with very little assets, probably large overdrafts and mortgages to get started and still having high fixed costs and having to work the very long hours, all this to end the year $10,000's - $100'000s in the the red. (now all of those high flying fonterra employees who have tripled over the last few years - without actually growing the business much get there big pay packets). People who own farms and have a high proportion of equity will be able to ride out the hard times for several years, except those with a high percentage of debt on their land. But I'm sure it will a fair few dairy farming operations back to a low cost structure resulting in NZ becoming very competitive again thus squeezing overseas competitors, reducing world supply and increasing the payout, as many operations have become very high cost with the good payout years. The low NZD will also help and hopefully the Russians might get some NZ cheese again in the near future when Putin and the west sort their differences!

Top post mate but don't hold your breath waiting for hostilities to quieten down between Russia and the West. Hostilities have a way of festering unless people learn how to ignore others they can't seem to get along with.


Success!! SUCCESS,success!!!!!
I finally worked out how to put people on my ignore list..
Working a treat..!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
PS.Great post Xerof.

The ignore setting is a great idea for others that don't value robust open debate from the likes of Winner69 and myself.

[nextbigthing]

Estimated 2016 NPAT $51 - $55M from HNZ latest update. They tend to easily meet their stated objectives. So say $53M.
$53M / 470M shares / $1.11 closing price = earnings yield of approx 10%.


HNZ aren't stupid and know what's going on with dairy, that's why they briefly addressed that concern in their update. They've stated the '$53M' figure includes impairments.


Dairy is only 7.6% of its lending book. Of that, how many guys are actually going to completely tip over, given the extra lending and support from HNZ* and the support from Fonterra etc. Even of the guys that do unfortunately go under, obviously some of the loan is still recoverable. Sure, the lower payouts aren't good news for HNZ, but how badly are they really going to be affected?


Let's not also forget that while dairying isn't looking too flash at the moment, other sectors are doing nicely, to HNZ's advantage. I know of two dairy farmers who have each just purchased supplementary beef blocks.

Even if they lose a few loans and therefore the ongoing revenue streams, what will the earnings yield drop down to? Maybe 8%? That's still far better than the return in most other dividend stocks (if they went to 100% payout), and it's easily fair compensation for the risk.


Trend is your friend and I'm not advocating buying now. But a company with great fundamentals and a great track record being on sale due to a
temporary drop in milk prices, this strikes me as the sort of situation that would have Buffet all barred up in his old white wirefronts. Simmer down Warren.

Disc hold and will buy more when time is right.

NBT



*more revenue.

[tim23]

Gee Nexbigthing - would have thought anytime now was a good time to buy?

[Joshuatree]

Ha ha Roger - I think quite a few members told you and me to fuk off last night. They don't want nonholders and freewheelers posting here, upsets them apparently.

Conversely I find the same old repetitious stuff saying how good HNZ are that gets posted a bit boring. hardly anything new most of the time..

Obviously no muzzling you Roger .....getting told to fuk off is like a red rag to a bull to me anyway.

I think both sides of the story are important.

Pretty provocative w69; i feel a little disappointed by your seeming to enjoy stirring the pot with inaccuracies. And if you want to lower the standards and use the F word i suggest you go elsewhere. I will be taking it up with mod if you keep using it; lets keep reasonable standard on this forum thanks.
I think BB said it quite well. No one is suggested muzzling or not discussing those are yours and Rogers words. But it is the frequency of posting that concerns me and the bulldozing of an attitude that he is right and everyone else is wrong and he has a tardus to prove it.Haranging is a fair word for BB to use in my opinion. Attempting to influence people re sentiment on a stock is unacceptable;and that is how it comes across at times.Im hoping its not meant to but thats feedback from recipients. Anyway reporting is pretty close now ; looking forward to what results are.

[winner69]

The 19th getting closer.

There won't be anything exciting announced. This financial year all done and dusted and really far too early for Heartland to say anything too specific about any potential exposure to a high level of bad debts - the **** hasn't hit the fan yet, and unless a potential problem can be quantified it won't be disclosed.

I'll be looking at two things.

One is the segmental analysis to see whether nims are holding up as well as tracking the movements in impairment provisions to judge whether they may be getting a bit more 'aggressive' in general provisioning.

Secondly will try to work out why H2 incremental profit is only about $1m when it has been averaging over $3m for the last couple of years. That $1m just seem right - compared to recent history and then to get to $56m in FY16 it has to average $3m again. Something a bit wonky here or next years forecast is way out.


I expect the 19th will be anti-climatic and a non-event. It will be seen as no news is good news for some but others might Dig a bit deeper. That'll keep the debate going.

[axe]

Heartland been paying for some solid advertising spots for seniors finance on sky sport around the AB's games.

Winner - how much you think next divvy will be?

[nextbigthing]

Gee Nexbigthing - would have thought anytime now was a good time to buy?

Don't catch a falling knife :)

[winner69]

OK Joshua, I apologise for using and will cease using such words.

Yes, we need to lift our standards.


Thanks for pulling me up.

[Joshuatree]

I like your piece 1 and 2 BB sensible stuff.
w69 so much time on your hands mate; micro managing can a psychotic paranoid inducing lifestyle; get out into nature, take on winters elements (have all the gear); look at the early cheer and daffodils sprouting, i saw two tuis fighting today;spring is coming soon, go and donate your time to a charity etc live a little of the life that is being human. Here endth my sermon. Note to self ;do more of the same. Climbed Mt Maunganui today :t_up:.

Winner thanks for the reply; you seem to have deleted it?I enjoyed reading it and apologies re above.Im not suggesting you were any of them just that watching the s/p etc all the time much can be less then productive; the mkt is weighing machine etc etc. Yeah i too find it really helpful when i get out for some exercise and a roam in nature ; gives me more perspective about what really matters and puts making money in its place in the order of the quality of living. Think i will just await results now and spend less time watching and reading on here myself:0 cheers JT

[Crackity]

OK Joshua, I apologise for using and will cease using such words.

Yes, we need to lift our standards.


Thanks for pulling me up.



i tried this tonight - it was great.

Apple PieFrom the Edmonds Cookbook, Apple Pie with shortcrust pastry
Ingredients200 g shortcrust pastry
25 g butter, melted
2 teaspoons sugar
Filling4-6 Granny Smith apples
1/2 cup sugar
2 tablespoons Edmonds plain baking flour
1/4 teaspoon ground cloves
PreparationOn a lightly floured board roll out pastry slightly larger than a 20 cm pie plate
Cut two 2.5 cm wide strips long enough to go around the edge of the pie plate
Brush with water
Spoon apple filling into centre of pie plate
Pour butter over filling
Cover with remaining pastry
Press edges firmly together to seal
Cut steam holes in centre of pastry
Trim and crimp edges
Decorate pie with any pastry trimmings
Brush lightly with milk or water
Sprinkle with sugar
Bake at 200°C for 25 minutes or until pastry is golden
Test with a skewer if the apple is cooked
If not, reduce oven temperature to 180°C and cook until apple is tender
FillingPeel, core and slice the apples. Combine sugar, flour and cloves. Toss apples in this mixture.

[Hectorplains]

Confused, okay? If there's a vote or something then I'm all good with no kumbayas, circle jerk or recipe swaps. I was was thinking that the "sharetrader" in the url was a fair clue or am I missing the point?

[winner69]

Hector ....think scales

[nextbigthing]

Here's a crude way to quantify things.
HNZ's dairy exposure $200M. Say 50% of them gounder. HNZ only recover $25M so they're $75M down in total.
The revenue stream from the lost dairying is made up by the growth in other sectors so they continue to have NPAT $50M.
For five years they reduce the payout by $15M to rebuild the $75M. Therefore they pay $35M individends which equates to over 7% return..
That's a fairly bleak scenario with 50% of guys going under and recovering only 25% due to lower herd prices. Yet they can rebuild the funds while paying 7% for five years then return to 10%.

Still better than most divvy stocks or bank interest.

[nextbigthing]

Percy my friend, fetch your finest Friesian, I have a plan.

http://www.bbc.com/news/uk-england-stoke-staffordshire-33840815

[percy]

Craig's research 30/7/2015.
FY 16 NPAT guidance of $51-55m [which includes an allowance for estimated impairments relating to the dairy loans] indicates the slowdown will not detract from its positive earnings momemtum.
The market update re-affirmed our view that the share price has over-reacted to the potential impact of the dairy slowdown on HNZ's earnings.We reiterate our BUY.

My our thoughts are the name Heartland is working against HNZ.I think "the market" sees HNZ as a "rural" bank.The fact they have an exposure to dairying of 7.8% of their loan book, compared to the other banks' up to 15% has not been seen by the market.As I have pointed out previously " In the land of the blind,the one-eyed man is king."

[mouse]

Craig's research 30/7/2015.
FY 16 NPAT guidance of $51-55m [which includes an allowance for estimated impairments relating to the dairy loans] indicates the slowdown will not detract from its positive earnings momemtum.
The market update re-affirmed our view that the share price has over-reacted to the potential impact of the dairy slowdown on HNZ's earnings.We reiterate our BUY.

My our thoughts are the name Heartland is working against HNZ.I think "the market" sees HNZ as a "rural" bank.The fact they have an exposure to dairying of 7.8% of their loan book, compared to the other banks' up to 15% has not been seen by the market.As I have pointed out previously " In the land of the blind,the one-eyed man is king."

My thoughts too. Heartland is a finance company, with the protection of being a bank. It has many income streams which seems to exclude mortgages on homes. Not saying that all is OK. But we are in quite perilous times, both here and Oz. I think Heartland is doing as well as can be expected in the circumstances. And putting your cash under the bed is not advisable. So, hope for the best and take the dividends.

[winner69]

Have Heartland lent on real farms, the land, or is that left to the big banks?

Does this then mean that the bulk of Heartland dairy exposure is on machinery, plant, livestock and working capital etc?

Different risk profiles I would presume.

[Hoop]

Fitch say a bbb rated bank is more sensitive to its economic environment than an aaa rated bank....so it seems HNZ is telling us the NZ economy is a bit stuffed at the moment.

Time to look at the economic clock again and see whereabouts the NZ economy is at within its economic cycle.

Hmmmm ...The clock looks broken.. the FED & Co, Mr Wheeler incl, must had fiddled around with its mechanisms....it's now behaving like a 2 bob watch

http://www.boursecommunications.com.au/assets/clock_lg.gif

[Beagle]

Have Heartland lent on real farms, the land, or is that left to the big banks?

Does this then mean that the bulk of Heartland dairy exposure is on machinery, plant, livestock and working capital etc?
Different risk profiles I would presume.

That is precisely what many people don't appear to want to understand. How land values move downwards in really tough economic times is one thing, (and certainly the very early anecdotal evidence is startling), and how stock, plant and machinery move down is a completely different matter. It will be interesting to see if HNZ break down their dairy sector lending by security type in their forthcoming update.
In a severe industry contraction finance company's and finance company type lending get's belted much harder than traditional land and buildings type lending. Surely people remember this from all the finance company collapses during the GFC ?
While there's circa $200m of direct dairy exposure does anyone know or has anyone contemplated how much lending there is on plant and machinery to business's that support dairy ?
Talk of the prospects of a credit rating upgrade in this sort of macro economic environment is just plain ridiculous...all the more so when Fitch specifically mentioned the downside risks surrounding dairy in their most recent public statement.

[noodles]

That is precisely what many people don't appear to want to understand. How land values move downwards in really tough economic times is one thing, (and certainly the very early anecdotal evidence is startling), and how stock, plant and machinery move down is a completely different matter.
Finance company's and finance company type lending get's belted much harder than traditional land and buildings type lending. Surely people remember this from all the finance company collapses during the GFC ?
While there's circa $200m of direct dairy exposure does anyone know or has anyone contemplated how much lending there is on plant and machinery to business's that support dairy ?
Talk of the prospects of a credit rating upgrade in this sort of macro economic environment is just plain ridiculous...all the more so when Fitch specifically mentioned the downside risks surrounding dairy in their most recent public statement.
Analysts have stated that the majority of the diary lending is on land.

[winner69]

So no final payments on last seasons production and very small advance payments this season
http://www.sharechat.co.nz/article/741ce202/fonterra-overshoot-on-2015-advance-payment-worsens-2016-farmer-cash-flows.html?utm_medium=email&utm_campaign=Fonterra+overshoot+on+2015+advance+pa yment+worsens+2016+farmer+cash+flows&utm_content=Fonterra+overshoot+on+2015+advance+pay ment+worsens+2016+farmer+cash+flows+CID_eceaf1dd62 0dedff44e8007417c574ee&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle741ce202fonter ra-overshoot-on-2015-advance-payment-worsens-2016-farmer-cash-flowshtml

[winner69]

A large chunk of the $35 billion dairy debt is owed by 10%

If heartland have any exposure to these 10% I think moral / socially responsibly stuff needs to be forgotten and they just foreclose on those individuals if they are in default. Get in first before farm prices fall I reckon.

[Beagle]

A large chunk of the $35 billion dairy debt is owed by 10%

If heartland have any exposure to these 10% I think moral / socially responsibly stuff needs to be forgotten and they just foreclose on those individuals if they are in default. Get in first before farm prices fall I reckon.
Judging by the evidence of what you posted last week mate its too late and they've already fallen. I think with an average of 61% LVR HNZ have plenty of exposure to the most at risk sector of the industry. Upcoming sales will only reflect what we already know, that being that the massive disconnect between land prices and what that land is actually capable of producing in terms of cash flow has to close. Personally I think an astute buyer of a dairy farm right at the minute would be looking at bidding somewhere in the mid to high $2m range for an operation at its peak that would have been $4m. Just my opinion by why would any astute businessman right at the minute pay any more knowing its never been more of a buyers market ? We're in for a really meaningful correction in dairy farm prices, of that I am very sure. How much of that translates into real losses to HNZ, is very hard to quantify but history tells us that when times are really tough, (e.g. GFC), finance companies invariably underestimate their doubtful debt provisions, usually by a long way. I would have thought its crystal clear, all the risk to HNZ's FY16 forecast is too the downside. In terms of the point you've made mate, hopefully the board are well aware of there legal obligation to place the interests of shareholders ahead of anyone else. Thankfully the Fonterra loan thing buys some participants who are hopelessly unviable, at current pay-out level's, time to be helped to be managed out of the industry rather than be in a foreclosure position and therein probably lies a bit of relief for HNZ shareholders. Without the Fonterra loan thing the situation would be FAR worse.