HGH - Heartland Group Holdings

[trader_jackson]

Well, low volume, solid little rise... don't want to get the market too excited right before results day (and then do a PGW and fall 5% or so on day of results...)

[winner69]

Close $1.43 is an ALL TIME RECORD HIGH CLOSE

Yippee

And tomorrow is the big day - full year profit announcement

Looks like it, or the F17 guidance / outlook is going to be a ripper

No worries ....but I be pissed if Jeff says 'well positioned', surely he's past that nonsense

Won't sleep tonite in anticipation

[winner69]

Interesting to see the W69 effect remains firmly in place. $1.40 seems to be the figure most commonly used.The bigger picture will emerge in time , once some restraint is introduced or medication increased , whichever comes first.

The medication was increased kiwi ......and look what its done to the share price

Might get to $1.50 tomorrow

[King1212]

https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=4215421

Great result!

[Joshuatree]

Heartland Posts Full Year Profit Of $54.2M (https://www.nzx.com/companies/HBL/announcements/287292) All good as expected

[winner69]

Obviously full year npat going to be in the $51m to $55m range

So no 'stunning result' but just a solid one come August 16th when Jeff says ' $54.7m which is at the upper end of guidance"

So pro-active provisioning works

Wonder where the 1/2 million went?

Proactive provisioning i assume

They bloody good at 'smoothing' things out eh

Almost quarantee FY17 npat will be $59.3m

[Balance]

The medication was increased kiwi ......and look what its done to the share price

Might get to $1.50 tomorrow

8.5c total fully imputed dividend for FY16.

Thanks to Georgie Porgie Kerr who sold out at 54c! Gross dividend yield of 21.8% on that give-away price.

[trader_jackson]

Very solid... another year of double digit growth, with another year forecast of double digit growth, collecting a nice fully franked dividend along the way with a potential huge upside of an acquisition.

Great the ROE is increasing well, and the seemingly impending doom of Dairy (and the 'huge' impairments this will create, and one of the key things holding back the share price), has still not materialized.

[trader_jackson]

I'll also point out that the dividend was inline with consensus, while NPAT and ROE were ahead, so a reasonably positive reaction should occur today... Might not get to $1.50 today, but maybe by the end of the week;)

[winner69]

Bonus points - no mention of 'well positioned'

[trader_jackson]

Bonus points - no mention of 'well positioned'

Well they don't need to state the obvious anymore...;)

[Balance]

15m shares to go and like PGW, the stench of George Kerr will be lifted from HNZ.

That banking license for HNZ will be so much easier to get after George Kerr's decomposing credibility is gone.

Time to pick up on some cheap shares from George - not often in life you get a mortgagee sale situation as George Kerr's selling looks desperate.

July 2012 - 54c sp bargain which was highlighted for all to see.

Percy did his best at that time to point out the opportunity but alas, many chose to look at the sp trending downwards (due to Dodgy Porgie selling) rather than the fact that the bank was cheap.

So 165% capital gain and a 21.8% gross dividend yield courtesy of PGC and George Kerr.

[percy]

July 2012 - 54c sp bargain which was highlighted for all to see.

Percy did his best at that time to point out the opportunity but alas, many chose to look at the sp trending downwards (due to Dodgy Porgie selling) rather than the fact that the bank was cheap.

So 165% capital gain and a 21.8% gross dividend yield courtesy of PGC and George Kerr.

Well Balance in hindsight it looked so simple?!
Heartland Bank just delivering on what they said they would do.
SP at $1.47 to $1.48 and that dividend just keeps cranking up.!!'
Yet somehow I feel "the market" is only now starting to recognise Heartland Bank's potential .Going from the outlook statement,it is very positive.
Great that we saw it before "the market".
Enjoy your 21.8% gross divie.!!..lol

[Balance]

Well Balance in hindsight it looked so simple?!
Heartland Bank just delivering on what they said they would do.
SP at $1.47 to $1.48 and that dividend just keeps cranking up.!!'
Yet somehow I feel "the market" is only now starting to recognise Heartland Bank's potential .Going from the outlook statement,it is very positive.
Great that we saw it before "the market".
Enjoy your 21.8% gross divie.!!..lol

Likewise to you Percy.

Loaded up BIG from Georgie Porgie 'mortgagee' selling so am very very happy indeed.

Will treat myself to another bottle of Cristal over dinner this weekend!

Cheers!

[winner69]

I'll also point out that the dividend was inline with consensus, while NPAT and ROE were ahead, so a reasonably positive reaction should occur today... Might not get to $1.50 today, but maybe by the end of the week;)

Of course it well t_j

Maybe $1.60 by end of week in light of the mention of $60m in F17 - an upgrade after 1/2 year and $63m beckons

Hey nextbigthing - $1.60 sooner than we thought seeing world is so happy these days

[trader_jackson]

Looks like a few retail investors have seen the price and gone "gee nearly $1.50, this looks great!" "time to sell"... probably don't even know the results were released today ;)

[Jantar]

Looks like a few retail investors have seen the price and gone "gee nearly $1.50, this looks great!" "time to sell"... probably don't even know the results were released today ;)
And at least one retail investor added a few more today ;)

[winner69]

On numerous occasions they say ' Strongest Net Interest Margin amongst competitors'

Nothing new there

But strangely they don't actually say what the net interest margin is. Wonder how Percy's favourite table of ever increasing margins looks like if they add the F16 number?

[Joshuatree]

Looks like a few retail investors have seen the price and gone "gee nearly $1.50, this looks great!" "time to sell"... probably don't even know the results were released today ;)

Traders will have got set; bought earlier in the buildup and lead up to results and sold today . Its pretty obvious ; but happens more on other forums; the ones that spruik/pump it are traders; a few are here too ; thats the way it is; zig when others are zagging.Just don't get sucked in and if you re in hopefully for a long haul; and i think this stock is ideal for that at pit just reinvest the divs and enjoy the run.

[trader_jackson]

Traders will have got set; bought earlier in the buildup and lead up to results and sold today . Its pretty obvious ; but happens more on other forums; the ones that spruik/pump it are traders; a few are here too ; thats the way it is; zig when others are zagging.Just don't get sucked in and if you re in hopefully for a long haul; and i think this stock is ideal for that at pit just reinvest the divs and enjoy the run.

In fact, if I recall correctly I don't think the share price even moved when last years above the upper end of upgraded guidance profit was announced... took a few days/weeks for people to realize

[Snow Leopard]

Seems to be much rejoicing in the streets that once again Heartland has failed to go bust despite all the dodgy lending they indulge in.

Tiger Valuations:
Today: $1.385;
One year hence: $1.468.

Best Wishes
Paper Tiger

[Jantar]

Tiger Valuations:
Today: $1.385;
One year hence: $1.468.

Best Wishes
Paper TigerJantar Valuations:
Today: $1.469;
One year hence: $1.611 (provided HBL's guidance is as good as it has been in the past.

[Snow Leopard]

Jantar Valuations:
Today: $1.469;
One year hence: $1.611 (provided HBL's guidance is as good as it has been in the past.

Obviously you are not signed up for the DRiP. :p

Best Wishes
Paper Tiger

[percy]

On numerous occasions they say ' Strongest Net Interest Margin amongst competitors'

Nothing new there

But strangely they don't actually say what the net interest margin is. Wonder how Percy's favourite table of ever increasing margins looks like if they add the F16 number?

The 2/06/2016 presentation gave the figure 4.4% [and increasing]

[winner69]

The 2/06/2016 presentation gave the figure 4.4% [and increasing]

........wonder what F16 is

Nor saying means might be lower?

[percy]

........wonder what F16 is

Nor saying means might be lower?

No reason why the increasing trend should not continue.

[Beagle]

This dog continues to think there's better places to hunt for value but for what its worth my assessment is, (contingent on dairy price continuing to recover and chooks not finally coming home to roost for this troubled sector which is by no means a certainty,) at the mid point of their forecast I see EPS of 11.9 cps for FY17. I can't see any reason given the modest growth forecast and risks all banks face to ascribe a PE of at most 12, (and that's really stretching my snout right out) so I see 12 x 11.9, fair value in a year's time if all goes well @ $1.43 so I will continue to leave other divvy hounds to enjoy their feeds with this one.

[winner69]

At least the share price didn't go down today

HBL lives to fight another day

at 1.4 times book value now ....hmmm

[trader_jackson]

I look forward to hearing about what they plan to do with all their capital... return or acquisition, it can only be good for shareholders ;), Mr Market continues to ignore this...

Mr Market also ignores the fact while most 'big' bank profits are barely increasing or even decreasing, HBL is way above this with double digit growth, which is expected to continue.

As I expected, on relatively low turn over (for a results day at least) there was only a modest overall gain (I am quite sure on results day last year there was no gain... last years amazing results took a few weeks to settle in, and then the share price started steadily rising... could be the same for this year)

Word on the street is still $1.60 by the end of the year ;)

[Snow Leopard]

I look forward to hearing about what they plan to do with all their capital... return or acquisition, it can only be good for shareholders ;), Mr Market continues to ignore this...

Mr Market also ignores the fact while most 'big' bank profits are barely increasing or even decreasing, HBL is way above this with double digit growth, which is expected to continue.

As I expected, on relatively low turn over (for a results day at least) there was only a modest overall gain (I am quite sure on results day last year there was no gain... last years amazing results took a few weeks to settle in, and then the share price started steadily rising... could be the same for this year)

Word on the street is still $1.60 by the end of the year ;)

Your enthusiasm is amusing.

http://i7.photobucket.com/albums/y269/TheTigerWithNoName/SharetraderImages/NZX-HBL/NZX-HBL-20160816.png
From last years announcement [on the left] to yesterday.

Best Wishes
Paper Tiger

Disc: Lots of HBL & in the DRiP

[winner69]

GDP prices boom - whole milk powder up 19%

That'll boost HBL share price today - good milk prices always seem to help

Good for dairy farmers - good for Heartland

From yesterdays announcement - We appetite for new business with sharemilkers and dairy farmers who meet lending criteria.

That criteria just got easier to meet = more lending

And probably be able to write back some of the provisions made = more profit

$60m next year piece of cake

[winner69]

You have to say Heartland npat was really $55.2m if you take into account the $1m they spent on that 28 page book for the restructure and capital return

And guidance for F17 is only $57m-$60m.

[Jantar]

You have to say Heartland npat was really $55.2m if you take into account the $1m they spent on that 28 page book for the restructure and capital return

And guidance for F17 is only $57m-$60m.
I feel confident that they will find something else to spend a million or two on to ensure that NPAT does come within that range. :)

[trader_jackson]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11695555

Further confirmation Dairy isn't likely to blow up into a big issue

Forsyth price target: $1.50 , but downgraded to neutral as uncertainty around capital return / acquisition weighs

With the above, and NBR's article this morning, it is really hard to see how HBL's share price isn't higher

[Joshuatree]

Craigs upped price target to $1,56 from $1.34. More loan growth to come and leverage and momentum to continue.

[winner69]

When Whole Milk prices go Heartland share price goes

Maybe a coincidence but maybe not - it could show that something drives a relationship between the two

Interesting if nothing else

[winner69]

Heartland keep on saying the health of their business depends on GDP growth and employment levels

Heck - unemployment rate just fallen to 5.1% (Stats NZ)

Good news for Heartland

[trader_jackson]

Thank you winner69 and joshuatree... Mr Market, let us aim for HBL at the magic $1.50 by the end of the week:t_up:

[nextbigthing]

Hey nextbigthing - $1.60 sooner than we thought seeing world is so happy these days

Craigs finally updated to a target of $1.56. Which part of $1.60 by Christmas are they struggling to understand? Pretty simple really. I guess they're just going to revise it upwards again closer to the time.

[Jantar]

Craigs finally updated to a target of $1.56. Which part of $1.60 by Christmas are they struggling to understand? Pretty simple really. I guess they're just going to revise it upwards again closer to the time.
$1.56, plus a 5c dividend makes it $1.61 equivilent

[winner69]

Craigs finally updated to a target of $1.56. Which part of $1.60 by Christmas are they struggling to understand? Pretty simple really. I guess they're just going to revise it upwards again closer to the time.

Yep when it gets there eh nextbigthing - like by end of this month

Fobar were pretty realistic eh - neutral ... ha ha

[SCOTTY]

Why not go for $2.00. Still 4.25% net tax paid yield with good growth prospects. Still beats any bank deposit :)

[percy]

Why not go for $2.00. Still 4.25% net tax paid yield with good growth prospects. Still beats any bank deposit :)

$2.00 has a nice ring to it.Would make it a lot easier for me to work out how much my holding is worth.!..lol.
And as you so rightly point out a very sound Yield at that price.!!
Certainly pays to own the bank, rather than having money in the bank.!

[King1212]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11696339

[trader_jackson]

hard to believe with this news heartland's share price is actually down today, not to mention the bonus Fonterra 10 cent dividend to farmers (announced this morning I believe)

[trader_jackson]

Some very large transactions have just gone through (by the looks of it), with buyers now outweigh sellers 6 to 1 ... Let's see if we can hold at or above the almighty $1.50, or if there will be a few Friday last minute panic sales ;)

Classic Heartland to move almost no where on results day, then have the share price 'kick into gear' a few days later... may it continue ;)

[winner69]

Some very large transactions have just gone through (by the looks of it), with buyers now outweigh sellers 6 to 1 ... Let's see if we can hold at or above the almighty $1.50, or if there will be a few Friday last minute panic sales ;)

Classic Heartland to move almost no where on results day, then have the share price 'kick into gear' a few days later... may it continue ;)

Yes - a $1.50 plus close on the cards

Guru analysts will need to redo their sums ......else their targets will look stupid in a few weeks

[trader_jackson]

Yes - a $1.50 plus close on the cards

Guru analysts will need to redo their sums ......else their targets will look stupid in a few weeks

The Guru analysts's targets have had no effect on SUM's share price... they shouldn't want to look stupid with a 2nd company...

[Bobdn]

$1.50 what a nice end to the week.

[RTM]

Yes it is....certainly preferring the slow steady ascent of HBL compared with the turbulent flight of AIR at the moment.
Be interesting to see what next week brings.
Disc: Hold both.

[trader_jackson]

Yes it is....certainly preferring the slow steady ascent of HBL compared with the turbulent flight of AIR at the moment.
Be interesting to see what next week brings.
Disc: Hold both.

Although Air NZ may be struggling to take off, you can certainly bank on Heartland to perform ;)

Disclosure: Today marks exactly 3 months since topping up on HBL at $1.19

[winner69]

Yes it is....certainly preferring the slow steady ascent of HBL compared with the turbulent flight of AIR at the moment.
Be interesting to see what next week brings.
Disc: Hold both.


Next week will bring $1.60 ...or more if one is optimistic

[King1212]

A lot of big buyers....we will never see $1.30 ish mark anymore....

[winner69]

A lot of big buyers....we will never see $1.30 ish mark anymore....

Ah, $1.30 odd was when you told me to increase my medication

Did as you suggested - glad I did as it got me even more excited than before ...and look what's happened since

[King1212]

Ah, $1.30 odd was when you told me to increase my medication

Did as you suggested - glad I did as it got me even more excited than before ...and look what's happened since

your medication must be good...keep taking it so the SP will go higher:t_up:

[trader_jackson]

your medication must be good...keep taking it so the SP will go higher:t_up:

Looks like 20 people took it today at the $1.50 mark today, clearly happy to be prescribed consistent, steady growth, underpinned by a great fully franked dividend :t_up:

Not to mention a rebounding dairy sector... this time next year we could easily see millions wiped off this year's impairments, but anyhow... dairy isn't exactly one of the growth engines/opportunities I would be intensely looking at, after all it does only make up 7% of Heartland's book, maybe only 5 or 6% this time next year

[winner69]

trader jackson ........
Not to mention a rebounding dairy sector... this time next year we could easily see millions wiped off this year's impairments, but anyhow... dairy isn't exactly one of the growth engines/opportunities I would be intensely looking at, after all it does only make up 7% of Heartland's book, maybe only 5 or 6% this time next year

Didn't you read the bit about having 'an appetite' for further dairy lending

So may still be 7% of the book

[trader_jackson]

Didn't you read the bit about having 'an appetite' for further dairy lending

So may still be 7% of the book

Well I suppose if they can make some money out of it, then this isn't a bad thing... I suppose they do have lots of money sitting around just waiting for investment and "the right opportunity" afterall...

[Snow Leopard]

Well end of the week and Heartland is back as my single biggest holding on the NZX having pipped Scales.

I blame tj.

Best Wishes
Paper Tiger

[winner69]

Well end of the week and Heartland is back as my single biggest holding on the NZX having pipped Scales.

I blame tj.

Best Wishes
Paper Tiger

Yes indeed - t_j has done us proud this week promoting Heartland as he has

[trader_jackson]

My apologies all, but I find it very hard not to promote HBL's double digit growth and excellent fundamentals ;)

[winner69]

HBL has never traded at such lofty price/book multiples as it is today. Over the last year that multiple has gone from 1.1 to 1.4. (Analysts like Craigs seem to think either price/book or price/NTA are the preferred multiples to use)

A year ago (day of announcement) HBL share price was $1.13 - it of course is now $1.50 - up33%

Of the 37 cents increase 34 cents has come from that multiple expansion. The other 3 cents from improved Heartland financials.

So most of the share price increase has from improved market sentiment rather than actual performance. Much the same has happened with market leaders like Fletcher Building and Spark so it seems pretty widespread

We (Heartland shareholders) have benefited from the general market increased enthusiasm for stocks. Heartland has played it's bit by not stuffing up but the 33% has mainly come from a enthusiastic market

Long may it continue - the market appears to still have a lot of 'enthusiasm' left and HBL shares should continue to rise in line with this enthusiam

[Baa_Baa]

Well end of the week and Heartland is back as my single biggest holding on the NZX having pipped Scales.

I blame tj.

Best Wishes
Paper Tiger

What does the TA tell us, now that it has an almost uninterrupted stunning 2 month appreciation, slamming into/through the upper 2.5 Std Deviation 20SMA (Bollinger) which has always portended a reversal? Bloody good run that's for sure, up 30% in a couple of months, question must be how sustainable it is from here, where / when to take profits, or not.

[Snow Leopard]

What does the TA tell us, now that it has an almost uninterrupted stunning 2 month appreciation, slamming into/through the upper 2.5 Std Deviation 20SMA (Bollinger) which has always portended a reversal? Bloody good run that's for sure, up 30% in a couple of months, question must be how sustainable it is from here, where / when to take profits, or not.

TA tells you & me it has gone up, no more no less.

As for upper 2.5 Std Deviation 20SMA (Bollinger)
http://www.levieuxcomptoir.co.uk/communities/1/004/011/429/231/images/4610560791.png
Yes definitely.

Best Wishes
Paper Tiger

Disc: The future is not yet known, but in an infinite universe anything can happen & often does.

[Ace]

TA tells you & me it has gone up, no more no less.

As for upper 2.5 Std Deviation 20SMA (Bollinger)
http://www.levieuxcomptoir.co.uk/communities/1/004/011/429/231/images/4610560791.png
Yes definitely.

Best Wishes
Paper Tiger

Disc: The future is not yet known, but in an infinite universe anything can happen & often does.

This has to be the best post on this forum, bollinger bands never felt so tempting on a friday night.

[winner69]

HBL share price still going up - good stuff

Well over $1.50 now

Amazing what a rising tide does eh (a rising tide lifts all boats (stocks) so they say)

But whose complaining

[Snow Leopard]

So on a scale of 1 - 6 where do you reckon we are?

http://www.wineracks.co.uk/images/wine-racks/basic/champagne/bollinger-wine-racking.jpg

Best Wishes
Paper Tiger

[nextbigthing]

So on a scale of 1 - 6 where do you reckon we are?


About here

8247

[Ggcc]

I thought the Auckland airport balloon would burst when the valuation got to $6 per share..... Guess I was wrong

[axe]

up ....up .....and away


About here

8247

[Leftfield]

Interest.co.nz reporting today......

The Commerce Commission has filed civil proceedings in the Auckland High Court asking the Court questions about how the Credit Contract and Consumer Finance Act 2003 (CCCFA) applies to consumer loans entered into with peer-to-peer lender Harmoney Limited.
Harmoney says it's "disappointed' with the commission's action.
The loss-making Harmoney is already facing a six-figure fine (http://www.interest.co.nz/business/82937/peer-peer-lender-harmoney-facing-significant-fine-fair-trading-act-case-news-also) in a separate Fair Trading case brought earlier by the commission, and to which it has pleaded guilty.

[percy]

Interest.co.nz reporting today......

The Commerce Commission has filed civil proceedings in the Auckland High Court asking the Court questions about how the Credit Contract and Consumer Finance Act 2003 (CCCFA) applies to consumer loans entered into with peer-to-peer lender Harmoney Limited.
Harmoney says it's "disappointed' with the commission's action.
The loss-making Harmoney is already facing a six-figure fine (http://www.interest.co.nz/business/82937/peer-peer-lender-harmoney-facing-significant-fine-fair-trading-act-case-news-also) in a separate Fair Trading case brought earlier by the commission, and to which it has pleaded guilty.

These proceedings will most probably affect the value of HBL's 10% holding in Harmoney.
[although I doubt it will be material].
What it will not affect is the very profitable lending Heartland Bank is conducting through Harmoney channels.

[Leftfield]

These proceedings will most probably affect the value of HBL's 10% holding in Harmoney.
[although I doubt it will be material].
What it will not affect is the very profitable lending Heartland Bank is conducting through Harmoney channels.

Agree that the effect on HBL is mitigated by them only having 10% of Harmony. However, it is in HBL's interests to have this resolved ASAP for the peer to peer lending investment to flourish.

In the meantime Harmony's losses likely to increase (and margins eroded)?

[percy]

Agree that the effect on HBL is mitigated by them only having 10% of Harmony. However, it is in HBL's interests to have this resolved ASAP for the peer to peer lending investment to flourish.

In the meantime Harmony's losses likely to increase (and margins eroded)?

We are seeing regulators in UK,Aussie and here clarifying lending rules,in particular pay day lending.
Vehicle/equipment lenders learnt a lot with the MTF/Sportzone Commerce commission case, and I expect online/peer to peer lenders will learn what is acceptable with CC and Harmoney resolution.
It is in every bodies interest to have fair regulations.

[tim23]

Anyone have a brokers valuation post result? Thanks

[percy]

Anyone have a brokers valuation post result? Thanks

In their research report dated 16th august 2016 ,Craigs rated HBL as a buy with a target price of $1.56.

[tim23]

Thanks Percy

[trader_jackson]

Not that I would recommend listening to brokers, but as you asked: Forsyth latest rating (released 17 August this year) was Neutral with a target price of $1.50.
They note the uncertainty regarding HBL's very strong capital position... and so can't take this most likely marvelous opportunity (whether that be a UDC acquisition, or a tremendous capital return) into account in their rating.

I also note on 4-traders, the consensus average is $1.51 (with 1.46 as the low and Craigs $1.56 as the high: out of 3 surveyed: http://www.4-traders.com/HEARTLAND-BANK-LTD-11344518/consensus/)

Although, word on the street is still $1.60 by Christmas ;)

[Joshuatree]

Double bagger friday. Wonderful stock this has been to me and long may it continue.Off for a Double shot latte in a glass to celebrate; cheers percy:t_up:
ps more than double with shares for divs

[winner69]

Although, word on the street is still $1.60 by Christmas ;)

t_j - you must be joking

[trader_jackson]

t_j - you must be joking

Yes, good to see you got the joke!

Obviously it will be $1.60 well before Christmas ;)
(especially if dairy keeps turning around this rapidly, not to mention how well positioned HBL are in general of course)

[winner69]

Yes, good to see you got the joke!

Obviously it will be $1.60 well before Christmas ;)
(especially if dairy keeps turning around this rapidly, not to mention how well positioned HBL are in general of course)

.....and without making an acquisition as that is off the agenda

[winner69]

Heartland say they do well in good economic times (good GDP numbers)

Jeez - last week we've seen record new vehicle sales / wholesale trade up +4.4% / Truckometer back on track implying strong GDP numbers / NZD staying high / high commodity prices / ever increasing house values etc etc etc

GDP this year probably 4% - wow

No wonder Heartland share price heading to $2 - on back of record profits in excess of $60m (even Jeff won't be able to avoid an earnings upgrade before Xmas)

[winner69]

Global Dairy Prices up with solid increases in latest auction overnight

Generally positive for HBL share price

Just more good news

[percy]

Yes "the stars are aligned" for Heartland Bank.
I do not know whether we will have any further announcements before the agm on the 22nd November or not.
I expect the agm will see Heartland give a full presentation of where they are,where they are headed, and how they are going to achieve their objectives.
No word from anyone on ANZ Bank's UDC sale.Would be a perfect fit for Heartland.
Maybe a further credit rating upgrade announcement?
In the meantime we will enjoy the lovely dividend,payable on my wife's birthday, and the solid share price.

[trader_jackson]

Global Dairy Prices up with solid increases in latest auction overnight

Generally positive for HBL share price

Just more good news

Hard to believe the share price is still in the $1.50's really

NZ Herald this morning: Significant boost for dairy farmers
... should probably mean a significant boost for Heartland?

You'd think more and more and more confirmation of a rebounding dairy sector, with famers almost certain to be resonably above break even this season, would finally bump the share price over $1.60?
(on the basis that the dramatic jump in rural net impaired assets in FY16, of about $21m, will be reversed almost as quickly as they were added on)

Not that dairy is my main focus... we know Heartland is well positioned for so much more;)

[winner69]

Yes t_j and percy - earnings upgrade coming before ASM

Nearly 3 months into the new year and even Jeff won't be able to keep everything in the bottom drawer awaiting that rainy day.

See Coop Banking got a ratings upgrade the other day - jeez on that basis Heartland rating should have an A in front of it. Now c'mon winner don't get too excited,

[jim9358]

Finally got some: Been trying to pull it down to 1.5 for the week, but chased it up to 1.54 last night and its been taken. Am ok about that as I think too November be interesting ;-)

[Hectorplains]

Hard to believe the share price is still in the $1.50's really

NZ Herald this morning: Significant boost for dairy farmers
... should probably mean a significant boost for Heartland?


So when dairy prices were in freefall that was not an issue for Heartland but now rising ones are a 'significant' positive.

Okay?

[iceman]

So when dairy prices were in freefall that was not an issue for Heartland but now rising ones are a 'significant' positive.

Okay?

I think it was an issue of moderate concern for HBL when milk prices fell as rapidly and as far as they did. It was never a make or break issue for HBL as they do have their eggs in many and varied baskets. Fast rising milk prices reduces that moderate concern again.

[winner69]

So when dairy prices were in freefall that was not an issue for Heartland but now rising ones are a 'significant' positive.

Okay?

Too right

In theirown words growth in dairy lending remains on the agenda - "Continued low dairy prices dictate a cautious approach to new lending, but remain open to new customers and supportive of existing customer"

Better dairy prices good for Heartland

[trader_jackson]

So when dairy prices were in freefall that was not an issue for Heartland but now rising ones are a 'significant' positive.

Okay?

Well the difference was, in my view, that the share price fell (in a reasonably significant way) when dairy prices fell, now they have dramatically risen, while HBL has barely moved
(just my view)

[percy]

The main reason Heartland Bank share price fell so much because of dairying was because the market thought a] Heartland had a huge exposure to dairying,and b] the borrowers would default.
Neither were correct.
Whether some people see things that way could affect Heartland Bank's share price,yet analysts from the major broking houses have never seem dairying as a "major" issue to Heartland Bank.They correctly saw HBL had low exposure to dairying,and the loans had good security.We must remember HBL brought PGW's rural loan book,which was mainly sheep and beef farmers.

[Hectorplains]

The main reason Heartland Bank share price fell so much because of dairying was because the market thought a] Heartland had a huge exposure to dairying,and b] the borrowers would default.
Neither were correct.
Whether some people see things that way could affect Heartland Bank's share price,yet analysts from the major broking houses have never seem dairying as a "major" issue to Heartland Bank.They correctly saw HBL had low exposure to dairying,and the loans had good security.We must remember HBL brought PGW's rural loan book,which was mainly sheep and beef farmers.

Which means that the correction in dairy prices will have little immediate impact on the state of the loan book, it does offer some potential going forward for loans. I doubt that potential warrants a significant share price rise?

[percy]

Which means that the correction in dairy prices will have little immediate impact on the state of the loan book, it does offer some potential going forward for loans. I doubt that potential warrants a significant share price rise?
I concur......lol.

[trader_jackson]

Which means that the correction in dairy prices will have little immediate impact on the state of the loan book, it does offer some potential going forward for loans. I doubt that potential warrants a significant share price rise?

Correct, probably doesn't warrant a significant share price rise, but for some unkown reason to me (and percy) it did seem to warrant a significan't share price drop (in my view)
...I'd like to see this 'reinstated' accordingly:t_up:... after the DRP ;)

[winner69]

Well the difference was, in my view, that the share price fell (in a reasonably significant way) when dairy prices fell, now they have dramatically risen, while HBL has barely moved
(just my view)

Relationship still exists t_j

HBL share price moving up faster than WMP is - not 'barely moved'

Interesting but a load of the old proverbial ....unless the populous relate Heartland to farming and as such dairy prices one way or the other have an affect on their profitability

Other things no doubt in play - like a market exuberance rerating most things upwards whether warranted or not.

[winner69]

One advantage of being small - you don't get the same scrutiny as the big banks. But industry behaviour might roll over to Heartland - if there is actually anything dodgy

http://www.interest.co.nz/rural-news/83510/reserve-bank-thematic-review-probe-banks-problem-loan-identification-and

Love the term forbearance - is that the same as putting off the day you need to face up to reality

Extract

"The topic for this year's thematic review is: "Problem loan identification, forbearance and provisioning practices in the dairy sector," the Reserve Bank says.

"Our objective is to better understand how banks are capturing and measuring dairy sector credit risk and how this translates into provisioning and forbearance practices. The review is limited to the industry's five largest dairy lenders [ANZ, ASB, BNZ, Rabobank and Westpac] and will require the banks to respond to a comprehensive questionnaire and provide supporting data."

[janner]

and will require the banks to respond to a comprehensive questionnaire and provide supporting data."

Which will be costly to those Banks and not Heartland..

Disc. Hold..

[Raz]

One advantage of being small - you don't get the same scrutiny as the big banks. But industry behaviour might roll over to Heartland - if there is actually anything dodgy

http://www.interest.co.nz/rural-news/83510/reserve-bank-thematic-review-probe-banks-problem-loan-identification-and

Love the term forbearance - is that the same as putting off the day you need to face up to reality

Extract

"The topic for this year's thematic review is: "Problem loan identification, forbearance and provisioning practices in the dairy sector," the Reserve Bank says.

"Our objective is to better understand how banks are capturing and measuring dairy sector credit risk and how this translates into provisioning and forbearance practices. The review is limited to the industry's five largest dairy lenders [ANZ, ASB, BNZ, Rabobank and Westpac] and will require the banks to respond to a comprehensive questionnaire and provide supporting data."

The problem lies in that prices have gone up as a consequence of cut back on volumes...revenue is still a concern....

[trader_jackson]

"when the economy does well, Heartland does well"

While the NZX 50 continues to slide, things got interesting for HBL after 3pm today... maybe we will finally see that $1.60 mark this week winner69?

Taken its time to get there, hasn't it?

[winner69]

"when the economy does well, Heartland does well"

While the NZX 50 continues to slide, things got interesting for HBL after 3pm today... maybe we will finally see that $1.60 mark this week winner69?

Taken its time to get there, hasn't it?

More good news t_j. GDP over 4% this year I reckon. Nothing like a real boom before a crash is there

Cameron Bagrie‏ @ANZ_cambagrie
NZ ANZ Roy Morgan consumer shows Spring bounce. Shows economic momentum continuing at brisk clip. House price expectations hit new high.

[Onion]

Directors Chris Flood and Jeff Greenslade buying more shares... but I think really just conversion of options to shares.

https://www.nzx.com/companies/HBL/announcements/289210
https://www.nzx.com/companies/HBL/announcements/289208

[trader_jackson]

More good news t_j. GDP over 4% this year I reckon. Nothing like a real boom before a crash is there

Cameron Bagrie‏ @ANZ_cambagrie
NZ ANZ Roy Morgan consumer shows Spring bounce. Shows economic momentum continuing at brisk clip. House price expectations hit new high.

Yes, things can only get better! I wonder how UDC is going? All this "economic momentum" is certainly carrying HBL higher, and who can't like a quality New Zealand company with a dividend that has a [recent] track record of double digit percent increases year after year?

HBL finished at a record high of $1.59, shame it didn't quite touch the $1.60, but in a week where the nzx 50 has fallen around 3%, while HBL has risen about 2%, I suppose we can't complain to much about another out-performance?

[janner]

[QUOTE=
HBL finished at a record high of $1.59, shame it didn't quite touch the $1.60, but in a week where the nzx 50 has fallen around 3%, while HBL has risen about 2%, I suppose we can't complain to much about another out-performance?[/QUOTE]

I am not complaining... Absolutely positive percy is not.. Quite a good investment purchasing at 52 cents and upwards .

Cursing myself for selling down to be honest.. Still my number one holding though.. Love those DRP's

[oldtech]

I bought in November 2015, and I've been watching with interest as this share has rocketed upwards in the last couple of months. I am trying to learn how to value share prices, and curious to know what people's opinions are on the current level. I see 4-traders has the target price at $1.51, does this seem fair to people?

Having tried - and failed - to catch the falling knife on AIR I'm feeling like taking a bit of a breather on that particular roller-coaster ... :)

[janner]

" Having tried - and failed - to catch the falling knife "..

That is how we all learnt... The hard way.. DYOR.. :-)))

[Valuegrowth]

Currently, it has bullish outlook and has some value when compare with some other stocks. My only concern is its ROE has declined over the fast five years.

[percy]

Currently, it has bullish outlook and has some value when compare with some other stocks. My only concern is its ROE has declined over the fast five years.

From Heartland presentation dated 2nd June 2016.
ROE.
2012... 4.2%
2013...6.5%
2014...9%
2015 ...10.4%.
Steadily increasing.

[percy]

Directors Chris Flood and Jeff Greenslade buying more shares... but I think really just conversion of options to shares.

https://www.nzx.com/companies/HBL/announcements/289210
https://www.nzx.com/companies/HBL/announcements/289208

Read how much both spent.
Very large sums of money.

[oldtech]

Fair enough janner, and I'm definitely trying to learn. Greatly appreciate the wealth of knowledge on these forums, but I understand the need to make my own mistakes. :D

[percy]

Oldtech.
Google The Zulu Principle by Jim Slater.A good place to start.

[Valuegrowth]

Sorry it is my mistake on the ROE.
From Heartland presentation dated 2nd June 2016.
ROE.
2012... 4.2%
2013...6.5%
2014...9%
2015 ...10.4%.
Steadily increasing.

[janner]

Fair enough janner, and I'm definitely trying to learn. Greatly appreciate the wealth of knowledge on these forums, but I understand the need to make my own mistakes. :D

It is really a game.. and all games have rules..

You do not play by the rules .. You get penalised ..

The trend is your friend..

[Snow Leopard]

Directors Chris Flood and Jeff Greenslade buying more shares... but I think really just conversion of options to shares.

https://www.nzx.com/companies/HBL/announcements/289210
https://www.nzx.com/companies/HBL/announcements/289208


Read how much both spent.
Very large sums of money.

A little digging suggests that Onion is more likely to be right.

Best Wishes
Paper Tiger

[percy]

A little digging suggests that Onion is more likely to be right.

Best Wishes
Paper Tiger

Thank you.

[SCOTTY]

A little digging suggests that Onion is more likely to be right.

Best Wishes
Paper Tiger

$1.49 per new share with the proceeds going to shareholder funds - well above NTA :)

[Snow Leopard]

$1.49 per new share with the proceeds going to shareholder funds - well above NTA :)

Pick up your well thumbed copies of the Financial Statements and find the section "Staff share ownership arrangements".

Read through it carefully and pay particular heed to the word 'expense' and similar.

Best Wishes
Paper Tiger

[SCOTTY]

Pick up your well thumbed copies of the Financial Statements and find the section "Staff share ownership arrangements".

Read through it carefully and pay particular heed to the word 'expense' and similar.

Best Wishes
Paper Tiger
From the NZX notice- consideration divided by number of shares =
What am I missing here?

[winner69]

Read how much both spent.
Very large sums of money.

Yes indeed - very large sums of money

Aren't we (as owners) very generous in allowing the issue of all these new shares as part of an incentive scheme (and then giving them to the likes of Flood and Greensleeves and others)

[winner69]

At least Flood et al aren't cashing in their huge bonuses

Now that's a real vote of confidence in the future

[percy]

At least Flood et al aren't cashing in their huge bonuses

Now that's a real vote of confidence in the future

Certainly is.
The directors of Heartland Bank are major shareholders,so I think we can be assured "management bonuses" are very much aligned with shareholders interests.

[oldtech]

Oldtech.
Google The Zulu Principle by Jim Slater.A good place to start.

Thanks percy! I'll have a look at getting hold of that - looks like the local library has a copy, or failing that $40 on Fishpond shouldn't break the bank.

[percy]

Thanks percy! I'll have a look at getting hold of that - looks like the local library has a copy, or failing that $40 on Fishpond shouldn't break the bank.

Will be the best $40 you have every invested.!!!

[RTM]

Thanks percy! I'll have a look at getting hold of that - looks like the local library has a copy, or failing that $40 on Fishpond shouldn't break the bank.

http://www.trademe.co.nz/books/fiction-literature/general-fiction/author-ac/auction-1160993502.htm

[Snow Leopard]

From the NZX notice- consideration divided by number of shares =
What am I missing here?

Strictly speaking you are correct in that new shares have been issued at a price above the NTA per share and thus the NTA per share of the company has risen.

However - and this is my being a little annoyed that this sort of thing goes on to the extent that it does (and that no one gives me a million dollars bonus):

the cost of those shares has been an expense to the company over the last few years and this 'debt for equity swap' just gives us our money back by diluting the equity with new shares at the same time.

And now for something completely different...

Best Wishes
Paper Tiger

[Traderwannabe]

http://www.trademe.co.nz/books/fiction-literature/general-fiction/author-ac/auction-1160993502.htm

Thank you for this post. Just bought the book! They are selling two if anyone else is interested :)

[SCOTTY]

Strictly speaking you are correct in that new shares have been issued at a price above the NTA per share and thus the NTA per share of the company has risen.

However - and this is my being a little annoyed that this sort of thing goes on to the extent that it does (and that no one gives me a million dollars bonus):

the cost of those shares has been an expense to the company over the last few years and this 'debt for equity swap' just gives us our money back by diluting the equity with new shares at the same time.

And now for something completely different...

Best Wishes
Paper Tiger

Thanks for your reply PT
At least at the time of issue the options would have been issued well out of the money as an incentive to perform. $1.49 would have looked like a big step back then. At least they were not giving away shareholders funds as freebies like a lot of US and Aussie Companies have been so good at over the years.

[winner69]

Thanks for your reply PT
At least at the time of issue the options would have been issued well out of the money as an incentive to perform. $1.49 would have looked like a big step back then. At least they were not giving away shareholders funds as freebies like a lot of US and Aussie Companies have been so good at over the years.

I think PT was pointing out these were 'freebies' (to Flood and Greensleeves that is essentially paid for by the company)

Maybe PT can explain in plain English?

[Snow Leopard]

I am reasonably sure:

that these shares, wot we are discussing, were freebies;

That those that received these shares did not pay anything at all for them;

(and by shares I include the options that they converted from)

[Stop here & read no further if you are easily confused]

That the cost of these shares has reduced company profits over the years and has been accumulating as a liability on the balance sheet;

That the total assets of the company has not changed by the issue of these shares, but the liability has been converted to equity as in:

Assets = Liaibilities + Equity

Assets = unchanged
Liabilities = reduced by X
Equity = increased by X

Best Wishes
Paper Tiger

[percy]

There is a later ( 2011 ) edition; 'Beyond the Zulu Principle'.

I think the original may have been updated too.
I found reading the summaries gave you a fair understanding of the book.

[winner69]

I am reasonably sure:

that these shares, wot we are discussing, were freebies;

That those that received these shares did not pay anything at all for them;

(and by shares I include the options that they converted from)

[Stop here & read no further if you are easily confused]

That the cost of these shares has reduced company profits over the years and has been accumulating as a liability on the balance sheet;

That the total assets of the company has not changed by the issue of these shares, but the liability has been converted to equity as in:

Assets = Liaibilities + Equity

Assets = unchanged
Liabilities = reduced by X
Equity = increased by X

Best Wishes
Paper Tiger

Correct - well done

[Leftfield]

Meanwhile, increasing heat on the Australian banks re rate rigging accusations.

http://www.bbc.com/news/business-37127579

[winner69]

Strictly speaking you are correct in that new shares have been issued at a price above the NTA per share and thus the NTA per share of the company has risen.

However - and this is my being a little annoyed that this sort of thing goes on to the extent that it does (and that no one gives me a million dollars bonus):

the cost of those shares has been an expense to the company over the last few years and this 'debt for equity swap' just gives us our money back by diluting the equity with new shares at the same time.

And now for something completely different...

Best Wishes
Paper Tiger

Time to get a 'little annoyed' again mate

Another 189,185 freebie shares allotted today (wonder who for this time)

Never ending gravy train

[winner69]

Global Dairy Trade results over night reasonably positive

Good for Heartland share price (for whatever reason pretty strong relationship between the two)

[trader_jackson]

http://www.theaustralian.com.au/business/dataroom/flexigroup-hires-kiwi-adviser-for-think-sale/news-story/eb543f3b5cc2ee714c2319d484c3e9f9

UDC sale getting closer...
Busy and exciting times with dairy famers 'back in black' and UDC sale on the horizon:t_up:

[winner69]

http://www.theaustralian.com.au/business/dataroom/flexigroup-hires-kiwi-adviser-for-think-sale/news-story/eb543f3b5cc2ee714c2319d484c3e9f9

UDC sale getting closer...
Busy and exciting times with dairy famers 'back in black' and UDC sale on the horizon:t_up:

Good eh t_j

So Kohlberg Kravis Roberts, Macquarie Group and Heartland Bank are touted as suitors

Despite Heartland continually repeating "Acquisitions remain a part of Heartland’s growth strategy, but they must be value accretive and either deliver innovation or a compelling distribution capability" I can see Jeff salivating at the mouth at the prospects of acquiring UDC.

An opportunity to great to miss no matter what the cost. One doesn't get that many opportunities to make a name for oneself and life must be pretty boring for him at the moment. Just say the magic words 'eps accretive' and its all honky dory and share holders will front up with zillions to make it happen.

[Jantar]

http://www.theaustralian.com.au/business/dataroom/flexigroup-hires-kiwi-adviser-for-think-sale/news-story/eb543f3b5cc2ee714c2319d484c3e9f9

UDC sale getting closer...
Busy and exciting times with dairy famers 'back in black' and UDC sale on the horizon:t_up:
Your link is behind a paywall. Can you give us an idea of what it says?

[percy]

Good eh t_j

So Kohlberg Kravis Roberts, Macquarie Group and Heartland Bank are touted as suitors

Despite Heartland continually repeating "Acquisitions remain a part of Heartland’s growth strategy, but they must be value accretive and either deliver innovation or a compelling distribution capability" I can see Jeff salivating at the mouth at the prospects of acquiring UDC.

An opportunity to great to miss no matter what the cost. One doesn't get that many opportunities to make a name for oneself and life must be pretty boring for him at the moment. Just say the magic words 'eps accretive' and its all honky dory and share holders will front up with zillions to make it happen.

Would be a great fit.

[trader_jackson]

Your link is behind a paywall. Can you give us an idea of what it says?

Essentially:
Deutsche gets set to launch the sale process of ANZ’s UDC Finance operation across the Tasman at the end of this month, suitors being touted as the likely buyers include Kohlberg Kravis Roberts, Macquarie Group and Heartland Bank.
UDC is a major NZ asset finance company, providing financing for plant, vehicles and equipment, along with secure term investments and call accounts.
It comes after ANZ last year sold its Australian auto finance operation Esanda to Macquarie and General Electric’s consumer finance operation was sold to a consortium including KKR.

Thanks to HBL's great dividend (even better than ARV's;)), and similar to HBL itself, I am "well positioned", and will have some cash around for the capital raising to acquire UDC (should this opportunity materialize) ;)

[nextbigthing]

$1.60 by Christmas

It has happened as stated, and with 3 months to spare! Congratulations to all holders!!!

I've awoken to this brilliant news on my yacht in the Med and shall celebrate with a 30l Boerl and Kroff Brut breakfast, will be interesting to see how long it lasts!

NBT

[percy]

It has happened as stated, and with 3 months to spare! Congratulations to all holders!!!

I've awoken to this brilliant news on my yacht in the Med and shall celebrate with a 30l Boerl and Kroff Brut breakfast, will be interesting to see how long it lasts!

NBT




Great call.
When do you see HBL hitting $2.00.???
Enjoy the Med,we are back into winter here in ChCh.

[Snow Leopard]

It has happened as stated, and with 3 months to spare! Congratulations to all holders!!!

I've awoken to this brilliant news on my yacht in the Med and shall celebrate with a 30l Boerl and Kroff Brut breakfast, will be interesting to see how long it lasts!

NBT




Trading ex-div and 5c lighter tomorrow so the question is when does it really get to $1.60 ?

Due to the magnificent 33%+ gains over the last 3 months, I am taking the cash this dividend.

Best Wishes
Paper Tiger

[trader_jackson]

Trading ex-div and 5c lighter tomorrow so the question is when does it really get to $1.60 ?


Hmm... end of next week? (give it a few days to recover...;))

What do you think winner69? am I being to generous? ;)

[JeremyALD]

New to share trading but heartland has certainly been my glowing share in the last few months. Bought in at 1.18 and it's been up ever since! Been really impressed with how well it's holding over the last two weeks ex dividend and a small correction across the NZX. Long may it continue. I feel like HBL still has a bit of gas left before Christmas.

[trader_jackson]

Hard few days for HBL... great fundamentals remain intact so no panic in TJ camp (maybe with Deutsche bank weakness etc etc UDC can be brought cheaper??)

In fact... isn't this good for the DRP?? :t_up:
"...P is the volume weighted average sale price in New Zealand dollars (expressed in cents and fractions of cents) for a Share calculated on all trades of Shares which took place through the NZX Main Board over the period of 5 trading days immediately following the Record Date."
hmm... Mr Market, please do a crazy over-reaction 'IQE style' and crash substantially, but only for the rest of this week before a swift rebound to $1.60+ thanx ;)

Got the lovely annual report in the post today... great stuff really, could go on all evening, but I've talked enough about HBL's recent results already I think ;)

Fun Fact(s) Tuesday:
Compared Executive Remuneration numbers... Summary: quite interesting but essentially the top seemed to take a haircut, although overall total is up to 113, from 109 in 2015 (contact me if you'd like a 'comprehensive' picture :))

Compared Shareholder Information... Summary: ACC was a very large seller that is for sure! Overall number shareholders are up by nearly 10%, with middle 1 001 - 100 000 (the 4 categories this covers) all increasing their ownership stakes... more retail shareholders than last year? (again, contact me if you'd like a 'comprehensive' picture :)))

Disclosure: Fun fact Tuesday will most likely not become a regular thing

[winner69]

Interesting Tuesday Facts there t_j

What they say about diversity?

[percy]

Interesting Tuesday Facts there t_j

What they say about diversity?

Loved it.
Thought straight away they put that in for you.!!!..lol.

[winner69]

Loved it.
Thought straight away they put that in for you.!!!..lol.

Ah I see it now - not much - the bare minimum as required by the NZX, no more and no less. All i would have expected from an old boys club run company.

Hope Ricketts has been briefed how to respond when asked about diversity at the ASM. He made an embarasing hash of it last year

Loved the pages in Maori though - diversity in action that is. Translated into Chinese next year as well

[Hectorplains]

Loved the pages in Maori though - diversity in action that is. Translated into Chinese next year as well

Hopefully not using Google Translate...

[JeremyALD]

Hopefully not using Google Translate...

Hmm down 3.2% today and the worst performer on the nzx

[trader_jackson]

Hmm down 3.2% today and the worst performer on the nzx

Great isn't it? Get a better price for the DRP :t_up:

[SCOTTY]

Great isn't it? Get a better price for the DRP :t_up:

Hi TJ
I think the DRP is calculated on the 5 trading days after going ex. I think the 5 days finished yesterday :(

[trader_jackson]

Hi TJ
I think the DRP is calculated on the 5 trading days after going ex. I think the 5 days finished yesterday :(

FY16 Final Dividend
Payment: 7 October 2016
Record: 23 September 2016 (5pm Friday Last week?)

So it did include today?

[winner69]

FY16 Final Dividend
Payment: 7 October 2016
Record: 23 September 2016 (5pm Friday Last week?)

So it did include today?

Ex date was 22/9

[trader_jackson]

Ex date was 22/9

Ah yes, my apologies, you are both correct.

[winner69]

Ah yes, my apologies, you are both correct.

We'll forgive you

You just need to rein in your excitement sometimes ....keep it up anyway mate

[percy]

Interesting Tuesday Facts there t_j

What they say about diversity?
And for W69.
Heartland Bank appoint Vanessa Stoddart to its board.
She will be a welcome addition.
She has a wealth of skills and experience.

[biker]

There is a HUGE amount of spin in this announcement. Especially the last sentence.
The quality of the HBL board has just been diluted IMO.




DIRECTOR: HBL: Heartland Bank appoints Vanessa Stoddart to its board

HBL
03/10/2016 08:42
DIRECTOR
NOT PRICE SENSITIVE
REL: 0842 HRS Heartland Bank Limited

DIRECTOR: HBL: Heartland Bank appoints Vanessa Stoddart to its board

NZX Release

Heartland Bank appoints Vanessa Stoddart to its board

3 October 2016

Heartland Bank Ltd (Heartland) (NZX: HBL) today announced the appointment of
Vanessa Stoddart as an independent director.

Vanessa is an experienced director and currently serves on the boards of New
Zealand Refining Company Ltd, The Warehouse Group Ltd, Alliance Group Ltd,
Tertiary Education Commission and the Financial Markets Authority.

Following an early legal career, Vanessa gained broad commercial experience
in change management and performance improvement roles for some of New
Zealand's largest companies.

In 2003, Vanessa joined Air New Zealand as part of the executive team to
transform the airline. She was initially responsible for a wide portfolio
including HR, Industrial Relations, Training, Facilities and Health Safety.
From 2009 she also led the Engineering Group, with responsibility for the
safety and maintenance of the airline. Prior to this, from 2000 to 2003 she
was Chief Executive of Carter Holt Harvey's Australian Packaging Group.

Vanessa has been recognised for her achievements in both the HR and
Engineering professions - as a Companion of IPENZ and Honorary Fellow of
HRINZ. She is a Graduate of the Australian Institute of Directors and a
Chartered Member of the New Zealand Institute of Directors.

Government appointments include MBIE's Audit and Risk Committee, DOC's Audit
and Risk Committee, and Business New Zealand's representative on DESC.
Vanessa previously Chaired the Otago University Business School Advisory
Board and is on the Board of Global Women and Kings College.

Heartland's chairman, Geoff Ricketts, said: "We are delighted to welcome
Vanessa onto the Heartland Bank board. She brings outstanding professional
leadership and governance experience to the role."

-

[winner69]

Sort of agree biker

Thought they go for somebody like the lady raz picked - somebody with modern day wherewithal and technical thinking

Lost opportunity imho

[SCOTTY]

Ah yes, my apologies, you are both correct.

Apologies to you TJ. On NZX announcements today: Record date 23rd with issue price $1.4766 :)

[trader_jackson]

Apologies to you TJ. On NZX announcements today: Record date 23rd with issue price $1.4766 :)

hmm interesting, so was the NZX's website inaccurate? (as I think this is where I saw the 22nd, and believed I was wrong)

Not a bad DRP at all, given not so long ago HBL was a cool $1.60...

And as for the appointment of Vanessa ... I would sort of agree with biker... but all about the diversity so at least something improved, right winner69?

[winner69]

GDT auction overnight - WMP down 4%

HBL down yesterday ....hmmm

Spooky eh possums

[percy]

GDT auction overnight - WMP down 4%

HBL down yesterday ....hmmm

Spooky eh possums

Do you think the GDT auction prices follow HBL's sp movements?.
I note HBL was down yesterday before last nights auction.!.............lol.

[iceman]

GDT auction overnight - WMP down 4%

HBL down yesterday ....hmmm

Spooky eh possums

And as recently as yesterday futures markets were picking a 1% rise !!

[winner69]

Heartland use the words digital and seamless a lot in this modern ever changing world

Good they use a (dodgy?) P2P platform for consumer loans and a little black box can approve business loans in a few minutes without human intervention .........but if one wants to put some cash on term deposit you need to ring and talk to a real person .....hmmmm

[macduffy]

They'll probably blame money laundering requirements to "know thy customer" and to make enquiries about the source of the funds involved. Or some other woollly reason!

[Onion]

What has happened today to trigger today's SP retreat? I haven't seen any news that would explain!

[Antipodean]

Worldwide markets worrying.
NZX generally in the red.
Global Dairy auctions.
Profit taking / rebalancing.
Any combination of the above.

I find it easier to be a 'well positioned' LT holder than worry too much about no news intraday drops.

[winner69]

Worldwide markets worrying.
NZX generally in the red.
Global Dairy auctions.
Profit taking / rebalancing.
Any combination of the above.

I find it easier to be a 'well positioned' LT holder than worry too much about no news intraday drops.

You missed that the price might be coming back to more realistic multiples after reaching elevated leels

Nearly 1.5 times book value is pretty high, especially as no acquisition on the cards.

[Baa_Baa]

Worldwide markets worrying.
NZX generally in the red.
Global Dairy auctions.
Profit taking / rebalancing.
Any combination of the above.

I find it easier to be a 'well positioned' LT holder than worry too much about no news intraday drops.

And technically, the top/turn-over was perfectly on the 50% Fib Extension and today's fall through the 50EMA likely spooked a few punters. $1.42 is the previous high and $1.41 is the 100EMA so those look like good price support, not fool proof but technically good.

[percy]

Not that I would recommend listening to brokers, but as you asked: Forsyth latest rating (released 17 August this year) was Neutral with a target price of $1.50.
They note the uncertainty regarding HBL's very strong capital position... and so can't take this most likely marvelous opportunity (whether that be a UDC acquisition, or a tremendous capital return) into account in their rating.

I also note on 4-traders, the consensus average is $1.51 (with 1.46 as the low and Craigs $1.56 as the high: out of 3 surveyed: http://www.4-traders.com/HEARTLAND-BANK-LTD-11344518/consensus/)

Although, word on the street is still $1.60 by Christmas ;)
The above was posted on 30-08-2016.
The consensus appears to have been pretty close.
Lets wait and see if the word on the streer proves to be correct?..lol.

[winner69]

The above was posted on 30-08-2016.
The consensus appears to have been pretty close.
Lets wait and see if the word on the streer proves to be correct?..lol.

Didn't nbt say 2 bucks by Christmas after it reached $1.60?

[percy]

Didn't nbt say 2 bucks by Christmas after it reached $1.60?

I am sure he is right too,but not sure whether he meant Christmas this year or next?

[winner69]

I am sure he is right too,but not sure whether he meant Christmas this year or next?

nbt was saying $1.60 by Christmas this time last year as well

But then again nbt recently did say $1.06 by Christmas

Word on the street that is

[Snow Leopard]

According to the Tiger Furry Logic Valuation Engine

Heartland Bank is today worth:

$1.384

and will be, on Christmas Day, worth

$1.424

Of course the share price is a different matter entirely :).

Best Wishes
Paper Tiger

[percy]

According to the Tiger Furry Logic Valuation Engine

Heartland Bank is today worth:

$1.384

and will be, on Christmas Day, worth

$1.424

Of course the share price is a different matter entirely :).

Best Wishes
Paper Tiger

OK,
You have made a good effort.
But more effort is required.
Forget the Tiger Furry Logic, and revert to the tried and tested Tiger Tea Leaves reading.[Tasseograph] .
We need the answer to two very simple questions:::
1] Date and time HBL sp,[notTFL] will hit $1.60.
2] Date and time HBL sp will hit $2.00.
You will need to concentrate a little harder than you did with the EBO target price.!
Looks as though I will be closer to the $20 time and date.!!

[SCOTTY]

The current tax paid yield of 5.82% with a likely net profit increase around 10% for next year makes them look pretty tasty to me :)

[Bobdn]

Yield seems to mean nothing at the moment. Genesis has a 10.5% gross yield and yet it has dropped quite a bit over the last few days. Incredible how people were so keen to pile into finance companies all those years ago for a lot less return than they would get with some boring old (and I hope safer) utility/infrastructure stocks today.

Wish Genesis had a DRP like HBL.

[huxley]

Yield seems to mean nothing at the moment. Genesis has a 10.5% gross yield and yet it has dropped quite a bit over the last few days. Incredible how people were so keen to pile into finance companies all those years ago for a lot less return than they would get with some boring old (and I hope safer) utility/infrastructure stocks today.

Wish Genesis had a DRP like HBL.

GNE = zero growth plus assets being run down (kupe gas).. what would they do with the capital from a DRP?

[Bobdn]

Yeah, I guess but I was just thinking of it being a nice compulsory savings plan. I'm hoping Kupe will run out mid 2030s rather than in 2027. I also hope for $100 US a barrel oil. I hope for lots of things.

Anyway, back to HBL:)

[trader_jackson]

Yield seems to mean nothing at the moment. Genesis has a 10.5% gross yield and yet it has dropped quite a bit over the last few days. Incredible how people were so keen to pile into finance companies all those years ago for a lot less return than they would get with some boring old (and I hope safer) utility/infrastructure stocks today.

Wish Genesis had a DRP like HBL.

GNE could not have a DRP it simply wouldn't work, as others have explained.

However I wish ARV could have a DRP, especially once they get to greenfield development and things go from exciting to ultra exciting! ;)

Anyway, back to HBL, great fundamentals remain intact (some even saying GDP of 4% or something??)... Australian Financials haven't been doing anywhere near as badly as HBL has been doing, and HBL has much better fundamentals (great interest margin for a start!)

Still great value and in 2 or 3 years (months?) time we could possibly all be looking back laughing how cheap $1.4x was (like it was when it dipped to $1.1x for that very short time during that brexit thingy)

(Dairy prices down 4% and NZX is down something like 4% since the high's earlier this month which probably doesn't help)

[percy]

Yeah, I guess but I was just thinking of it being a nice compulsory savings plan. I'm hoping Kupe will run out mid 2030s rather than in 2027. I also hope for $100 US a barrel oil. I hope for lots of things.

Anyway, back to HBL:)

No living in hope with HBL,just increasing eps, which will fund growing dividends.

[SCOTTY]

Looks like only about 22% of the divi went to the DRP

[trader_jackson]

Looks like only about 22% of the divi went to the DRP

I thought this was quite high... especially given the impressive share price run last quarter (best performer on the NZX?)

Anyone remember the historical rates?

[winner69]

Looks like only about 22% of the divi went to the DRP


Must be many in Heartland for no other reason then for the cash dividend

[trader_jackson]

Anyway, back to HBL, great fundamentals remain intact (some even saying GDP of 4% or something??)... Australian Financials haven't been doing anywhere near as badly as HBL has been doing, and HBL has much better fundamentals (great interest margin for a start!)

Still great value and in 2 or 3 years (months?) time we could possibly all be looking back laughing how cheap $1.4x was (like it was when it dipped to $1.1x for that very short time during that brexit thingy)


With the NZX 50 index dropping like a lead balloon (down nearly 1%), HBL bucking the trend and now back at $1.50 just like that! (panic sellers finished?) Makes me thing Mr Market is searching for the best of both worlds: Yield + Growth in these 'volatile' and 'challenging' times

[percy]

I joined the wife in not taking DRP this time.
Our dividends are in the bank.
Thank you and well done Heartland Bank.

[pierre]

I decided to go for the DRP this year Percy. At the current SP of $1.50 and a strike price of $!.476 I'm up an extra $3000 already. It's always a bit of a lottery as to how it will go but a happy investor here. I owe you a big thank you too. It was your enthusiasm for HBL that got me investing in the company at 63c back in 2012 and it's been a great ride since then. If I ever get to one of your ST meetings in Chch I'll buy you a beer - or even two!

Merci beaucoup
Pierre

[janner]

I decided to go for the DRP this year Percy. At the current SP of $1.50 and a strike price of $!.476 I'm up an extra $3000 already. It's always a bit of a lottery as to how it will go but a happy investor here. I owe you a big thank you too. It was your enthusiasm for HBL that got me investing in the company at 63c back in 2012 and it's been a great ride since then. If I ever get to one of your ST meetings in Chch I'll buy you a beer - or even two!

Merci beaucoup
Pierre

Percy would thank for Perrier :-))

[percy]

Percy would thank for Perrier :-))

Certainly would.!!!
I need a good bit of cash to help one of my daughters out,so that is why I did not take DRP.
Pierre.We remain "well positioned."!!..lol.

[winner69]

Hope that Heartland's (and other NZ banks)sympathetic 'support' of troubled dairy farmers isn't anything like this GRG group that the RBS ran

https://www.buzzfeed.com/heidiblake/dash-for-cash?utm_term=.nw0LAwR7W#.nipaPkKV9

Totally irrelevant but an intriguing story

[janner]

Certainly would.!!!
I need a good bit of cash to help one of my daughters out,so that is why I did not take DRP.
Pierre.We remain "well positioned."!!..lol.

Ha !!!.. Women.. We love them all.. Especially our own..

[fish]

Hope that Heartland's (and other NZ banks)sympathetic 'support' of troubled dairy farmers isn't anything like this GRG group that the RBS ran

https://www.buzzfeed.com/heidiblake/dash-for-cash?utm_term=.nw0LAwR7W#.nipaPkKV9

Totally irrelevant but an intriguing story

Even more irrelevant to Heatrland Bank(i hope)
My oldest brother was a senior manager at Nat West at the time RBS bought them out.
He couldnt ignore what RBS were doing and telling him to do.
People can be so easily encouraged to take loans when offered.
He got out just before the crash with a good retirement/redundancy package and sold all his RBS shares.
My youngest brother didnt sell.
The oldest is having a lovely life-doing as he wants always in summer climes-6 months northern hemisphere and 6 months southern every year.
The youngest is stuck in the uk-no longer in the bank-and scraping.
Wisdom comes with age and experience.
Timing is everything.
We need to watch the type of lending Heartland Bank is doing.
Insider knowledge can be very useful and should never be ignored

[trader_jackson]

https://www.nzx.com/companies/HBL/announcements/290626

Very nice to see, although not surprising for me.

Should at least provide strong support during these volatile times

[beetills]

if they make a significant aquisition then would the credit rating go up or down.

[trader_jackson]

if they make a significant aquisition then would the credit rating go up or down.

If they made an acquisition of something that had a lower credit rating, I would expect the credit rating to go down... if they made an acquisition of something that had a higher credit rating, then I would expect the credit rating to go up.

If they brought UDC, I believe the credit rating would not change as although UDC have a higher credit rating, this is mainly due to the fact ANZ own them... (although on second thought maybe go up a notch)

I believe HBL is deserving of a slightly higher credit rating, what do others think?

[percy]

If they made an acquisition of something that had a lower credit rating, I would expect the credit rating to go down... if they made an acquisition of something that had a higher credit rating, then I would expect the credit rating to go up.

If they brought UDC, I believe the credit rating would not change as although UDC have a higher credit rating, this is mainly due to the fact ANZ own them... (although on second thought maybe go up a notch)

I believe HBL is deserving of a slightly higher credit rating, what do others think?

Yes I did think they would warrant a higher rating.
When I spoke to Chris Flood a few months ago about this, he told me they were already getting funding/deposits at very good rates, and had no need for a higher rating.

[boysy]

Sounds like baloney Percy as a banker any company would crawl over glass to obtain a higher credit rating if anything to obtain a higher level of respectability. The BBB rating shared by the likes of bank of baroda(nz), co op and SBS.

[percy]

Sounds like baloney Percy as a banker any company would crawl over glass to obtain a higher credit rating if anything to obtain a higher level of respectability. The BBB rating shared by the likes of bank of baroda(nz), co op and SBS.

Ring Chris Flood and tell him that,[09] 927 9066.
I can only repeat what he told me.

[winner69]

The quarterly KPMG review of NZ bank's performance out

For those who love to salivate over how good our finance company (bank in drag) is here it is to have a look through

https://home.kpmg.com/content/dam/kpmg/nz/pdf/October/2016-fips-june-quarterly-kpmg-nz.pdf


Mind you the 65 basis points drop in interest margin over 6 months looks a bit ugly - must be a mistake, as they say don't believe everything you read on he internet

[trader_jackson]

Mind you the 65 basis points drop in interest margin over 6 months looks a bit ugly - must be a mistake, as they say don't believe everything you read on he internet

Yes could be a mistake ;)
Still nearly double the next highest, also higher than 12 months ago, when most are lower - this is extremly impressive given a backdrop of OCR cuts, imagine how great this could be when interest rates start rising again?

I look forward to those impaired assets, mostly related to dairy, improving dramatically this coming next year

[winner69]

Yes could be a mistake ;)
Still nearly double the next highest, also higher than 12 months ago, when most are lower - this is extremly impressive given a backdrop of OCR cuts, imagine how great this could be when interest rates start rising again?

I look forward to those impaired assets, mostly related to dairy, improving dramatically this coming next year

You been sucked in by the hype there trader with those high interest margins

Not really comparable to the other real banks - you would expect a finance company to have a higher margin

But warm fuzzies go a long way

[winner69]

Heartland use the words digital and seamless a lot in this modern ever changing world

Good they use a (dodgy?) P2P platform for consumer loans and a little black box can approve business loans in a few minutes without human intervention .........but if one wants to put some cash on term deposit you need to ring and talk to a real person .....hmmmm

And then the nice guy at Heartland says that internet banking doesn't work that well on mobile devices - best to use a desktop he says

Hmmm

[RTM]

Yes....after some time of stuffing around I found that neither of my Apple things would work.
An Android thing would work....however I have to make a special setting each time.....can't exactly recall what as I have largely given up on it while shore bound. They did say they were addressing it...and would let me know when.

Pain in the A !


And then the nice guy at Heartland says that internet banking doesn't work that well on mobile devices - best to use a desktop he says

Hmmm

[percy]

The quarterly KPMG review of NZ bank's performance out

For those who love to salivate over how good our finance company (bank in drag) is here it is to have a look through

https://home.kpmg.com/content/dam/kpmg/nz/pdf/October/2016-fips-june-quarterly-kpmg-nz.pdf


Mind you the 65 basis points drop in interest margin over 6 months looks a bit ugly - must be a mistake, as they say don't believe everything you read on he internet

Thanks for the link.
Yes always makes for good reading.

[winner69]

Yes....after some time of stuffing around I found that neither of my Apple things would work.
An Android thing would work....however I have to make a special setting each time.....can't exactly recall what as I have largely given up on it while shore bound. They did say they were addressing it...and would let me know when.

Pain in the A !

Maybe that shareholder at the last ASM who commented on Board diversity (especially in the context of modern thinking and technology things) by saying 'just look at you all, a row of old fuddy duddies' had a point

Possibly none of them of heard of Android anyway

Missed the opportunity of not appointing somebody like Raz's recommendation recently

[percy]

And then the nice guy at Heartland says that internet banking doesn't work that well on mobile devices - best to use a desktop he says

Hmmm

They will need to get this sorted very quickly.
It is the way the world is moving.

[percy]

The quarterly KPMG review of NZ bank's performance out



Mind you the 65 basis points drop in interest margin over 6 months looks a bit ugly - must be a mistake, as they say don't believe everything you read on he internet

May pay to read the footnote on page 17.

Looks to me as though all the banks are in good shape.

[winner69]

From my mate Cam

@ANZ_cambagrie: ANZ consumer confidence lifted in Oct to highest since mid-2015, driven by optimism about the economic outlook. https://t.co/JlMGukSRBJ


Wow - consumer confidence high + economy booming = punters borrow more = good for Heartland share price

How can a fantastically managed finance company strategically targeting niche markets not do well in this environment.

[trader_jackson]

From my mate Cam

@ANZ_cambagrie: ANZ consumer confidence lifted in Oct to highest since mid-2015, driven by optimism about the economic outlook. https://t.co/JlMGukSRBJ


Wow - consumer confidence high + economy booming = punters borrow more = good for Heartland share price

How can a fantastically managed finance company strategically targeting niche markets not do well in this environment.

Great stuff really, both the economy, and Heartland's proven niche approach providing ample profit... looks like both the NZ economy and Heartland are truly "well positioned"... you'd think then that some people got a bargain today with that unexplained and sudden drop to $1.48 ;)

[Snow Leopard]

No one worried about the troubles at Harmoney?

Best Wishes
Paper Tiger

[winner69]

No one worried about the troubles at Harmoney?

Best Wishes
Paper Tiger

Bad news doesn't happen

Posted this on Harmoney thread with no response. Seems pretty major developments -



Politics getting involved

Emotional stuff - govt accused of putting 45 jobs at risk

http://www.interest.co.nz/business/8...-overrule-over

[winner69]

I hope Jeff is on the phone to this guy first thing in the morning. Sounds like a jolly decent fellow. If the greedy big guys don't want him I'm sure an empathic local bank will greet him with open arms

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11728325

He be given Premier Service with Heartland even without his 100 grand (hope he doesn't use an iPhone for internet banking though)

[percy]

Bad news doesn't happen

Posted this on Harmoney thread with no response. Seems pretty major developments -



Politics getting involved

Emotional stuff - govt accused of putting 45 jobs at risk

http://www.interest.co.nz/business/8...-overrule-over

I have posted my thoughts on the Harmoney thread.
I think it is "material" to Heartland as they are both a shareholder, and a major lender via Harmoney.
So they have capital at risk,and will lose future lending profits should Harmoney close.

[BlackPeter]

Hmm - somebody seems to have pulled that link - I only get error 404 when trying to follow it.

Anything we should know?

[AndyLP]

Hmm - somebody seems to have pulled that link - I only get error 404 when trying to follow it.
Anything we should know?

here it is -
http://www.interest.co.nz/business/84043/acts-leader-tells-commerce-consumer-affairs-minister-paul-goldsmith-overrule-over

[BlackPeter]

[FONT=Verdana]

here it is -
http://www.interest.co.nz/business/84043/acts-leader-tells-commerce-consumer-affairs-minister-paul-goldsmith-overrule-over

cheers.

Had a look through it - and it looks like our consumer credit law might need some fine tuning to allow for organisations like Harmony to charge fees for their services. However - I don't think that this is something likely to kill Harmony. Even if laws don't change I am sure there would be an infinite number of other ways to charge for Harmony's services which would be compliant ...

[RTM]

They must still be confident.....

http://www.sharechat.co.nz/article/63ff6411/heartland-pumps-in-4-mln-to-harmoney-to-boost-stake.html?utm_medium=email&utm_campaign=Heartland%20pumps%20in%204%20mln%20to %20Harmoney%20to%20boost%20stake&utm_content=Heartland%20pumps%20in%204%20mln%20to% 20Harmoney%20to%20boost%20stake+CID_9893cddd357524 7c036f2c3f1f94b000&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle63ff6411heartl and-pumps-in-4-mln-to-harmoney-to-boost-stakehtml

"Heartland Bank, the NZX-listed lender, has lifted its stake in Harmoney Corp, injecting $4 million of new equity into the*peer-to-peer lender.*
The Auckland-based bank paid about 50.9 cents apiece for almost 787,000 shares, increasing its stake to 13 percent, filings to the Companies Office show. That's the same price as was paid by*Stone Ridge Ventures and P2P Global Investments when they pumped*$8.8 million into*Harmoney in its last capital raise in February.*
Harmoney said the funds raised .....etc "

[percy]

They must still be confident.....

http://www.sharechat.co.nz/article/63ff6411/heartland-pumps-in-4-mln-to-harmoney-to-boost-stake.html?utm_medium=email&utm_campaign=Heartland%20pumps%20in%204%20mln%20to %20Harmoney%20to%20boost%20stake&utm_content=Heartland%20pumps%20in%204%20mln%20to% 20Harmoney%20to%20boost%20stake+CID_9893cddd357524 7c036f2c3f1f94b000&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle63ff6411heartl and-pumps-in-4-mln-to-harmoney-to-boost-stakehtml

"Heartland Bank, the NZX-listed lender, has lifted its stake in Harmoney Corp, injecting $4 million of new equity into the*peer-to-peer lender.*
The Auckland-based bank paid about 50.9 cents apiece for almost 787,000 shares, increasing its stake to 13 percent, filings to the Companies Office show. That's the same price as was paid by*Stone Ridge Ventures and P2P Global Investments when they pumped*$8.8 million into*Harmoney in its last capital raise in February.*
Harmoney said the funds raised .....etc "
Thanks for the link.
On HBL's investment in Harmoney;
"The investment is a vote of confidence in the future and growth prospects of Harmoney."

[AndyLP]

Have enjoyed reading the valuable contributions to this thread for the last couple of years and finally found the time to try and learn how to do a DCF valuation.
I'm going by the method in Fundamental Analysis for Dummies - (Matt Krantz) gotta start somewhere right?

Wondering if you knowledgeable guys/gals had any ideas on what to do when the FCF for the most recent period is negative? Which is what I have for HBL currently at -40,706 (gathered from here http://tinyurl.com/zxed2pj)
I tried using an average from the last 5 years, which yields a positive result, but also ends up giving me a valuation of about 2.70!

Some more data.. would be good to know if I'm on the right track.
Discount Rate: 0.09166
CAPM Discount Rate = risk free rate + (expected market return – risk free rate) x stock beta
Risk free rate: 0.0248 (from the Treasury website)
Expected market return: 0.0885 (averaged NZSE return since 1971)
HBL stock beta: 1.05 (Reuters/Financial Times)

Assumed a long term growth rate of 2% and an intermediate term growth rate of 10%

Thanks for any thoughts and help

[RTM]

I can't help you with the DCF sorry....good luck with that.
However $2.70 sounds OK for HBL.
Just stop at that !
Cheers
RTM

[h2so4]

If you look carefully at HBL free cash flow figures for the last 5 years http://tinyurl.com/zxed2pj you will notice that none of the annual figures make any sense. That is because a banks free cash flow is not your normal free cash flow calculation.

Morningstars fcf calculation is simply net cash from operating activities plus purchases of property and equipment. The same for any company.

A banks fcf is different. How you arrive at a banks fcf I have no idea.

Would be an interesting discussion though.

[winner69]

Have enjoyed reading the valuable contributions to this thread for the last couple of years and finally found the time to try and learn how to do a DCF valuation.
I'm going by the method in Fundamental Analysis for Dummies - (Matt Krantz) gotta start somewhere right?

Wondering if you knowledgeable guys/gals had any ideas on what to do when the FCF for the most recent period is negative? Which is what I have for HBL currently at -40,706 (gathered from here http://tinyurl.com/zxed2pj)
I tried using an average from the last 5 years, which yields a positive result, but also ends up giving me a valuation of about 2.70!

Some more data.. would be good to know if I'm on the right track.
Discount Rate: 0.09166
CAPM Discount Rate = risk free rate + (expected market return – risk free rate) x stock beta
Risk free rate: 0.0248 (from the Treasury website)
Expected market return: 0.0885 (averaged NZSE return since 1971)
HBL stock beta: 1.05 (Reuters/Financial Times)

Assumed a long term growth rate of 2% and an intermediate term growth rate of 10%

Thanks for any thoughts and help

Andy - good on you in expanding your financial knowledge and learning new things. iI applaud you

Re HBL negative cash flow for F16 - if you look at their financial statements you will see that it a result of lending $251m more (ie cash out) while only increasing deposits by $186m (cash out). Not all bad but plays havoc with DCF eh.

With all due respect I wouldn't start practicing DCFs on banks. I'm sure you would get a much better understanding of the value of a DCF analysis by working on a less 'sophisticated' business than a bank - with a result that possibly be more rewarding for both your efforts/ learnings / pocket

What other stocks you interested in

[trader_jackson]

I can't help you with the DCF sorry....good luck with that.
However $2.70 sounds OK for HBL.
Just stop at that !
Cheers
RTM

I am very much in the same camp as RTM... but $2.70 does sound very nice! ;)

[h2so4]

I am very much in the same camp as RTM... but $2.70 does sound very nice! ;)

Same thought exactly. LOL!

How do calculate the fcf again winner?

[AndyLP]

Such good feedback - thanks winner, h2s04 (and others)

I did one for SUM as well and came out with $5.91, which feels in the right ball park - 20ish percent upside.. I don't know. Need to do a few more, get more input from you guys before I get enough confidence to execute buys and sells using this stuff.

I stopped buying stocks in 2014 when PEB tanked (which I eventually sold and made money but not nearly as much as I could have) and so promised myself I'd learn more FA before buying again, as I felt like I had no plan when with that stock. Have held HBL/HNZ through that time and continue to do so. Doing ok with it. Trying to work out what constitutes 'over valued' for this stock.. exit plan and all that.

[trader_jackson]

HBL up 1.3%, outperforming the market by a very wide margin... clearly some are happy to buy quality, robust Growth + Yield stocks (note the bold plus sign)

HBL is certainly holding up much better than many other stocks on the market... not down as much as the NZX 50 in these past few weeks... I see Aussie financial sector mostly in the green today and the US Banks reporting stronger than expected profits (Bank of America posted record high Q3 profit did I see this morning?)

Disclosure: not a recommendation to buy, just a statement of how its held up...... so far

[janner]

I have HUGE regrets with HBL..

Bought well above what should have when they first became available.. Sold down lower six figures.. They were to much a percentage of my portfolio.

Sold down another low end six figures for the same reason..

Still have six figures and REGRET SELLING EVERY SINGLE ONE THAT I DID.. ..

[percy]

I have HUGE regrets with HBL..

Bought well above what should have when they first became available.. Sold down lower six figures.. They were to much a percentage of my portfolio.

Sold down another low end six figures for the same reason..

Still have six figures and REGRET SELLING EVERY SINGLE ONE THAT I DID.. ..

Just wait until they break through the $2 mark.!!!!!..lol.

[winner69]

HBL up 1.3%, outperforming the market by a very wide margin... clearly some are happy to buy quality, robust Growth + Yield stocks (note the bold plus sign)



Must have known there was going to be a good GDT auction

Whole Milk Powder up 2.9% overnight - yippee

Should help

Should help HBL share price - action been a bit slack lately

[janner]

Just wait until they break through the $2 mark.!!!!!..lol.

More so when you take their DRP into consideration.. Woe..Woe..

[percy]

Must have known there was going to be a good GDT auction

Whole Milk Powder up 2.9% overnight - yippee

Should help

Should help HBL share price - action been a bit slack lately

Yes the "smart money" now watches HBL's sp to know the direction the GDT auction will go.
Currency traders used to watch the GDT auction to see what way the NZ $ will go, because milk exports make up so much of NZ's exports.
I guess they now follow HBL's sp as their major currency indicator...lol.
Not being "smart money". I just rejoice in the increasing HBL dividends,while my friend Janner can only manage a series of Woe Woes.!!.

[horus1]

I am still picking up Heartland .Just nibbling, I dont often sell anything

[winner69]

Hey nextbigthing

Thanks for sharing those quadratic equations with alpha and beta roots. Very interesting

I can now clearly see where you get $1.60 as a target price for Heartland

[trader_jackson]

http://www.interest.co.nz/business/84240/sp-cuts-udcs-credit-rating-saying-parent-anz-may-sell-finance-company-within-year

HBL + UDC within a year? ;)

Great fundamentals remain, $1.60 by Christmas ;)

[winner69]

http://www.interest.co.nz/business/84240/sp-cuts-udcs-credit-rating-saying-parent-anz-may-sell-finance-company-within-year

HBL + UDC within a year? ;)

Great fundamentals remain, $1.60 by Christmas ;)

You are speculating again t_j

No harm in that if it helps the share price

[winner69]

Hey t_j, seeing we into speculating what might happen how about this

Those Aussie parties touted as being interesting in UDC - betcha they have run the numbers on Heartland as well and maybe found them a better proposition

Maybe they thinking along the lines of Heartland or UDC which shall I chose ...or if you if the big M why not both.

What price you sell for?

[janner]

Hey t_j, seeing we into speculating what might happen how about this

Those Aussie parties touted as being interesting in UDC - betcha they have run the numbers on Heartland as well and maybe found them a better proposition

Maybe they thinking along the lines of Heartland or UDC which shall I chose ...or if you if the big M why not both.

What price you sell for?

Dream on both of you :-)))

[trader_jackson]

Hey t_j, seeing we into speculating what might happen how about this

Those Aussie parties touted as being interesting in UDC - betcha they have run the numbers on Heartland as well and maybe found them a better proposition

Maybe they thinking along the lines of Heartland or UDC which shall I chose ...or if you if the big M why not both.

What price you sell for?

Well this is an interesting question winner69, you have put me on the spot again, so I am not too sure... but if I have a quick think: HBL has quality dividend, quality assets, quality staff, and quality growth... hard to put a price on all this quality ;) but it would have to start with a 2 in front of it (dollars...)

[percy]

A 2 a 2,a2 ,2.2 2.
Something nice about a 2.
I 2 see a 2.

[macduffy]

No, percy, I don't see HBL getting down to the 20c bin!

;)

[winner69]

A takeover of Heartland will get the shareprice up to $2 or more

A struggle otherwise

[percy]

No, percy, I don't see HBL getting down to the 20c bin!

;)

No No No..!!!!!..lol.
$2.22......$2.22..

[percy]

A takeover of Heartland will get the shareprice up to $2 or more

A struggle otherwise

Struggle?????
Not when you have the right digital products, and the right online delivery channels.
Just a matter of when.?

[Snow Leopard]

So the little bank that can using Finzsoft software.

https://nzx.com/files/attachments/247095.pdf

$1.60 one day

Best Wishes
Paper Tiger

[winner69]

So the little bank that can using Finzsoft software.

https://nzx.com/files/attachments/247095.pdf

$1.60 one day

Best Wishes
Paper Tiger

Maybe one will now be able to use mobile devices to do internet banking

Progress - little bank growing up

[winner69]

WOW - GDT auction sees Whole Milk Powder up 20%

WMP been lagging the inflated / buoyant HBL share price of late but last night's action good news (for both)

[trader_jackson]

WOW - GDT auction sees Whole Milk Powder up 20%

WMP been lagging the inflated / buoyant HBL share price of late but last night's action good news (for both)

Well, looks like Dairy farmers will be increasingly "well positioned"... you'd like to think HBL would jump as well with this great news

[winner69]

Well, looks like Dairy farmers will be increasingly "well positioned"... you'd like to think HBL would jump as well with this great news

Yep - HBL needs all the help it can get to keep the inflated share price up

This'll help