HGH - Heartland Group Holdings

[percy]

Maybe true but ASX is a market too big and too important to ignore.

NZX is a pipsqueak market with a board and management who reminds one of headless chooks at the best of times - a market which can be ignored.

Unfortunately,too true.

[winner69]

You have been told correctly.
Your mate at The Co-Op.?

He left them ...gone to Fisher Funds

[percy]

He left them ...gone to Fisher Funds

Really.?
Your bowling club chums then....................lol.
Or did you ring Jeff.?

[winner69]

Really.?
Your bowling club chums then....................lol.
Or did you ring Jeff.?

No ....came from some anonymous know it all on an Internet forum .....but then maybe I shouldn’t believe everything I read on the internet

[BlackPeter]

CBL debacle will only put our market on a par with Aussie,after the fun and games they are having with BIG and GSW.

Its just that the ASX has roughly 8 times more listings than the NZX. If their regulatory oversight and governance would be as bad as ours, they would need 8 defaulters for every CBL ...

And CBL is just the most recent example for NZX companies with apparent governance problems, they are certainly not alone - but don't get me started ...

[minimoke]

CBL debacle will be having a flow on negative effect on HBL - overseas investors would be wondering whether RBNZ has what it takes to supervise the financial sector.

Now is the time for very strong statements from the regulators on the state of our financial service industry.

Also wouldn't mind hearing something from HBL to set our minds at ease. Something like the SML statement after ATM announced the deal with

[Balance]

Now is the time for very strong statements from the regulators on the state of our financial service industry.

Also wouldn't mind hearing something from HBL to set our minds at ease. Something like the SML statement after ATM announced the deal with

NBR headline "FMA knew of CBL probe in August". Says it (FMA) is bound by confidentiality!!!!!!!!

So much for the FMA motto of "Promoting fair, efficient and transparent financial markets".

Do not fill one with warm fuzzies, does it?

[minimoke]

NBR headline "FMA knew of CBL probe in August". Says it (FMA) is bound by confidentiality!!!!!!!!

So much for the FMA motto of "Promoting fair, efficient and transparent financial markets".

Do not fill one with warm fuzzies, does it?

I have a little sympathy for FMA and there requirement to uphold commercial sensitivity - but I can be easily be persuaded otherwise.

However no sympathy at all for CBL who have an overriding responsibility to shareholders.

[Balance]

I have a little sympathy for FMA and there requirement to uphold commercial sensitivity - but I can be easily be persuaded otherwise.

However no sympathy at all for CBL who have an overriding responsibility to shareholders.

One can argue that CBL was doing the right thing - it was trying to raise new capital and any disclosures about how shallow its reserves were would have led to a 'run' and collapse.

Any sympathy however disappeared after they made the unauthorised $55m payments to the offshore entities.

[percy]

No ....came from some anonymous know it all on an Internet forum .....but then maybe I shouldn’t believe everything I read on the internet

Internet forum..
I thought you knew better.

[Beagle]

didn’t poor ‘old Snoopy bring forward a very compelling PE debate awhile back and end up getting slated by a lot of people on ST for his comparison of HBL to the big ozzy banks?

I really enjoyed all of the contributions at the time, but seem to recall that the outcome (general consensus) was that a slight PE premium for a growing kiwi bank vs the ‘large, mature & clunky' ozzy banks was deemed acceptable?

charts indicate support at around 175. should be fine.

A fine debate that was too at that time. At the time HBL was growing its EPS faster than its Australian peer group so the theory then as espoused by this author was that a slight PE premium was fair and reasonable. The issue now is that with recent share issuance I don't see a superior rate of growth anymore so at least in my mind this begs the question of whether a PE premium is currently justified. Time will tell but I agree with posters above all this cloak and dagger stuff with RBNZ does not help confidence or transparency.
In a behind the paywall article on NBR today apparently the FMA knew about the RBNZ investigation into CBL from mid 2017. The only ones who didn't know about the unfolding fiasco were Joe public investors. How this is possibly acceptable in the context of continuous disclosure obligations of the NZX I have no idea ???? Perhaps there should have been a trading halt in August last year ?
Erosion of confidence in RBNZ's transparency will not help confidence in other companies they have a mandate to oversee which of course includes HBL.
Some people on this forum reckon we should all take great comfort from the fact that HBL has the oversight of RBNZ. How much comfort you really can now draw from that I have no idea.

[Balance]

Erosion of confidence in RBNZ's transparency will not help confidence in other companies they have a mandate to oversee which of course includes HBL.
Some people on this forum reckon we should all take great comfort from the fact that HBL has the oversight of RBNZ. How much comfort you really can now draw from that I have no idea.

I for one draws comfort from RBNZ oversight.

RBNZ may not be on the ball all the time but it certainly got the UDC decision right. ANZ was all for selling UDC to HNA group but RBNZ put a stop to it - HNA Group is in all kind of financial difficulties.

[winner69]

I for one draws comfort from RBNZ oversight.

RBNZ may not be on the ball all the time but it certainly got the UDC decision right. ANZ was all for selling UDC to HNA group but RBNZ put a stop to it - HNA Group is in all kind of financial difficulties.

And they recently did catch Westpac out on some of their disclosures around capital ratios and how they had made mistakes in calculating them

[winner69]

Internet forum..
I thought you knew better.


yeah, all sorts of shady characters on those

[Balance]

yeah, all sorts of shady characters on those

As true as it gets!

:D :D :D

[percy]

Wonder what the resident beagle makes of the increased provision for impairments...now 0.73% of all receiveables...compares to 0.1-0.2% for most of the major Aussie banks. I guess that's the price you pay for lending more to the consumer finance and agricultural sector...has to be some price when their net interest margin is circa double that of the Aussie banks.
Posted 22-02-2015.
Interestingly HBL's MIM has remained twice the Aussie Banks.Yes twice.
HBL funding model does not rely on European wholesale funds.
HBL exposure to Aussie residential property is via RELs, which are safer and have a better margin than normal mortgages.
HBL exposure to Aussie mining,and commercial property is nil.
HBL exposure to NZ housing market remains low.
HBL's equity ratio remains excellent.
HBL has good organic growth,mainly driven by digital products,and is stronger than Aussie banks.
HBL has a good record of paying increasing fully imputed dividends.
HBL's directors are major shareholders.The owner's eye.

[Baa_Baa]

Posted 22-02-2015.

Right after peak 'ramp' [those were thrilling times, when the duo show was in full swing and agreement] when it came off the Dec/Jan spike and then went down 25% then oscillated sideways(ish) over a year and a half before recovering.

[percy]

Right after peak 'ramp' [those were thrilling times, when the duo show was in full swing and agreement] when it came off the Dec/Jan spike and then went down 25% then oscillated sideways(ish) over a year and a half before recovering.

Yes it has been a fun ride with Heartland.Plenty of opportunities for every one to buy in.
With increasing fully imputed divies, us long term shareholders are certainly being well rewarded.
The next five years should be even more rewarding for those of us who enjoy fat divies.
May be the share price will be over $5.00.?

[Onion]

yeah, all sorts of shady characters on those

And some of those dodgy internet forums seem to get taken over by cats and dogs! Imagine! :scared:

[winner69]

And some of those dodgy internet forums seem to get taken over by cats and dogs! Imagine! :scared:

.....and the onions haven’t driven them away

Maybe need to put out some pepper spray

[percy]

And some of those dodgy internet forums seem to get taken over by cats and dogs! Imagine! :scared:

Absolute "classic"..............lol.

[winner69]

And some of those dodgy internet forums seem to get taken over by cats and dogs! Imagine! :scared:

One reason why Jeff keeps plenty in the bottom drawer ...for that eventual day when it rains cats and dogs

[steveb]

One reason why Jeff keeps plenty in the bottom drawer ...for that eventual day when it rains cats and dogs
Classic nice one winner

[winner69]

International Women’s Day not being celebrated as it should be at Heartland. Hopefully a reminder to the Board and Leadership team that to achieve credibility action needs to follow rhetoric.

One area where Heartland don’t do what they say they will do

Directors Ellie and Vanessa must be getting frustrated with progress

[minimoke]

International Women’s Day not being celebrated as it should be at Heartland. Hopefully a reminder to the Board and Leadership team that to achieve credibility action needs to follow rhetoric.

One area where Heartland don’t do what they say they will do

Directors Ellie and Vanessa must be getting frustrated with progress
Hopefully the Wimmins are in the kitchen making morning tea for all the staff to help celebrate. My preference though, is that rather than celebrate during work time they keep on doing the job they are paid to do

[horus1]

Couldn't agree more minimoke. All positions should be on merit, not whether you are male or female.

[winner69]

Couldn't agree more minimoke. All positions should be on merit, not whether you are male or female.

Agree horus

But whatbEllie and Vanessa are trying to do at Heartland is change the way that ‘merit’ is judged.....ie eliminate that view that females generally need ‘heaps more merit’ than a male to be called equal

[minimoke]

Agree horus

But whatbEllie and Vanessa are trying to do at Heartland is change the way that ‘merit’ is judged.....ie eliminate that view that females generally need ‘heaps more merit’ than a male to be called equalMerit and competency aren't hard things to judge and don't need sub-committees to over complicate. All you do is look at achievements. Its not what a person could do, its what a person has proven to have done.

[winner69]

Interesting article that some of the more enlightened forum members might find interesting. Even has some actual facts

The Legacy of "Fearless Girl" One Year Later
https://insight.factset.com/the-legacy-of-fearless-girl-one-year-later?utm_campaign=Insight&utm_source=hs_email&utm_medium=email&utm_content=61189632&_hsenc=p2ANqtz-8XvuGr6pHYwN7xIHTSe03w0eszH8qmyBPj-61HlcCRxTLeU1ekBD-92xbW7uhjqBiywlN3abR_xNUqkomwfka3jDnf7A&_hsmi=61189632




Extract -

The table above illustrates that companies with gender-balanced boards tend to generate higher price returns, return on equity, and return on invested capital and experience lower volatility. This data is consistent with our findings from the previous year and the differences are sharpest when comparing companies without female board members and with more than 40% female board members. We also discovered that companies with gender diverse boards pay more dividends than our other buckets.

[minimoke]

Interesting article that some of the more enlightened forum members might find interesting. Even has some actual facts

The Legacy of "Fearless Girl" One Year Later
https://insight.factset.com/the-legacy-of-fearless-girl-one-year-later?utm_campaign=Insight&utm_source=hs_email&utm_medium=email&utm_content=61189632&_hsenc=p2ANqtz-8XvuGr6pHYwN7xIHTSe03w0eszH8qmyBPj-61HlcCRxTLeU1ekBD-92xbW7uhjqBiywlN3abR_xNUqkomwfka3jDnf7A&_hsmi=61189632




Extract -

The table above illustrates that companies with gender-balanced boards tend to generate higher price returns, return on equity, and return on invested capital and experience lower volatility. This data is consistent with our findings from the previous year and the differences are sharpest when comparing companies without female board members and with more than 40% female board members. We also discovered that companies with gender diverse boards pay more dividends than our other buckets.Apart from the patronising title "fearless Girl" I find this sexist approach to diversity quite discriminatory. I would much prefer that Boards ensure 41% of their constituency have no religious affiliation as this will better reflect NZ society.

[Jantar]

International Women’s Day not being celebrated as it should be at Heartland. .... But to keep things in balance, they didn't celebrate International Men's day either.

[beetills]

If woman produce better reults why then is our education system kaput.
Men only make up 25% of teachers.
Rest homes,why is it that no one i talk to has a good word to say about the workers at rest homes,again nearly 80% are woman.
Not picking on woman just stating facts.

[mondograss]

If woman produce better reults why then is our education system kaput.
Men only make up 25% of teachers.
Rest homes,why is it that no one i talk to has a good word to say about the workers at rest homes,again nearly 80% are woman.
Not picking on woman just stating facts.

I have nothing but good things to say about the (mostly female) workers at my father in laws rest home or my uncles rest home for that matter. Suggest perhaps you need to find some stronger facts than random anecdotal rubbish.

[minimoke]

But to keep things in balance, they didn't celebrate International Men's day either.
There is such a day? Must have missed it while just getting on doing with whatever it was I was doing.

[beetills]

I have nothing but good things to say about the (mostly female) workers at my father in laws rest home or my uncles rest home for that matter. Suggest perhaps you need to find some stronger facts than random anecdotal rubbish.
I agree completly with you,have a Father in Law in care at the moment.I respect their work tremendously.
What i am saying is that it's pretty hard to find people that will agree with me as what i hear is moan moan bitch bitch about the staff.
Not from me i greatly appreciate the work they do.

[mondograss]

There is such a day? Must have missed it while just getting on doing with whatever it was I was doing.

https://en.wikipedia.org/wiki/International_Men%27s_Day

[percy]

Winner69.
I thought you had your own thread in "off market discussions" you could use for your rants.??
Better there than here.

[winner69]

Winner69.
I thought you had your own thread in "off market discussions" you could use for your rants.??
Better there than here.

Didn’t know that

This is about Heartland not doing what they said they would do anyway

You sound a bit pissed off with me ....

[percy]

Didn’t know that

This is about Heartland not doing what they said they would do anyway

You sound a bit pissed off with me ....

No.more disappointed you have nothing better to contribute to Sharetrader.

[minimoke]

https://en.wikipedia.org/wiki/International_Men%27s_DayThanks for that - thought I was missing out on something. I see NZ isnt one of the listed countries that participates in such nonsense.

[dabsman]

Nonsense? I think its great. I want a day and why not? Should be a public holiday too.

[Jantar]

Thanks for that - thought I was missing out on something. I see NZ isnt one of the listed countries that participates in such nonsense. I believe you may be missing out on something. That link said "International Men's Day is celebrated in over 70 countries,[9] (https://en.wikipedia.org/wiki/International_Men%27s_Day#cite_note-ReferenceB-9) including..." then listed 39 of those 70 countries. Here in NZ it is often recognized by events such as the Blue Ribbon Ride to highlight prostate cancer. It is not a day off work, and doesn't receive the same publicity that women's events do.

[minimoke]

I believe you may be missing out on something. That link said "International Men's Day is celebrated in over 70 countries,[9] (https://en.wikipedia.org/wiki/International_Men%27s_Day#cite_note-ReferenceB-9) including..." then listed 39 of those 70 countries. Here in NZ it is often recognized by events such as the Blue Ribbon Ride to highlight prostate cancer. It is not a day off work, and doesn't receive the same publicity that women's events do.I'm not missing out because its not something worth highlighting when I can celebrate it every day. And dont get me started on the sexist health department funding which must be run by wimmins. Prostate kills as many men as breast cancer but do these Wimmins put in as much money for prevention. No way. Anyhow - getting way off topic now!

[winner69]

No.more disappointed you have nothing better to contribute to Sharetrader.

I think it's a relevant contribution to the Heartland thread. ...just as diversity seems to be important to Heartland

[iceman]

I think it's a relevant contribution to the Heartland thread. ...just as diversity seems to be important to Heartland

I definitely think this is an issue worth debating and we should look at results from countries that are doing things different to us in this field. As you know, I have seen positive changes in a different country. But the Heartland thread taken over with pages of this already this morning is not the thread for it. It is not a company specific issue

[winner69]

You guys are right after all with all this carry on by Heartland about gender and enthnicity

I had a nice lunch with a wise old gentleman today. He reckons that many companies may have grown past their point of optimal size.

They then start wasting effort and money on feel-good diversity campaigns ....because they have so much scope for waste, not because its inherently economically beneficial or productive

Sort of makes sense - you were all right after all.

[Beagle]

You guys are right after all with all this carry on by Heartland about gender and enthnicity

I had a nice lunch with a wise old gentleman today. He reckons that many companies may have grown past their point of optimal size.

They then start wasting effort and money on feel-good diversity campaigns ....because they have so much scope for waste, not because its inherently economically beneficial or productive

Sort of makes sense - you were all right after all.

Been trying to tell you that for a while mate. All this printing of parts of the annual report in Maori and then going on to specifically single Maori's out for special treatment in the company and dressing that up as "general diversity" when we all know what it really is, is absolutely outrageous in my opinion.

[percy]

Been trying to tell you that for a while mate. All this printing of parts of the annual report in Maori and then going on to specifically single Maori's out for special treatment in the company and dressing that up as "general diversity" when we all know what it really is, is absolutely outrageous in my opinion.
Agreed.
Well I guess companies have to try to keep up with public opinion [rubbish] published on internet forums, and in "lifestyle finance" in Fairfax newspapers.??!

[Beagle]

Agreed.
Well I guess companies have to try to keep up with public opinion [rubbish] published on internet forums, and in "lifestyle finance" in Fairfax newspapers.??!

I think they take it to a new overt level and some shareholder(s) need to take the board to task for this. Must be some commercial reason they'd go so far out on a limb surely ? I for one wouldn't mind wagering a few quid that a significant amount of treaty settlement money was deposited by Iwi and it came with strings attached.

[percy]

Yes I would expect from Heartland's savvy board and management, it may well be for sound commercial reasons.
The very experienced board do have a lot of social/community commitments.
They connect with the community,staff,depositors,customers, and investors.

ps.With my granddaughter learning Maori,Heartland's annual report may be just what I am looking for to get her interested in the sharemarket.
Guess I may have to buy her a few shares ,so she gets her own report.?

[davflaws]

Been trying to tell you that for a while mate. All this printing of parts of the annual report in Maori and then going on to specifically single Maori's out for special treatment in the company and dressing that up as "general diversity" when we all know what it really is, is absolutely outrageous in my opinion.

I don't. So what is it really?

[Beagle]

I don't. So what is it really?

Open both eyes and you'll see for yourself.

[davflaws]

Open both eyes and you'll see for yourself.

That is the sort of put down that this site doesn't need. Your contributions are usually thoughtful and valuable and I think it is unworthy of you. You have a problem with Heartland's diversity policy generally, along with some others on this site, but it has never been clear to me what it is. I hesitate to ascribe it to generalised sexism or racism, and I invite you to explain why you believe that a diversity policy is not good for Heartland and its shareholders.

[macduffy]

It seems to me - I'm not a shareholder - that Heartland sees it as a point of difference to be "Kiwi", which in their view includes an effort to include te reo in their communications to shareholders and the wider investment market. Probably an effective and appropriate strategy in 2018.

[kizame]

That is the sort of put down that this site doesn't need. Your contributions are usually thoughtful and valuable and I think it is unworthy of you. You have a problem with Heartland's diversity policy generally, along with some others on this site, but it has never been clear to me what it is. I hesitate to ascribe it to generalised sexism or racism, and I invite you to explain why you believe that a diversity policy is not good for Heartland and its shareholders.

Personally I don't think a diversity policy is any good for a company,it should be the best person for the job,and the best person for the companies onward progression and growth. If that person be female,asian,maori or whatever then great.
But I do think HBL are trying to snuggle up to as many different ethnicities as they can,as it improves the likelyhood of improved business. imop. Those ethnicities are an important and large percentage of our economy now.

[bullfrog]

It seems to me - I'm not a shareholder - that Heartland sees it as a point of difference to be "Kiwi", which in their view includes an effort to include te reo in their communications to shareholders and the wider investment market. Probably an effective and appropriate strategy in 2018.
Absolutely right. They’re tagging the #metoo campaign, walking the talk that they are not an Aussie bank, giving themselves a point of difference. All banks basically offer the same things, so why will kiwis choose heartland... they’ll choose heartland with their heart

[Joshuatree]

We are in the era of inclusiveness,diversity and collaboration now. It does sound like some are still stuck in the past and yes to me it suggests sexism and racism not just ignorance. Come on get with the present and value this country and the diversity it is, all for one and one for all. heartland is showing by example.

[moka]

Merit and competency aren't hard things to judge and don't need sub-committees to over complicate. All you do is look at achievements. Its not what a person could do, its what a person has proven to have done.

It appears that people are often rated on potential rather than performance. For example the fact that a woman MAY have a baby sometime in the future which may affect her career is about potential rather than performance.

http://www.science20.com/news_articles/in_hiring_simulation_male_potential_is_preferred_o ver_a_female_track_record-155376
“Male applicants with leadership potential were most likely to be seen as successful and having the most impressive CV. Also, the findings suggested that men with leadership potential were rated higher than men with leadership performance. However, female applicants with potential were not rated higher than those with performance.”

http://www.catalyst.org/zing/how-new-discrimination-holding-women-back
• Men are promoted on potential, women on performance. Why do so many young male hotshots move up the ladder ahead of their more seasoned female peers? Because women are judged on what they have actually done. For promising men, potential is enough to win the day, according to research by Catalyst and McKinsey. Women have to prove themselves over and over and constantly fight the stereotype that they don’t have what it takes to be real leaders. Even in female-dominated fields, men get on the “Glass Escalator” and rise faster and higher than their equally qualified women colleagues.

[dabsman]

I reckon I'm better than what I actually am - in everything except stock picking

[fish]

[QUOTE=STMOD;707471]Not happy with the direction this thread is taking.



Couldnt agree more.
When I was banned along with others-even though it was only for a short-time it certainly made me reflect on how inappropriate threads can get

[winner69]

Worlds all happy again

HBL back to $2 in next week or so

Growing profits ...growing divvies ....what can go wrong

And don’t forget a profit upgrade still to come.

[minimoke]

Worlds all happy again

HBL back to $2 in next week or so

Growing profits ...growing divvies ....what can go wrong

And don’t forget a profit upgrade still to come.
I'm carrying a loss with HBL so best it rattle its daggs and get that SP moving up. No distraction. Just focus on giving customers what they want at a price they can afford.

[Beagle]

NBR headline "FMA knew of CBL probe in August". Says it (FMA) is bound by confidentiality!!!!!!!!

So much for the FMA motto of "Promoting fair, efficient and transparent financial markets".

Do not fill one with warm fuzzies, does it?

No it doesn't. https://www.nbr.co.nz/article/we-dont-have-duty-investor-rbnz-says-th-p-213619
Behind the paywall article in NBR today RBNZ comes out and basically says we do not have a duty to investors, which I find a little surprising.
The nub of this thing for those that don't have access is that their client is the bank or insurance company and they do not have a duty of disclosure to investors under the continuous disclosure requirements. The disturbing thing about this is that potentially the RBNZ could be conducting an investigation for a very long time on another client, like a bank and no disclosure would be forthcoming until they took whatever action they proposed.
RBNZ oversight in my opinion gives only limited additional assurance and certainly not any in terms of timely notification to investors.

[minimoke]

No it doesn't. https://www.nbr.co.nz/article/we-dont-have-duty-investor-rbnz-says-th-p-213619
Behind the paywall article in NBR today RBNZ comes out and basically says we do not have a duty to investors, which I find a little surprising.
The nub of this thing for those that don't have access is that their client is the bank or insurance company and they do not have a duty of disclosure to investors under the continuous disclosure requirements. The disturbing thing about this is that potentially the RBNZ could be conducting an investigation for a very long time on another client, like a bank and no disclosure would be forthcoming until they took whatever action they proposed.
RBNZ oversight in my opinion gives only limited additional assurance and certainly not any in terms of timely notification to investors.Shouldn't it then be incumbent on the bank / insurance company to let the market know it is "assisting the RBNZ with its enquiries"?

[Onion]

Worlds all happy again

HBL back to $2 in next week or so

Growing profits ...growing divvies ....what can go wrong

And don’t forget a profit upgrade still to come.

Winner -- can you please start talking this one DOWN -- your upbeat assessment has badly affected the SP today :t_down:

[Beagle]

Shouldn't it then be incumbent on the bank / insurance company to let the market know it is "assisting the RBNZ with its enquiries"?

Well I would have thought so but in the CBL case it was all wrapped up in confidentiality orders despite the subject matter being one of extremely high relevance to investors, i.e. solvency concerns. One also wonders how the auditors signed this off as a going concern. The mind boggles a bit about how this would have all played out for N.Z. banks including HBL if the recent dairy crisis had got a lot worse. Thankfully the banks dodged a bullet and its business as usual.
Can't help wondering if the SP reaction today in an otherwise strong market has something to do with the RBNZ calcifying the specific nature of their role ?

[silu]

I sold all of mine today. But pretty sure my piddly amount couldn't affect the SP though.

[winner69]

Winner -- can you please start talking this one DOWN -- your upbeat assessment has badly affected the SP today :t_down:

OMG — the share price was $1,87 when I posted and jeez now down to close on $1.80

maybe the days wrap up will just say ‘profit takibg’ As the reason

Earnings upgrade still to come

[winner69]

At least Heartland isn’t as down as much as Blis is

That’s good

[suse]

At least Heartland isn’t as down as much as Blis is

That’s good

ssshhhh, look what good that did to the share price yesterday. Blis went up and HBL down. I guess thats some manipulation so that the DRP goes lower is it?

[winner69]

ssshhhh, look what good that did to the share price yesterday. Blis went up and HBL down. I guess thats some manipulation so that the DRP goes lower is it?

No worries .....share price rocketing up today

[percy]

HBL should buy PGG Wrightsons. Be a good fit, strategically interesting.
Re-brand it Heartland Rural. ( I know hbl are pushing the online thingy, but a few rural offices might
generate some business for the bank)

Not where they are looking to grow.
PGW's market cap is $468mil at current share price of 62 cents.
That amount of capital would go a long way to buy UDC which would be a perfect fit with HBL.
HBL do already have an agreement in place with PGW, which was arranged when HBL brought PGW's finance division.

[iceman]

Not where they are looking to grow.
PGW's market cap is $468mil at current share price of 62 cents.
That amount of capital would go a long way to buy UDC which would be a perfect fit with HBL.
HBL do already have an agreement in place with PGW, which was arranged when HBL brought PGW's finance division.

Well put Percy. HBL will have no interest whatsoever other than seeing who will eventually buy PGW

[winner69]

Narrow thinking, that ignores several points.
HBL is not growing, earnings flat, eps in decline. UDC is bolt on, meaning they are working the same
flat growth space.

They could look to keep PGW listed. Don't need to find the full $468m.
And, the elephant in the room which you are ignoring: How to deal with UDC debenture borrowings
and the reported $2b of ANZ's cash in UDC.
Time for a rethink at HBL, the same old, same old, isn't cutting it anymore.

Wow

Was that just an earthquake in Christchurch I felt

[percy]

Narrow thinking, that ignores several points.
HBL is not growing, earnings flat, eps in decline. UDC is bolt on, meaning they are working the same
flat growth space.

They could look to keep PGW listed. Don't need to find the full $468m.
And, the elephant in the room which you are ignoring: How to deal with UDC debenture borrowings
and the reported $2b of ANZ's cash in UDC.
Time for a rethink at HBL, the same old, same old, isn't cutting it anymore.

I stand by my post.

[iceman]

Narrow thinking, that ignores several points.
HBL is not growing, earnings flat, eps in decline. UDC is bolt on, meaning they are working the same
flat growth space.

They could look to keep PGW listed. Don't need to find the full $468m.
And, the elephant in the room which you are ignoring: How to deal with UDC debenture borrowings
and the reported $2b of ANZ's cash in UDC.
Time for a rethink at HBL, the same old, same old, isn't cutting it anymore.

Umm, the HY report I read doesn't support your statement of no growth. It showed growth across almost all areas:
households +15%
personal +36%
vehicles + 15%
NZ reverse mortgages + 12%
business + 14%
rural + 17%
Australia +27%

Yes EPS was flat but I think its only fair to give them some time to get all the new capital working for us. I'm happy holding this stock although I have a lot less of it than I used to.

[janner]

The current drop from $2.24 has me wincing...
However ... Still looking forward to the next DRP to add a few thousand more..

Still keeping the faith..

[Beagle]

Top of the mountain was actually $2.14 in December 2017. Cunning folks sold at that price and recycled funds elsewhere :cool:

[janner]

I have the old age but lack the cunning... ( Both, overcomes all )..

I still sleep well at night..

After all it is just money :-)))))

[percy]

I have the old age but lack the cunning... ( Both, overcomes all )..

I still sleep well at night..

After all it is just money :-)))))

Forget the noise and work out your current dividend yield on your average HBL cost price,.
Then it is easy to see who the cunning one is.!!
No wonder you sleep well.

ps.Should you think the dividend will not be increased sell.
Should you think HBL have the capacity to keep increasing their fully imputated divie,sit back and enjoy it.I am..lol.

[SCOTTY]

Forget the noise and work out your current dividend yield on your average HBL cost price,.
Then it is easy to see who the cunning one is.!!
No wonder you sleep well.

ps.Should you think the dividend will not be increased sell.
Should you think HBL have the capacity to keep increasing their fully imputated divie,sit back and enjoy it.I am..lol.
Like you Percy I’m obviously not cunning but very happy. The bulk of my HBL were purchased @ 58c and with the drip obviously my average price is now considerably lower. I certainly don’t have any tax liability by constantly buying and selling either. Boring I know :)

[janner]

https://www.bing.com/videos/search?q=life+gets+tedious&view=detail&mid=FC3A64D88095DFA8E5BCFC3A64D88095DFA8E5BC&FORM=VIRE

[Leftfield]

Disc: former HBL holder. Jumped recently.

Did you buy ALF instead? ;)

[percy]

You got me. :(

I accept that it makes a grand headline, but if you look a little deeper, you see that while
finance receivables have risen by the numbers you've supplied, NIM is shrinking.
Working harder to to have earnings stand still, is no earnings growth.

Further to the "acquire PGW story"; for another $20m you could expand your customer base by
folding ALF into 'Heartland Rural' and have an excellent starting point to build a decent rural
services group. It could attract significant investor interest because it is exactly to kind of listed
rural focused opportunity that has been lacking in NZ. Done well it might just eat UDC's lunch
in rural financing and services.

Disc: former HBL holder. Jumped recently.

The MIM is still over twice the sector average.
This very slight reduction in MIM is caused by product mix.The margin on RELs ,although a lot higher than standard mortgages,is lower than the likes of motor vehicle loans.HBL has seen its Australian REL business grow an incredible 27%.Great business for HBL.
.

[winner69]

The MIM is still over twice the sector average.
This very slight reduction in MIM is caused by product mix.The margin on RELs ,although a lot higher than standard mortgages,is lower than the likes of motor vehicle loans.HBL has seen its Australian REL business grow an incredible 27%.Great business for HBL.u
.

One of the advantages of Heartland masquerading as a Bank is they compare their NIM to a sector average which predominately comprises the big hour.

Interestingly Heartlands NIM is significantly less than that achieved by non-bank financial institutions (KPMG say 5.68% in 2016).

Some would say that this a better ‘benchmark’ as their lending profile mirrors more a non-bank financial institution (like UDC etc) rather than comparing to banks with their large % of home mortgages.

Heartland NIM lower than UDC’s last time I looked (and MTF as well)

Just saying

[percy]

One of the advantages of Heartland masquerading as a Bank is they compare their NIM to a sector average which predominately comprises the big hour.

Interestingly Heartlands NIM is significantly less than that achieved by non-bank financial institutions (KPMG say 5.68% in 2016).

Some would say that this a better ‘benchmark’ as their lending profile mirrors more a non-bank financial institution (like UDC etc) rather than comparing to banks with their large % of home mortgages.

Heartland NIM lower than UDC’s last time I looked (and MTF as well)

Just saying

Yes buying UDC would improve HBL's MIM.!!..Bring it on.TRA appear to have a good working arrangement,as well as a blocking stake in MTF.
I think you have a good point about comparing HBL's MIM to finance company's,then again that would be wrong, because they are a registered bank.
Maybe somewhere between the two ?
In which case HBL's MIM is closer to finance companies than banks.
All is well !..lol.

[winner69]

They love this chart eh Percy

Probably goes a little way to justifying the ongoing issuing of milions of performance rights to senior management (ie free shares sometimes)

[percy]

Yes I think I and all shareholders love that chart.

Please don't start another one of your rants.

[winner69]

Yes I think I and all shareholders love that chart.

Please don't start another one of your rants.

I’ll leave that subject to Paper Tiger to do a rant on.

[percy]

I’ll leave that subject to Paper Tiger to do a rant on.

Sound judgement.
Leave him to his Rajang rant free cruise.?

[winner69]

Hope no glitches in Heartland automated systems

https://www.smh.com.au/business/banking-and-finance/doomed-to-fail-cba-s-10-000-inappropriate-loans-20180320-p4z573.html

[percy]

Hope no glitches in Heartland automated systems

https://www.smh.com.au/business/banking-and-finance/doomed-to-fail-cba-s-10-000-inappropriate-loans-20180320-p4z573.html

Most probably better on an Australian Bank thread.

[winner69]

Most probably better on an Australian Bank thread.

Heartland haven’t been glitch free with their systems so just raising this in respect of them.

Last year they had to send me revised statements on a simple Term Deposit saying they (sorry the dam computer) had miscalculated the interest.

[percy]

Heartland haven’t been glitch free with their systems so just raising this in respect of them.

Last year they had to send me revised statements on a simple Term Deposit saying they (sorry the dam computer) had miscalculated the interest.

So any time a bank has a glitch we will see reference to it on HBL thread.!
Hopeless.

[winner69]

So any time a bank has a glitch we will see reference to it on HBL thread.!
Hopeless.

I thought it was a relevant point to make..,..Heartland’s new systems have had their glitches and they are bound to lend responsibility just like CBA. Maybe an exposure Heartland have.

I’m sorry I’m ‘hopeless’. Not everybody can be perfect. I accept that so won’t be too offended by your comment about being ‘hopeless’. At least you didn’t say things like ‘wasted space’

Whatever you think percy, I still love you. I won’t bear a grudge

[percy]

Over the years HBL thread has become a rubbish dump for posters to throw their rubbish.
Heartland will not get a banking licence.
Heartland is in deep trouble with dairying loans,with links to dairy farms that were not HBL clients.
Heartland will loose huge money on no deposit vehicle loans.
Heartland is the only thread for diversity discussion.Why?
Now we are being thrown up every banks' computer clitchs.
I can not see this rubbish will help any ST investor gain a better understanding of HBL as an investment.
As you kindly point out "wasted space.".
I expect more from you.You let yourself down.

[winner69]

Over the years HBL thread has become a rubbish dump for posters to throw their rubbish.
Heartland will not get a banking licence.
Heartland is in deep trouble with dairying loans,with links to dairy farms that were not HBL clients.
Heartland will loose huge money on no deposit vehicle loans.
Heartland is the only thread for diversity discussion.Why?
Now we are being thrown up every banks' computer clitchs.
I can not see this rubbish will help any ST investor gain a better understanding of HBL as an investment.
As you kindly point out "wasted space.".
I expect more from you.You let yourself down.

Getting a better understanding of Heartland as an investment needs an assessment of risks / possible downsides .....as well as all the good things

More valuable contribution than just saying well positioned which seems a rather meaningless phrase

[percy]

My record on this thread has certainly been a great deal more than "well positioned."
Thankfully the likes of Sparky The Clown and Paper Tiger also made great contributions.
However it is ShareTraders great loss that Sparky left,and PaperTiger is seldom posting at present.
Possibly you could put a bit of effort into your HBL posts.?
I know you have the skills when you decide to use them.

[percy]

Off subject [already],but any one interested in Australian banks will find the discussion between Roger Montgomery [The Montgomery Fund] and Karl Siegling [ Cadence Capital] of interest.
Google Livewire 3 thriving small cap financials.
W69 will most probably be kind enough to post the link.

[winner69]

Off subject [already],but any one interested in Australian banks will find the discussion between Roger Montgomery [The Montgomery Fund] and Karl Siegling [ Cadence Capital] of interest.
Google Livewire 3 thriving small cap financials.
W69 will most probably be kind enough to post the link.

https://www.livewiremarkets.com/wires/small-cap-financials-thriving

[winner69]

DRP at $1.77

Less than last time .....what’s going on?

[Ggcc]

DRP at $1.77

Less than last time .....what’s going on?
hence I prefer the cash

[Leftfield]

hence I prefer the cash

Yep always cash for me..... that way you can chose when/if you buy. Crikey, there may even be another company (or two worth) investing your cash in!

[percy]

www.chrislee.co.nz market news has more to say on UDC/HBL.
From my very uninformed view, it looks to me as though HBL are still interested,but not at the price ANZ wants.Float talk is possibly ANZ's attempt for a higher price.
Although UDC would be a great fit,HBL must buy it at an eps accretive price or walk away.HBL shareholders will not support a capital raise, should HBL agree to pay too much.
I do note HBL are achieving strong organic growth on their own,so the importance of UDC buy lessens daily.

[iceman]

Well I think we can now put to bed the notion that HBL is not growing. Haven't got through the interim report yet but have to say the growth in Australia with Senior Finance and its reverse mortgages is pretty spectacular.At the end of Sept 2017 they had 16.8% marketshare with reverse mortgages in Australia and 66% of TOTAL AUSTRALIAN GROWTH in reverse mortgages.
Also looks at first glance that other sectors, such as business and rural have had good growth, 12 & 17% respectively.

But must say I've only had time to quickly glance at the report but look forward to reading it all and hearing views over the weekend

[Filthy]

I've only had time to quickly glance at the report

you only had to read the title page eh. 'GROWTH' ;) lol

[minimoke]

Well I think we can now put to bed the notion that HBL is not growing. Haven't got through the interim report yet but have to say the growth in Australia with Senior Finance and its reverse mortgages is pretty spectacular.At the end of Sept 2017 they had 16.8% marketshare with reverse mortgages in Australia and 66% of TOTAL AUSTRALIAN GROWTH in reverse mortgages.

I think the market for Reverse Mortgage market is still quite small so plenty of room for consumer demand to grow this part of the business.

[suse]

forecasting profit at top end of what they initially forecast which is unsurprising and good

[trader_jackson]

forecasting profit at top end of what they initially forecast which is unsurprising and good

And that is why the share price has weakened recently - for it to stay at or over $2, it really needed an upgrade to profit guidance, not just hit at the top of it.
At a share price of $1.76, the PE is 14.4 - not terribly high - but well above that of the Australian banks. at a share price of $2, it was 16.4 - that is over 40% higher than say ANZ
But is HBL growing 40% faster? Half year results would indicate not and those guys who brought shares in the book build at $2.02 might not be so happy right now with losing 13% of their capital in just 3.5 months.




Need more talking about a profit upgrade to get the share price back winning again

[Ggcc]

And that is why the share price has weakened recently - for it to stay at or over $2, it really needed an upgrade to profit guidance, not just hit at the top of it.
At a share price of $1.76, the PE is 14.4 - not terribly high - but well above that of the Australian banks. at a share price of $2, it was 16.4 - that is over 40% higher than say ANZ
But is HBL growing 40% faster? Half year results would indicate not and those guys who brought shares in the book build at $2.02 might not be so happy right now with losing 13% of their capital in just 3.5 months.




Need more talking about a profit upgrade to get the share price back winning again

I think for now Heartland is a long term hold, slowly increasing its sp with dividends increasing as well over time. I see the share price increasing per annum at the rate of growth in profit. Boring is good for me.

[iceman]

I think for now Heartland is a long term hold, slowly increasing its sp with dividends increasing as well over time. I see the share price increasing per annum at the rate of growth in profit. Boring is good for me.

Agree with this. HBL is a long term steady hold with growing dividends but fully priced for now. The interim report is reasonably good with substantial growth in all sectors. But what we need to see in the next few months is them successfully putting the extra capital they got in the rights issue and bonds issue put to work to grow EPS.

[BlackPeter]

Just looked at a chart comparing HBL with one of the big boys (ANZ). Stellar performance from HBL over the last 5 years, if you ask me.

Just in case anybody is wondering - HBL is the blue line, ANZ the orange one (I know, should have picked different colors ;);

9595

If we look at the forward PE (ANZ 11.1 and HBL 14) and the CAGR (ANZ 2.8 and HBL 11.7) (*), than yes, ANZ is the better earner and HBL is (based on past performance and analyst assumptions) faster growing. Question is just - how big a bonus do they deserve for this growth?

If I put these data into the Grahams formula, than HBL (current SP $1.82) would be worth $4.14 (Graham unmodified) or $2.81 (based on Rogers modified formula), which means they trade at a discount of at least 35% (against Rogers modified formula);
ANZ's (current SP AU$26.86) low growth does not really count for Grahams formula - so lets say the value is based on 12.5 PE is AU$28.20; Discount would be only 5%; Obviously - less risk and all these things ;);

Interesting - not sure I expected that when I fist looked at the chart. HBL seems to deserve their SP growth - while ANZ is (justified) basically stagnant.

Still - there is this saying about falling knives ... and the HBL chart might look like an unfinished head and shoulders ...

Not holding a material amount of any of them, but watching the trend with interest ... there might be bargains ahead ;);


(*) all raw data off 4-traders ...

[whome]

Great post and analysis BP. The volume section of your chart (presume is HBL) also tells a story - lots of turnover and volatility in ‘14 and ‘15, and low turnover and more stability in the years that follow. I pin my hopes on their good performance with Reverse Mortgages, thinking small is more nimble, but await a more optimistic update. Discl. Holder.

[Beagle]

Got too far ahead of itself at $2.14 in December 2017 on a forward PE of just over 17 when I sold my stake right at the peak.
In the process of correcting and finding itself steadily working its way towards fair value and presently from a TA perspective looks very weak.
Short term risks.
1. Financials are traditionally very vulnerable in a bear market with much heightened risk of delinquent and over due loans turning completely toxic.
2. UDC float sucking the wind (capital) out of this sector. Current PE seems about right on 14 but if UDC floats on the PE of say 12 capital will be re-deployed by some.

Summary. It may be about fair value now but I struggle to see any near term catalyst for a SP re-rating and remain happy to watch from the sidelines for now.

[trader_jackson]

Got too far ahead of itself at $2.14 in December 2017 on a forward PE of just over 17 when I sold my stake right at the peak.
In the process of correcting and finding itself steadily working its way towards fair value and presently from a TA perspective looks very weak.
Short term risks.
1. Financials are traditionally very vulnerable in a bear market with much heightened risk of delinquent and over due loans turning completely toxic.
2. UDC float sucking the wind (capital) out of this sector. Current PE seems about right on 14 but if UDC floats on the PE of say 12 capital will be re-deployed by some.

Summary. It may be about fair value now but I struggle to see any near term catalyst for a SP re-rating and remain happy to watch from the sidelines for now.

Agreed. Any UDC float info (eg PE, outlook etc) would be of particular interesting to watch given how similar UDC is to Heartland.

[percy]

Agreed. Any UDC float info (eg PE, outlook etc) would be of particular interesting to watch given how similar UDC is to Heartland.


The real fun will be seeing the cost of funds UDC will have to pay without ANZ Bank's support.

[Beagle]

The real fun will be seeing the cost of funds UDC will have to pay without ANZ Bank's support.

Hard to see how UDC will garner sufficient funding support even in the medium term so I would expect ANZ will remain as a substantial shareholder and a partial float will be how this pans out. That probably optimizes the float price too which in an ironic twist could be quite good for HBL. ANZ might be able to float say 66% at a forward PE of 13. I think the market would be pretty keen on that multiple with ongoing ANZ deposit support.

[percy]

Hard to see how UDC will garner sufficient funding support even in the medium term so I would expect ANZ will remain as a substantial shareholder and a partial float will be how this pans out. That probably optimizes the float price too which in an ironic twist could be quite good for HBL. ANZ might be able to float say 66% at a forward PE of 13. I think the market would be pretty keen on that multiple with ongoing ANZ deposit support.

So it is not possibly going to be a clean divestment for ANZ.
Trade sales have been the way in the past for ANZ, so we continue to "live in interesting times",particularly with the likes of HBL still showing interest.

[oldtech]

$1.73 currently, 50-day MA crossing the 200-day MA ... I am still holding but keeping a close eye on this.

I don't think the SP has been this low since June.

[Beagle]

Looking very ugly from a technical perspective.
Could test support in the $1.50 - $1.60 range soon.

[suse]

last time I listened to you doomsayers I sold a chunk and then the price jumped back up again. I might hold this time but what would be interesting is if it does fall to $1.60 how long do you think before it recovers? Will we have to wait till Jeff tells us they've got profit of 69M instead of 68M
PS I absolutely recognise that you guys know much more about this than I ever hope to or want to, so bow to your superior knowledge! and it was probably a good thing I sold those shares when I did.

[winner69]

Suse — we all know Heartland are performing. They are pretty reliable and if anything f18 earnings will be above guidance

So the discussion about where the share is going is only punters second guessing where market sentiment is going (that’s essentially is out of Heartlands control)

Charts show what that sentiment has been lately ...the future ...well your guess is good as anybody’s .

[oldtech]

suse, I certainly don't know more about this than you or anybody here I dare say. Merely looking at the charts and trying to work out whether the SP will continue to fall. Or not. Or turn around. Or ...

As winner69 says, your guess is just as good as mine, maybe better ;)

[percy]

"At the end of the day" my fully imputed dividend is in my bank account.
A big fat one it is too.
Most probably get an even fatter one later in the year.?
Am I getting ahead of myself thinking next year's will be even fatter?

[iceman]

Agree with winner69 and oldtech, its anybody's call and totally reliant on your method and what type of investor you are. Having been a SH in this one for many moons and a couple of name changes, I don't know how many times I would have sold and bought this stock if I invested purely based on sentiment (and risked IRD classing me as a trader). But I originally invested in an interesting company that ever since has done pretty well and at times pleasantly surprised us. It continues to do well.
For the first time, I sold 2/3 of my holdings early January but will hold the remainder for many years to come and add through the DRP. Sometimes we lose on the DRP and sometimes we gain. C'est la vie.
I do note that only about 27% of SH chose the DRP this time so maybe they are not confident the SP will grow much in the near future, or maybe they just need some cash. Either way, I will happily hold.

[Baa_Baa]

6 cent capital loss on the DRP, 3 million new shares in play diluting share holdings.
6 cent loss on balance of capital holdings on the day.
43 cents down (21%) on the high share price.

3.5 cents dividend paid. Was it worth it?

[Baa_Baa]

[snip] Still - there is this saying about falling knives ... and the HBL chart might look like an unfinished head and shoulders ...

Chart says long term horizontal support (major) fail breakdown and death cross (50EMA/200DMA). If it's a H&S forming, the right shoulder now starts lower, we just don't know how much lower which is harder to break out of (the more lopsided it gets) and increasingly more likely to break down as it completes.

[percy]

6 cent capital loss on the DRP, 3 million new shares in play diluting share holdings.
6 cent loss on balance of capital holdings on the day.
43 cents down (21%) on the high share price.

3.5 cents dividend paid. Was it worth it?
Depends what your average per share cost price was, and what your investing objectives are.?
For many of us, we have tripled or quadrupled our capital over the past 5 to 7 years, and are now receiving 5% plus fully imputed dividends on the current increased capital.
Game set and match for someone like me, who has now retired,and the bonus is I will most probably keep on receiving increasing dividends.To me that is what I set out to achieve many years ago.Slowly investing spare capital in a growing company/companies,has meant I have retired "well positioned.".
As always I expect a good company such as HBL to surprise on the upside.

From age 15 to age 65 the objective is to increase your capital/earnings to provide for lifestyle and your retirement.
When you have achieved that,and have a steady dividend income that is more than you spend ,you can enjoy your retirement.I am.!

[Baa_Baa]

Depends what your average per share cost price was, and what your investing objectives are.?
For many of us, we have tripled or quadrupled our capital over the past 5 to 7 years, and are now receiving 5% plus fully imputed dividends on the current increased capital.
Game set and match for someone like me, who has now retired,and the bonus is I will most probably keep on receiving increasing dividends.To me that is what I set out to achieve many years ago.Slowly investing spare capital in a growing company/companies,has meant I have retired "well positioned.".
As always I expect a good company such as HBL to surprise on the upside.

From age 15 to age 65 the objective is to increase your capital/earnings to provide for lifestyle and your retirement.
When you have achieved that,and have a steady dividend income that is more than you spend ,you can enjoy your retirement.I am.!

Contextually that is very helpful thanks Percy, it serves as a yardstick for people to compare their own circumstances. I don't know if "many here" (or the 5x other lurkers) are possibly in similar circumstances to yourself, but if so well done to you all. It won't matter much to you what the SP does, even if it got a severe haircut in a market rout. But for others who may have different circumstances, it might matter. It's good to have varying perspectives, it helps us all to gauge peoples views when they avidly support a company with their posts or when others at times appear ambivalent, or cautious or even bearish for various reasons. One size doesn't fit all.

[percy]

Contextually that is very helpful thanks Percy, it serves as a yardstick for people to compare their own circumstances. I don't know if "many here" (or the 5x other lurkers) are possibly in similar circumstances to yourself, but if so well done to you all. It won't matter much to you what the SP does, even if it got a severe haircut in a market rout. But for others who may have different circumstances, it might matter. It's good to have varying perspectives, it helps us all to gauge peoples views when they avidly support a company with their posts or when others at times appear ambivalent, or cautious or even bearish for various reasons. One size doesn't fit all.

It is a huge change of mindset.
It is funny how it changes.A younger person growing their portfolio can not really live with a company's share price going sideways or down over a couple of years.
For example EBO's share price in the last 25 years has gone from about 50 cents to $18,and the dividends have steadily increased.
Now if you are looking solely for capital growth ,you can not have your capital doing nothing for two years,or worse still losing capital.You would have needed to sell out of EBO and get your capital working.
Yet had you brought 5,000 EBO 25 years ago at a cost of $2,500, and had enjoyed 25 years of dividends you would most probably be happy to sit back and enjoy the 3% yield you are receiving on your $90,000 of EBO shares,knowing that EBO have the capacity to keep increasing their dividend.
Back to HBL.The questions I ask myself ,
Can HBL keep paying their dividends.?
Do HBL have the right business strategy.?
Do HBL do what they say they will do.?
Does HBL have a board/management with skin on the line.?
Will HBL be able to pay INCREASING dividends?.
For me the answer to all those questions is yes.

[Beagle]

I think its more rewarding to invest when both the technical indicators and the fundamental analysis show concurrent buy or hold signals.
I maintain this is a fairly simple stock to run fundamental analysis on. The company is transparent and reliable with its forecasting and there are at least six other comparatives listen on the ASX to compare it with. Further, banks have traditionally traded on low PE's due to their vulnerability to bearish economic cycles and traditionally have traded in the 12-15 PE multiple range.
When they trade well outside of that range and are approaching twice NTA its clear the SP had got too far ahead of itself, (was trading at a whopping 4 PE premium to its peer group at $2.14) which I made quite clear at the time represented a timely exit point.
Good stock to date when the fundamental's and technical's line up, (which they clearly don't at present). You don't have to be married to a stock, just own it when it's cheap or cheapish. I think its approaching fair value now but the momentum is clearly to the downside and looking at the extremely bearish chart I think its quite possible this could overshoot on this correction.

I see fair value at about a 13-13.5 forward PE on about 12.4 cps = $1.64, so with this sizeable correction we are almost there but I think there's a better than 50% chance this overshoots down into the $1.50-$1.60 zone.

[Baa_Baa]

Personally I think tonight has been more enlightening than many months of discussion, one side versus the other without having really known where each side is truely coming from. Both are right, it just depends on ones circumstances which discussion groups are notoriously ignorant of. Until now.

So where to from here?

Retirees and others who bought HBL long ago are sitting on multiples of capital gains and enjoying the recurring EPS growth and sustained increasing dividends. Their advice is to be taken in context with those circumstances. It is understandable and completely relevant that they would ignore capital fluctuations while the underlying fundamentals support their investment decisions and income oriented profile.

Capital sensitive investors will be out, despite the dividends as the capital losses outweigh the income generated. They will also be looking for a re-entry at fair or under value SP, exposing themselves to capital upside and income (dividend) streams. Until that changes. Then they will forgo dividends by selling and locking in capital gains.

Traders will also be out, they will have exited months ago, but still be looking for a re-entry while the fundamentals suggest HBL has a future SP upside appreciation. They probably are astute enough to be able to pick a re-entry at some SP that is within coo-ee of a bottom. They will ride out a bottom if they enter too early and ride up an appreciation in the SP as long as it goes up, before exiting near the next top.

There are almost certainly scenarios in between these extremes.

My point is that day to day here we enjoy a diverse discussion, including advocacy for HBL, counterpoints which seem agnostic, ambivalent or even antagonistic. Overriding all of that is ones circumstances, which hopefully is the defining point in determining which path ones follows, assuming independent thought.

There is no one right path for all of us, it’s about deciding which path is right for you.

[percy]

[COLOR=#454545][FONT=&]My point is that day to day here we enjoy a diverse discussion, including advocacy for HBL, counterpoints which seem agnostic, ambivalent or even antagonistic. Overriding all of that is ones circumstances, which hopefully is the defining point in determining which path ones follows, assuming independent thought.

There is no one right path for all of us, it’s about deciding which path is right for you.

This is very true.
To find your own path takes a great deal of reading,research,successes and failures.
The better research I do,the better the results I get.

[iceman]

I think its more rewarding to invest when both the technical indicators and the fundamental analysis show concurrent buy or hold signals.
I maintain this is a fairly simple stock to run fundamental analysis on. The company is transparent and reliable with its forecasting and there are at least six other comparatives listen on the ASX to compare it with. Further, banks have traditionally traded on low PE's due to their vulnerability to bearish economic cycles and traditionally have traded in the 12-15 PE multiple range.
When they trade well outside of that range and are approaching twice NTA its clear the SP had got too far ahead of itself, (was trading at a whopping 4 PE premium to its peer group at $2.14) which I made quite clear at the time represented a timely exit point.
Good stock to date when the fundamental's and technical's line up, (which they clearly don't at present). You don't have to be married to a stock, just own it when it's cheap or cheapish. I think its approaching fair value now but the momentum is clearly to the downside and looking at the extremely bearish chart I think its quite possible this could overshoot on this correction.

I see fair value at about a 13-13.5 forward PE on about 12.4 cps = $1.64, so with this sizeable correction we are almost there but I think there's a better than 50% chance this overshoots down into the $1.50-$1.60 zone.

I agree with Baa Baa and Beagle that this has been a most enlightening discussion. What is interesting is that I think we all agree that HBL is a well run business, we just don't know how to value it. Some (like me) go on fundamentals, others go on sentiments. Long term, who knows. Percy talks about the difference in view between older people and younger people and what we want. I'm not sure I agree. Almost exactly 7 years ago my ex wife reluctantly accepted we should sell a bach in the Coromandel and give my half to our daughters. We invested lots of it in HBL.
Since then, they've been 100% signed up to DRP. They've made 310% on HBL in that time, no selling and no buying. The bach in the Coromandel has gone up about 250% in the same time. But HBL has been ZERO hassle

I believe the next 5 years will contribute more healthy returns for my daughters who will keep their current holding in HBL. This is my story, others have different stories. Who's right ? Lets discuss it in 2023 !!

[iceman]

Personally I think tonight has been more enlightening than many months of discussion, one side versus the other without having really known where each side is truely coming from. Both are right, it just depends on ones circumstances which discussion groups are notoriously ignorant of. Until now.

So where to from here?

Retirees and others who bought HBL long ago are sitting on multiples of capital gains and enjoying the recurring EPS growth and sustained increasing dividends. Their advice is to be taken in context with those circumstances. It is understandable and completely relevant that they would ignore capital fluctuations while the underlying fundamentals support their investment decisions and income oriented profile.

Capital sensitive investors will be out, despite the dividends as the capital losses outweigh the income generated. They will also be looking for a re-entry at fair or under value SP, exposing themselves to capital upside and income (dividend) streams. Until that changes. Then they will forgo dividends by selling and locking in capital gains.

Traders will also be out, they will have exited months ago, but still be looking for a re-entry while the fundamentals suggest HBL has a future SP upside appreciation. They probably are astute enough to be able to pick a re-entry at some SP that is within coo-ee of a bottom. They will ride out a bottom if they enter too early and ride up an appreciation in the SP as long as it goes up, before exiting near the next top.

There are almost certainly scenarios in between these extremes.

My point is that day to day here we enjoy a diverse discussion, including advocacy for HBL, counterpoints which seem agnostic, ambivalent or even antagonistic. Overriding all of that is ones circumstances, which hopefully is the defining point in determining which path ones follows, assuming independent thought.

There is no one right path for all of us, it’s about deciding which path is right for you.

I think this is a great post. Makes us all think. Thanks Baa Baa

[oldtech]

I also agree, this has been a great discussion - thanks to everyone for their input.

As a very inexperienced investor I appreciate everybody's input, from all angles. "At the end of the day" HBL has been a great investment for me up to this point even though I got in relatively late, but I try to keep in my mind something I have seen repeated multiple times on this forum - don't make the mistake of falling in love with a stock, and getting blinded to the reality of what might be happening. This was one of the first stocks I bought two and a half years ago when I first started investing with a bit of seriousness and I have never sold. But maybe that time is here. Or maybe it's already passed ... :eek2:

From the great philosopher Baa Baa: "There is no one right path for all of us, it’s about deciding which path is right for you."

[horus1]

I keep accumulating . Buy on the dips. I dont trade only hold for Div which I am fortunate and do not need.

[percy]

I keep accumulating . Buy on the dips. I dont trade only hold for Div which I am fortunate and do not need.

I have just reread the interim result presentation, and feel your strategy is correct.

[RTM]

From age 15 to age 65 the objective is to increase your capital/earnings to provide for lifestyle and your retirement.
When you have achieved that,and have a steady dividend income that is more than you spend ,you can enjoy your retirement.I am.!

Broadly agree Percy, however I would urge people to not be fixated on 65 as the retirement age. With a bit of planning, if one wants to, one can retire a bit earlier, there are quite a few benefits to doing so especially as our later years can be a bit unsure health wise. Personally I retired 6 years prior to 65 and have never regretted it.

Yes, great discussion, In general I am a buy and hold investor looking for security of my capital and living off the dividends. Not really worried by current Heartland price which is much more than our average buy.

[oldtech]

I have traditionally been a proponent of buy and hold, but I do remember discussions on the forum around the wisdom of buy and hold versus trading - ie buy shares when low, sell when high and they start going down, buy back in when the price is low again.

As an example, say you'd been a clever beagle and sold at $2.14, you could now buy back in at $1.73 or so and either buy more or take the profit. I'm not necessarily advocating you or anybody does this, simply putting it out there as one possibility.

I also keep remembering this KISS principle from KW on when to sell:

"If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average), this is a signal that the downtrend is now firmly established."


Disc: Still holding ... at the moment ...

[percy]

g
Broadly agree Percy, however I would urge people to not be fixated on 65 as the retirement age. With a bit of planning, if one wants to, one can retire a bit earlier, there are quite a few benefits to doing so especially as our later years can be a bit unsure health wise. Personally I retired 6 years ago and have never regretted it.

Yes, great discussion, In general I am a buy and hold investor looking for security of my capital and living off the dividends. Not really worried by current Heartland price which is much less than our average buy.

Yes I too think 65 is a moving target.
The main point of investing is being able to retire "comfortably", at whatever age you decide to retire,whether that is 45 or 85.
In my case I just kept putting off retiring because I loved my job.

[Beagle]

Yes a good discussion and comparison of various points of view and an especially good post by Baa Baa, very well said.
Just want to add a couple of things.
High time we had a full comparison of PE's with the other six Australasian banks and a look at their respective EPS growth rates forecast for the next two years, (I'll try and get on to this later this week if I get time as this will be useful when considering that PE UDC might be floated on.)

Keep in mind that when we get another listing in a sector, (such as the rumored forthcoming UDC float) you often get institutions reallocating capital from the incumbent sector investments. For example we saw all the retirement stocks come under serious pressure this time last year when OCA was floated and they remained under pressure for months afterwards. In effect a new float sucks the wind out of the sails of the incumbent sector players. OCA by no means the only time this has happened, happens more often than not in my opinion.

[BlackPeter]

Yes a good discussion and comparison of various points of view and an especially good post by Baa Baa, very well said.
Just want to add a couple of things.
High time we had a full comparison of PE's with the other six Australasian banks and a look at their respective EPS growth rates forecast for the next two years, (I'll try and get on to this later this week if I get time as this will be useful when considering that PE UDC might be floated on.)

Keep in mind that when we get another listing in a sector, (such as the rumored forthcoming UDC float) you often get institutions reallocating capital from the incumbent sector investments. For example we saw all the retirement stocks come under serious pressure this time last year when OCA was floated and they remained under pressure for months afterwards. In effect a new float sucks the wind out of the sails of the incumbent sector players. OCA by no means the only time this has happened, happens more often than not in my opinion.

Good point. Buying opportunities on the horizon ;); Obviously, though - we should not forget to look at the bigger picture.

Banking shares currently under pressure all around the globe - and not sure they found their bottom already. Most of the German banks I follow dropped more than 20% in the last 3 months. Australian banks finding new lows (well, looking at the last handful of years). Markets are nervous with high property prices, unsustainable debt burdens for most developed countries and an idiot president in the East Island adding uncertainty into international trade relations doesn't help either.

While HBL carved out for itself a somewhat cosy niche market, I don't think they can completely decouple from the global trends. If we run into the next big downturn / debt crisis, than they certainly will be effected as well.

Expect markets to stay volatile and nervous ... maybe a good time to go fishing ;) and watch from the sidelines;

[Beagle]

Agree 100% with your sentiments on this sector from a global perspective. Not just European and Australasian banks that have been weak.

[Onion]

I have traditionally been a proponent of buy and hold, but I do remember discussions on the forum around the wisdom of buy and hold versus trading - ie buy shares when low, sell when high and they start going down, buy back in when the price is low again.

As an example, say you'd been a clever beagle and sold at $2.14, you could now buy back in at $1.73 or so and either buy more or take the profit. I'm not necessarily advocating you or anybody does this, simply putting it out there as one possibility.

I also keep remembering this KISS principle from KW on when to sell:

"If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average), this is a signal that the downtrend is now firmly established."


Disc: Still holding ... at the moment ...

All very well for clever beagles that can identify that the "top" has been reached and that the SP will not continue climbing.

I've certainly lost out when I have thought I was a clever "top" spotter only for the SP to continue rising. EBO would be an example - I sold at what I thought was a nice profit and have regretted it ever since as the SP has doggedly remained above my sell price.

[oldtech]

All very well for clever beagles that can identify that the "top" has been reached and that the SP will not continue climbing.

I've certainly lost out when I have thought I was a clever "top" spotter only for the SP to continue rising. EBO would be an example - I sold at what I thought was a nice profit and have regretted it ever since as the SP has doggedly remained above my sell price.

Oh hey ... join the club! Tried to be clever with SUM a while back, failed miserably.

[BlackPeter]

All very well for clever beagles that can identify that the "top" has been reached and that the SP will not continue climbing.

I've certainly lost out when I have thought I was a clever "top" spotter only for the SP to continue rising. EBO would be an example - I sold at what I thought was a nice profit and have regretted it ever since as the SP has doggedly remained above my sell price.

Agree - Beagle was spot on in picking this peak and kudos to him for freely communicating this view. Not easy to spot peaks without the benefit of hindsight ;).

However - for the mere mortals under us, there was still the MA50 (slightly above $2) and the MA100 (slightly below $2), which I used to dispose of my HBL shares ... and so far not too unhappy about this decision ;);

[dabsman]

I have so far timed nothing right but I keep tipping money in every month and I know at least 50% of these will be profitable in the next year and 90% will be in 5 years so I really dont care about peaks and troughs - I'm the Neil Wagner of investing - take the hits and keep going as in the end I'll win big!

[percy]

Good point. Buying opportunities on the horizon ;); Obviously, though - we should not forget to look at the bigger picture.

Banking shares currently under pressure all around the globe - and not sure they found their bottom already. Most of the German banks I follow dropped more than 20% in the last 3 months. Australian banks finding new lows (well, looking at the last handful of years). Markets are nervous with high property prices, unsustainable debt burdens for most developed countries and an idiot president in the East Island adding uncertainty into international trade relations doesn't help either.

While HBL carved out for itself a somewhat cosy niche market, I don't think they can completely decouple from the global trends. If we run into the next big downturn / debt crisis, than they certainly will be effected as well.

Expect markets to stay volatile and nervous ... maybe a good time to go fishing ;) and watch from the sidelines;

German Banks.Unlike German Banks HBL has no Sovereign exposure to countries such as Greece,Spain,Italy or Portugal.In fact no sovereign exposure at all.
Australian Banks.Unlike Australian Banks ,The Australian Royal Commission will have little or no effect on HBL.

[RTM]

All very well for clever beagles that can identify that the "top" has been reached and that the SP will not continue climbing.

I've certainly lost out when I have thought I was a clever "top" spotter only for the SP to continue rising. EBO would be an example - I sold at what I thought was a nice profit and have regretted it ever since as the SP has doggedly remained above my sell price.

Yep....exactly. I sold out of Ebos for a nice profit as well. And then bought back at a cent more. On the other side of things I did manage to exit FBU for a small profit. Different scenario.

[BlackPeter]

German Banks.Unlike German Banks HBL has no Sovereign exposure to countries such as Greece,Spain,Italy or Portugal.In fact no sovereign exposure at all.
Australian Banks.Unlike Australian Banks ,The Australian Royal Commission will have little or no effect on HBL.

Sure - they are a (much) smaller bank with (much) smaller risks. Not sure however, whether these risks are smaller compared to their size. As well - despite having no direct exposure to some of the bigger elephants in the room, they are not out of this world - and a real estate crash or significant increased unemployment coupled perhaps with higher interest rates would impact on the quality of their credit book as well.

Happy to acknowledge that they are a well run business which so far served its long term shareholders very well. Does not mean, though that there are no risks around.

BTW - I remember a well respected poster on share trader to remind us some years ago frequently that it might not be a good idea to hold shares priced well below the MA50 and the MA200 (and I am not referring to KW ;)). Wondering what happened to him? :p;

[percy]

Sure - they are a (much) smaller bank with (much) smaller risks. Not sure however, whether these risks are smaller compared to their size. As well - despite having no direct exposure to some of the bigger elephants in the room, they are not out of this world - and a real estate crash or significant increased unemployment coupled perhaps with higher interest rates would impact on the quality of their credit book as well.

Happy to acknowledge that they are a well run business which so far served its long term shareholders very well. Does not mean, though that there are no risks around.

BTW - I remember a well respected poster on share trader to remind us some years ago frequently that it might not be a good idea to hold shares priced well below the MA50 and the MA200 (and I am not referring to KW ;)). Wondering what happened to him? :p;

The outlook for HBL's major market NZ, looks excellent.Low unemployment,and low interest rates for the foreseeable future.
In Australia HBL's RELs are very secure form of lending and are tracking well. HBL are taking a measured approach with their Australian "open for business" products [currently run from Auckland].There appears to be a good opportunities for HBL to tap into the Australian small business lending sector.

[Brain]

Does anybody know why the MA50 and MA200 the preferred MA duration. Perhaps a MA100 and MA 400 or MA25 and MA100 could also work. Has there been any research done on the effectiveness of these Moving Averages? Clearly the death cross will occur on a chart that has been trending down for sometime or has rapidly fallen but by then the chart is clearly in a down trend anyway. I think it really comes down to trying to understand why the particular share has dropped in value. The trick is to be able to take a contrary view to the market and get it right.
I haven’t seen many (if any) accurate TA predictions in the threads that I read on ST. The FA predictions are often right. Don’t want to unduly upset any TAers but I probably have.

[winner69]

For whats it worth I reckon HBL has 'reverted' back to somewhere near a realistic value

Udated post from a month or so ago

[Beagle]

Agreed, top end of fair value though. 1.8 times price to book was a huge sell signal as was the forward PE of 17 which is unheard of for Australasian banks...although some on here from vague memory were calling for $2.50 in pretty short order after that, can't quite remember who...leave it to others to check back on the thread last December :p

[winner69]

Agreed, top end of fair value though. 1.8 times price to book was a huge sell signal as was the forward PE of 17 which is unheard of for Australasian banks...although some on here from vague memory were calling for $2.50 in pretty short order after that, can't quite remember who...leave it to others to check back on the thread last December :p

Probably me touting $2.50 ....but Jeff has disappointed by not coming out with an higher guidance figure

Sticking with $65m to $68m since like $70m to $72m but Jeff likes playing games eh

Never mind

[percy]

Probably me touting $2.50 ....but Jeff has disappointed by not coming out with an higher guidance figure

Sticking with $65m to $68m since like $70m to $72m but Jeff likes playing games eh

Never mind

I think Jeff just does it to keep you focussed....lol.

[Baa_Baa]

Thank you everyone who posted their kind thoughts and reputation comments re my post last night, I'm a bit overwhelmed by the warm response. When it's from the heart and hard learned experience it seems to resonate more strongly, albeit unexpectedly, perhaps we can reflect on that. Bless you all.

🙏🏻
BAA

[Entrep]

I need to work out which I am more rekt on, my HBL or ETH. Oh snap, it's my HBL

[WayOverTheHill]

I had a few spare minutes so did a quick comparison of HBL with Australian listed banks.

P/E from ASB site
Operating Profit (ebit) from 4 traders

Looks like HBL now fairly priced as noted by some earlier comments.

Hopefully I have completed this correctly - feedback welcome :-)





P/E
2018 EBIT
2020 EBIT
2 year growth %
PEG


Australia and New Zealand Banking Group
ANZ
12.06
10831
11444
3%
4.26


Australian Finance Group
AFG
7.63
46.2
57.7
12%
0.61


Auswide Bank Limited
ABA
14.09
25.2
28.4
6%
2.22


Bank of Queensland Limited
BOQ
11.88
589
623
3%
4.12


Bendigo and Adelaide Bank Limited
BEN
10.39
692
722
2%
4.79


Commonwealth Bank of Australia
CBA
12.67
14619
15723
4%
3.36


Cybg Plc
CYB
17.77
354
466
16%
1.12


Genworth Mortgage Assurance Australia Limited
GMA
7.61
176
207
9%
0.86


Goldfields Money Limited
GMY
-123.11


#DIV/0!
#DIV/0!


Homeloans Limited
HOM
10.41


#DIV/0!
#DIV/0!


Mortgage Choice Limited
MOC
9.8
33.8
31.3
-4%
-2.65


Mystate Limited
MYS
13.99
46.5
51
5%
2.89


N1 Holdings Limited
N1H
-6.52


#DIV/0!
#DIV/0!


National Australia Bank Limited
NAB
14.64
9361
11035
9%
1.64


Westpac Banking Corporation
WBC
12.08
12368
13560
5%
2.51


Heartland Bank Limited
HBL
14.46
101
122
10%
1.39

[percy]

Thanks WayOverTheHill.
AFG,CYB,and GMA will require researching.
NAB's 9% growth rate is higher than I would have expected.

[Beagle]

Very good work Wayoverthehill, saved me some time so many thanks. A warm welcome to the forum.
Looking through that list I can't help but wonder what multiple ANZ will try and float UDC on ?
For starters ANZ's own multiple is just 12 so my guess is it has to be at least 1 lower than that, possibly 2.
Maybe a PE of 10 ? That might see some capital reallocated by institutions here from HBL to UDC. As a separate matter, looking through that list HBL still looks well and truly fully priced at $1.75 to me.

[percy]

[QUOTE=percy;710112]Thanks WayOverTheHill.
AFG,CYB,and GMA will require researching.

Very much concentrated on property lending.
Not what I am looking to invest in.and very different from HBL's diversified lending model.

So that leaves HBL with the best PEG, well ahead of its banking peers,as I would have expected.[and NZders receive fully imputed divies.[not included in the PEG calculations].
Just surprised at how good NAB's is,miles ahead of the other Australian Banks.

[Beagle]

I had a few spare minutes so did a quick comparison of HBL with Australian listed banks.

P/E from ASB site
Operating Profit (ebit) from 4 traders

Looks like HBL now fairly priced as noted by some earlier comments.

Hopefully I have completed this correctly - feedback welcome :-)





P/E
2018 EBIT
2020 EBIT
2 year growth %
PEG


Australia and New Zealand Banking Group
ANZ
12.06
10831
11444
3%
4.26


Australian Finance Group
AFG
7.63
46.2
57.7
12%
0.61


Auswide Bank Limited
ABA
14.09
25.2
28.4
6%
2.22


Bank of Queensland Limited
BOQ
11.88
589
623
3%
4.12


Bendigo and Adelaide Bank Limited
BEN
10.39
692
722
2%
4.79


Commonwealth Bank of Australia
CBA
12.67
14619
15723
4%
3.36


Cybg Plc
CYB
17.77
354
466
16%
1.12


Genworth Mortgage Assurance Australia Limited
GMA
7.61
176
207
9%
0.86


Goldfields Money Limited
GMY
-123.11


#DIV/0!
#DIV/0!


Homeloans Limited
HOM
10.41


#DIV/0!
#DIV/0!


Mortgage Choice Limited
MOC
9.8
33.8
31.3
-4%
-2.65


Mystate Limited
MYS
13.99
46.5
51
5%
2.89


N1 Holdings Limited
N1H
-6.52


#DIV/0!
#DIV/0!


National Australia Bank Limited
NAB
14.64
9361
11035
9%
1.64


Westpac Banking Corporation
WBC
12.08
12368
13560
5%
2.51


Heartland Bank Limited
HBL
14.46
101
122
10%
1.39



I think BEN looks the best risk reward play of that lot taking into account their very cheap PE and very very long and successful trading history.

[percy]

BEN's growth rate is a fifth of HBL's,ie 2% against HBL's 10%.
BEN's PEG is 3.45 times HLB's,ie BEN 4.79 against HBL's 1.39.

[Beagle]

Any PEG over 1 indicates poor value so one must then revert to the PE. Forecast growth is just that, a forecast and the growth you mention is over 2 years.
If it was as simple as picking the best PEG ratio life would be easy and we'd simply invest in AFG and GMA from that list but alas its well recognized that we're in the last stages of a very mature bull market and what comes next is usually very unkind to finance companies and banks that take on substantial parts of their lending acting like a finance company.

At first glance I'd say BEN offers the best risk reward at this stage of the economic cycle.

[percy]

As expected I totally disagree.
No surprises there.!!
I must admit for NZ investors PEGD, ie PE divided by growth plus dividend works better than PEG,as NZ companies pay high dividends.
What works for you Beagle do it,but I much prefer to follow Jim Slater's "The Zulu Principle",as it has had a proven record of success since it was published in 1992.
"It really works."

[dabsman]

As expected I totally disagree.
No surprises there.!!
I must admit for NZ investors PEGD, ie PE divided by growth plus dividend works better than PEG,as NZ companies pay high dividends.
What works for you Beagle do it,but I much prefer to follow Jim Slater's "The Zulu Principle",as it has had a proven record of success since it was published in 1992.
"It really works."

Sorry to be a idiot percy but what you are saying is you become an expert in one or two areas and you don't deviate?

[percy]

Sorry to be a idiot percy but what you are saying is you become an expert in one or two areas and you don't deviate?

No not at all,however the greatest successes I have had investing came from following Jim Slater's advice.
I do not invest in companies or sectors I do not understand,and nowdays I place a lot of importance on dividend growth.
The book really was a game changer for me.
Interestingly enough, Jim's son Mark 's, "Slater Growth Fund" is using "The Zulu Principle" to achieve outstanding results.
It really works.Try it .

[Beagle]

No not at all,however the greatest successes I have had investing came from following Jim Slater's advice.
I do not invest in companies or sectors I do not understand,and nowdays I place a lot of importance on dividend growth.
The book really was a game changer for me.
Interestingly enough, Jim's son Mark 's, "Slater Growth Fund" is using "The Zulu Principle" to achieve outstanding results.
It really works.Try it .

Very good approach for retired folk. You retired now I take it Percy or still enjoying the school books thing ?

[dabsman]

No not at all,however the greatest successes I have had investing came from following Jim Slater's advice.
I do not invest in companies or sectors I do not understand,and nowdays I place a lot of importance on dividend growth.
The book really was a game changer for me.
Interestingly enough, Jim's son Mark 's, "Slater Growth Fund" is using "The Zulu Principle" to achieve outstanding results.
It really works.Try it .

I will grab the book. Someone also suggested "fooled by Randomness" and it is a great read - about half way thru it now. I think it may have been you or peat? Peat suggested some TA books and those are hard work for me to get thru...

[percy]

Retired at the end of January.The 69 year old body said enough is enough.Driving long distances and heavy boxes of books took their toll.
Missing it,but am enjoying not having to rush everything.
Was going to trade the market for fun,but having to become a trader would mean a change in my tax status,and far too much paper work,and big tax bills.!
Lucky enough helping out on my late friend's trust non trading portfolio, has taught me good disciplines,and our portfolios do not look as though they will need adjusting for the foreseeable future.
Buy with the view of never selling,means you spend more time on stock selection.

[percy]

I will grab the book. Someone also suggested "fooled by Randomness" and it is a great read - about half way thru it now. I think it may have been you or peat? Peat suggested some TA books and those are hard work for me to get thru...

Google The Zulu Principle,and down load the pdf.
The more you read the more you learn.
Yet you must keep it simple.
Buffett,and Peter Lynch speak in very simple terms.

[waikare]

Retired at the end of January.The 69 year old body said enough is enough.Driving long distances and heavy boxes of books took their toll.
Missing it,but am enjoying not having to rush everything.
Was going to trade the market for fun,but having to become a trader would mean a change in my tax status,and far too much paper work,and big tax bills.!
Lucky enough helping out on my late friend's trust non trading portfolio, has taught me good disciplines,and our portfolios do not look as though they will need adjusting for the foreseeable future.
Buy with the view of never selling,means you spend more time on stock selection.

Percy, I totally agree with your last statement, that's how I have been operating for the last 30 odd years. Buy, hold and add too if necessary.

[Beagle]

Retired at the end of January.The 69 year old body said enough is enough.Driving long distances and heavy boxes of books took their toll.
Missing it,but am enjoying not having to rush everything.
Was going to trade the market for fun,but having to become a trader would mean a change in my tax status,and far too much paper work,and big tax bills.!
Lucky enough helping out on my late friend's trust non trading portfolio, has taught me good disciplines,and our portfolios do not look as though they will need adjusting for the foreseeable future.
Buy with the view of never selling,means you spend more time on stock selection.

Best wishes for a long and happy retirement Percy.
There's SUM pretty nice retirement villages down your way, the one you showed me that RYM built looked very nice too.
The most common phrase you'll hear around retirement villages with the excellent camaraderie and community spirit that exists in almost all of them is I wish I'd moved in years ago. My mum's one has a weekly newsletter with all the activities and gong's on in her village and she tells me she's never had such an active and busy social life. You could even run a little share club for residents, I am sure they would appreciate that.
HBL the best bank stock for fully imputed dividends, I am sure that's one thing we can agree on :)

[percy]

Thank you Beagle.
We have looked at a few retirement villages,but have decided we are not ready for them yet.
Granddaughter is making the most of my retirement.Free Uber.!

[peat]

Granddaughter is making the most of my retirement.Free Uber.!

I have been called the UberMensch several times


The “higher man” — or as Nietzsche sometimes called him, the “overman” or “Übermensch (https://en.wikiquote.org/wiki/%C3%9Cbermensch)”
https://en.wikiquote.org/wiki/%C3%9Cbermensch

[winner69]

Chief Risk Officer leaving

Suppose 3 years in job good effort ....for him

[suse]

I love how they refer to grant Kemble as having been a partner in a leading law firm. The Russell McVeagh taint 😀

[Beagle]

Reading through his credentials...not much specific risk management experience leading up to this.

[winner69]

I love how they refer to grant Kemble as having been a partner in a leading law firm. The Russell McVeagh taint 😀

And Chris Lee who loves Heartland won’t be too impressed ...hmmm

[percy]

Reading through his credentials...not much specific risk management experience leading up to this.

With such an experience executive team to help him,he will learn quickly.

[winner69]

At least RBNZ have said it’s all OK - no surprises there

[percy]

At least RBNZ have said it’s all OK - no surprises there

As you correctly pointed out -- no surprises there...lol.

[suse]

And Chris Lee who loves Heartland won’t be too impressed ...hmmm
Yeah I think I saw a stab a while ago at Geoff Ricketts also ex RMCV

[percy]

Yeah I think I saw a stab a while ago at Geoff Ricketts also ex RMCV

No surprises there either................lol,.

[winner69]

With such an experience executive team to help him,he will learn quickly.

.....but aren’t Chief Risk Officers meant to learn the rest of the executive team about risk things?

[percy]

.....but aren’t Chief Risk Officers meant to learn the rest of the executive team about risk things?

Maybe ,but the excellent experience team have been in the finance/banking sector for a long time.
You would be right to say "a proven team."

[Beagle]

Maybe ,but the excellent experience team have been in the finance/banking sector for a long time.
You would be right to say "a proven team."

A team that simply threw more money at dairy farmers and hoped the dairy crisis would end. They got lucky, simple as that.


Hope Jeff is onto this. Get the Lawyers working on the Scheme of Arrangement to
buy Agria's stake. Better be moving, the SP is dropping and that's bad when you'll
need a capital raise. :t_up:

We saw an almost complete lack of support by institutions for the incumbent retirement players right before OCA was listed around this time last year and a woeful lack of support for some months afterwards as the huge capital raise sucked the wind out of the sector's sails quite a while. I think the same thing is playing out and a listing of UDC is highly likely this quarter and I think this is a very good quarter not to be a HBL shareholder and there's no dividends due this quarter to ease any potential unrealised or realised capital loss pain. I agree that the EPS growth of HBL is also somewhat underwhelming now compared to recent historical past. They've been crying wolf on making a takeover or acqusition for over two and a half years now and its come to nothing.

[beetills]

It maybe that once HBL sp hits a certain level,they may become a target themselves.
As far as UDC goes,they are only looking good because of the ANZ net.Once that goes i wouldn't touch them unless another Aussie bank supported them.Just my opinion.No expert.

[winner69]

Beagle: A team that simply threw more money at dairy farmers and hoped the dairy crisis would end. They got lucky, simple as that.

:

That’s good risk management

Previous guy was useless (and lucky) and the new guy ...well, hope he’s a lucky one as well.

[Beagle]

That’s good risk management

Previous guy was useless (and lucky) and the new guy ...well, hope he’s a lucky one as well.

Hope is a valid business strategy, right ?

[minimoke]

Whats happening at HBL. Hit a low of $1.68 4 weeks ago. Today trading at $1.81 with no news.

[percy]

Whats happening at HBL. Hit a low of $1.68 4 weeks ago. Today trading at $1.81 with no news.

Top end of town has been holding the price back,so you can add to your holding.

NB.They can not hold it back for you much longer............................................ .......................lol.

[BlackPeter]

Top end of town has been holding the price back,so you can add to your holding.

NB.They can not hold it back for you much longer............................................ .......................lol.

Why would they want to do that (hold the price back)?

Looking at the SP - while it is true it is currently going upwards .... SP still below all relevant MA's (50, 100, 200) - and the volume is not really overwhelming either.

Unless you know something we don't, this could well be just a wee up-ripple in a confirmed downtrend prepared to bounce at one of above MA's - couldn't it?

[percy]

Why would they want to do that (hold the price back)?

Looking at the SP - while it is true it is currently going upwards .... SP still below all relevant MA's (50, 100, 200) - and the volume is not really overwhelming either.

Unless you know something we don't, this could well be just a wee up-ripple in a confirmed downtrend prepared to bounce at one of above MA's - couldn't it?

You missed the ...lol.
50 day ma etc.? Who knows.?..Try the 400 day EMA.?.If that does not work try the 600 day EMA.!!You will find one that works.!
Maybe the share price is reacting to Australian fund manager Peter Cooper's positive comments on Livewire.?
Maybe the market is seeing past the first half, and looking forward to the organic growth continuing, not only in the second half,but continuing in the foreseeable future?
Maybe Craig's clients are following Craig's recent buy recommendation?

[Food4Thought]

HBL. Great kiwi stock to own. Long term great potential on a solid company. Don't say you wish you did in 5 years time.

[BlackPeter]

HBL. Great kiwi stock to own. Long term great potential on a solid company. Don't say you wish you did in 5 years time.

Will HBL be in 5 years more worth than it is now? Nobody knows, but you well might be right. Agree as well that it is a well run company, though from what I hear the overall customer experience is not flawless ... ever tried their mobile internet banking?

However - all this does not mean that it is a good idea to hold them now. SP is in a clear and sustained downtrend (below MA50 and MA200), and passed the cross of death (MA50 below MA 200); Analysts aren't that enthusiastic either: Consensus (12-month) price target is $1.81 and recommendation is "underperform".

And yes - analysts are not always right, but they are not always wrong either. I think KW's recommendation re not buying into a downtrend would be applicable here.

Banking stocks internationally on the downtrend - and even if we assume that HBL will keep continue growing as they did in the past - if the market feels that the industry deserves a lower PE, than HBL will be effected as well. No tragedy, just means that it might be possible to buy in some months (or whenever) a good stock at a still better price ;);

No point fighting the market.

Obviously - for people holding the question is - are we close enough to (or have we passed already) the bottom? This is a more difficult question to answer and I will not even try. However - I am glad I sold out around $2 ... and looking forward to buy them again when it looks like their uptrend continues.

[percy]

Selling buying back,is Ok for a person who pays tax on their trading,or has moved back to NZ from Aussie, and has organised their tax position,so as they do not have to pay tax for a couple of years.
For a long term investor,who pays tax on their dividends,but not on their capital gain,as they have held for a long time,regular buying/selling leaves them wide open as being a trader.
Not worth the risk with a large portfolio,which is being driven by companies such as HBL, who have the capacity,and who are paying increasing dividends.
Maybe we need another site ie s...... investor rather than s..... trader,as what suits a trader ,does not suit an investor..

[Beagle]

Will HBL be in 5 years more worth than it is now? Nobody knows, but you well might be right. Agree as well that it is a well run company, though from what I hear the overall customer experience is not flawless ... ever tried their mobile internet banking?

However - all this does not mean that it is a good idea to hold them now. SP is in a clear and sustained downtrend (below MA50 and MA200), and passed the cross of death (MA50 below MA 200); Analysts aren't that enthusiastic either: Consensus (12-month) price target is $1.81 and recommendation is "underperform".

And yes - analysts are not always right, but they are not always wrong either. I think KW's recommendation re not buying into a downtrend would be applicable here.

Banking stocks internationally on the downtrend - and even if we assume that HBL will keep continue growing as they did in the past - if the market feels that the industry deserves a lower PE, than HBL will be effected as well. No tragedy, just means that it might be possible to buy in some months (or whenever) a good stock at a still better price ;);

No point fighting the market.

Obviously - for people holding the question is - are we close enough to (or have we passed already) the bottom? This is a more difficult question to answer and I will not even try. However - I am glad I sold out around $2 ... and looking forward to buy them again when it looks like their uptrend continues.
Good post BP. Just want to add that their EPS growth rate is slowing too so that doesn't help and neither does a possible listing of UDC which could see over half a billion of capital raised sucking the wind out of this sector. I still think this is a good quarter to sit on the sidelines but like all things related to predicting the future, only time will tell :) Agree especially with the highlighted point you made.

[BlackPeter]

Selling buying back,is Ok for a person who pays tax on their trading,or has moved back to NZ from Aussie, and has organised their tax position,so as they do not have to pay tax for a couple of years.
For a long term investor,who pays tax on their dividends,but not on their capital gain,as they have held for a long time,regular buying/selling leaves them wide open as being a trader.
Not worth the risk with a large portfolio,which is being driven by companies such as HBL, who have the capacity,and who are paying increasing dividends.
Maybe we need another site ie ************* rather than Sharetrader,as what suits a trader ,does not suit an investor..

There is probably a better thread to discuss tax implications - so here just a couple of points in response:

Capital gains in NZ are taxable if the shares have been bought with the intention of trading (i.e. you intended to create an income through buying and selling at a better price). If you buy to enjoy the dividends but sell at some stage into a downtrend to preserve your capital, than any capital gains made that way are according to my understanding not taxable.

But even if you can't convince your friendly tax man by doing this too frequently (and I think this needs to be an individual discussion looking into the particular individuals "trading habits" to decide whether they are trading or investing), wouldn't it be better to make a profit and pay taxes on it than to make no profit and save paying the taxes?

If you are not sure - what really is the risk? Say you make $10k by selling at the start of a downtrend and buying the same amount of shares cheaper back at the bottom. If IRD deems in this particular situation that your intention was to trade (vs capital conservation), the worst which could happen is that you give (worst case) 3k of these 10k to IRD. Leaves you still 7k better off compared to holding throughout the downtrend.

I don't see a relationship to the size of the portfolio either. Even if you are considered a trader by IRD, than you only pay tax on realized gains, not on any paper gains your portfolio might enjoy (no matter how large it is). And the divvies you pay taxes on anyway) no matter whether deemed to be an investor or trader), though given that HBL divvies are fully imputed is this not a hard thing to do ;):

[percy]

Makes no sense at all to me to risk my tax position for $10K to $100k.
Each to their own accountant's advice.

[couta1]

Makes no sense at all to me to risk my tax position for $10K to $100k.
Each to their own accountant's advice. I always take my accountants advice, I see him every day in the mirror.

[percy]

I always take my accountants advice, I see him every day in the mirror.

Lucky you.
lol.

[winner69]

A business loan approved in minutes ...but a month to produce Tax Certificates

Other banks etc had them out in 5 or so days and online ....Heartland still use slow post ...a digital leader eh

Got a letter today which essentially said there new computer system is a bit rooted ...but might get a Tax Certificate in a day or two.

[percy]

A business loan approved in minutes ...but a month to produce Tax Certificates

Other banks etc had them out in 5 or so days and online ....Heartland still use slow post ...a digital leader eh

Got a letter today which essentially said there new computer system is a bit rooted ...but might get a Tax Certificate in a day or two.

Maybe Craigs and Westpac are using the same system, as I am still to receive Tax Certificates from them .

[iceman]

Maybe Craigs and Westpac are using the same system, as I am still to receive Tax Certificates from them .

Add ANZ and Link Services to that list. Useless.

[winner69]

Add ANZ and Link Services to that list. Useless.

For me ANZ were first. Downloadable early April (even taking into account Easter)

[Ggcc]

Add ANZ and Link Services to that list. Useless.
I had mine emailed to me on Monday from ANZ securities so no problem for me 😊

[iceman]

I had mine emailed to me on Monday from ANZ securities so no problem for me ��

I was referring to ANZ Bank

[777]

I was referring to ANZ Bank

ANZ Bank has been available online for about 10 days.

Why would you get one from Link Services? They are a share registry.

[iceman]

ANZ Bank has been available online for about 10 days.

Why would you get one from Link Services? They are a share registry.

Off topic I know but I have not been able to get mine online at ANZ despite them saying they're available. Have always had an annual tax certificate from Link Services and Computershare for all dividends and RWT paid. Seem to be slow this year.

[777]

Go to documents and where it says "Document Type" and select "Tax Certificate".

[minimoke]

Hopefully this helps put to bed forever now any talk about "Diversity". We should not expect to see this word ever again in an Annual Report (assuming I get one as I'm getting a bit bored with their SP performance)
https://www.stuff.co.nz/business/opinion-analysis/103747764/bloodbath-at-amp-as-female-directors-fed-to-baying-crowd

“But the debate shouldn't be about male or female – it should be about suitability, and in AMP's case they all need to go as soon as possible”.

[winner69]

Hopefully this helps put to bed forever now any talk about "Diversity". We should not expect to see this word ever again in an Annual Report (assuming I get one as I'm getting a bit bored with their SP performance)
https://www.stuff.co.nz/business/opinion-analysis/103747764/bloodbath-at-amp-as-female-directors-fed-to-baying-crowd

“But the debate shouldn't be about male or female – it should be about suitability, and in AMP's case they all need to go as soon as possible”.

Majority of those voting probably would have been male dominated institutional investors .....so with an outcome like this they may be the sexist ones.

Will the remaining men now gracefully (and belatedly) resign?

[winner69]

Might get nine months profit announcement next week ......

......and Jeff will have to finally come clean and make that profit upgrade announcement

Wonder how much over $70m it will be

If he doesn’t do something to pump up the share price by June 30 he might have to leave the TSR chart of the Annual Report ....can’t have a negative year can me (and might affect his bonus a bit)

[winner69]

Heartland staff member agreed their computer systems are ‘rooted’ when I asked

So I suggested they better start again and let slip that ‘was once considered’

Finally got my Tax Certificate

[winner69]

Like all NZ banks Heartland management busy putting their case together to prove to the FMA that are not a pack of ratbags like CBA, AMP etc and their market conduct is exemplary

[percy]

Heartland staff member agreed their computer systems are ‘rooted’ when I asked

So I suggested they better start again and let slip that ‘was once considered’

Finally got my Tax Certificate

They changed to Oracle.
Two months of hell.[and the reason for the increase in vehicle lending impairements]
Oracle will work better for them in future.
In fact will speed up their digital presence,and delivery.
Already proving to be the case,according to David Mackill CFO,Jeff Greenslade CEO,and Chris Flood deputy CEO,who presented at a recent ChCh Hobson Wealth evening.
Thank you HBL and Hobson Wealth.A wealth of good information.

[percy]

Like all NZ banks Heartland management busy putting their case together to prove to the FMA that are not a pack of ratbags like CBA, AMP etc and their market conduct is exemplary

Just wait a few months for their annual report.
Will make one of your Sunday morning rants look very modest.!!!...lol.
Appears NZ banks are clean,happy lovely people to deal with,while Australian owned NZ Banks may have issues,caused by their parents.
Comes down to what is legally right, and what is morally right

[winner69]

Keeping back the good news / profit upgrade until later in the year

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HBL/318143/279390.pdf

[trader_jackson]

Keeping back the good news / profit upgrade until later in the year

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HBL/318143/279390.pdf

Yes saving the $70m+ for a few weeks out from full year result.
No worries as the share price has fallen soo much that Mr Market is no longer really expecting $70m+ anyway

[winner69]

Yes saving the $70m+ for a few weeks out from full year result.
No worries as the share price has fallen soo much that Mr Market is no longer really expecting $70m+ anyway

tj ... I think that $70m+ is now a pipe dream. I need to temper my enthusiasm eh

Getting to $68m means Q4 growth needs to be 20% (YTD is only 8%)

Me becoming bearish could be good for share price though ....look out for $2 again soon.

[winner69]

Did the words say much ...was Jeff full of enthusiasm ...or was it all a bit boring and mundane?

[iceman]

Did the words say much ...was Jeff full of enthusiasm ...or was it all a bit boring and mundane?

Boring and mundane. As it should be. HSF growth pretty impressive though eh. Interesting comments about the reverse mortgage type scheme announced by the Aussie Government in their budget. One has to wonder whether this will be a competition for HSF or draw more people's attention to this option to supplement retirement funds, which could be beneficial to HSF !?

[percy]

Boring and mundane. As it should be. HSF growth pretty impressive though eh. Interesting comments about the reverse mortgage type scheme announced by the Aussie Government in their budget. One has to wonder whether this will be a competition for HSF or draw more people's attention to this option to supplement retirement funds, which could be beneficial to HSF !?

The negative is Australian retirees will be able to get a weekly/fortnightly supplement from their government,at better terms than Heartland can offer.
The positive is it will make people more aware of using reverse equity loans.
The real big positive is that the Australian government will not offer lump sum loans.These lump sum loans are being used to do up houses for sale,home improvements,travel ,new cars etc.
Therefore the positives will far out weigh the negatives.

[Beagle]

tj ... I think that $70m+ is now a pipe dream. I need to temper my enthusiasm eh

Getting to $68m means Q4 growth needs to be 20% (YTD is only 8%)

Me becoming bearish could be good for share price though ....look out for $2 again soon.

At 1.7 times book and trading on a forward PE of 14 I think HBL is still fully priced. I see no reason whatsoever for it to go back to $2 anytime soon.

[Snoopy]

Note that the financial year starts on 1st July of the previous calendar year and ends on 30th June.



YearDividends Paid 'per share'Significant Event During Year'


FY2013 1.5cps(sp) + 2.0cps17th December 2012: Heartland becomes a bank

[/TR]

FY2014 2.5cps + 2.5cps1st April 2014: Seniors 'Reverse Mortgage' Business Acquired


FY2015 3.5cps + 3.0cps10th September 2014: invests in Harmony P2P startup


28th October 2014: Credit rating upgraded from BBB- to BBB (Fitch Ratings)


FY20164.5cps + 3.5cps


FY2017([)5.0cps + 3.5cps(f)



Average FY2015 to FY2017 inclusive7.66cps



(f) indicates forecast result.

I have chosen to use the last three years of operation as indicative, as these years include the full contribution of the Reverse Mortgage Portfolio, a critical component of Heartland going forwards.




YearDividends Paid 'per share'Significant Event During Year'


FY2013 1.5cps(sp) + 2.0cps17th December 2012: Heartland becomes a bank

[/TR]

FY2014 2.5cps + 2.5cps1st April 2014: Seniors 'Reverse Mortgage' Business Acquired


FY2015 3.5cps + 3.0cps10th September 2014: invests in Harmony P2P startup


28th October 2014: Credit rating upgraded from BBB- to BBB (Fitch Ratings)


FY20164.5cps + 3.5cps


FY20175.0cps + 3.5cps


FY20185.5cps + 3.5cps


Average FY2015 to FY2018 inclusive8.00cps




I have chosen to use the last four years of operation as indicative, as these years include the full contribution of the Reverse Mortgage Portfolio, a critical component of Heartland going forwards.

SNOOPY

[Snoopy]

Plugging in a representative yield, one that represents the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation

(Representative Dividend per Share) / (Acceptable Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )

7.66c / 0.72 x 0.075 = $1.42

A reminder here that NTA was:

91cps

at balance date. This means my fair valuation is at a good premium to asset value, a credit to management from the rag tag of assets that they started with.

This $1.42 valuation is measured at the average point in the business cycle. One might argue that we are now riding high in the business cycle and that this $1.42 valuation is consequently too low given today's circumstances. I wouldn't argue with that. But, ever the bargain hound, neither would I look at buying any shares myself until that share price drifts down to that $1.42 level. Don't say that Snoopy didn't warn you!


Plugging in a representative yield, one that represents the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation

(Representative Dividend per Share) / (Acceptable Gross Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )

8.0c / 0.72 x 0.075 = $1.48

A reminder here that NTA was

($569.595m - $71.237m) / 516.684m = 96 cps

at balance date. This means my fair valuation is at a good premium to asset value, a credit to management from the rag tag of assets that they started with.

This $1.48 valuation is measured at the average point in the business cycle. One might argue that we are now riding high in the business cycle and that this $1.48 valuation is consequently too low given today's circumstances. I wouldn't argue with that. But, ever the bargain hound, neither would I look at buying any shares myself until that share price drifts down to that $1.48 level.

SNOOPY

[winner69]

Snoops .....I don’t think we will ever see a share price of $1.48 in the foreseeable future

[Snoopy]

Snoops .....I don’t think we will ever see a share price of $1.48 in the foreseeable future


We are currently in a sweet spot for the finance industry. My valuation is a 'business cycle average'. In good times my rule of thumb is that at the peak of the business the share price will rise to approximately 20% above the average,

$1.48 x 1.2 = $1.78

That is pretty similar to todays trading price of $1.81

Happy?

SNOOPY

[winner69]

We are currently in a sweet spot for the finance industry. My valuation is a 'business cycle average'. In good times my rule of thumb is that at the peak of the business the share price will rise to approximately 20% above the average,

$1.48 x 1.2 = $1.78

That is pretty similar to todays trading price of $1.81

Happy?

SNOOPY

Ok ..but do banks follow the ‘business cycle’ ..they tend to have little catastrophes of their own along the way

[Snoopy]

Ok ..but do banks follow the ‘business cycle’ ..they tend to have little catastrophes of their own along the way


Some say the banks cause the business cycle Winner, by withdrawing finance when it is most needed ;-P! I guess in that context, Heartland qualifies as a 'leader' not a 'follower', But cause and effect are moot in this context, IMO. Banks have good and bad years: Generally more good years. But when bad years come, they can turn out 'really bad'. When you think about it:

1/ adding a series of figures, each representing a dividend paid in that year, THEN
2/ dividing that total by the number of years looked at...

gives a figure that is not dependent on the order the years that were added up. So rather than say 'this is over a business cycle', I perhaps should have said I am modelling a series of good and 'not quite so good' years.

I have just done an exercise checking out returns over the '30th September to 30th September' year. Why those dates? Because it gives time for the June 30th end of year result to be declared and digested by the market.



Share PriceSept 30th 2015Sept 30th 2016Sept 30th 2017


Heartland Bank$1.12$1.51$1.80
[/TR]
[/TR]




Income ReceivedSale of RightsFinal Dividend (previous year)Interim Dividend


FY20164.5cps3.5cps


FY20175.0cps3.5cps


FY20182.13cps5.5cps3.5cps



Notes:

1/ Income received in italics not earned in period following 30th September under consideration.
2/ 7th December 2017 was when a 1:15 rights offer at $1.70 issue closed. Those shares not taken up were sold to institutions at $2.02 creating a profit for each right held by the the rights holders of: 32/15 = 2.13c

Overall Share Growth 30/09/2015 to 30/09/2016

$1.12 (1+g) = ($1.51 + ($0.035 + $0.05) ) => g = 42%

Overall Share Growth 30/09/2016 to 30/09/2017

$1.595 (1+g) = ($1.80 + ($0.035 + $0.055) ) => g = 19%

Those are pretty impressive growth figures. No wonder you shareholders are smiling!

SNOOPY

[blockhead]

I know Heartland has a Motor Vehicle lending portfolio so I went to their website to see what is involved in borrowing to buy a car, never found a reference to motor vehicle finance as such. Whilst pondering that I listed a car on Trademe for sale and before too long I received a call from a call centre in Akl to see if I would attach a "Finance available" banner to my car for sale on Trademe. The finance would be arranged through 9yards Finance in ChCh. I had never heard of this company so did a bit of research and discovered a good part of the finance they arrange is done through Heartland.
Anyone else aware of this link ?

Needless to say I now have my car listed for sale with finance available from 9yards Finance, aka Heartland !!

[Joshuatree]

Excellent, thanks for that info blockhead.Now why is Heartland not upfront and promoting this more?

[777]

I know Heartland has a Motor Vehicle lending portfolio so I went to their website to see what is involved in borrowing to buy a car, never found a reference to motor vehicle finance as such. Whilst pondering that I listed a car on Trademe for sale and before too long I received a call from a call centre in Akl to see if I would attach a "Finance available" banner to my car for sale on Trademe. The finance would be arranged through 9yards Finance in ChCh. I had never heard of this company so did a bit of research and discovered a good part of the finance they arrange is done through Heartland.
Anyone else aware of this link ?

Needless to say I now have my car listed for sale with finance available from 9yards Finance, aka Heartland !!

I trust you will get a commission if they take up the finance.?

[Investor]

Excellent, thanks for that info blockhead.Now why is Heartland not upfront and promoting this more?

From what has been said in this topic, they probably just supply funding to the others who are marketing such finance.

[ScrappyO]

My car loan was through Marac but the payments go to heartland bank.

[blockhead]

I trust you will get a commission if they take up the finance.?

I did make such an arrangement (;;)

[Beagle]

Just a little bit of anecdotal market evidence. Heard a whisper BNZ want to get more business in the asset finance area and try and eat some of UDC's lunch.
Thought nothing of it but today noticed an advertisement from Asset Finance a division of BNZ bank offering to finance fixed assets from no deposit and from 7.95% using the (Vehicle or plant and equipment as sole security). Not sure how that compares to Marac's rates but I would think the BNZ are using a pretty sharp pencil with their deals at present.

Interesting times with no resolution yet for ANZ bank with UDC.

[Oliver Mander]

This is interesting...the link contains some useful metrics on nz banks
https://bankdashboard.rbnz.govt.nz/summary

Thoughts?

[Antipodean]

This is interesting...the link contains some useful metrics on nz banks
https://bankdashboard.rbnz.govt.nz/summary

Thoughts?

The profitability graph is particularly nice for HBL.

[winner69]

The profitability graph is particularly nice for HBL.

The non-performing loans also looks nice

Only one of the highest because it shows Heartland is more willing to lend to riskier borrowers ...and that’s not bad

[percy]

The non-performing loans also looks nice

Only one of the highest because it shows Heartland is more willing to lend to riskier borrowers ...and that’s not bad

Pity no NIM graph.
W69 have a look at TRA's NIM.

[winner69]

Pity no NIM graph.
W69 have a look at TRA's NIM.

Truly amazing ...but not as high as Budget Loans or Evolution Finance get

[percy]

Truly amazing ...but not as high as Budget Loans or Evolution Finance get

Please do not tell anyone but I lost money on Alan Hawkins' Cynotech holdings.!
Thought he was badly done by with Equiticorp,but I was wrong.
A disgrace.

[kiora]

Pity no NIM graph.
W69 have a look at TRA's NIM.

What is NIM? Please share.

[percy]

What is NIM? Please share.

NIM is nett interest margin.
Most banks are just over 2%,HBL are nearer 4.4%,and TRA is 9%.
You will see it quoted in HBL's and TRA's presentations.

[Beagle]

NIM is nett interest margin.
Most banks are just over 2%,HBL are nearer 4.4%,and TRA is 9%.
You will see it quoted in HBL's and TRA's presentations.

Woohoo how good is that and unlike HBL on a PE of 14 TRA scream "cheep cheep" like a budgie :)

[beetills]

Please do not tell anyone but I lost money on Alan Hawkins' Cynotech holdings.!
Thought he was badly done by with Equiticorp,but I was wrong.
A disgrace.
He got my money also with Cynotech.Reasonable company badly managed imo.