HGH - Heartland Group Holdings

[DonkeyKong]

It is less than 18.74% of my HGH holding before allocation.

I don't want to provide exact numbers but it was roughly 15%.

Do you have some insight on how the allocation scaling worked at Jarden (and elsewhere)?

I don't have any insights. Since everyone seems to be getting different % of what they requested. I was going to guess that it would be 18.74% of their existing holdings because $200,000,000/$1.8 is 111111111 shares which is about 18.74% of 592,903,820 the current number of shares issued.

But I guess it is some other formula that takes into account both existing holding and application requested. Since if you got less than 18.74% of your existing holding then that would suggest others got more than 18.74% of their existing holdings.

[nztx]

What the %#&*$@ is going on with HGH .. days ago a short notice non holders offer out of Sharesies..

Now Holders get the same offer on slightly longer timeframe

Presumably both will scaled back somewhat depending on how many pounce on each of the HGH Placement offers

In the meantime head shares get market valued downwards allowing for the upcoming dividend

[Bjauck]

What the %#&*$@ is going on with HGH .. days ago a short notice non holders offer out of Sharesies..

Now Holders get the same offer on slightly longer timeframe

Presumably both will scaled back somewhat depending on how many pounce on each of the HGH Placement offers

In the meantime head shares get market valued downwards allowing for the upcoming dividend The pricing of the offers make an allowance for the dividend. The SPP is a different offer which could result in a cheaper price. This capital raising does lack transparency as to how shareholders are treated..

[alokdhir]

The pricing of the offers make an allowance for the dividend. The SPP is a different offer which could result in a cheaper price. This capital raising does lack transparency as to how shareholders are treated..

For SPP to result in cheaper then 1.80 base price ....VWAP of five days from Tuesday to Monday 5th Sept has be less then 1.84 ...as just 2.5% discount is offered and they will use lower of the price ...IMO its going to be 1.80 which will eventually work ....though u never know !!!

Though there is no transparency in the scaling method but its fair to assume that if your new request is less then 18.74% of your Original Holding on 22nd August then u may get them all ...if its more then it maybe scaled down to maximum that level

HGH has the right to keep oversubscription ....which surely they will like to exploit as 1.80 is a good price for them

In hindsight NZX Regco notice to HGH recently had some merit ....its price did get jacked up suddenly from 1.90 to 2.15 ...as this was in the works

[Onemootpoint]

FYI: An acquaintance with an existing smallish holding received around a third of his application.

[alokdhir]

FYI: An acquaintance with an existing smallish holding received around a third of his application.

As his holding was small so he could get max 19% of his holding ....thats the understanding at the moment ....

[Bjammin]

I got scaled to about a 3rd of what I subscribed for (via sharesies). Allocation represented about 60% of current holdings. Not bad for me given I recently liquidated a chunk of my holdings for a recent asset purchase

[850man]

I applied via Link Market Services, they debited my account by the full amount of my request, does this mean I will get all that I applied for or will they return some of my payment to me along with a reduced number of shares?

[alokdhir]

I applied via Link Market Services, they debited my account by the full amount of my request, does this mean I will get all that I applied for or will they return some of my payment to me along with a reduced number of shares?

U will know the result on 9th Sept ...Shares and refund will come together .

[alokdhir]

The way markets are looking ...I think it will easier to get HGH at issue price of 1.80 on NZX

I know lead manger Jarden will do everything possible to support the price till 5th Sept ....but they cant fight avalanche of selling if the general market tanks

Better to wait till the last few days ...see where its cheaper to get them ...maybe NZX !!!

[Classic]

I got scaled down to almost exactly two thirds of what I asked for via Sharesies (initially it implied that I would get the lot - I have just been refunded part of it). This was via the original offer, not the SPP.
What ended up with is ~10%-11% of my initial holding (small $$$).
Not sure what I am going to do from here - for me in the past the SPP process has always ended up being pretty much the same as just buying when the inevitable price drop hits, but having to wait longer, then wait to get my refunded portion back. Currently adopting a wait and see approach !

[justakiwi]

I think this is one of the main disadvantages for very small shareholders. Tying up those funds temporarily, knowing full well you're not going to get the number of shares you asked for, is a real negative for those who don't have additional cash reserves available, while waiting for a refund.


I got scaled down to almost exactly two thirds of what I asked for via Sharesies (initially it implied that I would get the lot - I have just been refunded part of it). This was via the original offer, not the SPP.
What ended up with is ~10%-11% of my initial holding (small $$$).
Not sure what I am going to do from here - for me in the past the SPP process has always ended up being pretty much the same as just buying when the inevitable price drop hits, but having to wait longer, then wait to get my refunded portion back. Currently adopting a wait and see approach !

[nztx]

Got approx 34% of what was applied for in first 'open to all' Placement offer

Will see if the offer for holders is any better in terms of success

IMO SP may well lower to 1.80 or lower in coming days after the placement shares are
dished out onto register

[Balance]

Like PEB, I think HGH will be taking any over subscriptions they get.

So apply for all you want - I am sure you will get them with the kind of volatile market conditions we are in.

[iceman]

Like PEB, I think HGH will be taking any over subscriptions they get.

So apply for all you want - I am sure you will get them with the kind of volatile market conditions we are in.

Agree. I will be surprised if HGH doesn’t keep as much if the money we offer as possible. Why they’re paying dividends at the same time is beyond me !

[Rawz]

Agree. I will be surprised if HGH doesn’t keep as much if the money we offer as possible. Why they’re paying dividends at the same time is beyond me !

I agree. Makes no sense.

There has been a bit of a love affair with HGH and Jeff for a long time now. It being a top pick with the brokers really cemented that.

I wonder how much damage this kerfuffle is going to do to that love affair..?

Don’t get me wrong, HGH is a great company and will be a very good long term hold for anyone.. but right now the magic is gone ay. And the SP will be under pressure for awhile. Not to mention the supposed recession coming our way.

[Balance]

Agree. I will be surprised if HGH doesn’t keep as much if the money we offer as possible. Why they’re paying dividends at the same time is beyond me !

Makes very little sense indeed.

[alokdhir]

Tomorrow is going to be big test of Jarden to keep HGH over 1.80 ...lets c if they can manage

Mr B's expected and wanted price will come sooner then later ...1.55 !!!! ...then 10% Gross will get people in like GNE

[Southern Lad]

Tomorrow is going to be big test of Jarden to keep HGH over 1.80 ...lets c if they can manage

Given the Share Purchase Plan isn’t underwritten and assuming the $130m placement was in fact fully subscribed without the underwriter applying for shares to avoid the optics of there being a shortfall, what role does Jarden have tomorrow other than trying to keep its clients who did participate in the placement happy?

Without having the SPP underwritten, HGH runs the risk of raising less than $70m if the share price falls to $1.80 or below. Are you suggesting the HGH will be paying Jarden to underpin the share price until the SPP closes?

[alokdhir]

Given the Share Purchase Plan isn’t underwritten and assuming the $130m placement was in fact fully subscribed without the underwriter applying for shares to avoid the optics of there being a shortfall, what role does Jarden have tomorrow other than trying to keep its clients who did participate in the placement happy?

Without having the SPP underwritten, HGH runs the risk of raising less than $70m if the share price falls to $1.80 or below. Are you suggesting the HGH will be paying Jarden to underpin the share price until the SPP closes?

Have u seen extreme volumes these days of HGH ...normal used to be around 200K ....now its almost 2m each day . Also guess who is on the buy side when all know fully well its going below 1.80 sooner then latter ...still there is lots of buying support !!

Even the most ardent fans of HGH here have decided not to participate in SPP at 1.80 as they think its more prudent to wait and get it cheaper in few weeks on the market . If before the SPP closes on 5th Sept it goes below 1.80 then it will become almost impossible to complete the process which will be very negative for the SP in the short term .

AIR raised big money by giving big discount and sops to existing shareholders by having a much more investor friendly structure of the offer while HGH is doing it in a manner which only suits them at the cost of the existing shareholders .

Market conditions are not being helpful but they wanted to take advantage of good results and good dividends payouts ....so they had to wait for this part of time when Jarden would have been knowing that markets have reached critical levels .

In nutshell in trying to have their cake and eat it too ...HGH management will face enormous difficulties in pulling it thru and rightly so

Underwritten placement done before ....flippers will be hindering SP support by constant supply over their issue price of 1.80

[mfd]

It is not really a problem for the SPP if the share price falls below 1.80 as the issue price will adjust if necessary.

"The offer price of these Shares will be the lower of the Placement offer price of NZ$1.80 and a 2.5% discount to the five-day volume weighted average price of Heartland shares traded on the NZX over the five business day period prior to, and including, the closing date of the SPP offer"

[alokdhir]

It is not really a problem for the SPP if the share price falls below 1.80 as the issue price will adjust if necessary.

"The offer price of these Shares will be the lower of the Placement offer price of NZ$1.80 and a 2.5% discount to the five-day volume weighted average price of Heartland shares traded on the NZX over the five business day period prior to, and including, the closing date of the SPP offer"

VWAP needs go below 1.84 to get below 1.80 ...its VWAP of 5 days ...while spot price on market maybe more interesting !!! Minus all the troubles of forms and waiting etc

[mfd]

If it doesn't go below 1.84 then the SPP is a great deal at 1.8. if it does go below, the 2.5% discount to VWAP has your back.

[Ggcc]

If it doesn't go below 1.84 then the SPP is a great deal at 1.8. if it does go below, the 2.5% discount to VWAP has your back.
With the Dow dropping as much as it did on Friday expect to see a sea of red today including HGH. If not woohoo

[alokdhir]

I listened to great Mr Jeffs advise to small shareholders like me ...He said if u cant see the big picture ...please exit ...As I do see the big picture from small shareholder side and exited fully ....as I dont want to stay with selfish and overambitious with my money kind of management . I also need to protect myself and look after myself ....so I will come back if suits me ....like management has done ...this current situation entirely suits them at small shareholders cost .

AIR did much better for the benefit of small shareholders while raising huge capital

[mfd]

With the Dow dropping as much as it did on Friday expect to see a sea of red today including HGH. If not woohoo

I'm hoping for a nice fall over the next week or two so that the SPP shares are cheaper.

[Balance]

I'm hoping for a nice fall over the next week or two so that the SPP shares are cheaper.

Interesting to see how many of the 72.22m shares placed at $1.80 allotted on Friday finds its way into the market over the course of this week?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HGH/397705/377687.pdf

[alokdhir]

As expected weakest stock on NZX is HGH ....thanks Mr Jeff

[nztx]

As expected weakest stock on NZX is HGH ....thanks Mr Jeff

$1.55 next week ? ;)

It always amuses me as to why HGH never really takes off like others to any degree ..

[alokdhir]

$1.55 next week ? ;)

It always amuses me as to why HGH never really takes off like others to any degree ..


1.55 will come eventually if S&P reaches 3600 again ...but not next week ...maybe after 20th Sept ...fingers crossed ...lol

[alokdhir]

HGH = 1.80 ....!!!! Wow ...all thinking like me now ...sell and regret is better then not sell and regret ...lol

[Rawz]

HGH = 1.80 ....!!!! Wow ...all thinking like me now ...sell and regret is better then not sell and regret ...lol

People rotating out of HGH and into MHJ for its strong dividend and growth?

[alokdhir]

People rotating out of HGH and into MHJ for its strong dividend and growth?

I will not be that adventurous ...with Central Banks looking to cause pain to households...going into super discretionary spending stocks ...lol

[winner69]

Heartland CPI Adjusted NPAT up a miserly 2.0% on pcp

No wonder the share price has tanked since announcing that

[alokdhir]

Heartland CPI Adjusted NPAT up a miserly 2.0% on pcp

No wonder the share price has tanked since announcing that

Four Broker's Pick ...including our Sharetrader Forum ....how all got it so wrong ...Seems Mr Jeff has magical powers ...lol

[winner69]

At least it didn't close on the low of the day

That's a good sign

[alokdhir]

At least it didn't close on the low of the day

That's a good sign

It closed below the price all was so happy to get allotment ....thats a very negative sign ...as per me

It is going towards Mr B's price ...ie 1.55

I am so happy I exited at first sign of trouble like Mr B does ....Looking forward to 1.55 now

[percy]

It closed below the price all was so happy to get allotment ....thats a very negative sign ...as per me

It is going towards Mr B's price ...ie 1.55

I am so happy I exited at first sign of trouble like Mr B does ....Looking forward to 1.55 now


This is from another site and was posted by Mr.B.
I expect he would not have bought should he expected his $1.55 price would be hit.

"If anyone's interested in the scaling ratio in the placement I applied to invest an extra $200,000 through Jarden and received 57,778 shares worth $104,000.40. 52% of the value I applied for."

[alokdhir]

This is from another site and was posted by Mr.B.
I expect he would not have bought should he expected his $1.55 price would be hit.

"If anyone's interested in the scaling ratio in the placement I applied to invest an extra $200,000 through Jarden and received 57,778 shares worth $104,000.40. 52% of the value I applied for."

Ohhh ....thats very enlightening as he in my mind one of the top most expert of HGH and top most fan also ....

I will love to know which site he is enlightening people now as me not aware of that

Anyways maybe yesterday he got chance to get all he wanted below 1.80 too ....

I will still wait to see it stabilise ....not in a hurry to come back and have a good cushion as exited pretty early ...

[BlackPeter]

Ohhh ....thats very enlightening as he in my mind one of the top most expert of HGH and top most fan also ....

I will love to know which site he is enlightening people now as me not aware of that

Anyways maybe yesterday he got chance to get all he wanted below 1.80 too ....

I will still wait to see it stabilise ....not in a hurry to come back and have a good cushion as exited pretty early ...

I understand he operates now in a different metaverse far far away, assuming the name of a rodent from faulty towers ;);

[Balance]

Let’s see how many who got scaled back actually buys on market at $1.80 or below.

If history is any guide, FOMO has become FOPTM?

[mfd]

It's funny how a few days ago the thread was mostly complaining about intuitions getting a sweet deal, but now it looks like the retail investors are going to get a better price than the instos we're complaining about that instead.

[Swala]

I understand he operates now in a different metaverse far far away, assuming the name of a rodent from faulty towers ;);

I thought the rodent was what Mr Faulty accused Manuel of having?

[Balance]

It's funny how a few days ago the thread was mostly complaining about intuitions getting a sweet deal, but now it looks like the retail investors are going to get a better price than the instos we're complaining about that instead.

Guess it shows how relatively irrelevant retail investors are vs the big market movements and big institutional players in stocks like HGH?

[Bjauck]

I thought the rodent was what Mr Faulty accused Manuel of having?
When does a fluffy Siberian hamster turn into a dirty rat?
A bit of classic comedy:
Basil the hamster? https://www.youtube.com/watch?v=khoJsN3nNzM

[BlackPeter]

I thought the rodent was what Mr Faulty accused Manuel of having?

Well possible - I am probably here just demonstrating my ignorance of this particular TV series ...

[bull....]

It's funny how a few days ago the thread was mostly complaining about intuitions getting a sweet deal, but now it looks like the retail investors are going to get a better price than the instos we're complaining about that instead.

lol so true , i think ill wait to buy mine back at 90c when the recession is in full swing. congrats to hgh though for a perfectly timed issue

[Ggcc]

I see a whole lot of negativity about HGH in the short-term and I don't have the same sentiment. As for the longterm it will go higher and I will look forward to the rising dividend with prudent controls on how they utilise their money. On market screener one analyst who originally thought HGH was worth $1.74 re rated it to $2.04. It is also now an Outperform.

I am not one to follow market screener without looking into the stock myself, but I am a happy holder and not selling anything yet.

https://www.marketscreener.com/quote/stock/HEARTLAND-GROUP-HOLDINGS-47041144/consensus/

[Snow Leopard]

I understand he operates now in a different metaverse far far away, assuming the name of a rodent from faulty towers ;);

Seriously he has changed his name to Basil the Rat? :D

Seems appropriate :)

[BlackPeter]

Seriously he has changed his name to Basil the Rat? :D

Seems appropriate :)

I couldn't possibly comment ;) ;

[winner69]

One of the highlights of the results announcement was this bit - Five year total shareholder return (TSR) of 66.9%, (19 August 2017 – 19 August 2022) compared with the NZX50 Index TSR of 56.7% in the same period.

And a nice chart to give punters the warm fuzzies (did have different dates but who cares)

Share price down 16% since then

Suppose that would make the chart look a bit different .... and they might not have included it

[Rawz]

that's a really interesting chart- i would have thoughts HGH would have outperformed much much higher.
As a shareholder for the majority of the time you are sitting in the red vs NZX50. Then only the last year or so you pass it and make a 10% better return.. Is that sufficient for the extra risk over 5 years?

now that extra risk is here in spades with the aussie expansion. Would want a higher premium than 10% over the next 5 years.

Maybe $1.55 is fair? what was that based on again? P/E or NTA ratio?

[winner69]

alokdhir, fyi last 5 years TSR returns from HGH have been as below. August years and TSR is change in share price plus gross dividend (not reinvested)

2018 -3%
2019 -2%
2020 -15%
2021 99%
2022 -10%

Hmm .... more down years than up years ...... and From August 17 returns has been 6.1% pa (gross dividends) ..... maybe I've been the mug punter

For rawz - did you see this post of mine the other day

Sort of answers your question (and the Aug 22 number is now different)

[Rawz]

For rawz - did you see this post of mine the other day

Sort of answers your question (and the Aug 22 number is now different)

Ah yes. its really interesting ay. HGH and Jeff were masters of the universe!! but in reality you are better to just buy the market. Unless you want the dividend income

[Onemootpoint]

But if one had bought HGH say Feb 2020, or Aug 2020, or Feb 2021; based on the chart which would have allowed for a better return on capital by Feb 2022 or even Aug 2022?

[winner69]

But if one had bought HGH say Feb 2020, or Aug 2020, or Feb 2021; based on the chart which would have allowed for a better return on capital by Feb 2022 or even Aug 2022?

Indeed

HGH is a great trading stock (even though we are all traders at the end of the day)

The signal is often the valuation multiple - gets 'undervalued' / cheap + time to buy and gets 'overvalued' / expensive = time to sell

The HGH Price/Book ratio is a good valuation multiple to follow as chart below

And now is a pretty good time to buy

[percy]

Was not going to,but changed my mind and applied for some in HGH's spp.
Very easy to complete the application form.

[winner69]

In case we overlook the obvious - Heartland (or our man Jeff) always does what he says he will do

Doubt if any have a guidance record like shown below

So in a years time we will be lauding NPAT of $114.1m or around about $114m

[BlackPeter]

In case we overlook the obvious - Heartland (or our man Jeff) always does what he says he will do

Doubt if any have a guidance record like shown below

So in a years time we will be lauding NPAT of $114.1m or around about $114m

Impressive track record.

Looks like though, he has quite some wiggle room if he commits to an NPAT range without defining the number of shares which share the earnings - doesn't he?

[Rawz]

Impressive track record.

Looks like though, he has quite some wiggle room if he commits to an NPAT range without defining the number of shares which share the earnings - doesn't he?

That's right BP. EPS flat. And like Winner says Jeff is never wrong so we know its going to be flat 100%.
With coming recession and guaranteed flat earnings per share then i just cant see the point in buying now unless the SP goes down around $1.50.

Better to wait and see what happens. Could pick some up really really cheap like the covid lows type cheap.

just my opinion.

[winner69]

Impressive track record.

Looks like though, he has quite some wiggle room if he commits to an NPAT range without defining the number of shares which share the earnings - doesn't he?

C’mon BP don’t be a spoil sport …..at least Jeff is willing to give guidance, ……unlike those dudes at Oceania and Fisher & Paykel Healthcare who say it’s too hard to take a guess.

$s are good enough for most of us …..from that we can work out other things if we want

[percy]

Hobson Wealth in a note today.
Price catalyst
• 12 - month price target: NZ$ 2.25 based on a DDM methodology.
• Catalyst : Avenue Bank outcome, asset growth/quality progression

[winner69]

Walking along the beach earlier today it dawned on me that a lot of what has been said about Heartland in the last week (generally negative) has been very much what was being said in 2018 when they went through that corporate restructure and became Heartland Group ... and listed on ASX

Lot of negativity back then .... too messy, not good concentrating more on Aussie etc etc ..... and the share price did weaken through 2018

But at the end of the day these things didn't seem to hold them back eh

In a few months time we'll be saying what was all the fuss about

[alokdhir]

that's a really interesting chart- i would have thoughts HGH would have outperformed much much higher.
As a shareholder for the majority of the time you are sitting in the red vs NZX50. Then only the last year or so you pass it and make a 10% better return.. Is that sufficient for the extra risk over 5 years?

now that extra risk is here in spades with the aussie expansion. Would want a higher premium than 10% over the next 5 years.

Maybe $1.55 is fair? what was that based on again? P/E or NTA ratio?

That was suggested by Mr B based on his lowest range of p/e of 9 ...as he suggested it trades in 9-18 range ...also at that price gross dividend yield is 10% ...though dividend is not as reliable as GNE ...

[maclir]

Anyone else getting this

14110

[justakiwi]

Getting it where?


Anyone else getting this

14110

[maclir]

When trying to get to the Heartland SPP offer site.

[Snoopy]

When trying to get to the Heartland SPP offer site.

www.heartlandshareoffer.co.nz

Just tried myself, and got the same error message.

SNOOPY

P.S. Tried again at 7:45am this morning 31/08/2022. Seems to be back up and running

[LaserEyeKiwi]

That was suggested by Mr B based on his lowest range of p/e of 9 ...as he suggested it trades in 9-18 range ...also at that price gross dividend yield is 10% ...though dividend is not as reliable as GNE ...

Doesn't one have to recalculate that now given the large amount of share dilution that just occurred?

[percy]

Doesn't one have to recalculate that now given the large amount of share dilution that just occurred?

The other side of the coin is HGH's current NTA of 96 cents, will increase as the new shares are being issued at $1.80.

[winner69]

The other side of the coin is HGH's current NTA of 96 cents, will increase as the new shares are being issued at $1.80.

You on to it percy

Book Value increases from $1.36 to $1.44 after capital raise

If Price Book ratio stays the same should see increase in share price

[Snoopy]

www.heartlandshareoffer.co.nz

Just tried myself, and got the same error message.

P.S. Tried again at 7:45am this morning 31/08/2022. Seems to be back up and running


I have been busy for the last couple of days so missed checking my e-mail. Last night found one from Jarden concerning an estate I am advising on. The message was about the Heartland Shareholder Top Up Plan. Record your shareholder interest by "Tuesday night". Darn it I thought, missed out, but left a message on the Jarden answerphone anyway.

Got a call back this morning (actually five calls back, because with all the background noise in the sites I was visiting I didn't hear the other four), and was expecting to be consoled for missing out. But no, I was in luck and the offer was still open. With the issue of scaling in my mind, I talked about how much money we should submit to the SPP. The answer surprised me.

"Heartland have the ability to accept over-subscriptions and even we got he full $50k worth of shares the portfolio would not be over-weighted in Heartland shares."

It was almost like I was being groomed to expect all of the money being submitted to the SPP to be accepted! The person I was speaking to was someone fairly senior within Jardens, so I expect that they would have a very watchful eye on how the capital raising process is going. Make of that what you will!

SNOOPY

[Snoopy]

The other side of the coin is HGH's current NTA of 96 cents, will increase as the new shares are being issued at $1.80.


No quite right. Big boys like 'the purse' will be getting their fill of HGH shares at $1.80 from the placement, that is true. But the 'not quite so big boys' will be getting their shares via the share price plan at "the market less 2.5% discount price", which is looking to be a little less than $1.80. Score one for the 'not quite so big boys'!

SNOOPY

[percy]

No quite right. Big boys like 'the purse' will be getting their fill of HGH shares at $1.80 from the placement, that is true. But the 'not quite so big boys' will be getting their shares via the share price plan at "the market less 2.5% discount price", which is looking to be a little less than $1.80. Score one for the 'not quite so big boys'!

SNOOPY

Really.?.........................

[Snoopy]

Really.?.........................

From p1 of the Jarden note on the Heartland Group Holdings Limited Share Purchase Plan Offer 25 August 2022.

"Under the SPP Offer, eligible shareholders are able to apply for up to $50,000 (A$45,000) of New Shares which will rank equally with existing Heartland shares but will not be entitled to the 5.5cps 2022 final dividend. The Issue Price under the Offer is set at the lower of $1.80 per share (the placement price) or a 2.5% discount to the ex-dividend volume weighted average price over the five days up to the Closing Date (5 September 2022).

$1.80/0.975 = $1.846

Heartland shares went ex-dividend on 25th August. So the price setting dates of August 29 ($1.83), 30 ($1.80), 31 and September 1,2 are all ex-dividend dates . As long as the share price closes lower than $1.846 on average for the five days this week, 'share price plan punters' should get shares for a little less than $1.80. That is how I read things.

SNOOPY

[percy]

Yeah right.
The point is the NTA will increase.

[maclir]

I have been busy for the last couple of days so missed checking my e-mail. Last night found one from Jarden concerning an estate I am advising on. The message was about the Heartland Shareholder Top Up Plan. Record your shareholder interest by "Tuesday night". Darn it I thought, missed out, but left a message on the Jarden answerphone anyway.

Got a call back this morning (actually five calls back, because with all the background noise in the sites I was visiting I didn't hear the other four), and was expecting to be consoled for missing out. But no, I was in luck and the offer was still open. With the issue of scaling in my mind, I talked about how much money we should submit to the SPP. The answer surprised me.

"Heartland have the ability to accept over-subscriptions and even we got he full $50k worth of shares the portfolio would not be over-weighted in Heartland shares."

It was almost like I was being groomed to expect all of the money being submitted to the SPP to be accepted! The person I was speaking to was someone fairly senior within Jardens, so I expect that they would have a very watchful eye on how the capital raising process is going. Make of that what you will!

SNOOPY

Cheers. I've been pretty flat out, too....maybe I'll gove em a call tomorrow.

[maclir]

In for slightly more than a penny, but less than a pound (which would be the full 50k).

[alokdhir]

Yeah right.
The point is the NTA will increase.

NTA will rise as people are paying 1.80 for 0.96 thing ...ie if u value NTA so much then why pay 1.80 for 0.96 NTA share ...:p

[percy]

You on to it percy

Book Value increases from $1.36 to $1.44 after capital raise

If Price Book ratio stays the same should see increase in share price

Yes we are used to seeing this happen.
Often used comparing one bank to another.

[Rawz]

You on to it percy

Book Value increases from $1.36 to $1.44 after capital raise

If Price Book ratio stays the same should see increase in share price

Avg price/book value over last 5 years is 1.26.

$1.44 x 1.26 = $1.81 sp.

I can see why they set the price at $1.80. All starting to make sense

[bull....]

Centrix managing director Keith McLaughlin says a simultaneous increase in demand for credit, and in arrears, points to people being under pressure to meet repayment obligations

https://www.interest.co.nz/personal-finance/117416/centrix-managing-director-keith-mclaughlin-says-simultaneous-increase

interesting auto arrears have been increasing mth on mth

[Rawz]

Centrix managing director Keith McLaughlin says a simultaneous increase in demand for credit, and in arrears, points to people being under pressure to meet repayment obligations

https://www.interest.co.nz/personal-finance/117416/centrix-managing-director-keith-mclaughlin-says-simultaneous-increase

interesting auto arrears have been increasing mth on mth

interesting article, thanks for sharing!

applies to TRA and HMY as well.

See auto loans are a way off normal arrears levels. this is why HGH raising capital at the top of the cycle is a excellent move ay.

Because i am a glass half full type of guy.... when things get tight, as a funder, you end up picking up a whole bunch of typical cash buyers, for various reasons. And these customers are AAA+ Helps a bit in offsetting the increasing arrears on the book.

[winner69]

Avg price/book value over last 5 years is 1.26.

$1.44 x 1.26 = $1.81 sp.

I can see why they set the price at $1.80. All starting to make sense

Just as well there's an above average sometimes


$1.44 x 1,75 = $2.52 sp

Cool eh

[percy]

Just as well there's an above average sometimes


$1.44 x 1,75 = $2.52 sp

Cool eh

I have been waiting on this post.
A cracker...lol.

[Rawz]

Just as well there's an above average sometimes


$1.44 x 1,75 = $2.52 sp

Cool eh


I have been waiting on this post.
A cracker...lol.

Just as well there's a below average sometimes

$1.44 x 0.97 = $1.40

But thats crazy stuff. there is no way the sp will trade 0.97x book value nowadays.

This did happen before thou- June 2014. This was a few months after HNZ announced a $87m acquisition of Seniors Money International's NZ and Aus Home Equity release mortgage business.
They raised $20m to partially fund it. $15m placement and $5m share purchase plan.

But yeah like i say, crazy crazy stuff. No similarities here

[winner69]

Heartland Bank raised their reverse equity rate by another +25 bps to 7.75%.

That’s good

[winner69]

In interest.co.nz ….do Heartland access this cheap money from RBNZ.

Another bank took $100 mln from the Funding for Lending program (FLP), taking the total accessed to $14 bln so far. We don't know who took this funding but it unlikely to have been one of the big four Aussie banks. (They don't get out of bed for less than $500 mln usually, from this source.) So a back of the envelope calculation suggests $100 mln will fund about 200 transactions? The whole FLP program is now only scheduled to run for another 90 days, so we might see a flurry of final activity in this space.

[Crypto Crude]

Well if you have "read" him correctly, it seems pretty clear that retail investors are not his priority, and small investors are insignificant.

Insignificant then...

[justakiwi]

Just stop stalking me. It's starting to feel creepy.


Insignificant then...

[850man]

Just stop stalking me. It's starting to feel creepy.
Please folks, can we stick to share chat in here. We need opinions from all points of view, we may not agree but that's the value of this forum. None of this is personal and should not be taken personally.

[mike2020]

So if the 5 day average is $1.81 does that mean the offer price is $1.765?

[alokdhir]

So if the 5 day average is $1.81 does that mean the offer price is $1.765?

Yes ...1.7648

[winner69]

See NIM fell 19 basis pionts to 4.16%

Johnny from Chris Lee says .........slight reduction in net interest margin – ........... one hopes the fall in net interest margin will not become a trend.

[Muse]

See NIM fell 19 basis pionts to 4.16%

Johnny from Chris Lee says .........slight reduction in net interest margin – ........... one hopes the fall in net interest margin will not become a trend.

Johnny should look at mix and attendant NLMs.

[winner69]

I note Heartland paying out $150m on 21 September as bond issue matures

Interesting timing of what some pundits have called a 'seemingly rushed' capital raise

[winner69]

Had a look at some numbers in their reports mainly to see impact of StockCo on F22 but more importantly on F23

Presentation says StockCo contributed $1.4m to F22 NPAT and is forecast to contribute A$10m to A$12m in F23 (lets say NZ$12m)

First observation: Backing StockCo out of F22 normalised NPAT of $96.1m means 'base' business grew at 7.7% over F21 (makes the reported 9.3% reported growth not that flash)

Second observation: F23 NPAT guidance is $109m to $114m and as above lets assume StockCo is going to contribute $12m. This implies that the 'base' business (ie excluding StockCo) NPAT is forecast to grow by 2% to 8% in F23. Not that impressive ......and a lot lower than most were touting before the results came out

Seems things getting tough for Heartland .... underlying earnings growth stalled / flattening out

No wonder share price down last week .... I don't think you can put it all down to the capital raise.

[iceman]

Had a look at some numbers in their reports mainly to see impact of StockCo on F22 but more importantly on F23

Presentation says StockCo contributed $1.4m to F22 NPAT and is forecast to contribute A$10m to A$12m in F23 (lets say NZ$12m)

First observation: Backing StockCo out of F22 normalised NPAT of $96.1m means 'base' business grew at 7.7% over F21 (makes the reported 9.3% reported growth not that flash)

Second observation: F23 NPAT guidance is $109m to $114m and as above lets assume StockCo is going to contribute $12m. This implies that the 'base' business (ie excluding StockCo) NPAT is forecast to grow by 2% to 8% in F23. Not that impressive ......and a lot lower than most were touting before the results came out

Seems things getting tough for Heartland .... underlying earnings growth stalled / flattening out

No wonder share price down last week .... I don't think you can put it all down to the capital raise.

Good work winner. Thank you.

[Rawz]

Had a look at some numbers in their reports mainly to see impact of StockCo on F22 but more importantly on F23

Presentation says StockCo contributed $1.4m to F22 NPAT and is forecast to contribute A$10m to A$12m in F23 (lets say NZ$12m)

First observation: Backing StockCo out of F22 normalised NPAT of $96.1m means 'base' business grew at 7.7% over F21 (makes the reported 9.3% reported growth not that flash)

Second observation: F23 NPAT guidance is $109m to $114m and as above lets assume StockCo is going to contribute $12m. This implies that the 'base' business (ie excluding StockCo) NPAT is forecast to grow by 2% to 8% in F23. Not that impressive ......and a lot lower than most were touting before the results came out

Seems things getting tough for Heartland .... underlying earnings growth stalled / flattening out

No wonder share price down last week .... I don't think you can put it all down to the capital raise.

Good post Winner. Thanks for sharing.

Ah well, at least they are still grinding out an increase in tough times. Hope shareholders keep the faith and look past F23. Any dips down to $1.50 range should be bought up aggressively and put in the bottom draw

[mfd]

Strong vote of confidence from the board. Looks like almost $23 million of the $130 million placement went to directors.

https://www.nzx.com/announcements/398224

[percy]

Strong vote of confidence from the board. Looks like almost $23 million of the $130 million placement went to directors.

https://www.nzx.com/announcements/398224

Now that is very serious "skin in the game".

What is 'Skin In The Game'. Skin in the game is a phrase made popular by renowned investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.

[winner69]

Now that is very serious "skin in the game".

What is 'Skin In The Game'. Skin in the game is a phrase made popular by renowned investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.

Tomlinson and Ricketts own 12.6% of the company between them

[percy]

Tomlinson and Ricketts own 12.6% of the company between them

Sage investors.......................

[herbert240]

Was not going to,but changed my mind and applied for some in HGH's spp.
Very easy to complete the application form.

How did you fare this time Percy? My wife applied for well below $50.000 worth and got just 43.2 % of her application!

[percy]

How did you fare this time Percy? My wife applied for well below $50.000 worth and got just 43.2 % of her application!

I do not know yet.
It closes tonight.5th.
SPP results out on Thursday.8th
SPP shares allocated on Friday.9th
SPP shares start trading next Monday 12th.
My application money went out of my bank a/c on Wednesday 31st August.

[Bjauck]

I do not know yet.
It closes tonight.5th.
SPP results out on Thursday.8th
SPP shares allocated on Friday.9th
SPP shares start trading next Monday 12t.
My application money went out of my bank a/c on Wednesday 31st August.
In the end I applied for half the equivalent value for my holding, as if the whole capital raising had been a rights issue. It will be interesting to see how “fairly” they treat my application.

[mike2020]

Do you think it will be scaled based on your holding or on what they choose to accept? I'm guessing if it's only slightly over the 70 mil subscription there will be no scale back at all.

[Master98]

Do you think it will be scaled based on your holding or on what they choose to accept? I'm guessing if it's only slightly over the 70 mil subscription there will be no scale back at all.
"If the SPP is oversubscribed, applications will be scaled having regard to shareholdings at the Record Date, and otherwise at Heartland’s discretion."

[herbert240]

Was not going to,but changed my mind and applied for some in HGH's spp.
Very easy to complete the application form.


I do not know yet.
It closes tonight.5th.
SPP results out on Thursday.8th
SPP shares allocated on Friday.9th
SPP shares start trading next Monday 12th.
My application money went out of my bank a/c on Wednesday 31st August.

Strange...Craigs have already made an entry in my wife's online portfolio showing what she is getting! It would seem some Craigs branches work differently!

[777]

Strange...Craigs have already made an entry in my wife's online portfolio showing what she is getting! It would seem some Craigs branches work differently!

Did you apply though Craigs and not via online process with Link Markets Services?

[herbert240]

Did you apply though Craigs and not via online process with Link Markets Services?

Craigs.....was talking to their financial adviser last week and discussed how many would need to be applied for to avoid dilution. Money moved by Craigs today from my wifes cash account indicate allocation will be 42.3% of what was applied for.

[percy]

Strange...Craigs have already made an entry in my wife's online portfolio showing what she is getting! It would seem some Craigs branches work differently!

We received all of "The Placement" shares we requested from Craigs.
I also applied for some shares via the "SPP Share Purchase Plan" which closed tonight.
I will know either on Thursday or Friday how many I got.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[herbert240]

We received all of "The Placement" shares we requested from Craigs.
I also applied for some shares via the "SPP Share Purchase Plan" which closed tonight.
I will know either on Thursday or Friday how many I got.

As I said Percy, would be interested to know how you fare in round 2!

[Bjauck]

We received all of "The Placement" shares we requested from Craigs.
I also applied for some shares via the "SPP Share Purchase Plan" which closed tonight.
I will know either on Thursday or Friday how many I got. I couldn't apply for any in the placement. I applied in the SPP for half of my entitlement (if the whole capital raising had been structured as a rights issue.) It will be interesting to see if I get it all and how "fair" this whole process is.

[Smithy02]

I couldn't apply for any in the placement. I applied in the SPP for half of my entitlement (if the whole capital raising had been structured as a rights issue.) It will be interesting to see if I get it all and how "fair" this whole process is.

I didn't know about the placement until it was all over, a bit miffed about that. Applied through the SPP.

S02

[Balance]

I didn't know about the placement until it was all over, a bit miffed about that. Applied through the SPP.

S02

You had the opportunity to buy on market below $1.80, remember?

[Muse]

5 day VWAP was ~$1.81, so less the 2.5% discount, SPP shares should be allotted at ~$1.766. Difference to spot equiv. to about an interim divy. Be interesting if the $70m is kept or oversubscriptions ensue - EBOS took some. The more oversubscriptions the lower the theoretical ex price once all settled up.

Also, below the transcript from HGH's conference call on the 22nd August. Always makes for interesting reading.

https://finance.yahoo.com/news/edited-transcript-hgh-nz-earnings-223000350.html

[winner69]

From that conference call ……a lesson how to do ‘proactive provisioning’

Question: First of all, the $8 million economic overlay, how did you calculate that, the science behind that?

Drumm: Thanks,. So what we did to calculate that as we look to the impact downside scenario on the portfolios that Jeff mentioned, being a business relationship and asset finance in particular. So what would a downflow scenario look like to those portfolios. And during the bottom up now sort of losses computed with model losses yielded a number and that informed the size of the overlay.

Question follow up - I guess how aggressive did you get in terms of I guess, economic conditions, I mean, what was sort of the assumptions behind it?

Drumm - I think -- look, there are a number of assumptions behind that. The problem, it's difficult to model losses, right? So -- what we did is looked at what we thought the impact could be on us by reference to our book and our individual exposures rather than using a sort of a more sophisticated model approach.


So lots of words showing how clever you can be in saying a ‘calculated guess’ ……..but a cynic / realist would say it’s really what was required to bring full year normalised npat to $96.1m …now that’s being proactive.

[Smithy02]

You had the opportunity to buy on market below $1.80, remember?

Yep, could have...

S02

[Muse]

From that conference call ……a lesson how to do ‘proactive provisioning’

Question: First of all, the $8 million economic overlay, how did you calculate that, the science behind that?

Drumm: Thanks,. So what we did to calculate that as we look to the impact downside scenario on the portfolios that Jeff mentioned, being a business relationship and asset finance in particular. So what would a downflow scenario look like to those portfolios. And during the bottom up now sort of losses computed with model losses yielded a number and that informed the size of the overlay.

Question follow up - I guess how aggressive did you get in terms of I guess, economic conditions, I mean, what was sort of the assumptions behind it?

Drumm - I think -- look, there are a number of assumptions behind that. The problem, it's difficult to model losses, right? So -- what we did is looked at what we thought the impact could be on us by reference to our book and our individual exposures rather than using a sort of a more sophisticated model approach.


So lots of words showing how clever you can be in saying a ‘calculated guess’ ……..but a cynic / realist would say it’s really what was required to bring full year normalised npat to $96.1m …now that’s being proactive.


ECL provisions a bit of a rabbit hole if you dive into them. It's not complete willy nilly stuff, there are specific accounting rules governing it all, applied regressed econometric models built to industry standard, but of course subjectivity. KPMG would have no doubt been through it in detail as it will be a key audit matter. They will have benchmarks and no doubt mindful of comparable provisions adopted by other banks, both live, and at other points in the cycle. It's not something you can just waive a wand at to get to your desired outcome, as that would be fraud.

[freddagg]

Strong vote of confidence from the board. Looks like almost $23 million of the $130 million placement went to directors.

https://www.nzx.com/announcements/398224

Being a director is one way of getting the number you applied for judging by the round dollar values.

Geoff $2999998.80
Bruce $45000
Kathryn $99000
Jeff $49998.60

[alokdhir]

Why HGH still under pressure ? I thought once SPP done it will revert to its fundamentals ....But maybe now people scared to buy ....

[Balance]

Why HGH still under pressure ? I thought once SPP done it will revert to its fundamentals ....But maybe now people scared to buy ....

They can get all they want via the SPP. Why would they buy on market?

[mike2020]

Isn't this basically it's fundamentals? The div was a little lighter than a few expected. The results of the spp tomorrow will be interesting.

[alokdhir]

They can get all they want via the SPP. Why would they buy on market?

I thought SPP was limited to $ 50K orders only and that too not all assured ....So if anyone needs to take advantage of today's attractive prices wont they be tempted to buy more on market ? Or people are expecting lower prices ahead !!!

[winner69]

I thought SPP was limited to $ 50K orders only and that too not all assured ....So if anyone needs to take advantage of today's attractive prices wont they be tempted to buy more on market ? Or people are expecting lower prices ahead !!!

Big end of town and those interested got their dibs in the placement - others probably hanging out to see what they got in the SPP

Come next week all the excitement of the results and the capital raise will be over and normality will return

[alokdhir]

Big end of town and those interested got their dibs in the placement - others probably hanging out to see what they got in the SPP

Come next week all the excitement of the results and the capital raise will be over and normality will return

What will be normality in your opinion ? 1.90 or 1.70 ? Which way is normal ?

[Snow Leopard]

I thought SPP was limited to $ 50K orders only and that too not all assured ....So if anyone needs to take advantage of today's attractive prices wont they be tempted to buy more on market ? Or people are expecting lower prices ahead !!!

Relax and enjoy the picture:
14134
Wildlife Explained (https://www.wildlifeexplained.com/snow-leopard/)

[winner69]

What will be normality in your opinion ? 1.90 or 1.70 ? Which way is normal ?

All depends on how contented punters are - so market conditions big variable .... but whatever we'll possibly see 2 bucks again by years end

You should heed Peter's advice - impossible to predict the future eh

[alokdhir]

All depends on how contented punters are - so market conditions big variable .... but whatever we'll possibly see 2 bucks again by years end

You should heed Peter's advice - impossible to predict the future eh

All have opinions ...need not be right always ...also all opinions are based on some logic ...so dont be afraid to pencil your opinion about what ahead for HGH SP ...after all u are a very seasoned player and people value your opinions ...short term direction will also show what market thinks of this equity raise and its processes ....

Market conditions actually dont determine correct SP ...stock fundamentals does ...which can be seen from IFT SP ...which is up 20% YTD

[winner69]

a few weeks ago 3 analysts targets ranged from 174 to 236

Analysts seem to have assimilated the latest report and are seem to be more on the same page - targets now 204 to 236

Seems reasonable

[mfd]

After all that complaining about the company not giving enough allowance to small shareholders, they didn't even use the full amount allocated.

"applications totalling approximately $68.8 million (against a target total SPP offer size of up to $70 million)."

Too busy complaining and not applying for the discounted shares. Good to know I'll have all the cheap shares I asked for, and about 2% cheaper than the big boys got theirs.

[alokdhir]

After all that complaining about the company not giving enough allowance to small shareholders, they didn't even use the full amount allocated.

"applications totalling approximately $68.8 million (against a target total SPP offer size of up to $70 million)."

Too busy complaining and not applying for the discounted shares. Good to know I'll have all the cheap shares I asked for, and about 2% cheaper than the big boys got theirs.

Maybe the smart ones who didn't apply get them cheaper ahead ...who knows ...:p

[winner69]

Maybe the smart ones who didn't apply get them cheaper ahead ...who knows ...:p

Might be a few who have seen their portfolio become ‘overweight’ Heartland ….and need to sell down when they rebalance ….. (but the double digit decline in share price might have done the ‘rebalancing’ for them lol) ……assuming some punters take portfolio weightings seriously)

Willingness to take part in cap raise shows confidence in Heartlands future and getting above average returns.

[777]

After all that complaining about the company not giving enough allowance to small shareholders, they didn't even use the full amount allocated.

"applications totalling approximately $68.8 million (against a target total SPP offer size of up to $70 million)."

Too busy complaining and not applying for the discounted shares. Good to know I'll have all the cheap shares I asked for, and about 2% cheaper than the big boys got theirs.

I could have applied for 3 lots but chose not to and I was not complaining and still happy with my decision.

[Rawz]

where is the demand?

I cant see the SP moving anywhere but down over the coming weeks

just my opinion

[alokdhir]

where is the demand?

I cant see the SP moving anywhere but down over the coming weeks

just my opinion

I agree with SPP not fully subscribed ...where is the demand ...AIR could raise billions ....I think its a thumbs down from retail investors who got treated very badly

Maybe below 1.70 I start to get in otherwise also I am pretty happy out of it ....it will languish here only for next 3-6 months ...imho

[RTM]

I sold some at 1.88 immediately post dividend and looks like I will replace them all in the SPP...maybe a few more as I calculated the cash @ 1.80.
Happy enough with the outcome so far, and hoping for not to big a dip in price over the coming weeks / months.

[Rawz]

I agree with SPP not fully subscribed ...where is the demand ...AIR could raise billions ....I think its a thumbs down from retail investors who got treated very badly

Maybe below 1.70 I start to get in otherwise also I am pretty happy out of it ....it will languish here only for next 3-6 months ...imho

What demand there was has just been sucked up fully by the under subscribed spp.

I wonder if some applied for more thinking they would get scaled heavily? and now need to in fact sell because they got a full feed when they only wanted a small one

EPS forecast flat for next year and we are (apparently) heading into a big fat recession. tough, very tough

[alokdhir]

What demand there was has just been sucked up fully by the under subscribed spp.

I wonder if some applied for more thinking they would get scaled heavily? and now need to in fact sell because they got a full feed when they only wanted a small one

EPS forecast flat for next year and we are (apparently) heading into a big fat recession. tough, very tough

I will still stick with Mr B's original best price to buy HGH ie 9 times ie 9x 16.2 = 150 ....though now he has changed his mind and calls even 11 p/e as compelling value ...it traded within 9-18 ...with 9 and 18 being extremes ...so even a 10 means 160

[ziggy415]

I could have applied for 3 lots but chose not to and I was not complaining and still happy with my decision.
With no announcements pre profit I figured no surprises forth coming so bought $200,000 worth at $2.05 .2 weeks before spp. Should of known when I drove shares up someone kept unloading more at lower price.....lucky no insider trading going on, so they got no money from me

[Snoopy]

With no announcements pre profit I figured no surprises forth coming so bought $200,000 worth at $2.05 .2 weeks before spp. Should have known when I drove shares up someone kept unloading more at lower price.....lucky no insider trading going on, so they got no money from me.


So what are you saying? You bought $200,000 worth from your broker at $2.05. Watched someone unload a whole lot of shares at a lower price. Realised you had been suckered. Refused to pay the broker for your purchased shares at the rip off price, and are now on the run? Blimey! Yet some still wonder how second tier lenders in NZ carry such a dodgy reputation!

SNOOPY

[mfd]

I could have applied for 3 lots but chose not to and I was not complaining and still happy with my decision.

No problem there, we all make our own decisions for our own reasons. I was referring to the prevailing mood on here about how hard done by small shareholders were by the placement compared to the SPP, but it looks to me like the SPP was positioned quite well, satisfied the volume demands of shareholders and gave us a small discount to boot.

[percy]

BINGO.
FULL HOUSE.
100% in the placement.
100% [plus ?] in the SPP.
"Well positioned".

[Snoopy]

What demand there was has just been sucked up fully by the under subscribed spp.

I wonder if some applied for more thinking they would get scaled heavily? and now need to in fact sell because they got a full feed when they only wanted a small one

EPS forecast flat for next year and we are (apparently) heading into a big fat recession. tough, very tough


Well, as someone relatively new to the Heartland express (bought my first ticket in January 2019), and with an interest in building up my holding I put some cash in the Heartland begging bowl, albeit not the full $50k. I had assumed the issue would end up scaled. But I still have some cash in my own dog bowl should the post capital raise share price sail south. Nevertheless, it only ended up $1.2m short. The board might have to buy their own coffees and small eats at the board meetings this year, and maybe move that board meeting they were planning in Australia back to NZ. Jeff may even have to forego a haircut. I am sure someone in the secretarial pool will lend him a rubber band to keep any 'pony tail' nice and neat for the AGM. But I don't see the 'capital shortfall' having any more of an effect that that.

I am currently sitting on an average buy price of $1.47 per share (post capital raising). I know for some of you Heartland long termers, that would be a pretty lame average entry price. But it ticks the 'Mr B' value box of around $1.50 ( buy HGH ie 9 times ie 9x 16.2 = 150 ...). So for someone late to the Heartland party, I am happy.

I have been diligently building up my shareholding through the DRP too. A few acquired last dividend time at $2.11. The dividend before that, a few more at $2.27. Hey, just a minute - I think that means I have just lost money! What was I thinking! Have I been caught up in the personality cult of Jeff? As his greatest ever supporter (a fact Percy will surely vouch for), surely not!

Nevertheless with Sir John Anderson now dead, our Jeff must surely be NZ's greatest living banker. And with the new push into Australia he is sure to 'digger' (see what I did there) we ANZAC shareholders out of any future financial hole. Jeff certainly could have been, might be in a while and certainly should be Heartland's greatest ever leader (except for the other Heartland Geoff I suppose ;-P).

SNOOPY

[Muse]

RAWZ per usual raises some good points...last few SPPs were well oversubscribed (like EBOS) so many would have chucked in large amounts thinking they would get scaled, and won't, and now may resize once receiving their (presumably) full allocation. Not totally surprised to see it come in just under the target $70m as a lot of investors managed to participate in the placement (not just the big boys). Near $200m capital sucked into HGH so could see some weaker demand and some portfolio regiging in coming weeks.

Personally satisfied with the $1.80 placement and $1.7674 SPP purchases. At the SPP price, that's a FY23 PE of 10.9x, yield of 6.85%, price to book (FY22 book adjusted for capital raising) of 1.24x, and prospective FY23 consensus P/B of 1.16x. That doesn't mean there won't be some volatility of the next few weeks (and indeed as things play out in this macro environment) but I found these to be sensible metrics. Each to their own, and do your own research.

[percy]

Thanks for posting the brokers' forecast figures.
Very modest ratios in my opinion.

[RTM]

Thanks for the Table FM.
Appreciated.

[Snow Leopard]

One of the joys of having a 'no more than 15% in one share rule' is the joy of breaking it.

So now should I be alokdhir's worst nightmare and rebalance the portfolio?

https://www.ourendangeredworld.com/wp-content/uploads/2022/08/snow-leopard-endangered-728x546.jpg
Our Endangered World (https://www.ourendangeredworld.com/species/snow-leopard/)

[RTM]

One of the joys of having a 'no more than 15% in one share rule' is the joy of breaking it.

So now should I be alokdhir's worst nightmare and rebalance the portfolio?

https://www.ourendangeredworld.com/wp-content/uploads/2022/08/snow-leopard-endangered-728x546.jpg
Our Endangered World (https://www.ourendangeredworld.com/species/snow-leopard/)

Nah...there are better ways to rebalance it.
Build up the others ?
My HGH has dropped back ...not quite sure to what yet...unfortunately not quite in the way I would have liked...with the SP dropping over the months....hoping this doesn't continue. So far so good...holding around 1.80 is good.

[ziggy415]

So what are you saying? You bought $200,000 worth from your broker at $2.05. Watched someone unload a whole lot of shares at a lower price. Realised you had been suckered. Refused to pay the broker for your purchased shares at the rip off price, and are now on the run? Blimey! Yet some still wonder how second tier lenders in NZ carry such a dodgy reputation!

SNOOPY
Ha ha ...no sorry paid for shares online then thought scaling would reduce spp shares so didn't bother with spp

[Rawz]

Solid wall of 56 buyers at $1.80.
Dont know what i was worried about :cool:

[alokdhir]

Solid wall of 56 buyers at $1.80.
Dont know what i was worried about :cool:

Have patience ...its a good day for markets ....on a bad day all walls will be scaled easily ....:D

[winner69]

Cap raise all but done and dusted

So big and small punters threw just under $200m into the Heartland coffers

Big vote of confidence in Heartlands future …..punters wouldn’t have fronted up if they thought Hesrland was a dog.

Expect share price to be over $2 by Christmas

Numbers on FM table looked pretty healthy …..where did the table go? ..it was a good un

[Rawz]

I missed the table as well.. must have been a goodie.

HGH certainly isn’t a dog. Over $2 by Christmas? Over $2.20 even. Just need good market sentiment or strong October economic data.

[Muse]

Hard to see much positive macro news for the next 18 months. Loosening CCCFA restrictions could release some pent up demand, but on the flip side we should learn more about the Deposit Takers Act by the end of the year, which will bring additional costs to HGH, but not fully implemented until 2025.

But on what the company can control, it is doing a pretty good job. Absolutely sensational cost control during the year - you'd be hard pressed to find a company who held its fixed costs as well as HGH did. Receivables growth (excluding stockco) was up 15% - that's 2.5x the new lending by banks & non bank lending institutions over the same period.

Placement and SPP not the most popular or equitable model - though on this occasion it appears it worked okay (assuming full allocations are received in the SPP). Many of us got two go's at it (via placement and SPP). But if you read the conference call transcript mgmt do make some interesting comments on the mix of retail and insto. Apparently Heartland has only 15% of its shares held by institutional holders (excluding Rickets/Tomlinson), well down the list if you sort the nzx50 by insto support, and ave turnover well below where it should be.

I suppose the board reckons retail are the marginal buyer that ultimately influences price, and retail demand high yields, so introducing some more instos to the register would compress those yields and press the price up over the long term. I can see some merit in the theory. Particularly if you can get more kiwisaver instos into it, with the never ending flow of money that needs to be put to work firming up positions.

(But if the board really wanted to achieve that, they could have whacked Tomlinson and Ricketts into the SPP with the $50k max (lol yeah right), not allow retail clients in the placement, and purely allocate all that stock to new and existing instos. Clearly that would have never happened as those two individuals own a massive chunk of the company & are directors, clients would have been pissed, the SPP too oversubscribed, etc. Everyone would have been way grumpier.)

The Aussie acquisition will be interesting. Won't settle until Q4 FY23, or FY24, funding TBD if it happens (~50m). Probably won't be immediately EPS accretive (dilutionary probably if anything in the very short term). But its the operational synergy it brings, whereby lower cost retail funds replace inefficient wholesale/warehouse costs which are the biggest handbreak on StockCo and the wider Aussie business. It's not, as I believe, a go at recreating a Heartland bank V2 in AU...it's about funding, and optimising it. Might be a tad dilutionary in the short term, but value accretive medium and long term.

[Waltzing]

Reading the macro prudential papers published by board members in NZ is alarming by the complete lack of Maths in the papers... NONE...

banking had always been Maths and it appears the reserve bank and the members of the prudential consulting community just want the deposits covered as they are all employees not private enterprise.

T1 at 16 means all the major AUS banks are going to be looking else where for growth.

[Muse]

Reading the macro prudential papers published by board members in NZ is alarming by the complete lack of Maths in the papers... NONE...

banking had always been Maths and it appears the reserve bank and the members of the prudential consulting community just want the deposits covered as they are all employees not private enterprise.

T1 at 16 means all the major AUS banks are going to be looking else where for growth.

mate you operate at a different level and I suspect far higher wave length than I do

but I suspect you are right and thats why westpac wanted to ditch NZ...but couldn't hold a poker face

I have been for some time hesitant on what those new capital requirements could mean for HGH. The DRP nets back a good whack of capital every year but was getting just slightly anxious what would happen to payout ratios (or future capital raises) to accommodate new requirements. Perhaps this raise was that by stealth, if just in part. How the OZ acquisition is funded could also impact all this - if done out of current liquid facilities & could require lower payout, or capital raise in future (either via core, hybrid, or equity, or some combination). I had modelled these same outcomes re Stockco's acquisition, which are now addressed. Excluding the former point we seem to be in good stead, but the company has other another bridge to cross in due time.

[Perky]

I’m a happy hgh shareholder and I invest savings and term deposit money with them from time to time.

One thing I find weird is they are always spouting on about being a digital bank but everytime I open a term deposit or receive interest on term deposit they post me a hard copy statement by nz post at great cost to you shareholders.
I can do basic math and as a shareholder I would like to see them save costs but I’m wondering if the digital bank has heard about digital communications?
Even that dodgy Westpac bank lets me go online and choose to turn off paper statements and receive digital coms.
I assume there is no legal reason for the post as I also use rabobank for term deposits and I never hear from them via post.
Anyone know why the digital bank uses one of the most expensive, slow and dying delivery systems?

[justakiwi]

I get no paper communications from Heartland so I’m 99% sure I opted into digital communications only when I signed up. Can’t recall where or how I did that right now but will have a look shortly. I use the app for pretty much everything now and seldom log in to internet banking. I assume the setting for digital communications only is somewhere in internet banking as it is definitely not in the app.

EDIT: weirdly, I cannot find it there either so I suspect maybe there was a box to check for this, at the time I first opened each account, including term deposits. Send them a secure message once you are logged in, and ask them for clarification. If you have a current TD they should able to change the instructions for it.


I’m a happy hgh shareholder and I invest savings and term deposit money with them from time to time.

One thing I find weird is they are always spouting on about being a digital bank but everytime I open a term deposit or receive interest on term deposit they post me a hard copy statement by nz post at great cost to you shareholders.
I can do basic math and as a shareholder I would like to see them save costs but I’m wondering if the digital bank has heard about digital communications?
Even that dodgy Westpac bank lets me go online and choose to turn off paper statements and receive digital coms.
I assume there is no legal reason for the post as I also use rabobank for term deposits and I never hear from them via post.
Anyone know why the digital bank uses one of the most expensive, slow and dying delivery systems?

[777]

Deleted..........

[Perky]

Thanks JAK, yeah I couldn’t see how to change this via app or online banking…it should be easy for customers to do this. Will drop customer services a message to change. I just raised it as I got an interest note in post yesterday and I’ve always found it weird they post. I should of been proactive earlier but now tough times are ahead I’ll get onto it.

[777]

Go to" My Settings" and select "update personal details" and ensure they have your email address.

[Rawz]

Wonder why KFL doesn’t invest in HGH. Nice growth stock..? Didn’t they have ANZ in the portfolio right after the COVID lows? So there has been a bank in there once, even if for a short period of time

[Perky]

They have my email. I guess my wider point as a shareholder of a digital bank is I’d expect the digital bank to set its default communications to customers to be digital. There should be an option for customers to receive hard copies but this should be a cost to customers of say $2 or whatever the actual cost is…maybe $5 is realistic. I can assure you that if the bank was charging for sending me statements I would have found a way to turn them off by now.
Im a professional money shuffler and I use Westpac, rabobank, heartland and Jarden cash account and I find the heartland digital platform to be the worst. It’s getting better but it pretty fundamental issue when you can’t go on a digital banking app and update your communications preference in 2022

[Waltzing]

FF you nailed it "westpac wanted to ditch NZ"

Those capital reserves have to come from somewhere and the RBNZ reserve bank before 2020 zoned in on high bank dividends of AUS banks.

Bank stocks have been under pressure anyway since 2016.

They have become a trade except CBA.

If was obvious to hold ASX stocks as its a bigger growth market.

What could crash the party is what Sheldon commented on last night in that this is a supply side inflation fire and hicking rates when you dont have demand side inflation is sure to hit markets harder.

market might react to the hiking is a bad way but good for SP price discovery.

[850man]

Surprised - I got the full amount in the SPP, no scaling at all. I applied direct to Link Market.

[alokdhir]

Surprised - I got the full amount in the SPP, no scaling at all. I applied direct to Link Market.

All got as it was undersubscribed ...they actually had a shortfall ...

[Yottie]

re: Heartland's back office ... with reference to Perky's 15909 / 912 / & 915 together with Just A Kiwi's 15910

Basically; it is a disaster.

The "self service" function within Internet Banking is not active. Yet, the App states that in order to change 'anything' one is to enter Internet Banking in order to do so.

It took me 5 weeks ( Secure Messages and direct e-mails ) to get some response. Each,(when it came), response came thru from a different person. No follow on ... ! And, no action.

Finally, I rang Newmarket and told them what it was that I wanted to do.
Yes, was the response; but since I had two account numbers ( long time customer ); how about simplifying things. As a result, a new log-in I.D.; a new Password, together with a reduction in duplication.

Since I am resident on the 'rock' to the west; I am reliant on "smart' systems in order to keep the NZ aspects up to date. Heartland's back office has a long way to go to get any more than 3 stars.

Long time SH in HGH and HBL. [ didn't do the SPP - have enough at $1.20 ]

regards

Yottie

[Perky]

Agree Yottie. like I say Im happy with hgh shares performance but if they want to become a digital bank and enter Australia via their new initiative they need to get better quickly.

Heartland have great products but delivery and ease of use needs to improve. It can’t be that hard..there are lots of good digital banking experiences out there now.

[Rawz]

When the head of investment/deposits (or similar title) sits at the top table with the heads of the lending divisions and begs and fights for more funding against the heads of the lending portfolios who do you think gets a bigger piece of the pie?? Not the investments/deposit side of the business that’s for sure. They get the scraps

Majority of the capex should go into better Systems for the borrowers as that’s where the money is made

Depositors are annoying and would be kicked to the curb if their funds weren’t needed lol

[Perky]

Good points Rawz. I agree but why can’t they do both. The last thing we need is another bank like kiwibank that’s just average user experience and a poor cousin to the big 4 aussies sucking our dollars back to OZ.
I want hgh to be best in class digital experience for depositors and borrowing. Being cheap doesn’t have to mean you operate poorly.

[alokdhir]

When the head of investment/deposits (or similar title) sits at the top table with the heads of the lending divisions and begs and fights for more funding against the heads of the lending portfolios who do you think gets a bigger piece of the pie?? Not the investments/deposit side of the business that’s for sure. They get the scraps

Majority of the capex should go into better Systems for the borrowers as that’s where the money is made

Depositors are annoying and would be kicked to the curb if their funds weren’t needed lol

The way they treated minority shareholders recently ....I think thats how they work

[Rawz]

The way they treated minority shareholders recently ....I think thats how they work

Maybe they did the small shareholders a favor for now? Time will tell

[alokdhir]

Maybe they did the small shareholders a favor for now? Time will tell

That would have happened by our good fortune not intended by them ...lol

Yes surely time will tell ...Charts not looking good in the words of W69 :p

[Rawz]

That would have happened by our good fortune not intended by them ...lol

Yes surely time will tell ...Charts not looking good in the words of W69 :p

Wasn’t Jeff they only one not to take up new shares? And he’s the puppet master!

[alokdhir]

Wasn’t Jeff they only one not to take up new shares? And he’s the puppet master!

I know many other experts and fans of HGH who didnt bother about the SPP ...So Jeff has esteem company if he didnt either ...

[winner69]

Wasn’t Jeff they only one not to take up new shares? And he’s the puppet master!

Jeff put $50k into the pot in Round 1

Now has just over 2 million shares

[winner69]

That would have happened by our good fortune not intended by them ...lol

Yes surely time will tell ...Charts not looking good in the words of W69 :p

the 100MA still trending up ..... so chart still looking good

[alokdhir]

the 100MA still trending up ..... so chart still looking good

Just wanted to tease u mate ....nothing more :D

[RTM]

Just wanted to tease u mate ....nothing more :D

That was a bit mean.:)
All in all quite happy with the way the week has panned out. Gambled on whether to buy in the SPP or the inevitable price drop afterwards....which didn't happen (yet?). Pleased I chose the SPP (thanks to whoever calculated the likely strike price, that swung it for me) and I replaced all that I sold at 1.88 for 1.7674. Price has closed up a bit, volume looks solid.
Nice end to the week.
Have a good weekend everyone.

14140

[winner69]

That was a bit mean.:)
All in all quite happy with the way the week has panned out. Gambled on whether to buy in the SPP or the inevitable price drop afterwards....which didn't happen (yet?). Pleased I chose the SPP (thanks to whoever calculated the likely strike price, that swung it for me) and I replaced all that I sold at 1.88 for 1.7674. Price has closed up a bit, volume looks solid.
Nice end to the week.
Have a good weekend everyone.

14140

Good effort RTM

Yep, nice end to week wasn't it

I'm sure things will be positive next few months now cap raise is all done and dusted

[Rawz]

Good effort RTM

Yep, nice end to week wasn't it

I'm sure things will be positive next few months now cap raise is all done and dusted

Winnner grinner confident in SP gains over
Next few months

Me- need so much and thinking I can’t get a cheaper entry. Rawz Just being greedy.

Don’t listen to Rawz. Low star general

[alokdhir]

14141
the 100MA still trending up ..... so chart still looking good

I just checked on yahoo charts ....200MA is 2.1993 ...100MA is 2.0595 ...50 MA is 2.000 ...20 MA is 1.9315

For my basic skills of TA thats pretty bad ...100 below 200 , 50 below 100 and 20 below 50 ...thats all death crosses as told to me by many TA experts

So maybe its really not looking good ...as per my basic TA skills ...

[winner69]

14141

I just checked on yahoo charts ....200MA is 2.1993 ...100MA is 2.0595 ...50 MA is 2.000 ...20 MA is 1.9315

For my basic skills of TA thats pretty bad ...100 below 200 , 50 below 100 and 20 below 50 ...thats all death crosses as told to me by many TA experts

So maybe its really not looking good ...as per my basic TA skills ...

Plenty of Golden Crosses coming up then ……that’s good I’m led to believe

[BlackPeter]

14141

I just checked on yahoo charts ....200MA is 2.1993 ...100MA is 2.0595 ...50 MA is 2.000 ...20 MA is 1.9315

For my basic skills of TA thats pretty bad ...100 below 200 , 50 below 100 and 20 below 50 ...thats all death crosses as told to me by many TA experts

So maybe its really not looking good ...as per my basic TA skills ...

You realize that you can adjust the MA's to whatever you want to get out of them?

Just increase the interval. In the example below the MA 100 is still rising (as winner said) and the SP is well above the MA200. Just change the interval from one day to one week.

14143

Obviously if you increase the interval to one month, than SP is still well above MA100 ... it is just - given that HGH is changing tickers so often, this does not work in yahoo (track record too short) :) ;

Note: Never trust a chart you didn't make up yourself (free after Churchill) and never disagree with a more experienced chartist about their charts ... they normally are right, you probably just misinterpreted their message :p .

[alokdhir]

What use is TA when it can be interpreted in any way u want it to be ....I never thought I will hear this about TA ....Totally lost respect for many stuff being told here


For FPH they are death crosses ...for HGH they are Golden ....what rubbish ....

Mr B said buy when SP at least over 30 MA and that over 60 MA on daily charts ....thats not the case here ...SIMPLE ...Period

Thats a definition for a confirmed downtrend if SP below all such MAs ...which is the case for HGH

[percy]

What use is TA when it can be interpreted in any way u want it to be ....I never thought I will hear this about TA ....Totally lost respect for many stuff being told here


For FPH they are death crosses ...for HGH they are Golden ....what rubbish ....

Mr B said buy when SP at least over 30 MA and that over 60 MA on daily charts ....thats not the case here ...SIMPLE ...Period

Thats a definition for a confirmed downtrend if SP below all such MAs ...which is the case for HGH

Loved your post.
Made my day.lol

[justakiwi]

You do realise that Mr B isn’t actually a guru?
You need to start thinking for yourself.



Mr B said buy when SP at least over 30 MA and that over 60 MA on daily charts ....thats not the case here ...SIMPLE ...Period

[alokdhir]

You do realise that Mr B isn’t actually a guru?
You need to start thinking for yourself.

Thanks for your advise ...I try to absorb all the good stuff...useful and actually worth absorbing from anyone ...

I think what he said about simple TA rules like what I quoted actually works pretty fine ...example is GNE ...

Whole purpose of this forum is to share knowledge and experiences and it works very well if people remain consistent with their rules with all stocks ....lol

[mike2020]

I remember the beagle telling everyone sum was a sell under 6 bucks then it doubled in value. In a short time. Thinking for yourself is good.

[Rawz]

TA is only good for entry/exit. But largely irrelevant if you are a long term investor. I have recently learned the very basics based on that thread that Beagle use to reference (post from KW was it? I can’t find it now hope it wasn’t deleted..?) It was a great post for newbies.

Based on that post HGH is not a buy right now. But then I don’t know how a cap raise changes the TA rules?

[percy]

TA.
I have bought shares when their chart shows they are "a buy",only to have a profit warning a few days later.
I have sold shares when their chart shows they are "a sell", only to have a takeover [at a premium] announced a few days later.
TA is just another very useful tool to an investor.
However the best "tool" is following companies "that do as they say they will do."
HGH has passed this "tool" test for years.

[RTM]

I remember the beagle telling everyone sum was a sell under 6 bucks then it doubled in value. In a short time. Thinking for yourself is good.

...and don't forget the meltdown he had with respect to Heartland and exposure to agriculture, dairy in particular. Don't recall the exact details....and he did I think eventually apologize to one and all. Everyone makes mistakes. Wrong predictions, wrong ideas, wrong knowledge suite, no one manages to get it right all the time.

This forum is not as vibrant without his posts, that's for sure. Wish he was still posting here.
It's far from ideal having two forums with many of the same posters on both.
Pity IMO.

[kiora]

TA is only good for entry/exit. But largely irrelevant if you are a long term investor. I have recently learned the very basics based on that thread that Beagle use to reference (post from KW was it? I can’t find it now hope it wasn’t deleted..?) It was a great post for newbies.

Based on that post HGH is not a buy right now. But then I don’t know how a cap raise changes the TA rules?

Quote Originally Posted by KW View Post
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517


2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.

MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)

Attachment 4518

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519

3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). 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).

ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520

I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.

[Rawz]

Quote Originally Posted by KW View Post
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517


2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.

MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)

Attachment 4518

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519

3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). 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).

ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520

I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.

Thanks Kiora!!

[ronaldson]

SPP shares are now trading in Australia (and NZ from last Friday) so any need to sell off/profit take will subside soon. Already the share price is well bid at $1.85 so will be interesting where the dust settles by, say, the end of the month. My guess is $1.95.

[ronaldson]

Just had an email to new shareholders offering a special TD rate of 4% for 6 months and 4.3% for 12 months.

According to a comparisons website I checked that 6-month offer is the best with any of the main deposit takers, albeit the 12-month offer is less of a standout. The comparative HBC rates are 3.6% and 4.2% respectively so the offer is advantageous in that regard also.

A good and simple marketing ploy anyhow.

[Snow Leopard]

Just:t_down: had an email to new shareholders ....

Us old shareholders got that too.

Disc: Still have all my own teeth.

[alokdhir]

Anyone else having trouble with missing dividend of shares sold on 25th August ie first ex dividend day ?

I sold some ex dividend on 25th August and didnt get dividend for them ...I claim that dividend from ASB Securities ?

[percy]

Anyone else having trouble with missing dividend of shares sold on 25th August ie first ex dividend day ?

I sold some ex dividend on 25th August and didnt get dividend for them ...I claim that dividend from ASB Securities ?

No if you sold XD ex div you miss out.
Should you have sold CD cum div, you should have received it today into your bank a/c.
Mine was there just after 1pm when I checked..

[dubya]

Anyone else having trouble with missing dividend of shares sold on 25th August ie first ex dividend day ?

I sold some ex dividend on 25th August and didnt get dividend for them ...I claim that dividend from ASB Securities ?

?? Ex dividend

[alokdhir]

No if you sold XD ex div you miss out.
Should you have sold CD cum div, you should have received it today into your bank a/c.
Mine was there just after 1pm when I checked..

Selling Ex dividend means ....I sold shares without dividend ...I will get as seller not the buyer ...thats ex dividend

If I had sold cum dividend ie 24th August then buyer gets dividend mate

[Snow Leopard]

Selling Ex dividend means ....I sold shares without dividend ...I will get as seller not the buyer ...thats ex dividend

If I had sold cum dividend ie 24th August then buyer gets dividend mate

Take it up with the registry: Link Market Services (https://www.linkmarketservices.co.nz/)

[percy]

Selling Ex dividend means ....I sold shares without dividend ...I will get as seller not the buyer ...thats ex dividend

If I had sold cum dividend ie 24th August then buyer gets dividend mate

Coreect.
Sorry my mind was elsewhere.
I would quote your contract note to ASB and get them to sort it out.

[aquaman]

Ive just checked my dividend payment from link/heartland and its short thousands of dollars. Looks like the have put the decimal in the wrong place and paid me in the hundreds and not thousands. Will follow up and check futher.

[winner69]

Ive just checked my dividend payment from link/heartland and its short thousands of dollars. Looks like the have put the decimal in the wrong place and paid me in the hundreds and not thousands. Will follow up and check futher.

That's a bugger mate

So checked mine ...... seems OK .... must be one of the lucky ones

[aquaman]

That's a bugger mate

So checked mine ...... seems OK .... must be one of the lucky ones


Sorted....

[winner69]

Sorted....

Good one

Hope it wasn't a big error on their part

[alokdhir]

Trouble is only for people who sold on 25th August as registry transferred shares out faster then needed ie before 5 pm record date 26th August ...so their ex dividend selling became cum dividend selling . ASB Custodial services are taking up the matter with registry as seems like their lapse

[RGR367]

Sorted....

Santa Banana!! You made me checked my ASB account too :p

[Grimy]

Mine came through, no issues.

[BlackPeter]

Trouble is only for people who sold on 25th August as registry transferred shares out faster then needed ie before 5 pm record date 26th August ...so their ex dividend selling became cum dividend selling . ASB Custodial services are taking up the matter with registry as seems like their lapse


Anyone else having trouble with missing dividend of shares sold on 25th August ie first ex dividend day ?

I sold some ex dividend on 25th August and didn't get dividend for them ...I claim that dividend from ASB Securities ?

My Payment Advice shows August 26 as record day, i.e. are you sure about the Ex dividend date?

However - if anybody got the payment wrong, than it would not be ASB Security, but Link Market Services (the registry).

[777]

From NZX

Code Ex Dividend Period Amount Supp. Imputation Payable Currency
HGH 25 Aug 2022 Final 5.500c 0.971c 2.139c 14 Sep 2022 NZD

[RTM]

Anyone else having trouble with missing dividend of shares sold on 25th August ie first ex dividend day ?

I sold some ex dividend on 25th August and didnt get dividend for them ...I claim that dividend from ASB Securities ?

Nope...but thanks for making me remember and check.
All good for me.

[dobby41]

Mine came through, no issues.

Same, same

[alokdhir]

My Payment Advice shows August 26 as record day, i.e. are you sure about the Ex dividend date?

However - if anybody got the payment wrong, than it would not be ASB Security, but Link Market Services (the registry).

Record date is 26th August but Ex Dividend is one day before so it was 25th August like 777 quoted .

As my shares are with ASB Custodial Services so they are trying to get it sorted ....ASB Securities is on the job ....not yet sorted but hopefully soon as they have already identified its missing for shares sold on 25th August otherwise balance payment came thru

[unhuman]

Have they suspended the DRP? I have always reinvested but this div has been banked "In accordance with your instructions."

Just checked Link and it says I'm participating in the DRP.

[mfd]

Have they suspended the DRP? I have always reinvested but this div has been banked "In accordance with your instructions."

Just checked Link and it says I'm participating in the DRP.

Suspended just for this dividend, due to the concurrent equity raise. I guess it made things too complicated.

[unhuman]

Suspended just for this dividend, due to the concurrent equity raise. I guess it made things too complicated.

Ah okay, thanks.

[alokdhir]

Solid wall of 56 buyers at $1.80.
Dont know what i was worried about :cool:

Your wall scaled mate ...

[winner69]

Mr Kensington from KPMG says banks have done very well lately but a bit glum about the future ...he says "Unless inflation gets under control, and unless interest rates come down, I think we're going to have a very difficult quarter to the end of the year, and we'll have a very difficult first quarter (of 2023),"

From KPMG's latest report on NZ banks

https://assets.kpmg/content/dam/kpmg/nz/pdf/2022/09/fips-june-2022-quarterly.pdf

[percy]

Mr Kensington from KPMG says banks have done very well lately but a bit glum about the future ...he says "Unless inflation gets under control, and unless interest rates come down, I think we're going to have a very difficult quarter to the end of the year, and we'll have a very difficult first quarter (of 2023),"

From KPMG's latest report on NZ banks

https://assets.kpmg/content/dam/kpmg/nz/pdf/2022/09/fips-june-2022-quarterly.pdf

Thanks for posting the link.
HGH keep on performing extremely well .

[silu]

I'm back on the register after my sale in 2017 as my bid at $1.78 somehow got accepted. Couldn't bypass the opportunity to buy below an oversubscribed share placement and at 52 week lows.

[BlackPeter]

I'm back on the register after my sale in 2017 as my bid at $1.78 somehow got accepted. Couldn't bypass the opportunity to buy below an oversubscribed share placement and at 52 week lows.

I don't want to spoil your excitement, however - the cost for buying in the capital raise was only $1.7674 :) ;

[percy]

I'm back on the register after my sale in 2017 as my bid at $1.78 somehow got accepted. Couldn't bypass the opportunity to buy below an oversubscribed share placement and at 52 week lows.

You did well.
I was happy to pay $1.80 plus brokerage in the placement.
The ones I bought in the SPP came a little cheaper.

[RTM]

I'm back on the register after my sale in 2017 as my bid at $1.78 somehow got accepted. Couldn't bypass the opportunity to buy below an oversubscribed share placement and at 52 week lows.


You did well.
I was happy to pay $1.80 plus brokerage in the placement.
The ones I bought in the SPP came a little cheaper.

I've learned a few lessons over the years about being to greedy over just a few cents. So easy to miss out and then regret not being part of a 10 or 20c or ? rise. Don't sweat the small stuff !

[alokdhir]

When walls get scaled on downside ...then I was told by many wise men here ...its like catching a falling knife ...I learnt that lesson pretty well ...

So I will let it fall and get ready ...need to learn from experienced people ...:p

[RTM]

When walls get scaled on downside ...then I was told by many wise men here ...its like catching a falling knife ...I learnt that lesson pretty well ...

So I will let it fall and get ready ...need to learn from experienced people ...:p

Yep…and waiting to long is another way to miss out. I saw a report somewhere recently that banks doing pretty well at the moment. But agree, I’ve bought HGH a lot lower than they are at the moment.
Good luck,

[Rawz]

When walls get scaled on downside ...then I was told by many wise men here ...its like catching a falling knife ...I learnt that lesson pretty well ...

So I will let it fall and get ready ...need to learn from experienced people ...:p
Lol well said I agree.

[Baa_Baa]

The TA on HGH is pretty awful, (https://invst.ly/z042w) after busting out of a medium term down trend channel (which was encouraging) it collapsed back into it folding at the 100MA and is currently plumbing short term double bottom SP at $1.78, well under major MA's and firmly in a consistent SP downtrend. Supports at $1.72 (bottom of a major support band, imo), $1.65, $1.55. Who knows where this is going, but capital losses are far exceeding dividends in the meantime.

Recent commentary on banks excessive NIM's and forthcoming profit headwinds suggests a watching brief on the SP before committing any more capital. Long termers won't be too concerned with yields vs capital losses as they aren't selling and are probably still a long way ahead on capital value, but they aren't buying more either, at least until this down trend resolves.

[alokdhir]

The TA on HGH is pretty awful, (https://invst.ly/z042w) after busting out of a medium term down trend channel (which was encouraging) it collapsed back into it folding at the 100MA and is currently plumbing short term double bottom SP at $1.78, well under major MA's and firmly in a consistent SP downtrend. Supports at $1.72 (bottom of a major support band, imo), $1.65, $1.55. Who knows where this is going, but capital losses are far exceeding dividends in the meantime.

Recent commentary on banks excessive NIM's and forthcoming profit headwinds suggests a watching brief on the SP before committing any more capital. Long termers won't be too concerned with yields vs capital losses as they aren't selling and are probably still a long way ahead on capital value, but they aren't buying more either, at least until this down trend resolves.

I was told that HGH becomes compelling value between $ 1.55 - $ 1.65 band ....Lets wait and see if it gets there . After $ 1.78 breaks down then action downwards will be faster !

[percy]

The market is seeing something ,neither I nor Craigs,Forbar,Jardens , Hobson Wealth,and HGH directors/management,have missed.?

[Rawz]

Nothing has changed with HGH’s long term story, I was actually thinking about the Aussie asset finance industry yesterday and there are some huuuuge opportunities for HGH over there on the commercial side (I.e not cars) as it’s dominated by banks and banks are not exactly fast and easy. HGH have so many growth opportunities it’s amazing really.

However in the short term… any recession or hard landing will damage the loan books, EPS growth is already confirmed to be zero next year and there is the overhang from the undersubscribed spp. how many applied for more thinking they would get scaled and now find themselves overweight and have to sell into a market that has had the demand for HGH shares filled by the raise. In the short term I can’t see any market or economic news helping the SP. HGH will just have to battle away for next 12 months

[RTM]

Nothing has changed with HGH’s long term story, I was actually thinking about the Aussie asset finance industry yesterday and there are some huuuuge opportunities for HGH over there on the commercial side (I.e not cars) as it’s dominated by banks and banks are not exactly fast and easy. HGH have so many growth opportunities it’s amazing really.

However in the short term… any recession or hard landing will damage the loan books, EPS growth is already confirmed to be zero next year and there is the overhang from the undersubscribed spp. how many applied for more thinking they would get scaled and now find themselves overweight and have to sell into a market that has had the demand for HGH shares filled by the raise. In the short term I can’t see any market or economic news helping the SP. HGH will just have to battle away for next 12 months

As long as they keep paying a decent dividend and don't go belly up, well, I'll continue to hold. Slow steady growth over years, not months works for me.

[Rawz]

Remember when this got to $2.60 earlier this year. wow what an outrageous high. 175% up from the covid lows. Very solid 21 month bull run.

Wonder where the outrageous low will be now that we are coming downhill? 30% down from the recent high, 8 months going.

[alokdhir]

Remember when this got to $2.60 earlier this year. wow what an outrageous high. 175% up from the covid lows. Very solid 21 month bull run.

Wonder where the outrageous low will be now that we are coming downhill? 30% down from the recent high, 8 months going.

As u said its a good company and has good prospects but it cant fight the current difficult conditions around its SP ...markets generally in poor state and it did a very hurried and investor unfriendly capital raise ...that was needed by some ill timed acquisitions ...when recessions round the corner , savvy managements dont become very proactive with inorganic growth ...but like many said Jeff is in a hurry to conquer the world or shall I say Australia ...So it will take a while in such market conditions for SP to recover ...it may end up testing new lows first as thats what market conditions are demanding ...nothing wrong with company ...just wrong timing maybe

[alokdhir]

" More capitalFresh off the back of its $200m equity capital raise, Heartland Group looks likely to need even more capital if it goes ahead with its plans to acquire start-up Avenue Bank as part of its moves to have an Australian bank.
Jarden analyst Grant Lowe said its base case was that Heartland was sufficiently capitalised following its recent equity raise to deliver on receivable growth and net profit.
But he noted the company would need to raise a further $100m to $150m if it acquired Avenue Bank.
Heartland is in talks to buy Avenue - a move which would enable it to enter the Australian banking market and fund its business through deposits, a lower-cost funding model than it currently has.
The move would require regulatory approval, among other criteria, before it goes ahead.
Lowe retained an "overweight" rating on the stock but dropped his target price from $2.36 to $2.09 due to the equity raise and proposed operating changes.
Heartland shares have fallen by more than 20 per cent in the past year."

Jarden has reduced its price target and looking for new equity raise business ahead !!!

[percy]

" More capitalFresh off the back of its $200m equity capital raise, Heartland Group looks likely to need even more capital if it goes ahead with its plans to acquire start-up Avenue Bank as part of its moves to have an Australian bank.
Jarden analyst Grant Lowe said its base case was that Heartland was sufficiently capitalised following its recent equity raise to deliver on receivable growth and net profit.
But he noted the company would need to raise a further $100m to $150m if it acquired Avenue Bank.
Heartland is in talks to buy Avenue - a move which would enable it to enter the Australian banking market and fund its business through deposits, a lower-cost funding model than it currently has.
The move would require regulatory approval, among other criteria, before it goes ahead.
Lowe retained an "overweight" rating on the stock but dropped his target price from $2.36 to $2.09 due to the equity raise and proposed operating changes.
Heartland shares have fallen by more than 20 per cent in the past year."

Jarden has reduced its price target and looking for new equity raise business ahead !!!

You omitted to mention that Jarden's new target price is $2.09 and one year total return,[share price growth plus dividend] is 21.6%.

[alokdhir]

You omitted to mention that Jarden's new target price is $2.09 and one year total return,[share price growth plus dividend] is 21.6%.

I just mentioned they reduced price target and gave full context and full quote from where I got that info ...also further raise possibility ...

Dont know how u found fault in that too ...lol

[percy]

I just mentioned they reduced price target and gave full context and full quote from where I got that info ...also further raise possibility ...

Dont know how u found fault in that too ...lol

Sorry.Should have just mentioned Jardens one year total return which I think is stunning.
Retaining their "overweight" is positive,as is the prospect of Avenue Bank acquisition.
Should Avenue Bank go ahead I expect all analysts will upgrade their projections to take into account the lower cost of funds via Avenue Bank.As in the case with Heartland Bank in NZ lower funding costs are ongoing.
It was the reason HGH went for a NZ Banking licence when first formed.

[Rawz]

HGH should lower the dividend. No point in all these discounted cap raises and then pay out big fat divs

[RTM]

HGH should lower the dividend. No point in all these discounted cap raises and then pay out big fat divs

Total dividend paid out 11c 705,321,388 shares = $77,585,352.68
How much would they need to lower this to make a meaningful contributution I wonder.
Could they sell a 1 year dividend holiday for instance ?
A 2c reduction would be an 18% decrease in dividend.
Gain: $14.1M...this doesn't feel to be overly significant.

[Rawz]

Total dividend paid out 11c 705,321,388 shares = $77,585,352.68
How much would they need to lower this to make a meaningful contributution I wonder.
Could they sell a 1 year dividend holiday for instance ?
A 2c reduction would be an 18% decrease in dividend.
Gain: $14.1M...this doesn't feel to be overly significant.

Yes when you put it like that doesnt feel like it would help much.

Ive just read on this thread before that HGH pays a very high dividend, possibly too high, and if it wasnt for the dividend reinvestment plan it wouldnt work.

I dont think another $100m cap raise is going to go down well? Hopefully the last of it if it goes ahead. And anymore growth in aussie is funded off the balance sheet. i.e. if you have big growth plans in Aus dont pay out so much cash!! leave some in the business

[Muse]

" More capital

Fresh off the back of its $200m equity capital raise, Heartland Group looks likely to need even more capital if it goes ahead with its plans to acquire start-up Avenue Bank as part of its moves to have an Australian bank.
Jarden analyst Grant Lowe said its base case was that Heartland was sufficiently capitalised following its recent equity raise to deliver on receivable growth and net profit.
But he noted the company would need to raise a further $100m to $150m if it acquired Avenue Bank.
Heartland is in talks to buy Avenue - a move which would enable it to enter the Australian banking market and fund its business through deposits, a lower-cost funding model than it currently has.
The move would require regulatory approval, among other criteria, before it goes ahead.
Lowe retained an "overweight" rating on the stock but dropped his target price from $2.36 to $2.09 due to the equity raise and proposed operating changes.
Heartland shares have fallen by more than 20 per cent in the past year."

Jarden has reduced its price target and looking for new equity raise business ahead !!!

That article takes Jarden's research and the capital raising scenario they illustrated completely out of context, and a disappointing example of business journalism in my view. The additional equity noted in the report wasn't just for an acquisition of Avenue Bank (how could it, given if it went ahead, the outlay is only ~A$49m more and in theory could be funded through corporate debt through to retained earnings or simply a raise for $49m) but was the larger 100-150 equity requirement for a fast track growth scenario in Australia that see's HGH australian receivables & NPAT (and eps) grow significantly faster than under the current status quo.

Part of heartland's investment rational for the StockCo purchase was in their view a tangible pathway to triple Stockco receivables in the short/med term as historically its biggest constraint was a lack of funding capability due to its private ownership.

Jarden run a what if scenario, taking stockco, its broader australian reverse mortgage business, and avenue bank (which secures lower cost funding) into consideration, looking at what growth could be secured and what the attendant equity requirements might be (banking is a capital intensive business).

They present their base case to FY25 for the australian business (without Avenue bank or any incremental capital) and note within it both the NZ and AU businesses are well funded. but then they ask the question well what if HGH goes harder and actually manages to triple Stockco by FY25 (well not quite 3x, $373 FY22 stockco receivables to $1b), grow the reverse mortgage business a bit faster, acquire avenue bank which could deliver $20m in incremental cost of funding savings), and see what the differential is in funding requirement, NPAT and EPS.

AU Receivables
FY22 Base: Reverse $1.235bn, StockCo $373m, NPAT 96.1m, EPS 16.2c
FY25 status quo: Reverse $1.814bn, Stockco $416m, NPAT 124.8m, EPS 17.7c
FY25 growth case: Reverse $2bn, StockCo $1bn, NPAT 152m, EPS 20c

It's all back of the envelope stuff but if life worked out per the spreadsheet or close to it the incremental equity to support a growth case is clearly value accretive and deliver a high IRR / return on investment for shareholders on that extra capital.

It's disappointing the journalist made it read like that $100-150m was dead money. Avenue bank could be corporate debt funded (but would defeat the point), funded by retained earnings (would have an impact on growth rates and dividends), funded by equity for the A$49m expected purchase price, or a bigger raising could be sought to achieve faster growth rates in the existing core reverse mortgage book and stockco book.

Banking in particular is a balancing act and series of trade offs...growth consumes capital, the very heavy retail shareholder register demands dividends & prefers the status quo, but wants to see growth but howls at capital raising. Divy payout a bit high which reflects retail but DRP successful and capital raising by stealth. Personally if there was a growth case where incremental capital could be put to work that generated high returns I would be all for it, but I know many prefer the status quo and would only see it as dillutive...I think that's why HGH went out of its way to get some institutional investors in. Could be some disharmoney as the mix of shareholders change and macro sentiment sours over the next 18 months.

I look forward to that...the TA looked s**t hot on its way up to $2.60 (& thining fundamentals) which I thought was silly but apparently thats the best time to buy in. I look forward SP weakness and even stronger fundamental value as the price falls. More than happy to watch the squiggly line fall and as bottoms up pick up some more.

[Muse]

You omitted to mention that Jarden's new target price is $2.09 and one year total return,[share price growth plus dividend] is 21.6%.

one thing that has gone unsaid is Forbar raised their TP +17% +30cps to $2.04 on the back of material upgrades to their forecasts (+8% to FY23 EPS, +9% to FY24 EPS, and +13% to FY25 EPS)

[percy]

one thing that has gone unsaid is Forbar raised their TP +17% +30cps to $2.04 on the back of material upgrades to their forecasts (+8% to FY23 EPS, +9% to FY24 EPS, and +13% to FY25 EPS)

Your excellent research is much appreciated.

[SCOTTY]

HGH should lower the dividend. No point in all these discounted cap raises and then pay out big fat divs

The regular reliable dividend makes it an ideal investment vehicle for retired investors like myself. It would be very damaging for the credibility of the company and management if this policy was changed.

[alokdhir]

That article takes Jarden's research and the capital raising scenario they illustrated completely out of context, and a disappointing example of business journalism in my view. The additional equity noted in the report wasn't just for an acquisition of Avenue Bank (how could it, given if it went ahead, the outlay is only ~A$49m more and in theory could be funded through corporate debt through to retained earnings or simply a raise for $49m) but was the larger 100-150 equity requirement for a fast track growth scenario in Australia that see's HGH australian receivables & NPAT (and eps) grow significantly faster than under the current status quo.

Part of heartland's investment rational for the StockCo purchase was in their view a tangible pathway to triple Stockco receivables in the short/med term as historically its biggest constraint was a lack of funding capability due to its private ownership.

Jarden run a what if scenario, taking stockco, its broader australian reverse mortgage business, and avenue bank (which secures lower cost funding) into consideration, looking at what growth could be secured and what the attendant equity requirements might be (banking is a capital intensive business).

They present their base case to FY25 for the australian business (without Avenue bank or any incremental capital) and note within it both the NZ and AU businesses are well funded. but then they ask the question well what if HGH goes harder and actually manages to triple Stockco by FY25 (well not quite 3x, $373 FY22 stockco receivables to $1b), grow the reverse mortgage business a bit faster, acquire avenue bank which could deliver $20m in incremental cost of funding savings), and see what the differential is in funding requirement, NPAT and EPS.

AU Receivables
FY22 Base: Reverse $1.235bn, StockCo $373m, NPAT 96.1m, EPS 16.2c
FY25 status quo: Reverse $1.814bn, Stockco $416m, NPAT 124.8m, EPS 17.7c
FY25 growth case: Reverse $2bn, StockCo $1bn, NPAT 152m, EPS 20c

It's all back of the envelope stuff but if life worked out per the spreadsheet or close to it the incremental equity to support a growth case is clearly value accretive and deliver a high IRR / return on investment for shareholders on that extra capital.

It's disappointing the journalist made it read like that $100-150m was dead money. Avenue bank could be corporate debt funded (but would defeat the point), funded by retained earnings (would have an impact on growth rates and dividends), funded by equity for the A$49m expected purchase price, or a bigger raising could be sought to achieve faster growth rates in the existing core reverse mortgage book and stockco book.

Banking in particular is a balancing act and series of trade offs...growth consumes capital, the very heavy retail shareholder register demands dividends & prefers the status quo, but wants to see growth but howls at capital raising. Divy payout a bit high which reflects retail but DRP successful and capital raising by stealth. Personally if there was a growth case where incremental capital could be put to work that generated high returns I would be all for it, but I know many prefer the status quo and would only see it as dillutive...I think that's why HGH went out of its way to get some institutional investors in. Could be some disharmoney as the mix of shareholders change and macro sentiment sours over the next 18 months.

I look forward to that...the TA looked s**t hot on its way up to $2.60 (& thining fundamentals) which I thought was silly but apparently thats the best time to buy in. I look forward SP weakness and even stronger fundamental value as the price falls. More than happy to watch the squiggly line fall and as bottoms up pick up some more.

Base case FY 25 status quo is EPS of 17.7 C ? In two years just 17.7 C from 16.2 ? Thats not very heartening !!!

As next 2 years conditions are going to be tough for them so most likely that can be the expected outcome ??

[Muse]

Base case FY 25 status quo is EPS of 17.7 C ? In two years just 17.7 C from 16.2 ? Thats not very heartening !!!

As next 2 years conditions are going to be tough for them so most likely that can be the expected outcome ??


Yes Jarden are the most conservative of the 4 research analysts covering Heartland (Forbar, Craigs, Macquarie, Jarden), make of that what you will.

Consensus FY23 EPS is 16cps, 16.6cps FY24, 17.8cps FY25. Jarden are the lowest of the 4 each year.
Consensus DPS is 11.8cps, 12.7cps, 13.6cps for those same years, respectively. (6.6% to 7.5% net yield at spot price).

I think Jarden's base case is plausible if more conservative than the others, centred on some chunky impairment assumptions across FY23-fy24. Its nice to have a range and an average.

Note their base doesnt assume (as I imagine any other analysts do) the avenue bank acquisition until its completed. That could push EPS to 20c by fy25 under their BOE analysis.

I think Grant is an excellent analyst.