Dairy prices flat of late (GDT results) - just like the Heartland share price
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Dairy prices flat of late (GDT results) - just like the Heartland share price
Price breaking through some resistances. Those dairy futures must be moving up are they winner?
this might not be good for heartland
Treasurer Josh Frydenberg to review Pensions Loan Scheme interest rate after 'gouging' allegations
Treasurer Josh Frydenberg will review the Government's reverse mortgage scheme to reflect Reserve Bank interest rates in the face of "gouging" claims from retirees.
https://www.abc.net.au/news/2019-10-...ction=business
if the govt scheme drops rates due to political pressure hgh probably be forced to match or they run the risk of losing business
https://www.heartland.co.nz/savings-...interest-rates
Gross yield on shares 9% at $1.62 assuming 10.5 cps fully imputed dividends for FY20. Important to invest on the right side of the ledger.
Strong spread of lending and funding.
Fast growing Reverse Equity Lending helps reduce risks, as does better quality motor vehicle lending,together with generally shorter lending terms.ie seasonal and livestock rural lending rather than rural mortgages.
Equity ratio is very close to The Reserve Bank of NZ's new proposed level.
Had a quick look at the comparative group I follow in Australia.
BEN, BOQ, NAB, ANZ, WBC and ANZ. Many of these banks have issues arising from the Australian banking enquiry and are inadequately capitalised for the pending RBNZ capital requirements.
HGH are much better capitalised, do not face any issues arising from said review, are growing faster and yet has a lower forward 2020 PE at 11.9 than any of them and is significantly cheaper than some. Forward PE of 11.9 is right toward the bottom end of its range in recent years of 11.0 - 17.0 and yet we have the lowest interest rates in 100 years which implies another 1 or 2 PE above the medium should apply.
My sense is HGH has been languishing below fair value pending clarification of the RBNZ's capital requirements which if I recall correctly are due to be announced some time next month ? Maybe there is some worry some of the Australian banks will list their NZ subsidiaries here ?
I don't think banks do well in a recession. The slightest sniff of trouble and the share price plummets, at least that's what happened last time. I guess no two recessions are the same and the last crisis was all about banks and liquidy. Still, I'm guessing that when a recession comes, banks will do a lot worse than other assets like dividend paying utilities for example.
I still hold HGH and some Australian banks directly for a grand total of 4% of my total financial assets. For me that's enough just at this stage.
HGH has been close to dead money over the last 12 months.
I very much enjoyed this presentation by David Rosenberg about how to be positioned during a recession and what gets hit and what does ok. You can cut straight to the 21 minute mark for the punchline but its worth watching the whole thing.
https://www.youtube.com/watch?v=afgvcwp__DY
Just for balance, I should also add that this excellent presentation, from Josh Brown, who you sometimes see on CNBC, which notes that more money is lost in trying to prepare for a recession than is actually lost in a recession. So that's why I still hold banks and some big cap miners directly and even drip feed into the Smartshares S&P US Growth Fund every week. It feels dirty and uncomfortable but this circus could still last for years so who knows. For the most part however, I'm going the David Rosenberg way.
https://www.youtube.com/watch?v=IQqw1S2U1yM