The Liquidity test will continue to be the main problem here and of course the index can remain unchanged.
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Yeah mate...unfortunately those were dark days in March-April...some old dogs found themselves in an unfortunate position...this probably says it best https://www.youtube.com/watch?v=CPYmtEQiG18
From the latest annual report...Only 114 people with 50,000 shares or more, maybe a new target to aim for ?...whereas over at OCA 406 people own 100K shares or more...crikey...they let any old Tom Dick or Dog into their top club.
Are you referring to the relative liquidity test? A back of the fag packet calculation suggests the absolute liquidity test is ok for the past 6 months at ~9% , but I haven't looked at the 2 prior periods of 6 months (I believe you need to pass 3 consecutive periods to be considered). I'm not sure I fully understand the relative liquidity test and/or how to calculate that figure.
I see 2 other major hurdles for HLG making it into the NZX50 - being they may not be first in line and they have to make it to position 44* (and not 50) to be included.
Delegats would be ahead of HLG on IWF, assuming DGL can pass their liquidity tests (which I have not examined). I believe the IWF for Delegats is higher than HLG (i.e. 24m shares @ $14.85 > 48m shares @ $6.12). Keep in mind strategic/founder holdings have been removed from my BOTFP calc's.
*The second major hurdle, assuming I'm reading/interpreting the rules correctly is that HLG would need to not only pass the liquidity tests above (over 3 consecutive periods), and beat DGL, but also have a higher IWF than #44 on the list being FSF. The IWF for FSF looks to be about $482m vs HLG IWF of ~$292m. This would require a share price for HLG over $10 to have a higher IWF.
I too would like to see this happen, but I'm not holding my breath.....unless I have completely misunderstood how this works. Happy to be corrected.
I have said it before, but still worth repeating.
Even in a depression people need clothes. Some retail clothing shops did not make it through the lockdown. A few others who tried to enter the NZ market found it too tough and pulled out even before the crisis. That leaves fewer and fewer shops for people to buy their clothes from, and not everyone is happy with shopping at the red shed. So as shops close that leaves HLG picking up a larger percentage of the trade without having to open more stores.
Add to that their quick reaction at building their on line trade, and its easy to see where that growth comes from.
Physical stores vs on line
https://www.livewiremarkets.com/wire...-avoid-in-2021
Add to that the fact that Glassons has less stores in Australia (32) than N.Z. (36) despite there being more than 5 times the dressable market in Australia and Blind Freddy should be able to see where the growth is going to come from, exactly that sentiment is stated clearly in the annual report.
I wish people would do at least some basic reading before making ill considered remarks. The annual report is here http://nzx-prod-s7fsd7f98s.s3-websit...283/333885.pdf
I hear you ... and I agree that people will always need clothing, even in a depression. However - do they really need new and fashionable (i.e. fast outdated) clothing and do they really need to replace their wardrobe every season?
I am pretty sure that most of us could well survive for the next decade without the need to buy any (or hardly any) new clothes (well, maybe with the exception of replacing from time to time underwear and socks) - well, we could. And even if the fashion freaks under us choose to replace their stuff only every other year instead of every season, revenue will drastically drop.
I don't want to rain onto the parade, but linear extrapolations are always dangerous, given that most things in life move in circles. We well might have reached peak cloth buying season for some time.
Yes, if HLG keeps growing as it did the recent years, and if it manages to keep the margins as it did the recent years, it is still reasonable priced, but didn't we think the same thing with many other shares short before they reached their peaks?
This share clearly has a place in any income portfolio, but not quite sure whether now is really the time to buy or accumulate ...
Discl: used to hold in the past, but not now.
Happily married with the same woman for the last 40 odd years. Not sure this proves I understand the female part of the "species", but I must have done something right in that regard (and it was not replacing her wardrobe every season :p:). We both prefer to buy quality which lasts ...
Maybe time to check whether some of the stereotypes which swirl around about women are really true?
Bears repeating. Their performance in the context of the overall apparel market is absolutely stunning.
This fact seems lost on a lot of people here as does the fact that a very average retailer like WHS is on a forward PE of 14, (one professional analyst very recently put a value of $3.00 on it which suggest a PE of 17.5 !!) and a company like Briscoes which is not growing is on a PE of 14.6
Some people seem stuck in their mind with the notion this will only ever break above $6 temporarily and are ignoring recent years growth and the growth potential going forward.
True but I tend to think of them less as a fashion house, perhaps more of an essential apparel thing. Yes they obviously have to (and have a knack for) get the style right but one might easily pop in and procure something under $5000 that works at a tidy bbq/work function and may well be acceptable a year (even two) later. One would have to be at a rather undemanding work gig to get away with last year's "Fashion" item. Probably counter intuitive but to me it increases demand as a go-to outlet. Mind you, never been into a glassons, could be a completely wrong on dresses.
One thing I often find when people ask what I invest in is that they are surprised to hear Hallenstein Glassons. I don't imagine I'd get the same response if I said The Warehouse. Maybe Briscoes would fall somewhere in the middle. I can't speak entirely from experience though as haven't held the latter two. But possibly this is one of the issues, it hasn't taken off with the Sharesies crowd, or the analysts, and hence we have this liquidity issue and subsequently it probably won't make it into the NZX50, which in itself means the cycle can't be broken and the share price will continue to languish with a conservative PE. Oh well, treat it as a gift and accumulate. One day the market will figure it out.
HLG were in the NZX50 about 5 years ago
Got kicked out and replaced by PEB
HLG financial year F20 NZD.USD average was 0.6355
Seems to be about 0.66 at the moment ...and forecasts suggest its going to get stronger