Originally Posted by
Ferg
Thanks Snoopy, although that fag packet is pretty old now and has multiple scribblings on it since I gave up 20 years, 9 months and 7 days ago.
I was coming to the same conclusion; there need to be no headwinds or tripping on hurdles on the way to growing the loan book to $1b in that timeframe, although with enough efforts they could get there quicker if they want to "buy" customers. IMO they would need a loan book over $1b to justify the SP based on what some might call "traditional" methods. My fear with new methods is we have seen those previously.....as per winner's signature.
Also, there is no "time value of money" built into todays SP with an FY25 PE of ~14. That's worth about 11-16% based on 3.5 years inflation at 3-4% p.a., assuming that a 3.5 year look forward PE ratio of 14 is a roughly correct way of valuing HMY (it could be higher or lower and depends on future growth from that point). Even if inflation was built into the current SP, that puts the share price (starting from $1.90ish today) at $2.10-$2.20 in FY25 which divided into my traditional EPS forecast of 13.9c for FY25 gives a PE ratio 15-16 at that time, which still implies future growth.
To FM's point, if some of the employee share remuneration costs were a one off in FY21, that would definitely help the view I compiled (by having higher NPAT sooner), although it would make no difference to "cash NPAT" per their methodology given it is a non-cash expense. Do we know anything about their employee share scheme?
Disclosure: not currently holding, am an interested observer seeking undervalued shares