Originally Posted by
Maverick
Just to offer an alternative perspective to the current positivity on HLG , specifically the share price, I've just fully sold out.
Yes, it has and is a great company, run well, high div's in a low interest environment,long record of profits, potential growth in Aussy, etc etc.... but the share price is now maxed out IMO.
The ratio of 6 monthly NPAT /share price is at the same level last seen in CY2013.HLG was then on a roll of increasing profits but unexpectedly reported a much lesser 6 monthly result and the share price was then walloped. That ratio has been substantially (and consistent) at a much lower level for seven years since then and now.
Looking at what happened back in 2013, the share price had risen at a similar rate as now to about $5.70 from About $3.50 and within 6 months of that record it was back at about $3.00.
I've said before I don't care for share price charting but I really do care about ratios. I'm just saying that market expectations that are now baked into the share price are at historically high levels, and HLG have significantly disappointed the market from these levels before.
I am a value investor and I think the value here has been maximised, now we are seeing growth being added to the equation to sustain this share price,which IMO is dangerous in the rag trade.