None so queer as folk! But things are looking up.
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Hi This is my first post but am I missing something - wasn't the license granted 17/12/12
Just to clarify -on behalf of that rogue poster-, for those who came in late: the reserve bank's own rules required three years of prior accounts before an entity is granted a banking licence. My deduction from that was that Heartland in its current form would have to wait three years before a banking licence from the point in time it took over PGW finance. I don't know why the reserve bank did not follow their own rules, and decided to grant a banking licence a little more than a year from the PGW finance takeover. My critics have never offered an explanation as to why either. Mind you since the banking licence has been granted, I would argue the whole issue is now moot anyway. I still stand by my original prediction of not receiving a banking licence for three years given the information I had available to me at the time of making the prediction.
Also I mentioned that I believed Heartland was risky, and I still believe that. That is not the same thing as saying Heratland is on the way to inevitable trouble.
SNOOPY
Snoopy - you sure sniff some strange stuff at times?
finally! over the 75/76 barrier. Now 77. Mouse will be able to breakeven soon. Hopefully be 80s by end of this week or next week. Unfortunately not able to buy more as it is already a big chunk of my small portfolio.
Likely they will be given a 4c dividend for this year based on their earnings, I would estimate (2c now, 2c in Dec). That's basically the same as having money in the bank and earning interest, or actually a little better because its fully imputed and a slightly better than most rates the banks offer.
As such, my estimation of the real price value now for these guys sits at 95c-$1. If they get growth, which is looking likely, there is considerable upside to that value in the medium term. With a 90c NTA, I see no reason why the Heartlands price is below this value at least. However I know why - people still a bit scared to invest in a finance company, especially one with a chequered past that still has a BBB- rating.
Although interestingly Heartlands TDs are at 4.25% for 6 months or 4.45% for a year! This is higher than their dividend (though less after tax).... I wonder if this is telling? Is it better to have money in the bank or own the bank?
I think you are forgetting the Heartland hasn't hit $1 yet.
4c/77c = 5.2% net yeild (7.2% gross)
Much higher than the interest rate being offered. Plus 17% growth to get to NTA. For shareholders on capital account, that will be the equivalent to a 32% interest rate if the share price gets to 90c by the end of 12 months (capital growth of 17% grossed up and div of 7%).
Oh yes, you are right CJ, I was putting the cart before the horse! Good numbers!
http://www.thebreakfastclub.org.nz/
mentioned on another thread
May 28th ..... roll up to the an inspiring sermon from the man himself ..... probably more hysteria than at a Billy Graham gathering of old unless they restrict who is allowed to go
What a day it could be .... HNZ hits a buck and Jeff preaches to the converted
sincere apologies for the above post .... jeff will probably inspire the young wannabe bankers that morning
I am not sure that I have explained the above point clearly.
Risk in this context is a probability assessment of a possible outcome. There is both good risk, where the company has a result far in excess of analyst expectations and bad risk where the result is far worse. In my assessment HNZ possesses both of these kind of risks. I mentioned in a previous post that HNZ was a real investment and one of the few shares on the NZx where significant gains were possible. However such gains were never certain even if management does everything right that they can control.
I am consistently on record as saying that I woudl invest in HNZ if the capital position was more secure. Going after seasonal farm finance instead of financing the land itself might be a good strategy, but it also requires a higher capital ratio in the long term. In my assessment following what seems to be a sensible strategy will ultimately require more capital. That means a discounted share placement or rights issue. In my judgement that will be the best time to enter HNZ to balance the upside risks against the downside risks. The further the share price rises in the interim, the worse the entry point for long term investors.
The half year report does not contain the information needed to judge how HNZ is going long term. So I will reserve all judgements until the full year report comes out (as I have said before). If other people want to gamble on the outcome before then, well good luck to them. I will be staying out, no matter what happens to the share price until that fulll year information is out
SNOOPY