Thanks Peat. Your analysis appreciated. I hope your 'bullish gartley' all 'holey' and 'spotted' is not too contagious :p.
Looks like a mild sort of bullish penant formation to me. But I wouldn't bet my house on it.
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I wrote the above before I was a shareholder and before 'you shareholders' voted the deal through. For shareholders at that time, the HGH restructuring has been a disaster. We have had this and the PGW seed sale as recent incidences where the directors apparently did not know best. Shareholders in both of these companies who blindly followed the directors voting advice at consideration time, have ended up voting for the destruction of their own share capital. Perhaps 'thinking for yourself' might be a salutatory lesson to learn from this?
I talked to my broker before buying into Heartland recently. He said that talk around the institutions was that Heartland had doubled down on their Australian operations at exactly the wrong time. Confirmation of further falling property values, particularly in Sydney and Melbourne, meant many institutions have headed for the exit. However, my broker suggested that the dividend yield had become so compelling that he saw value at $1.38. If the restructuring had not gone through and Heartland had 'stuck to its knitting' my broker thought the share price would be about $1.80 now. Co-incidence or not, the $1.38 trading price is 10% below my 'fair valuation' of the company, this time based on a multi-year picture of dividend yield. My own modelling suggests that $1.38 is good value even if the dividend falls a cent or two. That means I will be happy to hold on to my HGH shares, even if this does eventuate.
That 'Aussie Banking Industry Spanking' dealt out by Kenneth M Hayne, Commissioner looks determined to see trailing commissions on mortgages phased out, in favour of a one off 'fee for service' charge. I don't know how any trailing commissions were structured by Heartland for arranging REMs in Australia. But they may have increased as the loan value increased via accruing of interest over the years. That won't happen from now on.
Most of Heartland's representation in Australia is through brokers in Australia. I presume there is no such thing as a 'Reverse Mortgage Broker'. These brokers would handle all mortgage products. So why would they put their efforts into encouraging REM loans which tend to be smaller than regular mortgages? I think the selling of REM loans into Australia is destined to get a lot harder!
SNOOPY
Welcome to the Heartland registry Snoopy. Pity you did not sign up back in the days when the risk/reward ratio was higher.
I voted against this restructure (and also against the PGW sale) and of the ten NZX holdings I currently have, HGH is the smallest.
But I am not particularly concerned about the timing of Heartland's expansion in the Oz market. It is a long game and now is as good as any other.
So the $64 question: Does the Snow Leopard think a $1.38 is good value for money?
The $64 answer: Yes.
The $65 question: Is the Snow Leopard buying?
The $65 answer: No. Look at that chart! (but really it is because I have no spare change)
A reality check from one hound to another. People are just like dogs, they like to eat and have their treats. If the food bowl provided by most all other sources has been withdrawn then every man woman and dog of age will look for some food bowl that's full. You don't have to sell anything. People and Beagles can't help themselves and like their treats, they will follow their nose and come looking. Payment of commissions is irrelevant to people eating into their own homes equity...if the customer must pay it then it will simply be loaded onto the loan.Quote:
I think the selling of REM loans into Australia is destined to get a lot harder! Snoopy
Falling house prices will sort themselves out over time and I am confident that HGH's lending policies are fairly conservative.
One other thought for the day. As one of the very last food providers, those needy and looking for treats might find they have to pay a bit more for them...that would be a real "disappointment" for HGH shareholders wouldn't it :)
The $64,000 question is are HGH shares value at this price ?...Is the Pope a Catholic ? Do I expect a quick ascent from here, absolutely not but with a gross dividend yield of ~ 9% and a forward PE of ~ 11 every man and his dog has the luxury of being patient.
Why are a number of people talking about a dividend cut when eps is going up this year ? Some people appear to have forgotten that the RBNZ's capital adequacy proposal is just that, a proposal and that even if implemented in its current radical form, banks will have 5 years to comply and HGH can get there solely through its dividend reinvestment scheme issuing shares at , (from memory a 2% discount to VWAP). Ask yourself this simple question and the penny might drop. What would happen to the shareholder participation rate of the dividend reinvestment scheme if they raised the discount level to 3 or 4% ?
Good on investors who got in at lower levels and despite the recent share price fall, are still sitting on a good capital profit while those dividends continue to flow. Personally I do not regret not getting in earlier. The risk/reward ratio an investor is comfortable with is a personal choice. 'Benefit of hindsight analysis' does not show that those who made the choice not to invest at the time made the wrong choice. I have been researching Heartland for many years and was well aware of alternative future paths at the time that Heartland could have followed, not all of those alternative futures being under the control of management! Five years of navigating through challenging market conditions gives me more confidence in Heartland's management's ability to navigate through the business ups and downs. I think that I have bought in at a risk/reward sweep spot. At this point I am happy to put my HGH shares in the bottom drawer and harvest the dividend stream. But if they can gain more traction in Australia, then all power to them. It will be 'growth for free' for me.
I sense 'mixed mind messages' with the statement of being in for the medium term countered by the caution of short term chart signals. But I understand that 'no spare change' is the most legitimate ultimate trump card in this investment strategy game!Quote:
I voted against this restructure.
But I am not particularly concerned about the timing of Heartland's expansion in the Oz market. It is a long game and now is as good as any other.
So the $64 question: Does the Snow Leopard think a $1.38 is good value for money?
The $64 answer: Yes.
The $65 question: Is the Snow Leopard buying?
The $65 answer: No. Look at that chart! (but really it is because I have no spare change)
SNOOPY
Relentless selling....where is the button?
Heck, I've just seen the closing price ... where did that come from?
I've been holding off from topping up ... don't really have the cash ... but I might just have to dig deep.