HLG - Hallenstein Glasson

[winner69]

Looking at it as a cyclical stock - so orthodox wisdom says Price-Sales is better indicator of value that Price-Earnings - the track record for the last 10 years suggests it's a sell at PS over 1.1 (hit at $6 last year) and a good buy below 0.8. Currently 0.86.
However, let's not forget that the company has been growing market share in NZ, and the successful expansion of Glassons in Australia does give offer a long growth runway - particularly for a well-managed company with high returns on capital.
(But also keeping in mind headwinds from a potential consumer downturn - particularly with falling house prices in Australia, increased competition, and the lower NZD and esp AUD. Margins currently 9.8%, low of 6.1% in 2016; would still leave P/cashflow around 10, allowing for ongoing high divies)

Using price:sales good idea to measure market sentiment

Growing market share in NZ ....if you use Stats NZ Retail Trade Survey and Clothing,footwear sector as a proxy for market size HLG Group just holding share over the last couple of years.

[couta1]

http://www.dividendyield.co.nz/viewdetails.php?loc=HLG

Yep and adding in the last 2 years we get an average divvy of 30.25c over the last 16 yrs which included some pretty tough years, none too shabby aye.

[Beagle]

http://www.dividendyield.co.nz/viewdetails.php?loc=HLG

Thanks Doug. Dividends held up really well even during the GFC which is surely the greatest stress test any company listed on the NZX has had, (none were around during the great depression of the 1930's) and with HLG the oldest company listed on the NZX it makes any suggestion the company would cut dividends completely look like nothing more than theoretical and quite idle speculation.
Even using the low point of the GFC payout of 21 cps fully imputed that gives a gross divvy of over 29 cps and a gross yield of at least 7.3% at the current price as an absolute bottom of the cycle minimum. No wonder many consider this to be arguably the "purrfect" dividend hounds stock.

[Beagle]

Yep and adding in the last 2 years we get an average divvy of 30.25c over the last 16 yrs which included some pretty tough years, none too shabby aye.

OMG that's incredible. So including many years of the GFC the average net dividend is 30.25 cps which inclusive of imputation credits is over 42 cps giving an average gross yield of over 10.5% at the current price of $4. No wonder the smart money just holds these forever...

[DarkHorse]

Using price:sales good idea to measure market sentiment

Growing market share in NZ ....if you use Stats NZ Retail Trade Survey and Clothing,footwear sector as a proxy for market size HLG Group just holding share over the last couple of years.

Thanks for the feedback Winner69. I was just thinking of the last full year -yoy nz sales growth of 8% for glassons and 6% for hallensteins (according to annual report) - which I assumed would be faster than overall spending growth in the sector?

[mikeybycrikey]

Interesting video from Forager Funds who have recently bought in to HLG. There probably isn’t too much new information in the video but it is good to get a different perspective from an Australian investment fund.

https://youtu.be/rvcU_e8ZL90

At the end of the video, they mention that they are invested at about 2.5%, which I assume means 2.5% of their AUD 150 million International Fund. So I guess that means somewhere close to 1 million shares, maybe.

Forager seems to be an interesting investment firm, since they are reasonable open about what they are doing and what they are thinking. They first came to my attention with a serious of blog posts during the demise of Dick Smith’s.

[peat]

Interesting video from Forager Funds who have recently bought in to HLG. There probably isn’t too much new information in the video but it is good to get a different perspective from an Australian investment fund.

https://youtu.be/rvcU_e8ZL90

At the end of the video, they mention that they are invested at about 2.5%, which I assume means 2.5% of their AUD 150 million International Fund. So I guess that means somewhere close to 1 million shares, maybe.

Forager seems to be an interesting investment firm, since they are reasonable open about what they are doing and what they are thinking. They first came to my attention with a serious of blog posts during the demise of Dick Smith’s.

wow that analyst is still wet behind the ears. did she just graduate last year ?
And she found out about Glassons by her own shopping experiences lol - I guess she's never going to cover BHP.

thanks for the link though mike

[kiwico]

wow that analyst is still wet behind the ears. did she just graduate last year ?
And she found out about Glassons by her own shopping experiences lol - I guess she's never going to cover BHP.

thanks for the link though mike

I attended their (Forager's) presentation in Wellington before Christmas - I have some their Australian (I guess it's now Australasian) fund. The analyst mentioned she'd been checking put HLG but I couldn't help feel they had bought it at a relatively high price. As a long time Intelligent Investor subscriber it was interesting to meet Steve Johnson (he previously headed up II) but couldn't agree that the NZ Herald was the paper read by all of New Zealand.

[Lewylewylewy]

That dividend history completely changes my view of hlg. I always saw it as a div stock for covering "wants" in my retirement portfolio. I now see that it can represent the "needs" part of my income.

[BlackPeter]

wow that analyst is still wet behind the ears. did she just graduate last year ?
And she found out about Glassons by her own shopping experiences lol - I guess she's never going to cover BHP.

thanks for the link though mike

She graduated in 2013 with a finance degree and had already Researcher / Analyst positions for KPMG and Deloitte before she went to Forager.

So - not quite as green as you are implying - looks can be deceiving ...

Actually - what was wrong with her analysis?