HLG - Hallenstein Glasson

[Beagle]

"Hounded" up a few more of these today. "Purrfect" dividend hounds stock with a truly superb track record of high dividends. Coutts will be proud of me

[Beagle]

Yep ...good move beagle

I reckon $6 plus in inevitable in the near future year

Yeap, it was a sound strategic move hounding some more of these up. $6 already.

[couta1]

Yeap, it was a sound strategic move hounding some more of these up. $6 already.

Lol, you cant have too many and I wish I had more.

[winner69]

Yeap, it was a sound strategic move hounding some more of these up. $6 already.

Will go even higher before next divie - pretty much risk free and still relatively cheap in these days of ultra low interest rates.

[Beagle]

Will go even higher before next divie - pretty much risk free and still relatively cheap in these days of ultra low interest rates.

I think what you're saying here and something I completely agree with is that the business has proved to be extremely resilient despite very low consumer confidence on both sides of the Tasman so in more normal times when confidence is better, returns will improve from here... I think they have strong growth potential in Australia and have carved out an excellent position in the mid price point of the rag trade. Been in business longer than I've been alive...I like companies that have proven themselves for more than 50 years...they just feel really, really solid to me. Just over 10% gross at $6 makes them a strong hold.

[Maverick]

I'm just not as sure as you guys on this one , at a $6 SP. It has been an enormous success for me personally the last few years but at these levels, it's by no means a one way bet.
Based on their latest forecast, which are always accurate, this winters earnings are slightly down on last year.(although their overall annual profit will be slightly up because of a fabulous prior summer) The FY 19 result no longer includes the loss making " Storm" brand which has now been sold off.
FYI -Storm lost about 1 million operationaly last year from memory.(without Storms influence from FY18 , overall net annual profit is actually about the same in FY 19)
Also, we now recently have a very low USD, never good for HLG.
Sure it's a great company, it is an iconic brand in the pronvinces where H +M etc won't dare tread, a terrific growing online platform and it really knows it's customer base. However , at 6 bucks I believe it's slightly overpriced.
While the HLG SP is historically safe at this time of the year leading into its November dividend, it just needs one bad seasons result, from either poor stock selection, unfavourable temperatures or whatever and there is now plenty of potential to disappoint the market.
While the current SP 's upward driving force seems to be both momentum and unprecedented low interest rates, historically the current share price, compared to earnings, is well ahead of where it normally sits.
Im just saying that there are real, longer term risks at $6 ,that seem to be currently overlooked.
Disc, have had "boots in all " but just a handful now.

[BlackPeter]

I'm just not as sure as you guys on this one , at a $6 SP. It has been an enormous success for me personally the last few years but at these levels, it's by no means a one way bet.
Based on their latest forecast, which are always accurate, this winters earnings are slightly down on last year.(although their overall annual profit will be slightly up because of a fabulous prior summer) The FY 19 result no longer includes the loss making " Storm" brand which has now been sold off.
FYI -Storm lost about 1 million operationaly last year from memory.(without Storms influence from FY18 , overall net annual profit is actually about the same in FY 19)
Also, we now recently have a very low USD, never good for HLG.
Sure it's a great company, it is an iconic brand in the pronvinces where H +M etc won't dare tread, a terrific growing online platform and it really knows it's customer base. However , at 6 bucks I believe it's slightly overpriced.
While the HLG SP is historically safe at this time of the year leading into its November dividend, it just needs one bad seasons result, from either poor stock selection, unfavourable temperatures or whatever and there is now plenty of potential to disappoint the market.
While the current SP 's upward driving force seems to be both momentum and unprecedented low interest rates, historically the current share price, compared to earnings, is well ahead of where it normally sits.
Im just saying that there are real, longer term risks at $6 ,that seem to be currently overlooked.
Disc, have had "boots in all " but just a handful now.

Good points, and while HLG is a well run company likely to master the coming storms as well as it did the same trick in the past ... it is still a cyclical close to an all time high resistance line.

Look at it from another perspective - what are the chances for the SP to go over the next 12 months another $2 up? Quite unlikely in my view given that growth seems to stall and exchange rates turn unfavorable and consumers become more careful with spending money anyway.

On the other hand - what are the chances for them dropping $2? I don't think it would need a lot encouragement for the SP to get there ... One bad season could do that.

As a holder I would not like the odds.

Discl: "casual" holder, but not now ;

[Beagle]

Fair points and good debate
I would counter with the following
Managements proven track record. In horse racing terms if you'll excuse the analyogy, thoroughbread's with an exceptionally long track record will always sell at a premium to young tempremental colt's.
Cyclical in a long term slow uptrend.
Has only recently hit critical mass in Australia and has tremendous potential for growth there
100 year low interest rates gives scope to add up to a 2 PE premium to the traditional PE this has sold at
Has weathered what could be a cyclical low in consumer confidence.
Strong brand
Well entrenched market position
Dynamic and rapidly growing digital footprint
Proven ability to run an efficient distribution model
Gross yield just over 10% assuming 44 cps in annual fully imputed dividends.
I think consumers can pay a little more to cover the exchange rate cost increase and happy to bet they can.
Electronic card spend data for apparel up a very strong 4.5% in August 2019 indicating a probable strong start for the year to N.Z. operations
Real estate appears to have bottomed in Australia and with ultra low interest rates consumer confidence might also have bottomed.

[percy]

I retain my doubts about their Managing Director's capabilities.
Never stayed long anywhere.

[Beagle]

Sector Comparison
Based on very recent guidance
HLG - FY19 PE 12.76
WHS - FY19 PE 11.60
Based on recent results
KMD FY19 PE 12.75
BGR FY19 PE 13.19
Average for sector 12.6
In the context of the current 100 year low interest rates I don't think these PE's are expensive at all.