HLG - Hallenstein Glasson

[winner69]

LOL Leave me alone mate, I need a drink..its been a tough quarter.

I don't bother do return calculations ......saves a bit of pain sometimes

[percy]

I don't bother do return calculations ......saves a bit of pain sometimes

Well I have just checked this year's sharetrader competition, as it reflects my portfolio, and I see I am 28th being up 9.30%.
My sharebroker will most probably send me a portfolio update tomorrow, which should confirm I am "well positioned."
May be even better as I note I am 6th in the Australian competition, being up 28%.
My find myself "very well positioned."

[winner69]

Dairying must be in a really bad way to be affecting great cash cows too.!

Post of the century this one

[Beagle]

I don't bother do return calculations ......saves a bit of pain sometimes

Wasn't too bad much like my head this morning lol

[Snoopy]

I bought this stock for its impeccable record through thick and thin of paying really meaningful dividends, all fully imputed and because of its super strong clean and tidy balance sheet, impeccable stock management as well as growth opportunities which the directors fully articulated in their half year report. Apart from the currency headwind which is more than fully reflected in the recent significant correction, nothing has changed.

I have never been an HLG shareholder myself. Always kept it on the radar though, because when it comes to retailing there aren't many who do it as well as HLG. While I agree in general with what Roger has said here, you don't have to go back too far (FY2014!) to find times when HLG's stock managment was less than impeccable. To managment's credit they set about solving these stock hiccups by looking at themselves rather than blaming 'the market'. I have a lot of respect for such an approach.

As for the growth opportunities, I can't think of too many that have panned out well. HLG have been trying to become profitable in Australia seemingly forever. The latest attempt seems to be opening new signature stores in Sydney and Melbourne. Previous attempts have stalled I think because of the high rents that shopping centre owners demand in Australia. They had to pull the Hallenstien brand out of Australia altogether IIRC.

Back over this side of the Tasman there is the 'Storm' brand, which masquerades as an upmarket boutique shop. Not sure if too many women are fooled by that, nor how many designer boutiques have all their clothes made in bulk in China. Was going well until the headwinds stuck in FY2014.

I walk past a Glassons and Hallenstein's every week when I pick up the shopping. As I walk by, my foot tracks seem to recalibrate themselves to walk towards the entrance of both shops. The vibrant displays seem to have this magnetic attraction for shoppers, even if they aren't after clothes! Plenty get trapped inside too!

OK, cutting to the chase. HLG management are not short growth ideas, and concept execution seems good. But eps remains some 20% below pre GFC levels of FY2006 and FY2007. I don't know of many companies that run so hard just to stay still. Retail is a tough business to be sure, and things aren't getting any easier. So the question I ask myself is not if HLG is a great retailer (I think they are) but do I want to invest in the retail sector (outside of food) at all?

SNOOPY

[Snoopy]

Here is my quick analysis on HLG, based on averaging the last five years worth of dividends.

-----------

2012F	14.5cps	17cps
2011	14.0cps	17.0cps
2010	14.0cps	17.0cps
2009	10.0cps	11.0cps
2008	10.0cps	17.0cps

-------

Average annual dividend per share 28.3cps.

If we consider a dividend yield over the business cycle of 8% being fair, then this implies a fair value share price of:

28.3c/0.08= $5.05

Ok time to rerun my dividend yield valuation. I am going to stick to the last five years of results, simply becasue the retail scene does seem to be evolving so fast.

Year	Interim Dividend	Final Dividend	eps	Payout ratio
2014	12.0cps	16.5cps	24.2cps	118%
2013	16.0cps	17.5cps	31.3cps	107%
2012	14.5cps	19cps	31.0cps	108%
2011	14.0cps	17.0cps	29.3cps	106%
2010	14.0cps	17.0cps	34.3cps	90%
Total	70.5cps	87.0cps	150.1cps

Payout ratio (5yr average): (70.5 +87.0)/ 150.1 = 105% (Not sustainable?)

Average Annual payout (5yr average): 31.5cps

If we consider a yield of 6.5% over today's business cycle being 'fair', then my valuation for HLG is:

31.5/ 0.065 = $4.85

SNOOPY

[James108]

I would argue you would have to go back to the GFC to try and capture the "business cycle".

[Joshuatree]

Well my feet took me in today ; had to really hunt but found the $10 rack and added 2 more tshirts (were $30 e)to my collection. I was the only one there at re 10.45 am.Loaded with stock.

[percy]

Well my feet took me in today ; had to really hunt but found the $10 rack and added 2 more tshirts (were $30 e)to my collection. I was the only one there at re 10.45 am.Loaded with stock.

You were had.!!!
$9 at Postie Plus. lol.

[Joshuatree]

These are qualiTEE Panel shirts with designs printed all over ,not just an old fashioned little oblong print on the front of the thinnest piece of nano cotton. Get with it Percy; age is no excuse . Postiplus has imitations of everything and serves a purpose for those on a true budget and those scrooges with no taste