HLG - Hallenstein Glasson

[Beagle]

Dont mind watching Top Gun again and again https://www.google.com.ar/search?q=k...jhsXxnTDox4OM:

Just be sure when watching for the third time and Mrs Iceman asks why, tell her you like the planes

[couta1]

No Beagle or any other hound will talk me into selling ANY of these beauties, keep smoking baby.

[Beagle]

Mid point of forecast is $27.35m. Normalise for the net cost after tax of the $1.7m Strom exit, a non-repeating item ($1.7 x .72) = $1.224m
Normalised profit based on my estimate of a prevailing average of around 70 cents US during the year = $27.35m + $1.224m = $28.574m.
on 59.65 m shares that gives 47.9 cps. Currency lower this year but maybe HLG has some pricing power to combat this ?

Comparitives in N.Z. Best comparison is KMD, currently trading on a historic PE of 14.34.
Briscoes is trading on a historic PE of 12.85.

If we ignore Briscoes and simply accept KMD's PE as a benchmark 14.34 x 47.9 = $6.87. Maybe given Glassons excellent growth prospects in Australia this could be $7+ ?

[Beagle]

Might look at the relative growth rates of sales and EPS over the last couple of years for KMD v HLG tomorrow. Heck, here's a thought, maybe HLG has more potential and has demonstrated more growth so deserves a decent PE premium to KMD ? Might send some people into orbit if we start talking $8-9+...so better keep it super, duper rational...don't want any of my mates blowing a gasket...

[winner69]

Consumers still pretty confident and as the story goes "Perceptions of current conditions remain strong” ...that’s good

http://www.sharechat.co.nz/article/6...l-cautioushtml

[Beagle]

Mid point of forecast is $27.35m. Normalise for the net cost after tax of the $1.7m Strom exit, a non-repeating item ($1.7 x .72) = $1.224m
Normalised profit based on my estimate of a prevailing average of around 70 cents US during the year = $27.35m + $1.224m = $28.574m.
on 59.65 m shares that gives 47.9 cps. Currency lower this year but maybe HLG has some pricing power to combat this ?

Comparitives in N.Z. Best comparison is KMD, currently trading on a historic PE of 14.34.
Briscoes is trading on a historic PE of 12.85.

If we ignore Briscoes and simply accept KMD's PE as a benchmark 14.34 x 47.9 = $6.87. Maybe given Glassons excellent growth prospects in Australia this could be $7+ ?

Sales growth in 2017 KMD 4.6%, HLG 6.9%
Sales growth in 2018 forecast KMD 7.7% HLG actual 16.2%
Conclusion HLG sales growth over the last two years has been materially stronger than KMD's.

Profit Growth 2017 KMD 13.5% HLG 26.2%
EPS growth 2018 forecast KMD 0% (based on significantly larger number of shares on issue this year) HLG 58%
Conclusion HLG earnings growth over the last two years has been dramatically better than KMD

PE of KMD, forecast for FY18 14.2

Now one wonders why our new Australian friends make of this. Perhaps they think the correct PE for HLG is materially higher than KMD ?

If we said HLG should be at a 3 PE premium to KMD which the above growth variance would suggest is pretty conservative then on a PE of 17.2 x 47.9 cps normalized earnings HLG appears to have the potential (Bull case) to trade as high as $8.24. Maybe our new Australian institutional friends think we really are mispricing this wonderful growth stock based on historical PE norms and not figuring enough that its morphed into a successful retailer with huge growth potential for Glassons in the massive Australian market ?

This could easily move even further north into uncharted territory.

Is this a retailer trading at the peak of cyclical earnings or a growth stock ? I don't know, you tell me... (I have a bob each way having sold half recently)

[couta1]

At this stage it's a growth stock Beagle, I reckon it's a couple of years away from it's peak.

[sb9]

Let's see if that big wall at $6.35 is broken this arvo, if so we could test the $7 mark soon.

[Gisborne Grumbler]

As you know i went with you tip..then doubted they can make it work in Australia as no NZ company has really pulled that off...

Apart from these two (both Australian businesses bigger than Hallensteins in total):
- Michael Hill with sales of $325m (AUD) in Australia
- KMD with FY17 sales of $298m (NZD) in Australia

[Beagle]

I agree but what happens if they stop buying ?

Posted 30/8/18

Now we know. Exchange rate 65 point something certainly doesn't help either. Fair value...who knows ?, certainly not me.