HLG - Hallenstein Glasson

[Waltzing]

The markets never go up in one direction for 4 years..but maybe AUS and NZ will disconnect to some degree in certain defensive sectors.

[nztx]

The markets never go up in one direction for 4 years..but maybe AUS and NZ will disconnect to some degree in certain defensive sectors.

have they not already to a degree with all the carnage going on in Europe & the US ?

[Waltzing]

Well it may take time for the international investors to notice that NZ is different. On returning to NZ it became clear that NZ has taken a new direction under Keys as NZ missed the bigger impacts of the GFC due to increasing population and capital inflows.

NZ tends to be over looked and dumped when money moves around the global markets.

HLG is a stock that can unfortunately get hit about a bit.

But perhaps there expansion into AUS can stop this trend depicted in the charts.

With Russia's vaccine 92% effective the world is going to change in the next 6 months and stocks such as travel will start to return. The other vaccines will change the world in the next 12 months we all know this.

Its not that HLG isnt worth good money its just where the money goes and NZX inclusion is vital to stop the chart bouncing up and down.

While we love the bouncing around its not actually good for the vast majority of investors.

[nztx]

Maybe in different times, different conditions - Waltzing .. not sure my crystal ball suggests going forward ST this time

Too many other factors present ..

Excess money supply out there / relative unreported inflation / yield driven market / finite scrip,
just past one of the better (post Covid) retail recoveries period etc etc

but them I may be wrong too

[Waltzing]

If HB doesnt perform probability a short term hit of a 50 cents only this time.

We are not expecting a hit to SP.

unless the ghost of LTCM hits markets.


HRO all over again...

biggest short SQ in 25 years.

biggest unwind since 2009.

[Beagle]

I'm still forecasting 50 cps fully imputed per annum in dividends = 69.44 cps gross = 9.7% yield on yesterday's closing price of $7.19
I think they can easily do 60 cps in earnings this year so are on a forward PE of just 12 and I think there is very strong evidence that they have excellent growth prospects in Australia with Glassons. The risk to my forecasts is to the upside.

They had 83 cps in cash at balance date, (and no obvious need to deploy it) so backing that out they are on a FY21 forecast PE net of cash of just 10.6 !

I think a takeover of IFT is more likely than not and if HLG doesn't get into the NZX50 that way its likely too under its own steam in the near future.

Peer comparative notes.
Briscoes closed yesterday at 19.4 times last years covid affected earnings.
WHS was at 24.2 times last years earnings.
The average is 21.8 times last years affected earnings. I think HLG has significantly better growth prospects than either of these two peers, (neither of which have their brand growing strongly in Australia) but if we just stick with the average 21.8 times, HLG's 2020 Covid affected earnings of 46.56 cps = Fair Value on a comparative basis = $10.15

They have a very strong balance sheet, no debt, excellent stock turn, the highest percentage of online sales of their peer group, new distribution center's in Aust and N.Z., no immediate need for further capex and are taking a very cautious approach towards store openings in the current environment so their warcheast of ~ $50m will likely continue to grow.

There is presently no analyst coverage, (this might change soon with NZX50 inclusion) and they are literally knocking on the door of NZX50 inclusion.

A trading update is due sometime in February, possibly quite soon, and I am expecting $24m for the first half up 50% on the prior comparative period.

Disc - I bought more last week and a further modest top up this morning making HLG my largest investment position.

[arekaywhy]

hmm...pushing toward $7.30 this morning?

[LaserEyeKiwi]

I'm still forecasting 50 cps fully imputed per annum in dividends = 69.44 cps gross = 9.7% yield on yesterday's closing price of $7.19
I think they can easily do 60 cps in earnings this year so are on a forward PE of just 12 and I think there is very strong evidence that they have excellent growth prospects in Australia with Glassons. The risk to my forecasts is to the upside.

They had 83 cps in cash at balance date, (and no obvious need to deploy it) so backing that out they are on a FY21 forecast PE net of cash of just 10.6 !

I think a takeover of IFT is more likely than not and if HLG doesn't get into the NZX50 that way its likely too under its own steam in the near future.

Peer comparative notes.
Briscoes closed yesterday at 19.4 times last years covid affected earnings.
WHS was at 24.2 times last years earnings.
The average is 21.8 times last years affected earnings. I think HLG has significantly better growth prospects than either of these two peers, (neither of which have their brand growing strongly in Australia) but if we just stick with the average 21.8 times, HLG's 2020 Covid affected earnings of 46.56 cps = Fair Value on a comparative basis = $10.15

They have a very strong balance sheet, no debt, excellent stock turn, the highest percentage of online sales of their peer group, new distribution center's in Aust and N.Z., no immediate need for further capex and are taking a very cautious approach towards store openings in the current environment so their warcheast of ~ $50m will likely continue to grow.

There is presently no analyst coverage, (this might change soon with NZX50 inclusion) and they are literally knocking on the door of NZX50 inclusion.

A trading update is due sometime in February, possibly quite soon, and I am expecting $24m for the first half up 50% on the prior comparative period.

Disc - I bought more last week and a further modest top up this morning making HLG my largest investment position.

Excellent summation!

I'm wondering with the large cash balance if they are considering expanding/acquiring with another brand with a different market with which they could leverage there existing fulfilment infrastructure. Could just be an online effort initially as well. Maybe something in footwear (think Allbirds) or a clothing subscription offering.

[winner69]

I'm still forecasting 50 cps fully imputed per annum in dividends = 69.44 cps gross = 9.7% yield on yesterday's closing price of $7.19
I think they can easily do 60 cps in earnings this year so are on a forward PE of just 12 and I think there is very strong evidence that they have excellent growth prospects in Australia with Glassons. The risk to my forecasts is to the upside.

They had 83 cps in cash at balance date, (and no obvious need to deploy it) so backing that out they are on a FY21 forecast PE net of cash of just 10.6 !

I think a takeover of IFT is more likely than not and if HLG doesn't get into the NZX50 that way its likely too under its own steam in the near future.

Peer comparative notes.
Briscoes closed yesterday at 19.4 times last years covid affected earnings.
WHS was at 24.2 times last years earnings.
The average is 21.8 times last years affected earnings. I think HLG has significantly better growth prospects than either of these two peers, (neither of which have their brand growing strongly in Australia) but if we just stick with the average 21.8 times, HLG's 2020 Covid affected earnings of 46.56 cps = Fair Value on a comparative basis = $10.15

They have a very strong balance sheet, no debt, excellent stock turn, the highest percentage of online sales of their peer group, new distribution center's in Aust and N.Z., no immediate need for further capex and are taking a very cautious approach towards store openings in the current environment so their warcheast of ~ $50m will likely continue to grow.

There is presently no analyst coverage, (this might change soon with NZX50 inclusion) and they are literally knocking on the door of NZX50 inclusion.

A trading update is due sometime in February, possibly quite soon, and I am expecting $24m for the first half up 50% on the prior comparative period.

Disc - I bought more last week and a further modest top up this morning making HLG my largest investment position.

Jeez Beagle, forecasting eps 60 cents not the usual bullish beagle

EPS 60 cents is $36m npat

If they do $24m in H121 then the last year (H220 + H121) is $36.3m - even with all covid issues. So $36m for full year would be seeing earnings decline in H2.

Surely we should add a bit of growth in --- maybe $40m full year, ie eps 67 cents

And 67 times 21.8 is $14.60

That's half todays price - spooky eh

[Balance]

Jeez Beagle, forecasting eps 60 cents not the usual bullish beagle

EPS 60 cents is $36m npat

If they do $24m in H121 then the last year (H220 + H121) is $36.3m - even with all covid issues. So $36m for full year would be seeing earnings decline in H2.

Surely we should add a bit of growth in --- maybe $40m full year, ie eps 67 cents

On that note, a man just have to buy a few more of them beauties!