HLG - Hallenstein Glasson

[LaserEyeKiwi]

As the E in P/E represents "earnings", shouldn't we adjust by the amount of interest (earnings) from the $50m cash mountain, not the $50m itself?

Not sure its material given current interest rates.

[Beagle]

As the E in P/E represents "earnings", shouldn't we adjust by the amount of interest (earnings) from the $50m cash mountain, not the $50m itself?

What earnings from interest on deposit ? Basically nothing these days. To my way of thinking with HLG you are buying a cash mountain, (the size of which is unprecedented) and future earnings. Eventually they have to do something with all that cash (although as a conservative company I expect them to continue to run a high cash balance until we're completely out of the woods with Covid). That said if they're earning 74 cents per share, (hardly expending anything on capex so cash flow before depreciation is much more than 74 cps) and they already have a very high cash balance so I think my estimate of 50 cps fully imputed for FY21 is looking excessively conservative.

For what its worth this is the brief message I sent to the board

Dear Directors, You will probably be aware there has been some commentary from Forsyth Barr that our company is knocking on the door of NZX50 inclusion and is ostensibly the next cab off the rank if one of the existing constituents falls out. One of the criteria for inclusion is based around the liquidity of the shares and I feel with the share price over $7 a share split would be most helpful in boosting liquidity. Perhaps a 5:1 like Pushpay recently did ? Kind regards ....

[Waltzing]

Compare to size of capital allocated HLG has over the decade generated profit for us almost more than any other share here in NZ or even on overseas exchange.

No other stock has given us 3 slices at the cake in such short time frames.

The capital allocated should always be calculated in hours invested on the market and that where buy good luck it out performed.

sorry no fun comments in this one. No license taken with words like Double Bubble or anything fun...

[peat]

spread for any real parcel is very high
you'd have to pay $8 to get only 15k shares.

[macduffy]

What earnings from interest on deposit ? Basically nothing these days

That, of course, was my point!

[Waltzing]

"That, of course, was my point!"

we all figured that out back in april last year....old news

[macduffy]

It seems I'll have to spell it out for Waltzing.......

I was suggesting that it was the earnings (minimal) on the $50m war chest that should be used to adjust the E in HLG's P/E, not the "capital" $50m sum itself.

Was that correct, or not?

[Beagle]

Perhaps we should move on. I'm really not any fan of these cash adjusted PE's anyway. My point is simply that one is buying not just a high current and future earnings stream but a company with a LOT of cash on hand (83 cps at last balance date) and no debt. I think from a financial point of view that puts them in a very robust position going forward.

I see WHS has announced a special dividend this morning. Perhaps that's an idea for some of HLG's cash mountain or maybe we just "make do" with them paying out all earnings this year.
74 cps fully imputed = ~ $1.03 per share gross inclusive of imputation credits and on the current share price that's ~ 14% gross yield...WOW !!

[jimdog31]

Perhaps we should move on. I'm really not any fan of these cash adjusted PE's anyway. My point is simply that one is buying not just a high current and future earnings stream but a company with a LOT of cash on hand (83 cps at last balance date) and no debt. I think from a financial point of view that puts them in a very robust position going forward.

I see WHS has announced a special dividend this morning. Perhaps that's an idea for some of HLG's cash mountain or maybe we just "make do" with them paying out all earnings this year.
74 cps fully imputed = ~ $1.03 per share gross inclusive of imputation credits and on the current share price that's ~ 14% gross yield...WOW !!

Unfortunately (as much as I agree with them not paying the subsidy back) I think they will suffer a PR backlash from a special divy. I dont think that would be wise. WHS are clearly able to do it without worrying about that now.

Id love to have cake and eat it too.

Ps welcome back mate!

[Waltzing]

"74 cps fully imputed = ~ $1.03 per share gross inclusive of imputation credits and on the current share price that's ~ 14% gross yield...WOW !!"

exactly...

over and out ...... hang on.....

Bulls eye yet again.. MR B takes home the bag and the money....

forget the WS as it should have been an IRD and Accounting standard for public companies and is the fault of the implementation.

P/E is only an historical function of capital structures in only as much as capital is used to invest in revenue generating operations and is a derivative of Accounting Body Standards and statue IRD interpretation. Once again MR B hits the bulls eye.