HLG - Hallenstein Glasson

[Beagle]

Deeply impressive. Let's not forget that they were struggling to break even with Glasson Au in 2014-2016. Contrast that now with just over 49% of group profitability coming from over the ditch! Glassons Au earned 27.5 cps last year and the CAGR in eps over the last 3 years has been 27% per annum. (Can't use my standard 5 year eps growth measurements as growth in eps from a loss of $1.9m in 2016 gives a nonsense answer).

What we can say with quite some assurance is that they have really cracked the Au market and that much was not completely obvious back in 2018 when the shares were trading on a PE of 13.7. Further, the potential for ongoing strong growth in Australia with their very lite existing store footprint and a total addressable market of more than 5 times the size here seems obvious.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum.
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years.

There is no analyst coverage so people have to work this out for themselves.

Do I think Balance has become unbalanced for thinking of this in due course as a $10 stock ? Absolutely not !!...but good things take time and in the meantime there's those handsome dividends to enjoy

[Waltzing]

Been a retail trading stock for us. Now with NZ interest rates getting far ahead of the rest of the world and a long way ahead of AUS.

Its a defensive trade on one country draining liquidity and another country not..

Therefore as the authority on this stock MR B says growth is not built in therefore this coming week its a BUY on the DIPS if not in the portfolios.

[see weed]

You can see why Glassons AU excites Beagle - stunning sales growth since Di sorted them out 4 to 5 years ago

And as Beagle says penetration is low - like <1% of the addressable market - huge opportunity going forward


Pity Hallensteins remains a dog and a stilla drag on group performance

Hallensteins Sylvia Park sold $46,000 of product last Friday, $37,000 yesterday and probably the same today. Not to mention all the other stores. Sounds like a good little dog at the moment. They are catering for the younger now from 9 or 10 year olds and upwards.

[Muse]

Deeply impressive. Let's not forget that they were struggling to break even with Glasson Au in 2014-2016. Contrast that now with just over 49% of group profitability coming from over the ditch! Glassons Au earned 27.5 cps last year and the CAGR in eps over the last 3 years has been 27% per annum. (Can't use my standard 5 year eps growth measurements as growth in eps from a loss of $1.9m in 2016 gives a nonsense answer).

What we can say with quite some assurance is that they have really cracked the Au market and that much was not completely obvious back in 2018 when the shares were trading on a PE of 13.7. Further, the potential for ongoing strong growth in Australia with their very lite existing store footprint and a total addressable market of more than 5 times the size here seems obvious.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum.
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years.

There is no analyst coverage so people have to work this out for themselves.

Do I think Balance has become unbalanced for thinking of this in due course as a $10 stock ? Absolutely not !!...but good things take time and in the meantime there's those handsome dividends to enjoy

I’d say there is one analyst (at least) - thats you beagle. Good commentary.

[Waltzing]

Changing retail trends in the US. After 6 weeks still havnt had a Off/On road trek repaired with parts shipping from AUS. Supply chains are broken for some types of products.

https://www.cnbc.com/2021/11/28/shop...heres-why.html

[LaserEyeKiwi]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

5DE6D17E-277D-47D1-BB50-F66121BFCEB7.jpg

[boysy]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

5DE6D17E-277D-47D1-BB50-F66121BFCEB7.jpg

Unless you are a first buyer or any one else up to their eye balls in debt (Not sure how may people out there with $1M+ mortgages are getting 15-20k pay rises this year to simply afford the higher interest costs), i would expect these parties and their Children could very well be the stereotypical HLG shopper .....

[Muse]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

5DE6D17E-277D-47D1-BB50-F66121BFCEB7.jpg

yeah I'm not so sure about that but regardless HLG's australian exposure is attractive. Their interest rates outta rise slower than ours but HLG's ability grow faster than adverse effects from inflation/interest rates is an interesting one to consider.

[LaserEyeKiwi]

Unless you are a first buyer or any one else up to their eye balls in debt (Not sure how may people out there with $1M+ mortgages are getting 15-20k pay rises this year to simply afford the higher interest costs), i would expect these parties and their Children could very well be the stereotypical HLG shopper .....

You are understating how ridiculously cheap mortgages were over the last 12 months when they briefly even broke below 2%. In many cases even highly indebted homeowners were paying far less than they would in rent. Now with 1 & 2 year rates in the 3.5%-4% range, even highly indebted people are still facing very low mortgage interest rates by any standard. It’s basically almost the same payments on a $1 million mortgage now as people were paying on $600,000 6 years ago.

And very few homeowners are anywhere near that level of debt ($1 million) - Instead most home owners are sitting on huge equity increases of several hundred thousand dollars on their properties over the last 12 months, creating a massive wealth effect.

Meanwhile, the 40% of the population who are renting have seen minimal rent increases while their wages have increased significantly, and unemployment has dropped to near zero for the “employable” population.

Household savings are at all time highs while credit card balances are at ten year lows and overseas travel still remains firmly off the table for the year ahead.

Am I worried about NZ retail industry. Not at all.

[Rawz]

I think the retail dash is largely done. All nzx retailers had 30-50% gains this year. Not HLG and maybe KMD but certainly WHS, BGR and MHJ.

If you are staying retail you want it to be in growth mode and Beagle and W69 have made the case for glassons across the ditch, must admit it’s quite compelling.

HLG probably be nzx retail stock winner next year.

LEK don’t underestimate the pinch of rising rates. There is a reason the reserve bank puts rates up. Sucks a lot of money out of household spending budgets