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  1. #10851
    Legend minimoke's Avatar
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    Quote Originally Posted by iceman View Post
    Out of interest when you and mini talk about "increase for the year", is that last 12 months, so far this calendar year, so far this financial year or ?
    Quote Originally Posted by peat View Post
    Isnt it interesting how Couta and Beagle have completely opposite strategies.

    And as a comment its not usually a good idea to broadcast your stop loss level Minimoke
    not sure why. When it hits 1.70 I'm out and I don't think that will rattle the market

  2. #10852
    Legend minimoke's Avatar
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    Well, the wine was pleasant and cleared my head and caused me to break my rule. I've ignored the stop loss and helped lift the market today to $1.75. Well that's what I sold out at- and all holdings. I felt a need to preserve my capital

    The rationale was that I was 9.7% down the gurgler so far. I gave them more money at bonus issue at $1.70 so a price now of $1.74 I didn't feel was appropriate reward for that faith. Only thing mitigating the loss was the dividend reinvestment plan - which in hindsight I should have taken the cash.

    So being 9.7% down I now need to see a 10.75% increase in price to get back to break even. Given that I have to think - who is going to get me that 10.75% fastest. I could wait another year for HBL to deliver. Or perhaps I should put the money into someone that can return that lost capital earlier. I have plans for that and will let you know when my BUY has completed.

    So a bit sad to sell. But bright side is I have cash again and remaining shares are showing a 32% (exc divi's) positive return this year.

  3. #10853
    Speedy Az winner69's Avatar
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    Mini - spoken like an old hand Fund Manager

    Get rid of the dogs and the returns go up ....survivorship bias interesting subject
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #10854
    percy
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    Quote Originally Posted by winner69 View Post
    Mini - spoken like an old hand Fund Manager

    Get rid of the dogs and the returns go up ....survivorship bias interesting subject
    Always pays to sell your losers and add to your winners.
    Funny enough, HBL is a big winner for a lot of us.

  5. #10855
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    Quote Originally Posted by percy View Post
    Always pays to sell your losers and add to your winners.
    Funny enough, HBL is a big winner for a lot of us.
    Not a share I would be selling for a loss, even at 10% down, I've learnt the hard way quite a few times selling good stable divvy paying stocks ,only to see them bounce back above my original buy price.

  6. #10856
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    Quote Originally Posted by couta1 View Post
    Not a share I would be selling for a loss, even at 10% down, I've learnt the hard way quite a few times selling good stable divvy paying stocks ,only to see them bounce back above my original buy price.
    I thought about the stability and the divi. And that's not going to get my 10% back in a hurry. If its stable its not going to go anywhere from here. Likely mooch along $1.75 - $1.90. With the only excitement a divi from time to time - after which SP will drop back again.

  7. #10857
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    Quote Originally Posted by minimoke View Post
    I thought about the stability and the divi. And that's not going to get my 10% back in a hurry. If its stable its not going to go anywhere from here. Likely mooch along $1.75 - $1.90. With the only excitement a divi from time to time - after which SP will drop back again.
    If the share price increases at more than inflation and it keeps paying a steadily increasing dividend I’ll be really happy. Yep, it’s boring, what does one expect from a bank. I wish all my shares were as boring as Heartland. My biggest holding.

  8. #10858
    IMO
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    272 pages of posting and you call it boring!!!?? .....lol agreed

  9. #10859
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    Happy to hold this one at what I would call fair value at the moment. Still in this tight holding pattern in the 1.7x range which is still a decent buy if you compare to the overvalued market.

    If it drops in price following the announcement of the FY results I think it will be more a case of the new spending on the systems. I could see this happening if its closer to 65m on that guidance. I wouldn't mind that at all given the strong dividend. I would just get more shares on the DRIP.

  10. #10860
    On the doghouse
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    Default Customer Concentration Test FY2017

    Quote Originally Posted by Snoopy View Post
    Industry Group Risk

    From AR2016 note 18c, the greatest 'business group' risk in dollar terms is agriculture, with $628.202m worth of assets. This represents an increase of $90.916m over the previous year.

    $628.202m/ $3,461.292m = 18% of all loans


    Regional Risk

    From AR2016 note 18b, the greatest regional area of credit risk in dollar terms is 'Rest of the North Island' , with $888.080m worth of assets. This represents:

    $880.080m/ $3,461.392m = 25% of all loans

    The 'Rest of North Island' loans (which excludes Auckland and Wellington) have risen 12.5% in numerical terms over the year, outstripping the growth of the previous largest region Auckland which only grew by 2% in gross loan amounts (Auckland still covers 24.5% of all loans) . This is a significant change for all other years where Auckland has been the largest market. Given 'Agriculture' loans have grown by 17% over the year, this 'growth' could reflect the compounding of agricultural interest charges into existing loans. According to AR2016 p7, dairy represent 7% of Heartland's total loan book.

    0.07 x $3,461.392m = $242m

    At an interest rate of 8%, assuming no interest was actually paid, this would increase the value of the Heartland loan book by:

    $242m x 0.08 = $19.3m

    Since the actual agricultural loan balance increased by $90.9m, we can assume that more net new agricultural loans were taken out, rather than just rolling over the dairy loan book. This is very much a contrast to traditional market leader ANZ.NZ who kept their total rural loan book static over the similar period. Looked at just in agricultural terms, you could say that Heartland are compounding their own problems for the future. But because the loan book in total has grown, reducing Heartland's relative reliance on Auckland is probably a positive.

    The multi-year picture is shown below:


    2012 2013 2014 2015 2016
    Largest Regional Market Auckland (30%) Auckland (30%) Auckland (25%) Auckland (26%) Rest of North Island (25%)
    Largest Industry Group Market Agriculture (24%) Agriculture (21%) Agriculture (16%) Agriculture (17%) Agriculture (18%)
    Industry Group Risk

    From AR2017 note 18c, the greatest 'business group' risk in dollar terms is agriculture, with $757.004m worth of assets. This represents an increase of $129.334m over the previous year.

    $757.004m/ $3,931,239m = 19% of all loans

    Regional Risk

    From AR2017 note 18b, the greatest regional area of credit risk in dollar terms is 'Rest of the North Island' , with $1,037.873m worth of assets. This represents:

    $1,037.873m/ $3,939.231m = 26% of all loans

    The 'Rest of North Island' loans (which excludes Auckland and Wellington) have risen 18% in numerical terms over the year, outstripping the growth of the previous largest region Auckland which grew by 13% in gross loan amounts (Auckland still covers 24.0% of all loans) . Given 'Agriculture' loans have grown by 21% over the year in dollar terms, this 'growth' could reflect the compounding of agricultural interest charges into existing loans. According to Heartland, dairy represent 8% of Heartland's total loan book (but still under the 10% to one customer group earnings cap that I use as a volatility risk indicator).

    0.08 x $3,931.239m = $314m

    At an interest rate of 8%, assuming no interest was actually paid (i.e it was all capitalised), this would increase the value of the Heartland Agricultural loan book by:

    $314m x 0.08 = $25.1m

    Since the actual agricultural loan balance increased by $129.334m, we can assume that more net new agricultural loans were taken out, rather than just rolling over the dairy loan book. This is logical when by 30th June 2017, it was becoming clear the dairy crisis was past its worst.

    This is very much a contrast to traditional market leader ANZ.NZ who kept their total rural loan book static over the similar period ($NZ19.205m @ 30th September 2017 vs $NZ19.226m @ 30th September 2016)

    Looked at just in agricultural terms, you could say that Heartland are potentially compounding their own problems for the future. Or is it just a case a putting more emphasis on their rural roots? Yet because the loan book in total has grown, reducing Heartland's relative reliance on Auckland is probably a positive.

    The multi-year picture is shown below:


    2012 2013 2014 2015 2016 2017
    Largest Regional Market Auckland (30%) Auckland (30%) Auckland (25%) Auckland (26%) Rest of North Island (25%) Rest of North Island (26%)
    Largest Industry Group Market Agriculture (24%) Agriculture (21%) Agriculture (16%) Agriculture (17%) Agriculture (18%) Agriculture (19%)

    SNOOPY
    Last edited by Snoopy; 16-10-2018 at 10:34 AM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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