HGH - Heartland Group Holdings

[Oliver Mander]

Fair enough and each to their own.
Checking through, yes forecast of $66.5m on 516.7m shares = 12.9 cps this year v 11.8 cps = 9.4% profit growth expected in EPS this year. Solid numbers and good outlook for EPS growth no matter how you slice and dice it, in my opinion.

Agree. Even at the low end of the stated range ($65m) its still 12.6 cps (6.8%).
Since I've joined ST, I notice the phrase "well-positioned" seems to be used a lot in relation to HBL. I also feel well-positioned...:-)

[Beagle]

Aussie banks forecast to grow at 3.6% and 2% respectively in EPS for FY18 and FY19 according to 4 traders. Average of ANZ, WBC NAB, BEN and BOQ
Using my version of Ben Graham's formula where PE is 8.5 for no growth plus 1 x g Aussie banks should be on 12.1 average, current average 13.
Depending on how you slice and dice the numbers for HBL you get 8.5 + 1g where G is approx. 7-9% = PE of ~ 16.5
16.5 x 12.9 cps = $2.13 = no worries plus the stock currently trades cum a 5.5 cps fully imputed dividend.
Can't see Winner69 and Percy getting their $2.50 anytime soon unless there's a takeover

[Snoopy]

Hi all,

Just been looking through the results and was wondering what advantage there is for us shareholders for a company to use a 'weighted average number of share" vs the total number of share at the reporting date?

On the surface it looks as if the 'weighted average' helps paint a prettier picture of the earnings per share (and EPS growth rate), yet in reality the number of shareholders entitled to a share of the profits is in fact the number of shareholders at report dating.

Any clarity on this will be gratefully appreciated

I always use the number of shares at the end of the year to calculate my 'eps' figures McGinty.

One reason is that the number of shares on issue at the end of the year is easy to find, whereas shareholders actually have no easy way to calculate the 'weighted average number of shares.' on issue over a year. The other reason is that for the current year looking forwards the 'weighted average number of shares' becomes an historical irrelevance. We all know that earnings for the coming year must be spread over (at least) the current number of shares on issue. So using the current number of shares provides a better measuring stick as to whether the the coming year results are really an improvement.

There is an argument that if new capital via new shares has been raised during the year, that this new capital has not been available to the company all year. So the new shares, representing this new capital, should not be counted. There is nothing wrong with this argument. Yet for dividend hounds, the dividend is always paid on the current number of shares on issue when the dividend is declared. So once again the 'weighted average number of historical shares' has no relevance.

Using the current number of shares on issue will yield either neutral or conservative projections. There is no bad thing in building a little conservatism into your projected investment returns.

SNOOPY

[Oliver Mander]

Yes my EPS growth rate on "current" shares is 3.43% on pcp

FY17: $60.8m / 516.68m = EPS of 11.76
FY16: $54.2m / 476.5m = EPS of 11.37

And looking back at last years announcements, the number of share increases further prior to Ex-div from 476.5 at report date to 481m (LTI options plan) at Ex-date.

Yes, hence my comments on earnings dilution posted above, and using the "actual" number of shares rather than the weighted average. I like the share and i like the result, but will always try to factor in some EPS dilution due to share issue on this one.

[Beagle]

No mention of the expected quantum of the capital notes issue or their intended purpose. Capital adequacy looks good at 13.6%. Modest share buy-back to boost EPS ?

[McGinty]

Thanks for your thoughts fellow members

It's one thing I've been wondering for a while and was interested in how others view it.

As Snoopy mentioned above "the current number of share provides a better measuring stick", as look forward to the upcoming year.

So my opinion on the upcoming year will be that HBL achieve the higher end of their guidance ($68m) and would possibly dilute the shares down by another 23m shares (LTI and two DRP's) Total FY18 shares approx 540m

FY18: $68m/540m = EPS 12.6
FY17: $60.8/516.68 = EPS 11.76

est FY18 EPS growth = 7.14%

[trader_jackson]

The results are as expected, a fraction ahead of guidance.
We all know next year will be $68.9 million, worst case.
Still seems pretty expensive, but no doubt HBL will continue to defy gravity and we'll see $2 before next years result announcement.
(disclosure: no longer a holder, but keeping a close eye)

[winner69]

Book Value is $1.10 a share - June 2016 it was $1.05 so up about 5%

Share price up about 50% in the meantime

WOW - that's some rerating ....P/B now over 1.7. That's pretty high

No doubt the rerating will continue -- maybe Heartland (Jeff) is more awesome than the awesome Jacinda

Come 2 bucks by weeks end

[Beagle]

You won't think Jacinda so awesome if they get in and as stated on the weekend introduce a capital gains tax, Jeff still be awesome though

[couta1]

Funny thing the old market, CEN up 13c on a poor result and HBL unchanged. Disc-Not holding either.