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  1. #9941
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    Quote Originally Posted by Beagle View Post
    Your welcome. I forgot to include Bendigo bank in my comparative PE analysis which is here http://www.4-traders.com/BENDIGO-AND...apide&mots=BEN and their 2018 PE is just 12.2. The average of the six Aussie banks peer group that I follow is thus 13.2 v HBL at 15.6.
    HBL thus trades at a PE premium of 2.4 compared to its peers whereas a few years ago it traded at a PE discount of a similar amount.
    Has this got the legs (EPS growth) to expand its PE premium to the Aussie banks further or is a reversion tighter into its peer group to be expected ?
    I would guess that Heartland has considerably less exposure to residential real estate than do the other Aussie banks. Maybe this might give it some advantage if folk consider that there might be some kind of major house price correction on either side of the Tasman ?

  2. #9942
    Reincarnated Panthera Snow Leopard's Avatar
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    Thumbs up The nearest to a buy and hold that I hold

    Despite the facts that:
    not only is HBL a greater percentage of my NZX portfolio than my rules ideally permit;
    but also that I regard even $1.70 as a [small] premium to current value (but less than EOFY value].

    I will be opening my wallet to take up my full rights (and have no intention of quitting the DRiP).

    As for comparing PE ratios of banks or indeed any company.
    Value each one on it's own merits to discover whether to you each represents good/fair/poor buying at their current price.


    Best Wishes
    Paper Tiger
    om mani peme hum

  3. #9943
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by RTM View Post
    I would guess that Heartland has considerably less exposure to residential real estate than do the other Aussie banks. Maybe this might give it some advantage if folk consider that there might be some kind of major house price correction on either side of the Tasman ?
    Yes, no,... maybe. HBL have built up quite a substantial reverse equity loan book in Australia and N.Z. and its growing very fast. A lot of lending on hire purchase, (some have even referred to them with the distasteful reference of being a finance company "in drag") dairy presents as an ongoing commercial risk but certainly many of the Australian banks have larger exposure. Some Aussie banks have huge exposure to mining companies and their long term projects predicated on long term assumptions regarding the price of LNG, Oil and Gas and base metal prices e.t.c. Horses for courses I don't think on balance their risk exposure is all that much different. My theory which may or may not be as good as any other is that HBL has earned a PE premium based on its faster EPS growth over the last few years relative to its peers. Whether that continues is of course "the question".
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  4. #9944
    Speedy Az winner69's Avatar
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    On the eve of Heartland breaking through the $2 barrier James Smalley from Hamilton Hinden Green said -

    Heartland Bank was the best performer, up 1 percent to $1.97, an all-time record for the stock which has gained 30 percent this year.

    "It has been a quiet achiever over the last two to three years," Smalley said. "Investors who participated quite early at 50-odd cents will have done exceptionally well, particularly in contrast to the major banks - it has blown them out of the water."


    Once past $2 we can look forward to $3 eh
    Last edited by winner69; 11-11-2017 at 07:47 AM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  5. #9945
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Beagle View Post
    Yes, no,... maybe. HBL have built up quite a substantial reverse equity loan book in Australia and N.Z. and its growing very fast. A lot of lending on hire purchase, (some have even referred to them with the distasteful reference of being a finance company "in drag") dairy presents as an ongoing commercial risk but certainly many of the Australian banks have larger exposure. Some Aussie banks have huge exposure to mining companies and their long term projects predicated on long term assumptions regarding the price of LNG, Oil and Gas and base metal prices e.t.c. Horses for courses I don't think on balance their risk exposure is all that much different. My theory which may or may not be as good as any other is that HBL has earned a PE premium based on its faster EPS growth over the last few years relative to its peers. Whether that continues is of course "the question".
    You got to remember that companies that continually grow eps divies year after year and always do what they say they will do deserve a decent premium.


    if they improved Board and senior management gender and ethnicity diversity they might even get rewarded with a bigger premium
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  6. #9946
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    You got to remember that companies that continually grow eps divies year after year and always do what they say they will do deserve a decent premium.


    if they improved Board and senior management gender and ethnicity diversity they might even get rewarded with a bigger premium
    Certainly their reverse equity home loan book growth is extremely impressive...all very high margin, very low risk lending. I thought fair value is $2 by next Christmas, (Xmas 2018) but maybe you're right and the market pays a premium for their growth and excellent net interest margin. Certainly there's a vast market out there for baby boomers retiring on both sides of the Tasman looking to tap into some of the equity in their overpriced houses and very, very low level's of competition in this lucrative niche by other banks. They can just about write their own ticket in this niche so maybe given this area of the market has outstanding growth potential maybe their PE premium is warranted and maybe even another multiple or two...heck 2 x book value and a forward PE of 18 would be something to write home about wouldn't it !! You and Percy are probably right. I have lost any interest in selling at $2.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  7. #9947
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    Lots of positive stuff here. Looks like everyone, well here on ST anyway, is taking up the rights issue.

    Would there be any reason for not taking up the rights issue?

  8. #9948
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    The REL business would grow even quicker, if HBL had a solid competitor, such as ASB, to grow the market.

  9. #9949
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    Quote Originally Posted by Fatboyj View Post
    Lots of positive stuff here. Looks like everyone, well here on ST anyway, is taking up the rights issue.

    Would there be any reason for not taking up the rights issue?
    Yep, put spare cash into some crypto thing would be much better
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  10. #9950
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    come on winner..just buy 1 and you have your 2 bucks by christmas

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