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26-02-2020, 11:07 AM
#13041
![Quote](images/misc/quote_icon.png) Originally Posted by Beagle
I "hounded" some more up first thing this morning at $1.87...the early dog gets the bone ![Grin](images/smilies/smile2grin.gif)
Looks like the early dog snatched the bone without checking how much meat was on it.
![Quote](images/misc/quote_icon.png) Originally Posted by Snoopy
Plugging in a representative yield of 7.5%, one that IMO represents an appropriate risk for the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation.
(Representative Dividend per Share) / (Acceptable Gross Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )
9.0c / (0.72 x 0.075) = $1.67
A reminder here that NTA was
($687.600m - $72.159m) / 577.468m = $1.07 cps
at the half year FY2020 balance date. This means my 'fair valuation' is at a good premium (+56%) to net tangible asset value.
This $1.67 valuation is measured at the average point in the business cycle. My rule of thumb is that over the business cycle the actual share price will fluctuate between 80% and 120% of capitalised dividend fair value. This gives a target share price range for HGH of $1.34 to $2.00. $1.90, where the share is trading today, looks a ten cents or so above fair value. My target accumulation price (10% below fair value) is now $1.50. And yes I could add the upcoming 4.5c interim dividend onto that fair value.
The capitalised dividend valuation saved me from going after the bone the other Beagle got.
Back to my fair value range today. But the high $1.60s is still not cheap, even allowing for the upcoming dividend. Nevertheless it is now cheap enough for me to stay in the DRP, which I was on the point of pulling out from.
![Quote](images/misc/quote_icon.png) Originally Posted by jonu
Hasn't traded there since March 2019. What are the odds? ![Wink](images/smilies/wink2.gif)
Over the last few days, the odds of picking up a few at $1.50 in the next few weeks or months just got a lot better. If the market mood turns negative against second tier financers then 'fair value' can be undershot.
SNOOPY
Last edited by Snoopy; 26-02-2020 at 11:11 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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26-02-2020, 11:09 AM
#13042
![Quote](images/misc/quote_icon.png) Originally Posted by Snoopy
Looks like the early dog snatched the bone without checking how much meat was on it.
SNOOPY
LOL Touché
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
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29-02-2020, 03:47 PM
#13043
should be some cheap shares coming through via the DRP
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29-02-2020, 04:18 PM
#13044
![Quote](images/misc/quote_icon.png) Originally Posted by trader_jackson
should be some cheap shares coming through via the DRP
Good point. Would make a nice silver-lining.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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29-02-2020, 10:19 PM
#13045
![Quote](images/misc/quote_icon.png) Originally Posted by trader_jackson
should be some cheap shares coming through via the DRP
Agree. Visited Link marketservices´website today to make sure I´m signed up 100% !
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29-02-2020, 10:45 PM
#13046
Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
Times like this TA is your friend and just throw your FA analysis out the window, its useless.
Last edited by Beagle; 29-02-2020 at 11:05 PM.
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
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29-02-2020, 11:40 PM
#13047
![Quote](images/misc/quote_icon.png) Originally Posted by Beagle
Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
Times like this TA is your friend and just throw your FA analysis out the window, its useless.
I made my strategy decision 3 weeks ago with regard to HGH and other NZX investments and am sticking to it, unless something completely unexpected happens, which it has not done so far.
I do note you were buying and wanting more only 10 days ago and now you have sold all.
I do not think there is any one right strategy while we go through the COVID-19 effects on the markets and economies and we just all have to be content with our decisions and actions.
This is a very fluid situation Worldwide. Since our "chat" the other day I am now potentially faced with 2-3 months extra time where I am now (you know where) , which is not ideal for self or family !! Them is the breaks !!
Last edited by iceman; 29-02-2020 at 11:43 PM.
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29-02-2020, 11:54 PM
#13048
![Quote](images/misc/quote_icon.png) Originally Posted by Beagle
Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
Times like this TA is your friend and just throw your FA analysis out the window, its useless.
Sorry to lose you from 'the team' Beagle. I'll be thinking of you earning 2% on your former Heartland Capital (in a Heartland call account no less!) while we shareholders earn a gross yield upward of 7% on our Heartland shares. Rest assured I will wait until Heartland recovers from any bear market / recession before I consider selling any of my HGH shares. If anything, I would suggest any bear market / recession is the time to top up your HGH holding before the next business cycle starts.
Many consider the true messiah goes about under the initials 'JC'. But Heartland shareholders know the modern incarnation of the messiah goes about under the initials 'JG'. You need to learn to 'keep the faith' in 'our Jeff' Beagle. Good luck on the outside of the Heartland Temple.
SNOOPY
discl: Heartland shareholder looking to buy more.
Last edited by Snoopy; 01-03-2020 at 12:03 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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29-02-2020, 11:57 PM
#13049
Fair enough mate. The Covid 19 situation is very dynamic, fluid and fast moving situation and since we last chatted I have acted very quickly and decisively on a wide range of shares to get out of the way of what I believe is a bear market coming. See Bear market thread, my central theme is the market as a whole is highly likely to be significantly cheaper in 2-3 months time.
You're much safer where you are than anywhere here.
Last edited by Beagle; 29-02-2020 at 11:58 PM.
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
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02-03-2020, 03:39 PM
#13050
Jeff has often said Heartlands fortunes are tied to general economic conditions and levels of employment
Everybody is talking a big recession coming and with the inevitable consequential rising unemployed numbers things might be a bit tough for Heartland for a while
Reduced profits?
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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