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23-01-2017, 08:28 AM
#8491
Originally Posted by Paper Tiger
There is too much equity, where you are not earning enough rewards;
There is too little equity, where you are taking too much risk;
and there is the Goldilocks zone .
But that is just part of the story.
Best Wishes
Paper Tiger
And all those are subjective
Applying conventional wisdom often leads to trouble
”When investors are euphoric, they are incapable of recognising euphoria itself “
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23-01-2017, 10:01 AM
#8492
Originally Posted by Paper Tiger
This one is definitely about taxonomy and we need to delve into classes and sub-classes.
Or maybe hierarchies would sit better in your mind?
But in this case we have equity and it's assorted sub classes: share capital, retained earnings and a positive plethora of reserves.
Let us ignore the glib 'if there are the same why are then on different rows then?' reply and let us follow the money.
It is after all, all money.
So where did the dividend reinvestment plan stuff come from?
From the dividends paid !
And where did the dividends paid come from?
From the retained earnings !
Read the table and you will also notice the morphing of many other sub-classes.
So maybe it is a bit of the old semantics as well then!
I think you are making things more complicated than they need to be PT.
Of course you are correct in that the proceeds from the dividend reinvestment plan comes from dividends. But the question is not "where does the money comes from"? The question is "what is the money applied to"? And whether the money you invest in a Heartland capital raising is borrowed from the bank, inherited from Aunty Flora, or comes from dividends makes no difference as far as Heartland is concerned. It is all just new capital.
The whole purpose of a Dividend Reinvestment Plan is to raise new capital. If the company you invest in has a DRP and cancels it, this is because the company doesn't need any new capital. And yes this has happened to a couple of companies I invest in over the last couple of years. The fact that the DRP exists is evidence that Heartland would like a steady supply of new capital.
SNOOPY
Last edited by Snoopy; 23-01-2017 at 10:05 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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23-01-2017, 10:09 AM
#8493
Buffett Point 4a/ FY2016: Net Profit Margin history
What we are looking for here is the ability to raise margins at above the rate of inflation over some time period longer than two years back to back.
Financial Year |
Net Sustainable Profit (A) |
Gross Interest Revenue (B) |
Net Profit margin (A)/(B) |
2012 |
$26.606m + 0.72($5.642m + $3.900m) =$30.476m |
$205.142m |
14.9% |
2013 |
$6.912m + 0.72($22.527m+ $5.101m)= $26.804m |
$206.349m |
13.0% |
2014 |
$36.039m |
$210.297m |
17.2% |
2015 |
$48.163m - 0.72(0.588m) = $47.743m |
$260.488m |
18.3% |
2016 |
$54.164m - 0.72(1.136m) = $53.346m |
$265.475m |
20.1% |
Result: Pass Test
SNOOPY
Last edited by Snoopy; 25-01-2017 at 10:26 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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23-01-2017, 10:19 AM
#8494
Buffett Point 4b/ FY2016: Gross Interest Margin history
What we are looking for here is the ability to raise margins at above the rate of inflation over some time period longer than two years back to back.
Financial Year |
Interest Income (A) |
Interest Expense (B) |
EOFY Finance Receivables (C) |
Gross Interest margin [(A)-(B)]/(C)] |
2012 |
$205.142m |
$121.502m |
$2,078.276m |
4.02% |
2013 |
$206.349m |
$110.895m |
$2,010.376m |
4.75% |
2014 |
$210.297m |
$101.221m |
$2,607.393m |
4.18% |
2015 |
$260.488m |
$126.041m |
$2,862.070m |
4.70% |
2016 |
$265.475m |
$118.815m |
$3,118.957m |
4.70% |
Result: Pass Test
When examining most companies profitability I like to look at the 'Net Profit Margin', as I have done in "Buffet Point 4a". Being a bank, the 'goods sold' are really money. So I thought that maybe looking at the gross interest margin was more relevant? To some extent it doesn't matter as both tests earn a 'pass' mark for Heartland.
What is interesting is that the 'Net Profit Margin' looks to be improving faster then the 'Gross Interest Margin.' 'Net Profit' takes into account head office and branch costs and advertising expenses. "Gross Interest Expense' does not. The fact that the 'Net Profit Margin' is improving faster then the 'Gross Interest Margin' is an indicator suggests to me that 'successful control of costs' is very much part of Heartland's success in this area.
SNOOPY
Last edited by Snoopy; 25-01-2017 at 10:26 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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23-01-2017, 12:34 PM
#8495
Originally Posted by percy
Maybe Heartland's presentation paints a clearer picture which is easier to understand.
page 8,Key Financial/Operational Metrics;
................................2012...........201 3..........2014...........2015
Dad debt ratio..............0.5%.........0.4%...........0.3 %...........0.2%.......clearly reducing.
Net Interest margin........4%............4.2%...........4.2%... .......4.4%.....Increasing and the envy of the Australian banks..[twice as much].
eps..............................4cents..........6 cents........9cents..........10cents..Again very positive real growth.
ROE.............................4.2%............6. 5%..........9%..............10.4%.Excellent progress.
Cost to income ratio.......0.5%............0.4%.........0.3%..... ......0.2%.certainly reducing costs.
Above posted 04-06-2016.
And it has now come to pass,7 months later, that guru Snoopy, has finally worked out for himself Heartland Bank's net interest margin is increasing.
Snoopy surely you can do better?
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23-01-2017, 07:32 PM
#8496
Originally Posted by percy
Above posted 04-06-2016.
And it has now come to pass,7 months later, that guru Snoopy, has finally worked out for himself Heartland Bank's net interest margin is increasing.
Snoopy surely you can do better?
Your honour, I put up in my defence:
1/ I am not a holder of HLB, so feel that I have the discretion and time to crunch the Heartland numbers at my own pace.
2/ With due respect to your honour, I couldn't help noticing that you published your own FY2015 year perspective on 04-06-2016, some 11 months after the close of the financial year. OTOH I published the FY2016 results seven months after the end of the financial year.
I plead 'guilty', but respectfully suggest that the learned judge join me in the 'sin bin' ;-P.
SNOOPY
Last edited by Snoopy; 23-01-2017 at 07:34 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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23-01-2017, 07:39 PM
#8497
Originally Posted by Snoopy
Your honour, I put up in my defence:
1/ I am not a holder of HLB, so feel that I have the discretion and time to crunch the Heartland numbers at my own pace.
2/ With due respect to your honour, I couldn't help noticing that you published your own FY2015 year perspective on 04-06-2016, some 11 months after the close of the financial year. OTOH I published the FY2016 results seven months after the end of the financial year.
I plead 'guilty', but respectfully suggest that the learned judge join me in the 'sin bin' ;-P.
SNOOPY
Bugger.!
Since I was first in the sin bin, it looks as though I have to buy the beers.!
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23-01-2017, 07:52 PM
#8498
Snoopy I do enjoy reading your posts and I do learn a lot from them. I am interested to know ( as I am sure many others would also ) which shares do you currently own?
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23-01-2017, 10:37 PM
#8499
Originally Posted by Brain
Snoopy I do enjoy reading your posts and I do learn a lot from them. I am interested to know ( as I am sure many others would also ) which shares do you currently own?
None. They're all too risky.
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24-01-2017, 07:17 AM
#8500
Originally Posted by nextbigthing
None. They're all too risky.
Had a bit of a chuckle too.!!!..lol.
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