HGH - Heartland Group Holdings

[percy]

Thanks WayOverTheHill.
AFG,CYB,and GMA will require researching.
NAB's 9% growth rate is higher than I would have expected.

[Beagle]

Very good work Wayoverthehill, saved me some time so many thanks. A warm welcome to the forum.
Looking through that list I can't help but wonder what multiple ANZ will try and float UDC on ?
For starters ANZ's own multiple is just 12 so my guess is it has to be at least 1 lower than that, possibly 2.
Maybe a PE of 10 ? That might see some capital reallocated by institutions here from HBL to UDC. As a separate matter, looking through that list HBL still looks well and truly fully priced at $1.75 to me.

[percy]

[QUOTE=percy;710112]Thanks WayOverTheHill.
AFG,CYB,and GMA will require researching.

Very much concentrated on property lending.
Not what I am looking to invest in.and very different from HBL's diversified lending model.

So that leaves HBL with the best PEG, well ahead of its banking peers,as I would have expected.[and NZders receive fully imputed divies.[not included in the PEG calculations].
Just surprised at how good NAB's is,miles ahead of the other Australian Banks.

[Beagle]

I had a few spare minutes so did a quick comparison of HBL with Australian listed banks.

P/E from ASB site
Operating Profit (ebit) from 4 traders

Looks like HBL now fairly priced as noted by some earlier comments.

Hopefully I have completed this correctly - feedback welcome :-)

		P/E	2018 EBIT	2020 EBIT	2 year growth %	PEG
Australia and New Zealand Banking Group	ANZ	12.06	10831	11444	3%	4.26
Australian Finance Group	AFG	7.63	46.2	57.7	12%	0.61
Auswide Bank Limited	ABA	14.09	25.2	28.4	6%	2.22
Bank of Queensland Limited	BOQ	11.88	589	623	3%	4.12
Bendigo and Adelaide Bank Limited	BEN	10.39	692	722	2%	4.79
Commonwealth Bank of Australia	CBA	12.67	14619	15723	4%	3.36
Cybg Plc	CYB	17.77	354	466	16%	1.12
Genworth Mortgage Assurance Australia Limited	GMA	7.61	176	207	9%	0.86
Goldfields Money Limited	GMY	-123.11			#DIV/0!	#DIV/0!
Homeloans Limited	HOM	10.41			#DIV/0!	#DIV/0!
Mortgage Choice Limited	MOC	9.8	33.8	31.3	-4%	-2.65
Mystate Limited	MYS	13.99	46.5	51	5%	2.89
N1 Holdings Limited	N1H	-6.52			#DIV/0!	#DIV/0!
National Australia Bank Limited	NAB	14.64	9361	11035	9%	1.64
Westpac Banking Corporation	WBC	12.08	12368	13560	5%	2.51
Heartland Bank Limited	HBL	14.46	101	122	10%	1.39

I think BEN looks the best risk reward play of that lot taking into account their very cheap PE and very very long and successful trading history.

[percy]

BEN's growth rate is a fifth of HBL's,ie 2% against HBL's 10%.
BEN's PEG is 3.45 times HLB's,ie BEN 4.79 against HBL's 1.39.

[Beagle]

Any PEG over 1 indicates poor value so one must then revert to the PE. Forecast growth is just that, a forecast and the growth you mention is over 2 years.
If it was as simple as picking the best PEG ratio life would be easy and we'd simply invest in AFG and GMA from that list but alas its well recognized that we're in the last stages of a very mature bull market and what comes next is usually very unkind to finance companies and banks that take on substantial parts of their lending acting like a finance company.

At first glance I'd say BEN offers the best risk reward at this stage of the economic cycle.

[percy]

As expected I totally disagree.
No surprises there.!!
I must admit for NZ investors PEGD, ie PE divided by growth plus dividend works better than PEG,as NZ companies pay high dividends.
What works for you Beagle do it,but I much prefer to follow Jim Slater's "The Zulu Principle",as it has had a proven record of success since it was published in 1992.
"It really works."

[dabsman]

As expected I totally disagree.
No surprises there.!!
I must admit for NZ investors PEGD, ie PE divided by growth plus dividend works better than PEG,as NZ companies pay high dividends.
What works for you Beagle do it,but I much prefer to follow Jim Slater's "The Zulu Principle",as it has had a proven record of success since it was published in 1992.
"It really works."

Sorry to be a idiot percy but what you are saying is you become an expert in one or two areas and you don't deviate?

[percy]

Sorry to be a idiot percy but what you are saying is you become an expert in one or two areas and you don't deviate?

No not at all,however the greatest successes I have had investing came from following Jim Slater's advice.
I do not invest in companies or sectors I do not understand,and nowdays I place a lot of importance on dividend growth.
The book really was a game changer for me.
Interestingly enough, Jim's son Mark 's, "Slater Growth Fund" is using "The Zulu Principle" to achieve outstanding results.
It really works.Try it .

[Beagle]

No not at all,however the greatest successes I have had investing came from following Jim Slater's advice.
I do not invest in companies or sectors I do not understand,and nowdays I place a lot of importance on dividend growth.
The book really was a game changer for me.
Interestingly enough, Jim's son Mark 's, "Slater Growth Fund" is using "The Zulu Principle" to achieve outstanding results.
It really works.Try it .

Very good approach for retired folk. You retired now I take it Percy or still enjoying the school books thing ?