HGH - Heartland Group Holdings

[Snoopy]

Blocky has $150k in the bank, have been saying to myself for 6 months I should have it owning the bank, perhaps I change today. Then have to provide the same explanation as Fish, he survived so I guess I might too

Take care Blocky. Unfortunately you can no longer buy Heartland Bank directly. You have to buy something called 'Heartland Group Holdings' (HGH) which owns Heartland Bank. And the reason for the creation of HGH? because the Australian Reverse Mortgage portfolio was going to become a problem for the NZ banking regulators, and so Heartland decided to place these loans outside the of their banking group structure.

The situation is that Reverse Mortgages over a period of 6-8 years are funded by banking arrangements in Australia and directly issued Heartland Australian bonds on 1-3 year terms. IOW there is a mismatch in the timing of funding and providing loans. This isn't a problem provided funding continues to be available and confidence in 'Seniors Australia' remains high. But confidences can change. And HGH could potentially be left in a very difficult position. Heartland management are not fools and I suspect that steps are underway behind the scenes to correct this mismatch. Yet while the mismatch exists such investments are not in any way risk free. It was a similar mismatch of funding and maturity that precipitated the demise of the once highly respected South Canterbury Finance (SCF) a decade ago. Not saying HGH will following the SCF path. But you have to be awake to that possibility when you invest in HGH.

It looks to me like HGH is currently 'priced to perfection', with nothing able to go wrong. I will leave it to you if you think that provides a good entry point.

SNOOPY

discl: a slightly nervous HGH holder

[blockhead]

Appreciated, its hard to come by, don't want to be diminishing it

[Beagle]

It looks to me like HGH is currently 'priced to perfection', with nothing able to go wrong. I will leave it to you if you think that provides a good entry point.

SNOOPY

discl: a slightly nervous HGH holder

Well my Beagle friend having seen your recent posts on MET and the retirement sector generally and this one I am starting to worry that your nose for a feed isn't working properly. Maybe its time for a visit to the Vet ?

Mid point of forecast for FY20 is $78.5m and on 577.47m shares that's eps forecast of 13.59 cps which at $1.85 = forward PE of 13.61.
Over the last 5 years Heartland's forward PE has ranged from 11 (dirt cheap) to 17.5 (priced for perfection) with a mid point of 14.25.

I think its a hold at present and slightly under fair value and note from a technical perspective its in a nice uptrend. I see no reason to be slightly nervous whatsoever which is why I topped up on Tuesday. 7.5% gross dividend yield > 1.6% in an HGH call account, the maths on that one is pretty simple

[value_investor]

Well my Beagle friend having seen your recent posts on MET and the retirement sector generally and this one I am starting to worry that your nose for a feed isn't working properly. Maybe its time for a visit to the Vet ?

Mid point of forecast for FY20 is $78.5m and on 577.47m shares that's eps forecast of 13.59 cps which at $1.85 = forward PE of 13.61.
Over the last 5 years Heartland's forward PE has ranged from 11 (dirt cheap) to 17.5 (priced for perfection) with a mid point of 14.25.

I think its a hold at present and slightly under fair value and note from a technical perspective its in a nice uptrend. I see no reason to be slightly nervous whatsoever which is why I topped up on Tuesday. 7.5% gross dividend yield > 1.6% in an HGH call account, the maths on that one is pretty simple

I like it at the current prices but not enough for me to top up at the moment. T There's not a lot for a value investor right now in the NZX at this moment.

[winner69]

Well my Beagle friend having seen your recent posts on MET and the retirement sector generally and this one I am starting to worry that your nose for a feed isn't working properly. Maybe its time for a visit to the Vet ?

Hope not to be euthanised ....we need Snoopy to keep us from getting over excited

[percy]

Hope not to be euthanised ....we need Snoopy to keep us from getting over excited

Perhaps he should read Chris Lee's book "The Billion Dollar Bonfire" to better understand how finance companies and banks work.
Then his posts may be worth reading.


ps.The book was well researched and well written.A must read.

[winner69]

Perhaps he should read Chris Lee's book "The Billion Dollar Bonfire" to better understand how finance companies and banks work.
Then his posts may be worth reading.


ps.The book was well researched and well written.A must read.

Maybe Snoopy has read too many books like Crashed by Adam Tooze and Why Banks Fail by Joseph Katie

[percy]

Maybe Snoopy has read too many books like Crashed by Adam Tooze and Why Banks Fail by Joseph Katie

That I very much doubt

[winner69]

That I very much doubt

Probably hasn’t read How To Analyze Bank Financial Statements: A concise practical guide for analysts and investors by Padberg Thomas

[percy]

Probably hasn’t read How To Analyze Bank Financial Statements: A concise practical guide for analysts and investors by Padberg Thomas

He has a great deal of reading to do..............lol.


ps.Don't think the Australian Banks/Insurance companies with rural exposure will be looking to flash with all the terrible fires.