HGH - Heartland Group Holdings

[Arbitrage]

Well CJ you will be pleased to see the price is touching 80c this morning so it is heading in the right direction. Didn't they say that a discount may be offered as a part of the scheme?

[CJ]

Well CJ you will be pleased to see the price is touching 80c this morning so it is heading in the right direction. Didn't they say that a discount may be offered as a part of the scheme?

Discount of no more than 5% from memory but non at this stage.

I assume a discount would only be offered if they need to retain cash so need to incentivise shareholders to sign up for DRP.

[JohnnyTheHorse]

I'm thinking about doing a trade here. Only thing holding me back right now is the slight lack of depth on the buyer side. Anyone serious traders have any thoughts?

[percy]

Note to self ... Shut up until you've bought!

That has to be the quote of the year.!!!!! lol.

[Minerbarejet]

Buy at 80

Way ahead of you moosie - first off the block- shook a few sellers out of their trees whoever took the big bite.

[JohnnyTheHorse]

Buy at 80

Hmm, not quite convinced of a breakout yet. That could change very soon though!

[Balance]

Hmm, not quite convinced of a breakout yet. That could change very soon though!

Must be a breakout because Snoopy has gone deadly quiet?

Better start loading up on PGW as well while he is busy keeping the sp down for you all to buy in?

[Snoopy]

Snoopy, allow me to summarize the opinions of those who are in HNZ:

1. Growth for growth's sake is a bit like drinking for the sake of getting drunk - nothing can come good from it, save for a sore head or a busted liver years later. Just as bad as buying stuff non-stop just because it is on sale.

Growth is about leveraging the real estate and the people, and about minimizing the average cost of each transaction. Having said that I am not concerned that Heartland did not grow their revenues year on year. IMO getting the chaff dealt with is the more important focus for management.

2. HNZ is doing it the right way - grow profitably and be patient. That is the correct strategy.

Agreed.

3. Capital is not an issue when you are profitable and demonstrate disciplined and profitable growth. There is unlimited capital available out there for banks when they show they are well managed and disciplined.

South Canterbury Finance and the other finance companies provide ample proof that growth (and size) are not everything.

I would take a different lesson from the South Canterbury Finance collapse. Even large lenders can face a capital crunch, and the market conditions that claimed South Canterbury finance have not moved on that much IMO. Pre GFC, there were plenty of finance companies that appeared highly profitable, yet shareholders still lost all of their money.

I would go as far as to say that for any finance outfit outside the big six banks, profit is largely irrelevant for the survival of the company. I don't care what profit HNZ makes or is projected to make. Until those bad loans are sorted out, HNZ is just too great a risk for me, although I accept others have a different risk reward balance. All I know is that I didn't lose any money in the finance company collapses (because I was out of that part of the market) and I don't intend to lose any money in finance companies (even those with bank stickers all over them) going forwards either.

As has been written before, you are missing the big picture, Snoopy, by nitpicking on numbers.

What you call nitpicking, I call preserving capital.

HNZ is on the move and there's plenty more potential ahead.

Agreed. There is also plenty of downside risk from principally property loans going bad. I realise that my escaping the 'bad' risk I also escape the 'good' risk. But that is the investment path I choose to take.

SNOOPY

[Snoopy]

my concern with Heartland is that a good number of those very lending people ex-SCF jumped across to HNZ, taking their client loans with them.

Putting your head out of the trench on this thread requires you to wear a helmet Xerof! At least someone else on this thread recognises the risks in HNZ though. I would hope that those SCF staff who have jumped to Heartland have learned their lessons. But given what has happened in the whole finance company sector, I see it as prudent to wait for more proof of this.

Not saying HNZ is a bad investment. Have never said that. One day I see myself on the share register. But not just yet....

SNOOPY

PS See you have pulled the post I quoted from already! It is tough in the trenches!

[Balance]

Putting your head out of the trench on this thread requires you to wear a helmet Xerof! At least someone else on this thread recognises the risks in HNZ though. I would hope that those SCF staff who have jumped to Heartland have learned their lessons. But given what has happened in the whole finance company sector, I see it as prudent to wait for more proof of this.

Not saying HNZ is a bad investment. Have never said that. One day I see myself on the share register. But not just yet....

SNOOPY

PS See you have pulled the post I quoted from already! It is tough in the trenches!

You have only missed out on 60% so far buying from George Kerr.

Buying now? I wouldn't buy now if I were you as your risk/reward equation getting in at this level is not same as getting in at 52 cents.

To each their own.