Heartland's npat growth rate over the years is interesting
Growth is consistently slowing
Spot the trend in the numbers below - almost has a A2 growth profile look to it
Heartland NPAT growth:
2013 74.3%
2014 47.5%
2015 33.3%
2016 12.9%
2017 12.2%
2018 11.0%
2019 9.0%
2020 7.2% on normalised $78.9m otherwise it would be negative
2021 6.5% forecast $84 midpoint
One needs to bear in mind that EPS growth is generally less than NPAT because of capital raises and DRIP
So growth not as flash as the hype makes it out to be - if share price gets to 15 times EPS than it would be on a PEG over 2 - some say that's quite a high PEG and indicates expensive and not good value.
I'm talking December 2021...think you're talking June 21 so there's some difference there.
No growth PE is about 12 in my book with 10 year Govt stock at ~ 1% so currently priced at 11.4 times FY21 earnings like its never going to grow in the future.
Looking at that track record of growth that doesn't seem plausible in any way so we both agree its cheap and likely headed north.
In terms of paying a forward PE of 15 with a track record of growth like that, I think that marks the company out as arguably the best GARP stock on the NZX, certainly a vastly better growth track record than any of the Aussie banks I follow and they're currently on a forward PE of ~ 16. Then there's the not so small matter of this paying fully imputed dividends and the Aussie banks offering partial or no imputation credits. Hmmm
Last edited by Beagle; 17-12-2020 at 10:01 AM.
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
Maybe I should not have mentioned A2 .......maybe tempting fate and preempting something
if only it had kept up 74.5% annual growth it had in 2013....its NPAT would now be about 86 times that of 2012. Back in March, 6.5% growth for 2021 would have seemed fantastic.
Occupied myself while looking at cricket last night by converting my old Heartland P/B chart into a PE one to see what PE Heartland has traded on over the years. Of course the P/B and PE charts are the same shape because they are inextricably linked.
For what it's with HGH's PE over the 5 years up to Feb 2010 has averaged 13.1 (so covid impact excluded. The longer term average is 12 something. Majority of the time it has ranged between 11 and 14.
As the market is a 'voting machine' the PE ratio gets way out of kilter at times. HGH was over hyped in 2017 and the inevitable happened - the share price collapsed and it's PE reverted to a point below the mean. And Covid stuffed things up and shareprice collapsed with it's PE but is recovering to it's (prob overshoot)
At recent average PE of 13.1 HGH would be about $1.85 (that's good) but maybe even overshoot past 2 bucks - definitely the time for those who don't buy and hold to sell
A PE of 13 odd ties in with what I have said about P/B ratio - they are inextricably linked, especially when you throw in ROE, payout %ages, growth rates and risk free rates into the study as finance gurus (academics?) love doing.
Sorry for the indulgence in posting such stuff but I found it interesting - pity Kohli got run out, he was going well but just shows you one never knows what can happen next.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Thanks for your post W69.
I found it very interesting.Good to know when HGH are over/under valued.
Thanks PERCY
By the way some the rata we planted a few years ago are flowering this year ......percy rata got flower buds so soon but snoopy rata no sign of flowers yet
Merry Christmas and happy new year to you and your family.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Occupied myself while looking at cricket last night by converting my old Heartland P/B chart into a PE one to see what PE Heartland has traded on over the years. Of course the P/B and PE charts are the same shape because they are inextricably linked.
For what it's with HGH's PE over the 5 years up to Feb 2010 has averaged 13.1 (so covid impact excluded. The longer term average is 12 something. Majority of the time it has ranged between 11 and 14.
As the market is a 'voting machine' the PE ratio gets way out of kilter at times. HGH was over hyped in 2017 and the inevitable happened - the share price collapsed and it's PE reverted to a point below the mean. And Covid stuffed things up and shareprice collapsed with it's PE but is recovering to it's (prob overshoot)
At recent average PE of 13.1 HGH would be about $1.85 (that's good) but maybe even overshoot past 2 bucks - definitely the time for those who don't buy and hold to sell
A PE of 13 odd ties in with what I have said about P/B ratio - they are inextricably linked, especially when you throw in ROE, payout %ages, growth rates and risk free rates into the study as finance gurus (academics?) love doing.
Sorry for the indulgence in posting such stuff but I found it interesting - pity Kohli got run out, he was going well but just shows you one never knows what can happen next.
Even if I don't agree with you its good you're basing your opinion on something unlike last time when you were ramping it for all you were worth saying it was worth $2.50
What you're suggesting is that this time when its hits $2.14 it will also be a sell. Not sure I agree but I will survey the landscape when it gets there in due course.
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
Occupied myself while looking at cricket last night by converting my old Heartland P/B chart into a PE one to see what PE Heartland has traded on over the years. Of course the P/B and PE charts are the same shape because they are inextricably linked.
For what it's with HGH's PE over the 5 years up to Feb 2010 has averaged 13.1 (so covid impact excluded. The longer term average is 12 something. Majority of the time it has ranged between 11 and 14.
As the market is a 'voting machine' the PE ratio gets way out of kilter at times. HGH was over hyped in 2017 and the inevitable happened - the share price collapsed and it's PE reverted to a point below the mean. And Covid stuffed things up and shareprice collapsed with it's PE but is recovering to it's (prob overshoot)
At recent average PE of 13.1 HGH would be about $1.85 (that's good) but maybe even overshoot past 2 bucks - definitely the time for those who don't buy and hold to sell
A PE of 13 odd ties in with what I have said about P/B ratio - they are inextricably linked, especially when you throw in ROE, payout %ages, growth rates and risk free rates into the study as finance gurus (academics?) love doing.
Sorry for the indulgence in posting such stuff but I found it interesting - pity Kohli got run out, he was going well but just shows you one never knows what can happen next.
Most equities around the world have P/E & Dividend yield ratios that change with adjustments in central bank interest rates, but curiously New Zealand equities don't seem to have had their earnings multiples repriced higher to what would be expected for such a large fall in central bank interest rates (and the reduced retail bank interest rates that follows).
With Interest rates below 1%, solid dividend paying companies should have yields around 3% (giving a 2% risk premium above the "risk free" bank deposit rate). The fact that many solid New Zealand companies are paying between 5%-9% forward dividend yields is mind blowing - they are absolutely screaming bargains.
Originally Posted by winner69
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