HGH - Heartland Group Holdings

[percy]

Became a holder today at 85c. Decided i'm a long term holder not a trader so moved my trading funds 50-50 between HNZ and SUM.

Looks to me as though you are "well positioned."
No need to trade HNZ or SUM.

[SCOTTY]

The financial statistics as published in the daily papers make their calculations for earnings per share (eps) and price earnings ratios (pe's) based on net profit after tax. For the last tax year as we know, HNZ wrote off some $18m. Because of this the financials show eps as 1.78c giving a current pe of some 47. For the general public who do not follow the company or who rely only on this information only, this does not look good. For those of us who follow the company this is not a problem as we understand that the earning before the writedown were some $24m. We are looking ahead to next year when without further writedowns and increased earnings, the published statistics will look very attractive to the general public.

In the meantime I see this as a buying opportunity.

[iceman]

The financial statistics as published in the daily papers make their calculations for earnings per share (eps) and price earnings ratios (pe's) based on net profit after tax. For the last tax year as we know, HNZ wrote off some $18m. Because of this the financials show eps as 1.78c giving a current pe of some 47. For the general public who do not follow the company or who rely only on this information only, this does not look good. For those of us who follow the company this is not a problem as we understand that the earning before the writedown were some $24m. We are looking ahead to next year when without further writedowns and increased earnings, the published statistics will look very attractive to the general public.

In the meantime I see this as a buying opportunity.

That's right Scotty. When we record our full year 9-10 cps earnings for the current year, the statistics will indeed look very different. HNZ is without a doubt in my mind, a very cheap stock where we can expect both good dividends and good capital gain in the near/medium future.

Discl: accumulating

[vorno]

Became a holder today at 85c. Decided i'm a long term holder not a trader so moved my trading funds 50-50 between HNZ and SUM.

I too have become a HNZ holder today

[Dej]

still waiting for my buy order of 84 cps to be filled.

Same here!

[percy]

still waiting for my buy order of 84 cps to be filled.

Maybe not today as only 19,000 for sale at 86cents and 240,593 wanted at 85cents.
Perhaps tomorrow?

[percy]

You'd be right Snoopy. The "formation" documents of many "conservative" funds would keep them out of this company.

Still most fund managers have "aggressive" or "growth" funds that would allow a dabble. Maybe a smaller overall weighting of the fund tho. It might account for some lack of enthusiasm but not as much as we're seeing.

NZ Central Securities Depository Ltd., are the holders of 72,744,916 or 18.7147% of Heartland shares.
So some "aggressive" or "growth" funds are indeed holders.
Expect their enthusiasm to develope with more "runs on the board."

[vorno]

It did dip down to 84 today but not enough traded to complete my order.

The stock is a sleepy undiscovered opportunity at these levels.

Currently with a .85 Buy - 245,593 & .86 Sell - 13,000 I imagine that the price could very well increase again today.
Seems to be quite a slow-moving stock this early in the game

UPDATE: Only 9,500 at .86 Sell now.. hehe

[Snoopy]

There is an interesting article in the "Press" Business Day section today; C21 - A Brokers View. The article by Grant Davies was looking at Westpac and ANZ Banks. Although these two banks operate in different markets to Heartland the thing that caught my attention is the 15.3% return on equity for ANZ and 16% for Westpac.

The problem with this comparison is that the amount of lending a bank can do is related to their tier one capital of which shareholders equity is one component. In the case of Heartland they only have shareholders equity (be it subscribed or retained earnings). ANZ and WBC have other sources of tier 1 capital such as bank issued bonds with long maturity dates locked in.

If you compared 'Return on tier 1 capital' you will probably find that ANZ and WBC do not compare as favourably with Heartland as a bare 'ROE' comparison might suggest.

SNOOPY

[winner69]

That why roe bad metric for banks .....leverage clouds the issue

But bank execs love it when their huge bonuses tied to roe .....just go out and borrow more and do some risky lending and hey presto roe shoots up ....and bonuses as well