HGH - Heartland Group Holdings

[Wolf]

What amount of shares are people using for EPS 2014? I'm using 458,455,000 full amount of shares not sure what the weighted average is.

2013 Normalized eps of 6.3 gives a current PE of 14

At the current price with my estimates taken from guidance
35m for FY2014 would give HNZ eps of 7.6c putting it on a 2014 PE of 11.7
43m for FY2015 would give HNZ eps of 9.4c putting it on a 2015 PE of 9.5


With over 20% eps growth forecast i see HNZ as a growth stock warranting a fairly higher PE is there any broker reports/ anyone done some research on forecast into 2016 and beyond?

But at a PE of 14 which it has been trading on (normalised) 2013 i get a 2014 value of $1.07 and 2015 $1.31. And dividends...

HNZ is currently my favourite stock on the NZX. Market re rating could send this share alot higher, hopefully we get some more broker coverage.

Disc: Hold

[noodles]

What amount of shares are people using for EPS 2014? I'm using 458,455,000 full amount of shares not sure what the weighted average is.

This is my calculation:

Event	Date	Days	Shares	Shares used for calc
Opening	01/07/2013	0	388704000	388,704,000
div resinvest	04/10/2013	95	3850604	2,848,392
Partial fund	19/02/2014	233	17045455	6,164,384
SPP	25/03/2014	267	5854940	1,572,011
more HER	01/04/2014	274	43000000	10,720,548
DRP	04/04/2014	277	4811618	1,160,061
				411,169,396

[noodles]

At the current price with my estimates taken from guidance
35m for FY2014 would give HNZ eps of 7.6c putting it on a 2014 PE of 11.7
43m for FY2015 would give HNZ eps of 9.4c putting it on a 2015 PE of 9.5


With over 20% eps growth forecast i see HNZ as a growth stock warranting a fairly higher PE is there any broker reports/ anyone done some research on forecast into 2016 and beyond?

Using NZ First Capital Estimates:

Year	NPAT	eps
31/6/2014	35200	0.086
31/6/2015	41100	0.089

[winner69]

The old weighted average trick eh

Helps make things look better this year and next year... and probably help the eps accretive bit come true

Hey noodles one question .... when they come to pay out the next divie bet you they don't use the weighted average number

[noodles]

The old weighted average trick eh

Helps make things look better this year and next year... and probably help the eps accretive bit come true

Hey noodles one question .... when they come to pay out the next divie bet you they don't use the weighted average number

I think the acquisition was marginally eps accretive. Even if there is no uplift in eps, at least HER is another avenue for loan growth. Growth doesn't seem to be evident in other parts of the business.

[Snow Leopard]

The current number of shares on issue is 463,266,592 [NZX.COM]

I never bother with the weighted average stuff. Going forward the quantity of shares will not [generally] be less than the current count.

For me it is:
1/ Anything to worry about in the current accounts ?
2/ What is expected next year ?

I believe the current share price undervalues the company and thus it has more upside than downside potential.

Best Wishes
Paper Tiger

[percy]

Using NZ First Capital Estimates:

Year	NPAT	eps
31/6/2014	35200	0.086
31/6/2015	41100	0.089

Forbar research 3/4/2014
2014 year NPAT 35.8 mil ...eps 0.080
2015 year NPAT 45.2 mil...eps 0.099
they therefore expect eps growth of 12.5% from 2014 to 2015.
My own view is closer to NZ First Capital estimates.
Growth will be driven by Sentinel and any further acquisitions.
I look forward to management's guidance of future earnings.
Recently UDC announced a good result,so I am sure Heartland will do so as well.

[Harvey Specter]

With consumer/business confidence picking up there will be some growth ...

When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

[winner69]

When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

For all we know hey may reduce lending rates as well.

Maintain margin but be me more competitive?

I have no idea

[percy]

When you talk about growth, are you talk g about loan book size,, the margin they earn or both.

With the better credit rating, their cost of funds should reduce, giving them revenue growth (actually reduced expenses or net interest revenue), regardless of loan book growth. Does that sound right?

For me growth is earnings per share growth.
Heartland have been moving from low margin business [home loans] to higher margin loans [such as seasonal rural lending].
I agree the better credit rating will benefit them,however I think they have had access to cheaper funding since gaining the banking licence.
I am waiting for further guidance from the company,as there are too many variables for me to figure out growth.Those variables include rural lending [I have no idea how that is going,although I suspect with beef and sheep farmers also doing well Heartland will be doing well].Motor vehicles should be doing well with car sales at record levels.Business finance,I am not sure of. The big surprise could come from Sentinel,with pent up demand driving big growth.
I am inclined to look past the numbers,ie they are doing everything they said they would.The business is in great shape.This was confirmed by the S&P credit upgrade.I am sure Heartland will be working towards another upgrade.They talked at the last agm about acquisitions.I thought they may do one of about $25mil to $30mil from cash on hand,so I was over the moon with the Sentinel acquisition.As with most well run companies, the surprises tend to be on the upside.