HGH - Heartland Group Holdings

[Xerof]

1.22 low is filling the gap. Just need to squeeze the trigger a bit harder, or clean your nozzle of dry material

[Beagle]

Basically what I've been saying for many weeks now.
http://www.nzherald.co.nz/business/n...ectid=11460713

[percy]

I wonder about Fitch's comment about NZ banks having ample capacity to absorb impaired - loan levels similar to 2009-2010.Were they meaning NZ banks,or were they forgetting that the Australian banks need to shore up their capital?
Heartland with their "niche", "diversified" rural lending should not face the challenges the likes of the Australian Banks, such as BNZ ,whose rural exposure is mainly mortgage lending.

[noodles]

Basically what I've been saying for many weeks now.
http://www.nzherald.co.nz/business/n...ectid=11460713

The article is not all doom and gloom

"Fitch said farmers were well placed to withstand weaker prices because of the substantial cash payout by Fonterra from the record 2013-2014 season.Smaller payouts this season were widely anticipated following last year's drop in global dairy prices, and farmers have generally used last season's high prices and dividends to pay down debt or invest, Fitch said."
It also points out that 25% of farmers would experience negative cashflow.

But clearly there will be pain, but what is not clear or quantifiable is the impact on HNZ. For instance, how many farmers will actually go under? Of the 25% mentioned above, how many will be able to extend their existing mortgage facilities? How many will be able to get loans from family? Will the RBNZ lower the OCR and mortgage rates drop. How low will the currency fall with RBNZ drops rates? If in fact a HNZ loan does go into default, how much will the security (cows or equipment) be worth when HNZ repossess?

Even after all these unknowns, rural lending only represents 17% of the HNZ loan book. And not all of that is dairy!

So even if the recent HNZ price weakness is due the dairy price, I think it is well and truly priced in.

[Baa_Baa]

The whole Banking sector has caught gravity, has had it for a few weeks. Some chart comparisons/overlays show in first few weeks there was only vague correlation with HNZ but as the Aussies/Kiwi banks began moving further down HNZ seems more tightly correlated. Perhaps HNZ may now be part of the broader de-risking going on in banking/finance generally? The HNZ daily price gap hasn't quite closed and it's correct, that HNZ showed fortitude when the big banks sold off Fri but the weekly chart tells a story with weekly 39EMA (approximates to the daily 200EMA) at around $1.20 now close at hand and below that some horizontal price support between $1.18 and $1.12, though the 200EMA traders would be out by then. Other chart indicators are weak/down and arguably not yet oversold. If the banking sector rout continues, HNZ may well drop with it. Thoughts?

Good day on the bourse today, Heartland didn't go down even though the Aussie banks took another pummelling.

That No More Gaps not working Xerof, what's up

[Joshuatree]

Im thinking you are right re "broader derisking going on in banking....etc"
ASX down 4.8% this week ; worst in 3 years; lead by the banks

[percy]

The whole Banking sector has caught gravity, has had it for a few weeks. Some chart comparisons/overlays show in first few weeks there was only vague correlation with HNZ but as the Aussies/Kiwi banks began moving further down HNZ seems more tightly correlated. Perhaps HNZ may now be part of the broader de-risking going on in banking/finance generally? The HNZ daily price gap hasn't quite closed and it's correct, that HNZ showed fortitude when the big banks sold off Fri but the weekly chart tells a story with weekly 39EMA (approximates to the daily 200EMA) at around $1.20 now close at hand and below that some horizontal price support between $1.18 and $1.12, though the 200EMA traders would be out by then. Other chart indicators are weak/down and arguably not yet oversold. If the banking sector rout continues, HNZ may well drop with it. Thoughts?

I think the market reacts to results.Should earnings meet or exceed management's and analysts projections,the share price usually goes up.Should the earnings be lower than expected the share price goes down.
Once we have Heartland's result in late August we can work out the ratios, ROE,EPS, PE,dividend,provisions, and hopefully we can get some idea of projected growth.
At this time I think we will see that Heartland are in better shape than the Australian banks,with better growth prospects,so I expect they will be rated differently.[positively].
We should note two weeks ago Heartland had 9 months trading under their belt and said they should be at the top end of their forecast.
The Australian Banks have shown remarkable strength,a huge capacity to grow and pay increasing dividends.They bounce back.
In 1991 Westpac had huge loses on commercial property.At one stage it looked like Kerry Packer would take them over at under $4.On Friday they were down to $31.19,so someone who brought in 1991 would be up 732% plus they would have enjoyed lovely dividends.
From 1991 the others were up as follows [does not include dividends] ANZ 917%,CBA 1076% and NAB 671%.

[percy]

On 21st May Heartland announced their 9month result to 31st March.
So from 31st March to 21st May they had another 6 weeks trading.They would have had a fair idea how those 6 weeks had gone.Had they not gone well you would not announce expects;" npat to be upper end"!
Heartland's year ends 31st June.So from 21st May to end of June they had to guess how the next 6 weeks would go.
I would think that would have been a piece of cake.
I therefore think all the headlines of doom have been overdone as far as Heartland are concerned.

[winner69]

On 21st May Heartland announced their 9month result to 31st March.
So from 31st March to 21st May they had another 6 weeks trading.They would have had a fair idea how those 6 weeks had gone.Had they not gone well you would not announce expects;" npat to be upper end"!
Heartland's year ends 31st June.So from 21st May to end of June they had to guess how the next 6 weeks would go.
I would think that would have been a piece of cake.
I therefore think all the headlines of doom have been overdone as far as Heartland are concerned.

Spot on Percy, you are so so right.


So NPAT will be $47.0m to $47.9m. Nothing more, nothing less. Anything more they haven't really been upfront and telling porkies. So close to the end of the year they already knew the answer within a few bucks.

I think Roger highlighting dairy lending is relevant. He is not saying it might hurt heartland this year but has a genuine concern about the next year or so. Things slowly get worse.

I think taking the associated risks into account is wise. Ignoring the potential risk and not assessing its impact is folly. Your assessment no doubt will differ from Rogers

[winner69]

Doesn't heartland only use Fitch as its rating agency? They sacked the other one I think.

Methinks those comments from Fitch is a veiled warning to the likes of Heartland, probably reinforcing 'publicly' what has been said in private.