HGH - Heartland Group Holdings

[Harvey Specter]

I'd speculate they've lent >$100m through Harmoney now and what's the bet the loan collection process and delinquency rate is anything but harmonious

Pretty sure the whole platform is under $100m (which was their 12m target) so I think you are way off!

NBR paywall: http://www.nbr.co.nz/article/harmone...ck-cs-p-176109

In the 11 months since starting up, Harmoney has lent more than $85 million, he says. Harmoney had previously committed to lend $100 million in its first year.

I think that 11 months doesn't refer to their financial year end as they only started loans in August (?)

[Beagle]

Well there's also all their new unsecured consumer lending through their own www.ifinance.co.nz site too. Have you heard their radio advertisements targeting existing customers of Noel Leeming and Harvey Norman who haven't paid off their latest consumer gadget within the interest free period. People who buy the latest gadget on interest free terms and make the minimum payments such that their gadget that's almost worthless 36 months later but still isn't paid off don't strike me as having the most credit worthy profile and yet that's exactly the type of consumer HNZ is targeting with their unsecured loans ! Bank or really nothing more than a finance company "in drag" ?, you folks decide for yourselves.

[Hoop]

Hoop, I gave up on this flag poke thing

Yes a pretty flag pole and flag shown recently. But to form a new pattern wouldn't the flag pole need a pretty quick spurt up to 160?

I don't think that will happen ..so gave the hope of a new flag pole away.

Reverted to the I sees nothin, nothin approach ....especially useful with rose tinted glasses

Logic Question... Why did you buy rose tinted glasses in the first place .
Re : flagpole and flag
A bullish pattern is one with a better probability of breaking upwards than downwards..If you look at my chart there's a big risk that the flag break could be downwards not up. It's broken down at the moment but within the margin of error... Remember with limit boundary patterns the price trades within it reaching the boundaries at both ends...during a very long pattern as this HNZ pattern is you can watch for warning signs..On my chart there is a warning sign where the previous high point did not reach the top boundary of the pattern it failed creating a possible bottom breakout warning. On the positive side there is however a solid support line at 1.12 (confirmed on the HNZ depth table)..so at 114 /115 trading today this flag break thing may be a mirage as the price may still be within the margin of error of the flag.

HNZ flagpole flag pattern has lasted too long (normally a few weeks) Bulkowski is more pessimistic about overtimed patterns therefore HNZ flag pattern would not meet the criteria as a flag pattern in his statistical analysis....so for HNZ flag pattern we don't know the probabilities...

Edit....Spurting up to 160?.....tight flag patterns with upward breakouts reach 40%, 50% of the time..loose flags patterns Average rise 23% but only 54% break upwards above the flag pattern....HNZ with looser than that guidelines would probability be a bit less but still be classed as a bullish pattern ....not great odds, not terrible neither.

What would be the chances of this rise happening to a BBB Fitch rated NZ Bank in these present economic times??

Investment grade

• AAA : the best quality companies, reliable and stable
• AA : quality companies, a bit higher risk than AAA
• A : economic situation can affect finance
• BBB : medium class companies, which are satisfactory at the moment

Non-investment grade

• BB : more prone to changes in the economy
• B : financial situation varies noticeably
• CCC : currently vulnerable and dependent on favorable economic conditions to meet its commitments
• CC : highly vulnerable, very speculative bonds
• C : highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
• D : has defaulted on obligations and Fitch believes that it will generally default on most or all obligations
• NR : not publicly rated

[Joshuatree]

Good updated research from CRAIGS on Heartland today.
Upgrade to BUY
Exposure to dairy re only 7%. Downside risk real impact overplayed
FY16CETI forecast of 12.3%
Attractive DPS yields ,net +6% are sustainable etc etc.

Good solid research amongst all the"noise" on here.

[Harvey Specter]

Good updated research from CRAIGS on Heartland today.
Upgrade to BUY

Target price?

[winner69]

Good updated research from CRAIGS on Heartland today.
Upgrade to BUY
Exposure to dairy re only 7%. Downside risk real impact overplayed
FY16CETI forecast of 12.3%
Attractive DPS yields ,net +6% are sustainable etc etc.

Good solid research amongst all the"noise" on here.

Please Joshua, what's CETI

[percy]

Good updated research from CRAIGS on Heartland today.
Upgrade to BUY
Exposure to dairy re only 7%. Downside risk real impact overplayed
FY16CETI forecast of 12.3%
Attractive DPS yields ,net +6% are sustainable etc etc.

Good solid research amongst all the"noise" on here.

HNZ's exposure to dairying is less than half the other banks 15%.......
Michael Jonas is not being replaced.
Target price $1.30 which is half way between my $1,25 and $1.35 value.
Confirms what Xerof and I have been posting.

[macduffy]

HNZ's exposure to dairying is less than half the other banks 15%.......
Michael Jonas is not being replaced.
Target price $1.30 which is half way between my $1,25 and $1.35 value.
Confirms what Xerof and I have been posting.

As other banks' NZ business is about 10% of their total, their exposure to NZ dairying, while much bigger in absolute dollar terms, is about 1.5% of their total business. (15% of the 10%).

[Baa_Baa]

HNZ's exposure to dairying is less than half the other banks 15%.......
Michael Jonas is not being replaced.
... snip

Are those two facts also in the Craigs research percy? If not where can I verify them please.
TIA.

[Beagle]

As other banks' NZ business is about 10% of their total, their exposure to NZ dairying, while much bigger in absolute dollar terms, is about 1.5% of their total business. (15% of the 10%).

Exactly and the vast majority of that's secured by first registered mortgage security over farmland and buildings which have held up in value quite well.

OTOH an awful lot of HNZ's lending to the dairy sector 7% of circa $3b = $210m is secured only by way of the herd itself, (which could prove awfully hard to liquidate in a complete dairy meltdown), as they're big on stock financing and sharemilker financing. If a significant percentage of that herd financing goes pear shaped then watch out for a major impact on FY16 and FY17 earnings.

I wonder if Craigs have actually bothered to differentiate between the two different types of dairy lending and their relative risk profile ?