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  1. #7781
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    Quote Originally Posted by Arbroath View Post
    - the equation to consider is overall loan quality across the book keeping in mind the NIM is 4%+. Heartland should suffer higher loan write-offs than the main banks due to the nature of there lending book. All of this can be factored into the price one pays for the stock. My personal opinion is $1.20 or thereabouts compensates for the risks around loan quality given their capital position and profit generating ability.
    I think this is the right way to look at things Arbroath.

    Some here think my presence on this thread is to cut down Heartland at every announcement. But actually I am trying to get a good measure on any announcement hype. Then once I get a value on the hype, I can make an adjustment to the declared profit numbers. Once I have a measure of "Snoopy adjusted underlying profit" (SAUP), then I can make a decision on the value of an investment in Heartland at this time. You say that $1.20 is a sufficient discount to compensate for all the risks, and this is your considered view. Fair enough.

    My measure of 'profit overhype' , I measure from the difference between the 'impaired asset expense' and the 'loans written off' over a longer period. We have representative results for four years or so now.

    'Total impaired asset expense' - 'Total loans written off'

    = $37.338m - $51.819m = -$14.481m over 4.5 years (pre tax)

    This represents an annual profit adjustment of:

    -$14.481m / 4.5 = -$3.218m /year (pre tax)

    Post tax this will reduce NPAT by

    -$3.218m x 0.72= -$2.317m per year

    So at last we are in a position to look at the Heartland 'SAUP"!

    SNOOPY
    Last edited by Snoopy; 23-06-2016 at 04:51 PM.
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  2. #7782
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    Default S A U P (Saup)

    Quote Originally Posted by Snoopy View Post
    So at last we are in a position to look at the Heartland 'SAUP"!
    FY2012 FY2013 FY2014 FY2015 FY2016(f)
    NPAT (Heartland Adjusted) $14.006m $24.408m $36.039m $48.163m $55m
    Snoopy Additional Annual Impairment Adjustment -$2.317m -$2.317m -$2.317m -$2.317m -$2.317m
    Heartland SAUP $11.689m $22.181m $33.722m $45.846m $52.683m

    Note: Heartland's own adjusted profits from declared results are calculated as follows:

    2012: $22.606m - $9.6m = $14.006m
    2013: $6.912m + 0.72($18.0m+$6.1m+$0.2m) = $24.408m

    -----
    No. shares on issue 476.5m (5th April 2016)
    => Historical eps = $45.846m / 476.5m = 9.6cps

    Share price $1.26 (23rd June)
    => Historical PE valuation = 126/9.6 = 13.0
    ----

    ----
    No. shares on issue 476.5m (5th April 2016)
    => Forecast eps = $52.683m / 476.5m = 11.0cps

    Share price $1.26 (23rd June)
    => Forecast PE valuation = 126/11.0 = 11.4
    ----

    In this current market that $1.26 closing price looks about right. Not cheap but neither is it expensive.

    I like to buy banks on a PE of about 10. So my target investment price for Heartland is around $1.10. Personally, I am not interested in investment above that price level. But if I held already, I probably wouldn't sell at $1.26.

    SNOOPY
    Last edited by Snoopy; 05-05-2017 at 01:57 PM.
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  3. #7783
    percy
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    [QUOTE=Snoopy;625664].

    Some here think my presence on this thread is to cut down Heartland at every announcement.

    Well Snoopy go back over 4 years,and history would show people who thought that were right..
    HNZ will not get a banking licence.
    HNZ do not have enough capital.
    HNZ will need to raise capital.
    HNZ will not realise the legacy property.
    HNZ will not be able to pay dividends.
    The list goes on and on.
    We have been lucky to have had posters such as Sparky the Clown,and Paper Tiger to correct your mistakes.You have wasted a lot of their time.
    In the meantime Heartland Bank keep delivering on what they say they will do.
    Last edited by percy; 23-06-2016 at 05:37 PM.

  4. #7784
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    Quote Originally Posted by percy View Post
    Snoopy wrote:
    "Some here think my presence on this thread is to cut down Heartland at every announcement."

    Well Snoopy go back over 4 years,and history would show people who thought that were right..
    HNZ will not get a banking licence.
    I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!

    HNZ do not have enough capital.
    HNZ will need to raise capital.
    HNZ will not realise the legacy property.
    The above three are tied together. That Heartland were able to reduce their non core property portfolio so well was due to the rampant property market. If the property market had not gone so well, they may have indeed needed more capital.

    HNZ will not be able to pay dividends.
    If you are raising capital, it does not make sense to pay taxable dividends at the same time. I think all my comments made sense in context at the time I wrote them.

    SNOOPY
    Last edited by Snoopy; 23-06-2016 at 05:46 PM.
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  5. #7785
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    Quote Originally Posted by Snoopy View Post
    I am still puzzled by the timing of the issuing of Heartland's bank licence. Because reserve bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his in try and just signed them off.

    You must be in high if you think like that?

  6. #7786
    percy
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    Quote Originally Posted by Snoopy View Post
    I think all my comments made sense in context at the time I wrote them.

    SNOOPY
    They never made sense to me. lol.

  7. #7787
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    I was sitting in front of the Corona late one balmy evening , picking my nose , just kicking the sh?t around; having just completed reading the last chapter of the “Never Ending Story”, Snoopy’s latest Tome about the famous in New Ziland little Heartland Bank.
    When a thought occured , is this a glass half full scenario? No came the reply , the glass is only half full because you keep topping it up with whisky , it’s really leaking like a sieve , just like that worm eaten hulk you call a boat.
    Yeah, what can I say, what with the downturn in pirating it does’nt pay as well as it used to and to earn a mouldy crust I had to turn my hand to something/no anything else????????
    Whilst glancing at the latest Wormwood Scrubs Digest, I spied thru the monocle over my good eyepatch a tasty little position available for a freelance journalist at the local office of the esteemed “Shaggers Gazette” .
    Aha, that’s the post for a man of my many unaccomplished talents I thought. So to make a short story long, here I sit reviewing Snoopy’s new unabridged pecial collectors/investors wordy masterpiece what he has writ the “Never Ending Story” for that well respected pillar of modern literary publishing the “Shaggers Gazette”.
    Bloody good mate, wildly inaccurate but filled with spicy innuendo, meatballs and lashings of gravy and bacon, jargonistic/hedonistic claptrap but brilliantly conceived and executed all the same and sure to be another best seller and favorite at the little Heartland Bank Xmas barbeque and I’m sure a shoo in for a Pulitzer/book club daily award.
    So there you have it Snoopy, well done , just don’t let this high praise go to your head, or anywhere else on your personage. And don’t spend all of the $5 voucher on booze and broads.


    NEWSFLASH SNOOPY WINS BOOK OF THE DAY PRIZE

  8. #7788
    percy
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    [QUOTE=Snoopy;625669]I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!

    Heartland had been negotiating with The Reserve Bank for a considerable time.They knew what The Reserve Bank required from them.They were audited and audited and audited to make sure they complied with everything The Reserve Bank required of them.
    They announced they were applying for a bank licence. I believe the way it works is you don't apply until The Reserve Bank tells you.
    Heartland Chairman told shareholders at the agm they had applied for it and would get.I posted this information at the time,you may recall.
    Your comments on Graeme Wheeler "just signing a pile of papers" don't make your story any more convincing.?

  9. #7789
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    [QUOTE=percy;625682]
    Quote Originally Posted by Snoopy View Post
    I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!

    Heartland had been negotiating with The Reserve Bank for a considerable time.They knew what The Reserve Bank required from them.They were audited and audited and audited to make sure they complied with everything The Reserve Bank required of them.
    They announced they were applying for a bank licence. I believe the way it works is you don't apply until The Reserve Bank tells you.
    Heartland Chairman told shareholders at the agm they had applied for it and would get.I posted this information at the time,you may recall.
    Your comments on Graeme Wheeler "just signing a pile of papers" don't make your story any more convincing.?
    Percy I appreciate your stamina with this debate. But I think people making comments like Snoopy has above should be directed a long way back on this thread to try to understand it better. But hang on, he was already commenting on it back then !!! It is not what we should be discussing today with Heartland. I'm more interested in whether we will get MTF or not or Heartland Directors down the track have been right to stick to their published view of not paying too much for any acquisitions

  10. #7790
    percy
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    [QUOTE=iceman;625684]
    Quote Originally Posted by percy View Post

    Percy I appreciate your stamina with this debate. But I think people making comments like Snoopy has above should be directed a long way back on this thread to try to understand it better. But hang on, he was already commenting on it back then !!! It is not what we should be discussing today with Heartland. I'm more interested in whether we will get MTF or not or Heartland Directors down the track have been right to stick to their published view of not paying too much for any acquisitions
    In post # 7797 Snoopy said,"Some here think my presence on this thread is to cut down Heartland at every announcement."
    I only pointed out that history over the past 4 years would confirm that this was in fact the case,and gave some examples.
    As far as MTF is concerned Heartland have been turned down because they are not prepared to pay too much.So as always they are doing what they say they will do.
    Last edited by percy; 24-06-2016 at 06:22 AM.

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