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  1. #13036
    percy
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    Quote Originally Posted by iceman View Post
    Heartland not in the running for UDC according to the AFR : https://www.interest.co.nz/banking/1...nts-are-duking

    Although I was happy for HGH to buy UDC at a reasonable earnings accretive price,I think it is good to see they will not pay more than than see as fair value.
    Pleasingly HGH has plenty of organic growth with RELS and O4B,using recycled funds from less profitable higher risk lending,ie business and rural relationships.
    So was UDC speculation built into HGH's share price.?
    Will UDC being sold at a high price see HGH's share price re-rated higher.?
    Last edited by percy; 22-02-2020 at 08:27 AM.

  2. #13037
    Dilettante
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    Quote Originally Posted by percy View Post
    Although I was happy for HGH to buy UDC at a reasonable earnings accretive price,I think it is good to see they will not pay more than than see as fair value.
    Pleasingly HGH has plenty of organic growth with RELS and O4B,using recycled funds from less profitable higher risk lending,ie business and rural relationships.
    So was UDC speculation built into HGH's share price.?
    Will UDC being sold at a high price see HGH's share price re-rated higher.?
    Hopefully it will go a bit lower. I sold half of mine 2 weeks ago as I did with HLG and some others, while I await the coronavirus economical threat to be completely over. Put the cash on 6 months fixed term so I can't touch it until then !! So happy for HGH to follow HLG a bit lower in the meantime :-)

  3. #13038
    ShareTrader Legend Beagle's Avatar
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    For my money, if the AFR report is true I am happy they are not in the running to buy UDC. They are growing organically at a strong pace already and this is not the time to be going out on a limb taking any sort of major risk with a big acquisition.
    No butts, hold no mutts, (unless they're the furry variety).

  4. #13039
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    Not holding shares in Heartland. But I do have a Term Deposit with them. Their systems dont seem to be as versatile and professional as the other banks. Lastly advertising up to $100k on business loans without security over your house, does worry me. In a downturn, just wonder how secure my TD would be. I think I will take it out at earliest opportunity. Mind you unsecured loans to get more interest. But really a bank? or a risky finance company. Not paying me enough interest for the risk.

  5. #13040
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    Quote Originally Posted by iceman View Post
    Hopefully it will go a bit lower. I sold half of mine 2 weeks ago as I did with HLG and some others, while I await the coronavirus economical threat to be completely over. Put the cash on 6 months fixed term so I can't touch it until then !! So happy for HGH to follow HLG a bit lower in the meantime :-)
    .

    that was a really good move.
    I only sold about a quarter of mine 2 weeks ago.
    Like Beagle I increased my holdings in January but was regretting doing so late in the month.
    Would appreciate hearing from Beagle or anyone else about the quality of all their loans and what will happen if there is a run on the money deposited.

  6. #13041
    ShareTrader Legend Beagle's Avatar
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    Hi Fish,

    HGH's capital ratio is significantly better than the Australian banks so I think this gives them a good buffer. That said I think on average they engage in more "finance company" type lending so they are possibly a bit more vulnerable in a major recession from losses associated with that lending.

    The open banking resolution is something that the Reserve Bank can impose to assist financial stability in times of great trouble.
    I am not concerned about money on deposit with them at this stage but in terms of the shares, banks typically do poorly in a recession so if that's what's coming then we can probably expect the shares to come under pressure.
    No butts, hold no mutts, (unless they're the furry variety).

  7. #13042
    Legend
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    Quote Originally Posted by Beagle View Post
    I "hounded" some more up first thing this morning at $1.87...the early dog gets the bone
    Looks like the early dog snatched the bone without checking how much meat was on it.

    Quote Originally Posted by Snoopy View Post
    Plugging in a representative yield of 7.5%, one that IMO represents an appropriate risk for the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation.

    (Representative Dividend per Share) / (Acceptable Gross Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )

    9.0c / (0.72 x 0.075) = $1.67

    A reminder here that NTA was

    ($687.600m - $72.159m) / 577.468m = $1.07 cps

    at the half year FY2020 balance date. This means my 'fair valuation' is at a good premium (+56%) to net tangible asset value.

    This $1.67 valuation is measured at the average point in the business cycle. My rule of thumb is that over the business cycle the actual share price will fluctuate between 80% and 120% of capitalised dividend fair value. This gives a target share price range for HGH of $1.34 to $2.00. $1.90, where the share is trading today, looks a ten cents or so above fair value. My target accumulation price (10% below fair value) is now $1.50. And yes I could add the upcoming 4.5c interim dividend onto that fair value.
    The capitalised dividend valuation saved me from going after the bone the other Beagle got.

    Back to my fair value range today. But the high $1.60s is still not cheap, even allowing for the upcoming dividend. Nevertheless it is now cheap enough for me to stay in the DRP, which I was on the point of pulling out from.

    Quote Originally Posted by jonu View Post
    Hasn't traded there since March 2019. What are the odds?
    Over the last few days, the odds of picking up a few at $1.50 in the next few weeks or months just got a lot better. If the market mood turns negative against second tier financers then 'fair value' can be undershot.

    SNOOPY
    Last edited by Snoopy; 26-02-2020 at 10:11 AM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  8. #13043
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Snoopy View Post
    Looks like the early dog snatched the bone without checking how much meat was on it.
    SNOOPY
    LOL Touché
    No butts, hold no mutts, (unless they're the furry variety).

  9. #13044
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    should be some cheap shares coming through via the DRP

  10. #13045
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by trader_jackson View Post
    should be some cheap shares coming through via the DRP
    Good point. Would make a nice silver-lining.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  11. #13046
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    Quote Originally Posted by trader_jackson View Post
    should be some cheap shares coming through via the DRP
    Agree. Visited Link marketservices´website today to make sure I´m signed up 100% !

  12. #13047
    ShareTrader Legend Beagle's Avatar
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    Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
    Times like this TA is your friend and just throw your FA analysis out the window, its useless.
    Last edited by Beagle; 29-02-2020 at 10:05 PM.
    No butts, hold no mutts, (unless they're the furry variety).

  13. #13048
    Dilettante
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    Quote Originally Posted by Beagle View Post
    Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
    Times like this TA is your friend and just throw your FA analysis out the window, its useless.
    I made my strategy decision 3 weeks ago with regard to HGH and other NZX investments and am sticking to it, unless something completely unexpected happens, which it has not done so far.
    I do note you were buying and wanting more only 10 days ago and now you have sold all.
    I do not think there is any one right strategy while we go through the COVID-19 effects on the markets and economies and we just all have to be content with our decisions and actions.
    This is a very fluid situation Worldwide. Since our "chat" the other day I am now potentially faced with 2-3 months extra time where I am now (you know where) , which is not ideal for self or family !! Them is the breaks !!
    Last edited by iceman; 29-02-2020 at 10:43 PM.

  14. #13049
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    Quote Originally Posted by Beagle View Post
    Finance companies and Banks don't do well in a bear market / recession. Clean break down through the 100 day MA, momentum is broken so I've sold out completely.
    Times like this TA is your friend and just throw your FA analysis out the window, its useless.
    Sorry to lose you from 'the team' Beagle. I'll be thinking of you earning 2% on your former Heartland Capital (in a Heartland call account no less!) while we shareholders earn a gross yield upward of 7% on our Heartland shares. Rest assured I will wait until Heartland recovers from any bear market / recession before I consider selling any of my HGH shares. If anything, I would suggest any bear market / recession is the time to top up your HGH holding before the next business cycle starts.

    Many consider the true messiah goes about under the initials 'JC'. But Heartland shareholders know the modern incarnation of the messiah goes about under the initials 'JG'. You need to learn to 'keep the faith' in 'our Jeff' Beagle. Good luck on the outside of the Heartland Temple.

    SNOOPY

    discl: Heartland shareholder looking to buy more.
    Last edited by Snoopy; 29-02-2020 at 11:03 PM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  15. #13050
    ShareTrader Legend Beagle's Avatar
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    Fair enough mate. The Covid 19 situation is very dynamic, fluid and fast moving situation and since we last chatted I have acted very quickly and decisively on a wide range of shares to get out of the way of what I believe is a bear market coming. See Bear market thread, my central theme is the market as a whole is highly likely to be significantly cheaper in 2-3 months time.

    You're much safer where you are than anywhere here.
    Last edited by Beagle; 29-02-2020 at 10:58 PM.
    No butts, hold no mutts, (unless they're the furry variety).

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