HGH - Heartland Group Holdings

[Beagle]

I've been in this one long term, since it had the BSH ticker. It's been a great investment.
Rather than just take 1 quarter in this and last year, I prefer longer term view and looking back to say 2014 as an example, EPS has grown from 9c to 12c (expected), dividends from 6c to 8.5c and SP from 85c to 190c. Throughout, the company has done what they said they would do and are actively broadening the business in innovative ways, mostly online, without direct competition with the Big Four.
I see no reason at this stage to dampen my enthusiasm for HBL as a long term investment and core of my portfolio.

Good post and fair comment but just a couple of notes of caution might be appropriate for new investors buying at the current $1.90 price.
1. I kicked off my investment in HBL about that time at about 85 cps after the credit rating upgrade and despite sitting out two years when the dairy price collapse posed excessive perceived risks to me and missing 17 cps of the SP gain its been an extremely rewarding investment BUT...to be fair we have seen a substantial expansion of the HBL's PE over that timeframe and their PE now exceeds all the big Australian banks as well as Bendigo Bank (BEN) and Bank of Queensland (BOQ) and I think it could be unwise to predicate any further or new investment on an expectation that the PE ratio will continue to expand.
2. Dairy prices have been softening to a fair degree lately and I would hate to see the dairy industry come in for another crisis so soon after the last one as many farmers are already encumbered with substantial extra legacy debt issues from the last one.

Like any other business there are risks faced by this one. For what its worth I see the shares as fair - fully priced at the current level with future capital gains dependent on EPS growth.

[percy]

All this recent new money (more than $200m) to grow the loan book ......and no doubt make more money ......but guidance has remained unchanged since August 14th

Whose kidding who mate?

Jeff only does it to keep you happy W69...!!!.
Must admit I share Jeff's sense of humor....You bite every time..!!!

[McGinty]

I've been in this one long term, since it had the BSH ticker. It's been a great investment.
Rather than just take 1 quarter in this and last year, I prefer longer term view and looking back to say 2014 as an example, EPS has grown from 9c to 12c (expected), dividends from 6c to 8.5c and SP from 85c to 190c. Throughout, the company has done what they said they would do and are actively broadening the business in innovative ways, mostly online, without direct competition with the Big Four.
I see no reason at this stage to dampen my enthusiasm for HBL as a long term investment and core of my portfolio.

Agree with you on all counts there as I was holding from day 1 as well.
The company has executed on everything they have said and in my opinion is one of the better ones on the NZX. I'm just looking at the numbers, and they show me that EPS growth is between 3-4% on a rolling 12 month basis.

Plus looking ahead at the current forecast FY18 NPAT of $68m (upper range) and post Rights issue and DRP, total issued capital approx 564.7m shares (est).
We have FY18 EPS of 12.04cps (FY17 EPS was 11.76cps), so forecast EPS growth rate of 2.4%.

This is just how I choose to look at the HBL story, each to their own and I respect that :-)

[Beagle]

Agree with you on all counts there as I was holding from day 1 as well.
The company has executed on everything they have said and in my opinion is one of the better ones on the NZX. I'm just looking at the numbers, and they show me that EPS growth is between 3-4% on a rolling 12 month basis.

Plus looking ahead at the current forecast FY18 NPAT of $68m (upper range) and post Rights issue and DRP, total issued capital approx 564.7m shares (est).
We have FY18 EPS of 12.04cps (FY17 EPS was 11.76cps), so forecast EPS growth rate of 2.4%.

This is just how I choose to look at the HBL story, each to their own and I respect that :-)

And if we accept that your viewpoint has some validity, (and I do) that puts their EPS growth rate smack bang in the middle of the range of the major Aussie banks which are on a materially cheaper PE. FWIW I will continue to hold my moderate position and am happy to buy more at $1.70, not at $1.90.

[winner69]

Jeff only does it to keep you happy W69...!!!.
Must admit I share Jeff's sense of humor....You bite every time..!!!

Has to manage that bottom drawer money for a rainy day eh

[percy]

Has to manage that bottom drawer money for a rainy day eh

Would not expect anything else from a savvy banker,who along with his board, have a great deal of skin on the line.

[winner69]

Would not expect anything else from a savvy banker,who along with his board, have a great deal of skin on the line.

Pro-active provisioning is a wonderful thing.

[trader_jackson]

"Under the offer, eligible shareholders are entitled to subscribe for 1 new share for every 15 existing shares held, as at 5pm on Friday 17 November 2017, at an issue price of $1.70 per share"

Looks like I've got a just over a week to get back on board the "HBL bus, next stop: $2"

[Snow Leopard]

Been running my own figures and I can't see where the "strong" growth is.

Sure 12% growth sounds nice on the prior three month period (Q1 2017) but as any of us more experienced investors do, we dig down a little further to identify the only earnings figure that matters to us shareholders.....Earnings per share (EPS). Now this rights issue will be the fourth dilutionary event this calendar year (with the SPP and two DRP's) all of which have given the company addition funding to grow on behalf of the shareholders.

I'll share my figures to illustrate:

1st Qrt 2017, NPAT $14.3m on 485.47m shares, = EPS of 2.95c

1st Qrt 2018, NPAT $16m on 522.65m shares, = EPS of 3.06c

Actual prior calendar period EPS growth rate of 3.7%

As you can see this is a way away from a "strong" growth rate.

Plus this being the second capital raising this year, shareholders should ask themselves if they are now actually funding the company's growth out of their own pockets?

I like to work on a total returns basis which includes the dividends so for me it goes like this:

Last year EPS quarterly was $0.0297 on a fully diluted basis and this year eps is $0.0310 [or an increase of 4.42%].

I also on the basis of the DRiP I have 5.32% more shares ($0.035 div strike at $1.5939 & $0.055 div strike at $1.8004).

So my total EPS growth on that 1 share I held a year ago is 9.97%.

While the YoY figures is going to bounce around a bit that DRiP return is baked in.

Best Wishes
Paper Tiger

[janner]

I like to work on a total returns basis which includes the dividends so for me it goes like this:

Last year EPS quarterly was $0.0297 on a fully diluted basis and this year eps is $0.0310 [or an increase of 4.42%].

I also on the basis of the DRiP I have 5.32% more shares ($0.035 div strike at $1.5939 & $0.055 div strike at $1.8004).

So my total EPS growth on that 1 share I held a year ago is 9.97%.

While the YoY figures is going to bounce around a bit that DRiP return is baked in.

Best Wishes
Paper Tiger

My laymans way of looking at it..

A year ago $1.50 Yesterday $1.90 = + 26% . No foreseeable changes ....

Don't wear out too many pencils that way... I'm happy..