HGH - Heartland Group Holdings

[iceman]

I just discovered it makes a difference HNZ or HBL, HBL shows sales history, HNZ doesn't.

Blocky needs to get with the latest tickers !

Yes this was a strange one. It did update automatically in the Portfolio but not on the Watchlist. So after deleting HNZ from Watchlist and entering HBL, all is honky dory

[winner69]

Heartland says "Key drivers of growth for Heartland are GDP and employment"

Great news then

@ANZ_cambagrie: Bumper December Truckometer (Heavy Traffic Index +2.6%) suggests NZ Q4 GDP may be well north of 1% q/q. https://t.co/n896N2egcY

Heartland share price bit slack of late

If Jeff right about what drives heartland profit they should be rolling in it.

C'mon boys - get things firing on all cylinders

[kizame]

Heartland says "Key drivers of growth for Heartland are GDP and employment"

Great news then

@ANZ_cambagrie: Bumper December Truckometer (Heavy Traffic Index +2.6%) suggests NZ Q4 GDP may be well north of 1% q/q. https://t.co/n896N2egcY

Heartland share price bit slack of late

If Jeff right about what drives heartland profit they should be rolling in it.

C'mon boys - get things firing on all cylinders

Calm down winner, share price is a bit slack of late cos of the markets,crikey you expect a bit much mate.And in fact the shareprice has held up pretty well considering.
I'm sure they feel your pressure to perform and will follow with a great result.

[Jantar]

Join the dots for me please percy. I don't want a share reduction or the cash.I will have to pay my broker to get back to my same holding; whats the point??? Thanks in advance.

I have been trying to see whether it is worth increasing my holding before the share buy back or after. At the SHM it was shown that the value of shares would not change, just the number that one would hold. There is quite a bit of information not given that will require some assumptions, but I have done a quick analysis to see what might happen to the share price after the buy back.

The asumptions I have made are:
The tier 2 capital raising will achieve the full oversubscription of $75M
The interest payable will be 5% and that interest will be tax deductible for NPAT calcs
Issued shares will increase prior to buyback in line with the DRP on a similar ratio to the previous year.
NTA (per share) for 2016 will increase due to the retained earnings from 2015
Without the Tier 2 capital the 2016 NPAT would have been close to $53M

The results I obtained are

	2015		2016
			Buyback
Shares issued	473646830		437308000
Tier 2			$75M
Reduce NPAT by			$2.8M
NPAT	48		50
NTA	0.895		0.923
EPS	0.103		0.114
Div	0.075		0.085

This suggests that the share price is likely to increase from my assumed $1.30 to $1.47 by the end of FY 2016

[winner69]

I have been trying to see whether it is worth increasing my holding before the share buy back or after. At the SHM it was shown that the value of shares would not change, just the number that one would hold. There is quite a bit of information not given that will require some assumptions, but I have done a quick analysis to see what might happen to the share price after the buy back.

The asumptions I have made are:
The tier 2 capital raising will achieve the full oversubscription of $75M
The interest payable will be 5% and that interest will be tax deductible for NPAT calcs
Issued shares will increase prior to buyback in line with the DRP on a similar ratio to the previous year.
NTA (per share) for 2016 will increase due to the retained earnings from 2015
Without the Tier 2 capital the 2016 NPAT would have been close to $53M

The results I obtained are

	2015		2016
			Buyback
Shares issued	473646830		437308000
Tier 2			$75M
Reduce NPAT by			$2.8M
NPAT	48		50
NTA	0.895		0.923
EPS	0.103		0.114
Div	0.075		0.085

This suggests that the share price is likely to increase from my assumed $1.30 to $1.47 by the end of FY 2016

In theory you are correct - based on your assumption that the PE ratio stays the same. (Higher eps at same PE = higher share price)

But also in theory the PE should reduce because of the new capital (bonds) from an shareholders perspective their investment is more risky.


In practice the answer will likely be somewhere in between .....but we'll never know what the answer is because other things (maybe a profit upgrade) will always happen.

If you are convinced of your workings shouldn't you buy before the buy-back because the price might 'adjust' quickly .....but then again the impact of the buyback might already be factored into today's price (as per one of Rogers post shortly after the buy back was announced)

[Jantar]

..... If you are convinced of your workings shouldn't you buy before the buy-back because the price might 'adjust' quickly .....but then again the impact of the buyback might already be factored into today's price (as per one of Rogers post shortly after the buy back was announced)

That is also what I conclude. Better to buy before rather than after.

[Harvey Specter]

The value will be the same before and after because the market will have/has factored it in. If there was an arbitrage, as you are trying to work out, someone with more time and money on their hands would have already figured it out, traded it and removed the arbitrage (assumes fully efficient markets which isn't the case).

[Jantar]

The value will be the same before and after because the market will have/has factored it in. If there was an arbitrage, as you are trying to work out, someone with more time and money on their hands would have already figured it out, traded it and removed the arbitrage (assumes fully efficient markets which isn't the case).

Just my opinion, but I don't think it could be fully factored in until after the interim dividend is announced.

Even if you are correct, and it has already been fully factored in then it would still be better to buy before rather than after in order to get the full impact of the interim dividend and the tax free buy back.

[winner69]

Heartland says "Key drivers of growth for Heartland are GDP and employment"

Great news then -

New Zealand workers became more optimistic about their job prospects in the December quarter, with employees feeling more secure and expecting future pay rises.

Should ave led to more consumer borrowing

I be very disappointed if Heartland doesn't raise the F16 guidance when H1 announced

Otherwise the guys have been taking it too easy and resting on their laurels

[kizame]

Heartland says "Key drivers of growth for Heartland are GDP and employment"

Great news then -

New Zealand workers became more optimistic about their job prospects in the December quarter, with employees feeling more secure and expecting future pay rises.

Should ave led to more consumer borrowing

I be very disappointed if Heartland doesn't raise the F16 guidance when H1 announced

Otherwise the guys have been taking it too easy and resting on their laurels

No they won't raise it. They are conservative and would have been able to see where the economy was headed short-medium term.
If I was them it would be far better to surprise on the upside than to try to quench your insatiable need for reassurance.

Resting on there Laurels? I don't think so.