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26-02-2019, 11:16 AM
#12101
Originally Posted by percy
Well done.
I note Jeff has never sold any.
Thanks. Herdlicker and many of the AIR exec's should take notes.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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27-02-2019, 03:15 PM
#12102
Junior Member
Strong volumes again. Someone is buying.
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27-02-2019, 03:45 PM
#12103
Member
Originally Posted by Fred_Rubble
Strong volumes again. Someone is buying.
And someone is selling
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28-02-2019, 12:31 PM
#12104
Dividend Capitalised Valuation: The Data: FY2019 perspective
Year |
Dividends Paid 'per share' |
Significant Event During Year' |
FY2013 |
1.5cps(sp) + 2.0cps |
17th December 2012: Heartland becomes a bank |
FY2014 |
2.5cps + 2.5cps |
1st April 2014: Seniors 'Reverse Mortgage' Business Acquired |
|
|
FY2015 |
3.5cps + 3.0cps |
10th September 2014: invests in Harmony P2P startup |
|
|
28th October 2014: Credit rating upgraded from BBB- to BBB (Fitch Ratings) |
FY2016 |
4.5cps + 3.5cps |
FY2017 |
5.0cps + 3.5cps |
FY2018 |
5.5cps + 3.5cps |
FY2019 |
5.5cps + 3.5cps |
1st November 2018, Heartland Group Holdings restructure set up |
Average FY2015 to FY2019 inclusive |
8.20cps |
|
I have chosen to use the last five years of operation as indicative, as these years include the full contribution of the Reverse Mortgage Portfolio, a critical component of Heartland going forwards.
SNOOPY
Last edited by Snoopy; 03-10-2019 at 09:11 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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28-02-2019, 12:40 PM
#12105
Dividend Capitalised Valuation: The Calculation: FY2019 perspective
Originally Posted by Snoopy
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 )
8.333c / (0.72 x 0.075) = $1.54
A reminder here that NTA was
($664.160m - $74.401m) / 560.587m = $1.05 cps
at balance date. This means my fair valuation is at a good premium (+46%) to asset value.
This $1.54 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 range of $1.23 to $1.85. Given where we are in the business cycle, $1.73 looks fair value today. Given the sweet spot in the business cycle today for shares, I think $1.85 over the next twelve months is a target that Heartland could get to. I don't see compelling value at $1.73 though. But if the share does drift back towards my fair value mid point of $1.54, that might be the time to -finally- add HBL to my portfolio.
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 )
8.2c / (0.72 x 0.075) = $1.52
A reminder here that NTA was
($654.150m - $73.085m) / 565.430m = $1.03 cps
at the half year FY2019 balance date. This means my fair valuation is at a good premium (+48%) to asset value.
This $1.52 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 range of $1.22 to $1.82. $1.41, where the share is trading today, looks a little below fair value. Take off the upcoming 3.5c dividend and we get down to an equivalent $1.375. That is a 10% discount to fair value. I therefore see HGH as worth accumulating at $1.41.
SNOOPY
discl: New shareholder, in at $1.38
Last edited by Snoopy; 28-02-2019 at 12:55 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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28-02-2019, 12:55 PM
#12106
Another positive ... I wanted some coin for another punt and since HGH has been boring me something chronic I took the hit and bailed today. It is bound to bounce back now given my track record - you lucky holders you.
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28-02-2019, 12:59 PM
#12107
Originally Posted by Snoopy
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 )
8.2c / (0.72 x 0.075) = $1.52
A reminder here that NTA was
($654.150m - $73.085m) / 565.430m = $1.03 cps
at the half year FY2019 balance date. This means my fair valuation is at a good premium (+48%) to asset value.
This $1.52 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 range of $1.22 to $1.82. $1.41, where the share is trading today, looks a little below fair value. Take off the upcoming 3.5c dividend and we get down to an equivalent $1.375. That is a 10% discount to fair value. I therefore see HGH as worth accumulating at $1.41.
SNOOPY
discl: New shareholder, in at $1.38
I also see it at around $1.50 using my peer comparison valuation methodology. 2 Beagles in agreement is not a common thing lol
With you on this one but good luck with your TRA, (you'll need it)
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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28-02-2019, 05:13 PM
#12108
Junior Member
Small but positive.
https://www.nzx.com/announcements/331285
Positive close too.
Last edited by Fred_Rubble; 28-02-2019 at 05:26 PM.
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01-03-2019, 10:09 AM
#12109
Originally Posted by Fred_Rubble
Yup, will be very interesting to see if that holds up today. SP has climbed fairly rapidly from 1.31 on the 15/02 to 1.44 at yesterday's close.
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01-03-2019, 10:12 AM
#12110
Originally Posted by oldtech
Yup, will be very interesting to see if that holds up today. SP has climbed fairly rapidly from 1.31 on the 15/02 to 1.44 at yesterday's close.
...will do ...heading into the 150s
Was always the time to buy in the low 130s
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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