HLG - Hallenstein Glasson

[Joshuatree]

50 shades of collars

[winner69]

HLG's track record of eps (rounded to one decimal place)
2014 23.9
2015 29.2
2016 22.9
2017 29.0
2018 45.9
2019 48.7

Average annual compound growth rate in earnings per share over the last 5 years = 15% per annum.
.

With Glassons NZ probably maxed out often recent burst and Hallensteins profit in decline the group won’t be growing earnings at 15% pa for the next 5 years will they?


As you say the future is all about Glassons AU .....need to keep sales growth momentum and to improve margins

One could say the NZ (inc Hallensteins Au) is currently on a PE of 10/11 and Glassons AU is on a PE of around 20

That’s how I see it at the moment

[Beagle]

Page 4 of the annual report sheds some valuable insight into your contention mate, and I quote
Glassons New Zealand
"Sales for the year were $100.73 million, an increase of 3.91% on the prior year. Sales growth in the second half continued to build and improve on the growth in the first half of the year" Nothing wrong with N.Z. sales growth for Glassons.

Impossible to project forward what future average earnings growth might be but well worth noting a couple of things.
1. You are ostensibly paying almost nothing for future growth, only trading about 1 multiple higher than a no growth company would be for 10 year Govt stock at just 1.3%.
2. The opportunity in Australia with sales just behind N.Z. despite their market being 6? times the size is huge and they have real momentum over there are are obviously well lead by young Glasson.

This is a classic GAARP stock. (Growth at a reasonable price) forward PE about 12 on theoretical ex divvy price of $6, and shareholders are being paid very handsomely at 10% gross yield, to be patient and enjoy more growth going forward. Other good GAARP's on the NZx where you pay nothing or almost nothing for growth include MET, (forward PE 11.7 @ $5.80 and HGH, forward PE 12.2 @ $1.68).

I like GAARP stocks as its hard to go too far wrong with them.

Latest consumer confidence survey out today shows more optimism and GST is going on imported clothes from Monday next week. These things help.

Possibly worth noting that sales for YTD for FY20 as last advised by the company are growing at more than twice last year's rate overall. I'm looking forward to the annual meeting update on 11 December.

[Beagle]

https://www.msn.com/en-nz/money/news...cid=spartandhp
Level's the playfield for local retailers.

I talked a bit about GARP stocks this week. HLG and MET fit this definition perfectly. Here's a bit more about this strategy if anyone's interested.
https://tradebrains.in/what-are-garp...sonable-price/

[Beagle]

Retail sector comparison
Historical PE
BGR 13.15
KMD 12.83
WHS 14.96
HLG 12.83
Average 13.44
I note HGH have a significantly higher percentage of their total sales 15%, online than any of the others.
Sales growth year to date in FY20 is over 7% and they are executing sales growth in Australia with Glasson's extremely well.

I remain very comfortable with HLG's metrics and think its one of the cheapest and most misunderstood growth stocks on the NZX.
No analysis of HLG's current metrics would be accurate without considering it currently trades cum a large 24 cent fully imputed dividend which goes ex in the next few weeks. Ex Dividend at $6.00 the historical PE is just 12.34 making it the cheapest stock in the retail sector in N.Z. by quite some margin but I would argue the one with the most growth potential and the best gross yield.

Sticking with this post 5/11/2019 and I note the NZX50 had a huge month of up ~ 5% in November and HLG only up 10 cents since then. Had a look at the chart this morning and there's a lovely clear uptrend so TA lines up fair and square with my fundamental analysis. Happy I added more last week and I think there's plenty of juice to come with this one.

[couta1]

Smoking along.

[oldtech]

I talked a bit about GARP stocks this week. HLG and MET fit this definition perfectly. Here's a bit more about this strategy if anyone's interested.
https://tradebrains.in/what-are-garp...sonable-price/

Nice read, thanks Beagle

[winner69]

Smoking along.

Black Friday specials went gangbusters I believe

[couta1]

At this rate it ain't going back to $6 ex divvy and in fact with things continuing on track it's going to $7.

[winner69]

At this rate it ain't going back to $6 ex divvy and in fact with things continuing on track it's going to $7.

$7 ex divvy of course