HLG - Hallenstein Glassons Holdings

[Basil]

Forsyth Barr update out today.
Financials: Aug/ 24A  25E  26E  27E
Rev (NZ$m)      435.6 459.5 475.6 494.0
NPAT* (NZ$m)    34.5  39.1  40.0  42.5
EPS* (NZc)      57.8  65.6  67.1  71.2
DPS (NZc)      50.5  56.0  57.0  60.5
Imputation (%)  75  75    75    75

*Based on normalised profits
Valuation (x) 24A 25E 26E 27E
PE            11.1  9.8  9.5  9.0
EV/EBIT        7.2  6.5  6.3  6.0
EV/EBITDA      4.2  3.9  3.7  3.6
Price / NTA    3.7  3.4  3.2  3.0

Cash div yld (%) 7.9  8.8  8.9  9.5
Gross div yld (%) 10.2  11.3  11.5  12.

All figures based on yesterday's closing price of $6.40.

Target price: Increased +5% (NZ40 cents per share) to NZ$8.30
Rating OUTPERFORM

Emphasis added. Gosh look at the future gross yields, 11.3% gross forecast for the current year FY25 !  A dividend hounds sheer delight...better watch my weight, you can get bloody fat when being fed that well lol   

[winner (n)]

The only numbers Forbar have got right are the 24E ones

If I was those analysts boss I'd say that's rubbish and tell them go back to their computers and get real

Shareprice 7 bucks by Friday .... Then 8 bucks by Christmas

[Basil]

Hot dog about your thinking !!  I hope you're right, might be $7 tomorrow lol

Forbar forecasting 5.5% group growth in sales in FY25 followed by only 3.5% in FY26 and 3.9% in FY27, (surely these latter two years are very conservative as monetary policy restraint will be significantly eased by then).

No price target from me, just a comment that I think over time, the share price is headed North !
I do note however that $8.30 would put them on 12.65 times FY25 forecast earnings, (currently on 10.2 times @ $6.71), which seems quite reasonable compared to another excellent retailer, Briscoes, currently on 13 times FY25 eps.  Tuners currently on 10.7 times Forbar's FY25 estimate, also looks very cheap....for how much longer, who knows.  Hey Winner, maybe we could get Tina to model some of Glasson's swimwear and invite her out on my boat for a party this Christmas 

[Ferg]

13 companies a VERY strong effort, (how do you find the time ?). and I really appreciate the work you are putting in.  I really love the objective decade long helicopter view you are providing on these companies.  So much talk and creative corporate "speak" by companies...just let the numbers do the talking I reckon.  Really looking forward to your thoughts on Turners.  Best wishes with moving house.

Thanks for that.  Nice to know it is appreciated.

Christmas has come early: https://stocktalk.co.nz/index.php?topic=104.msg26172
No tennis tonight so TRA became the priority.  I have been wanting to look at it.

Where do I find the time?  No TV and no social media.  Would you believe I have a lifetime ban on Reddit for making a 3 word joke?  That helps immensely, as have a couple of other investors behind the scenes who shall remain nameless.

[winner (n)]

Looking good for retail in Oz. Westpac says -


Retail sales came in above market expectations in August, from an upwardly revised July.

Gains were seen across all industries except household goods, which is continuing its unwind from a mid-year boost.

All states and territories saw a rise, with gains led by the big eastern states.

While warm weather may have played a part, today's result also looks to be a clearer sign that tax cuts and other fiscal support measures are starting to provide some lift to spending.


In the numbers I note Clothing up 2.5% seasonally adjusted from July ....what's that annualised lol

[winner (n)]

HLG seems the best performing and brighter future prospect of the favourite H stocks

Might see some switching

[KW]

Thanks for that.  Nice to know it is appreciated.

Christmas has come early: https://stocktalk.co.nz/index.php?topic=104.msg26172
No tennis tonight so TRA became the priority.  I have been wanting to look at it.

Where do I find the time?  No TV and no social media.  Would you believe I have a lifetime ban on Reddit for making a 3 word joke?  That helps immensely, as have a couple of other investors behind the scenes who shall remain nameless.

Reddit is where the stupid hang out.  You are better off not losing brain cells by reading it.  At least stick to X/Twitter where the intelligent people are.  FinTwit is pretty good. 

[Basil]

No tennis tonight so TRA became the priority.  I have been wanting to look at it.

Where do I find the time?  No TV and no social media.

Many thanks Ferg. 
Watching CNBC is my Archille's heel when it comes to wasting time....and oh yeah, I can't stop staying up to watch the America's cup racing live. I know there's a replay in the morning but for some illogical reason I prefer to watch it live...go figure, even I don't know why lol

Jarden's latest research out and they also see 66 cps in FY25 and an even higher gross yield than Forbar.  In terms of growth at a reasonable price, "GARP" stock investing, which is what I like to do the most, the price doesn't usually ever get any more reasonable than buying stocks with a proven growth history on a no growth forward PE of 10, noting also, a very similar situation exists with Turners at present.

I don't think you're missing much with Reddit, I don't bother.

[LoungeLizard]

Nearly $7!

[Basil]

Shareprice 7 bucks by Friday .... Then 8 bucks by Christmas

Hot dog about your thinking !!  I hope you're right, might be $7 tomorrow lol

For some time during the final 15 minute match process the match price was indeed $7.  If it closed there, that would have been a bit spooky after my post yesterday lol.
I think Winner might hit the jackpot with his Christmas $8 forecast.

[winner (n)]

For some time during the final 15 minute match process the match price was indeed $7.  If it closed there, that would have been a bit spooky after my post yesterday lol.
I think Winner might hit the jackpot with his Christmas $8 forecast.

The rave reviews by Forbar and Craig's must be creating a bit of interest eh

But their forecasts are really really conservative ...like this is how Forbar see sales/store .....going in future ....leaving upside for the next update

What was Forbars target price again?

You cannot view this attachment.

[Basil]

WOW, an image says a 1000 words eh.   Thanks for sharing that and I couldn't agree more.  Brokers, (and Jarden are the same), future sales expectations for Glassons Au are extremely conservative and at a major divergence to the well proven track record of strong growth since 2016.  The steepness of the black line (well proven) and the dotted future forecast path speaks volumes for how much room the analysts are giving themselves for future upgrades.  $8.30 within a year as a target is probably quite conservative considering significant expected central govt policy easing forecast over the next 12 months, hopefully starting with half a percentage point next week.  Certainly, the metrics even at that forecast price point are not demanding.

HLG well and truly overdue to hit a new all-time high sometime in the next 12 months I reckon, maybe by Christmas as you suggest with a good trading update at the December annual meeting.    Got as high as $7.85 in February 2021 and there's been a LOT of growth in Glassons Au since then.

[winner (n)]

For better or worse pundits saying 2 50bps ocr cuts by Christmas

Watch Term Deposits drop below 4%

Just imagine if advisors pointed punters to the HLG and said even 7% is pretty good relative to the banks 4%

Say HLG cash dividend is 60 cents next year ....even partially imputed that's still 75 cents. A share price of $10。70 would give them that 7%

Basically saying 8 bucks is cheap .... 9 bucks is still cheap .....

[Basil]

Shareprice 7 bucks by Friday .... Then 8 bucks by Christmas

A day early.  You're a legend mate.  A solid sales update at the annual meeting in December and I reckon you're odds-on favorite to be right again.

[Basil]

A friend asked me at lunch yesterday whether he had missed the boat with HLG.  Had to think about that a bit after the recent jump and came home and worked out that at $7.10 it's trading on 10.75 times FY25 consensus earnings.  How many other stocks with a well proven history of growth like Glassons Au has are trading on that multiple ?  Considering one is looking at this for FY25 income and beyond, if you treat the forthcoming final dividend from FY24 of 26.5 cps as a partial return of the purchase price, the net price becomes $6.835, (ignoring partial tax impost on the 26.5 cps divvy due in December), and 6.835 / 0.66 = a forward PE of 10.36.  Despite the recent share price rise, that's ostensibly a PE one normally associates with a no growth stock.  Disc: I bought some more this morning.