HGH - Heartland Group Holdings

[kasper]

I note Jarden Cash account are always ahead of Heartland Call account to put up the interest rates, Jarden now 2.25% and Heartland still 1.9%.

[lorraina]

Good news for us HGH shareholders...
"Better to own the bank,than having money in the bank,"

[Capt_Hook]

Sentiment changing? and portfolio reweighting today at close............either way good news.

[winner (n)]

So ANZ acquire Suncorp Bank at 1.3 times NTA

Jeez - same multiple applied to Heartland would mean $1.52

Just as well Heartland Group isn't just a bank

PS. Think basil mentioned the other day that on P/NTA basis HGH was richly valued relative to OZ peers

[Plata]

I guess at the end of the day a dairy cow is valued based on how much milk it produces is it not? HGH must be a different breed of cattle . That acquisition is not quite as attractive as the one our dear Jeff got his hands on is it? Relying solely on expected synergies to deliver any sort of accretion sounds like a pretty uncomfortable business case to me.

[Basil]

Price to NTA is expensive but the NIM is nearly double mainstream banks so I maintain PE relativity to its peer group is still the most pertinent comparative measure.  Last time I looked HGH were not especially cheap but not expensive either, forward PE in the late 11's.

TA  - Still in a confirmed downtrend though and I can't help wondering if Covid provisioning is sufficient for the coming recession ?  I see they are having to get far more competitive with their term deposit rates (1 year 4.0%) than they were 6 months back so forward NIM may not be as good as it has been historically.

As Winner has mentioned, the result is a foregone conclusion and will be within guidance range and definitely be "massaged" through provisioning measures.  Forward guidance will be the most interesting part of the result next month.   My hint to help your head in good shape is you can read the presentation with the annual result announcement which is designed for investment professionals and avoid all the politically correct nonsense of the annual report altogether.

[winner (n)]

A lot is made of Heartland  NIM being nearly double mainstream banks

Sounds really cool but does it mean very much at the end of the day - it's really only a result of the relative difference in the type of lending they each do

And a 'high' NIM doesn't seem to generate excessive ROE's

Good story and if punters think it's good Jeff will keep hammering that message home ... he's a master of spin as well as a master of profit management

[lorraina]

I am with Jeff,I too like high NIMs.
HGH,TRA,GEN.[and hopefully HMY].

[winner (n)]

I am with Jeff,I too like high NIMs.
HGH,TRA,GEN.[and hopefully HMY].

And the master of spin says very little about how much higher Heartlands impairment expense is relative to the others ... why spin bad stuff eh

[Basil]

At the end of the day NIM is just one metric that contributes to earnings and I believe earnings metrics relativity are the best yardstick.
In that regard I can't help noticing that ANZ are the cheapest of the Aussie banks and prior to the Suncorp deal announced today are on just 9.7 times average broker forecast FY23 earnings and 8.9 x FY24.  Earnings growth is also good at 6 and 9.4% respectively for the next 2 years.  Yield is also very good at 7% forecast.  If we could claim their franking credits that would gross us 10% but alas we can't, (pity).
Price to book is only 1.1 times.  TA - In a confirmed downtrend.  I suppose somewhere in today's presentation they will say the acquisition of Suncorp is eps accretive but I take such claims with a grain of salt so will stick with the above forecasted metrics that already look very attractive.
Despite the lack of imputation credits, I might take a modest stake once they break out of their downtrend because they do look dirt cheap.
Suppose Winner might even say they are a proper bank. 😃

[lorraina]

https://www.scoop.co.nz/stories/BU2207/S00259/heartland-bank-wins-canstars-savings-bank-of-the-year-award-for-the-fifth-year-running.htm

[Basil]

Breaking up through the 100 day moving average.  That wasn't quite how I envisaged this would play out.

[Minimoke]

Time for a chart
You cannot view this attachment.

[Old mate]

Wonder if the harmoney results and some of the us bank results pushing it along a bit.

[Basil]

Yeah I was wondering about that too.  Maybe the fact there's a 7-8 cent fully imputed dividend coming in a couple of months is a factor too.