HLG - Hallenstein Glassons Holdings

Basil · Apr 16, 2024, 07:03 PM

Sold out completely after NZX50 inclusion in early 2023 at $6.85. HLG too good a company to be booted out of the NZX50 index. Hope that doesn't happen. Wouldn't enjoy making money from that but would probably do it anyway lol

LoungeLizard · Apr 16, 2024, 07:14 PM

All a bit premature this talk of tanking and booted out of NZX50. Reality check - 2000 shares traded. Back up again tomorrow. Liquidity is a swings a roundabouts thing - SP surges up and down. Long term, solid dividend payer and forget the rest.

Waltzing · Apr 17, 2024, 09:05 AM

Remenber the old saying about not getting to attached to stocks....

Did not believe inflation would last like this and its going to stay for a while...

https://www.cnbc.com/2024/04/16/powell-cites-lack-of-progress-this-year-in-reaching-feds-inflation-goal.html

we are in one of those periods where its work on your back office and your accounting models.....

wait for the sunny weather...

Basil · Apr 17, 2024, 09:26 AM

Long time until the next partially imputed dividend in December. Level of imputation credits likely to diminish over time with the ongoing growth in Aust profit relative to N Z
Good well managed company.
Still belive fair value is around $5.40.
Possibility of NZX50 exclusion is a risk to consider for 2025 either based on lack of liquidity or free market cap grounds. Ignore that risk at your peril. Inclusion and subsequent exclusion has happened before.
Happy to sit on the sidelines for now.

LoungeLizard · Apr 17, 2024, 10:41 AM

Plenty of others at greater risk of exclusion. HLG would not be first in line.

For those of us who have retired early, imputation credits are not an issue - I have heaps already that cannot be applied. Better to pay normal tax rates and claim it back. Horses for courses on that one.

There's not many companies that are a safe hold on the NZX, but HLG is one that shareholders can take the swings and roundabouts whilst still getting a good return. As has been noted before, HLG have an outstanding record of maintaining dividends through thick and thin and I don't see that changing. Plenty of growth to come in OZ I feel.

Happy to hold until the next divvy.

Basil · Apr 17, 2024, 11:43 AM

Pretty close to the bottom of the NZX50, position 48 last time I looked and that was based on a 6 month price average of $5.98. A possible fall into the low $5's if it was sustained for 6 months or so would probably make them a real chance for exclusion on free market cap grounds. Then there's the liquidity test as well. A sustained period of low liquidity is also a risk. I see these as 2025 risks but risks nonetheless anyone with a multiyear holding period needs to consider.

I have done more tax returns than I care to even think about in my 44 year career so I can reliably tell you that imputation credits matter for more than 99% of the investing public. You are definitely an outlier not caring about them. Frankly I can't even remember the last time I did a client's tax return where imputation credits didn't matter.

TRA has been more resilient than HLG through the difficulties of the last 4 years and have full imputation credits.

Agree otherwise that HLG is a well-managed company, has paid very reliable dividends over its history and has very good prospects for growth in Australia. N.Z. operations are pretty "doggy" though. At the right price I'd be happy to be a shareholder again.

LoungeLizard · Apr 17, 2024, 03:21 PM

You will know then, when you pay little or no actual tax, then imputation credits don't carry much benefit as for those with tax payments to apply them against. Excess imputation credits is unavoidable in my case - and I would suggest, for many retired folk, dabbling in shares. So, no - HLG being only partly imputed isn't an issue for me, in fact it's ideal.

Basil · Apr 17, 2024, 03:30 PM

Most retired folk are collecting National superannuation so are able to use imputation credits to offset their tax and get part of the PAYE they have paid on their superannuation refunded or they have RWT on interest that's been deducted by the bank and they use imputation credits to offset against that and get that partially refunded. Believe me, you are in a tiny minority if no situation applies to you whereby imputation credits are not helpful.

Anyway....back to HLG,, we will see where the share price settles this winter.

LoungeLizard · Apr 17, 2024, 03:37 PM

Quote from: Basil on Apr 17, 2024, 03:30 PMMost retired folk are collecting National superannuation so are able to use imputation credits to offset their tax and get part of the PAYE they have paid on their superannuation refunded. Believe me, you are in a tiny minority...I've probably done more tax returns in my lifetime than you've had hot dinners.
Believe me, I have a much clearer perspective on this given my professional experience than you do.

Anyway....back to HLG,, we will see where the share price settles this winter.

I'm not concerned with what "most" people do. I retired very early and I don't draw a pension. I find it interesting that you claim to know more about my tax affairs than I do. Typical hubris.

Breezy · Apr 17, 2024, 03:47 PM

Quote from: LoungeLizard on Apr 17, 2024, 10:41 AMPlenty of others at greater risk of exclusion. HLG would not be first in line.

For those of us who have retired early, imputation credits are not an issue - I have heaps already that cannot be applied. Better to pay normal tax rates and claim it back. Horses for courses on that one.

There's not many companies that are a safe hold on the NZX, but HLG is one that shareholders can take the swings and roundabouts whilst still getting a good return. As has been noted before, HLG have an outstanding record of maintaining dividends through thick and thin and I don't see that changing. Plenty of growth to come in OZ I feel.

Happy to hold until the next divvy.

My biggest regret ever was selling my very large HLG holding in 2020 during Covid, that sale started a chain of events and bad decisions that ultimately cost me 10 yrs of gains which I am yet to make any headway getting back. Given the same circumstances again I would never have sold a single share. Such a great long term hold and if it ever gets back down near $4 again i would be all in in a heartbeat.

LoungeLizard · Apr 17, 2024, 04:03 PM

Quote from: Breezy on Apr 17, 2024, 03:47 PMMy biggest regret ever was selling my very large HLG holding in 2020 during Covid, that sale started a chain of events and bad decisions that ultimately cost me 10 yrs of gains which I am yet to make any headway getting back. Given the same circumstances again I would never have sold a single share. Such a great long term hold and if it ever gets back down near $4 again i would be all in in a heartbeat.

Been there. Held on to a share for years and then sold it just when it gains traction. Painful, I know.

HLG didn't skip a beat during the covid years - just kept paying, and increasing, dividends like it was business as usual. I think it's a solid hold, just ignore the chatter and keep banking those dividends. I'm afraid it's not going to be a $4 or even $5 stock now - $6 seems about right.

Breezy · Apr 17, 2024, 04:24 PM

Quote from: LoungeLizard on Apr 17, 2024, 04:03 PMBeen there. Held on to a share for years and then sold it just when it gains traction. Painful, I know.

HLG didn't skip a beat during the covid years - just kept paying, and increasing, dividends like it was business as usual. I think it's a solid hold, just ignore the chatter and keep banking those dividends. I'm afraid it's not going to be a $4 or even $5 stock now - $6 seems about right.

They dropped a divvy in 2020 during Covid but resumed soon after.

Basil · Apr 17, 2024, 04:48 PM

Quote from: LoungeLizard on Apr 17, 2024, 03:37 PMI'm not concerned with what "most" people do. I retired very early and I don't draw a pension. I find it interesting that you claim to know more about my tax affairs than I do. Typical hubris.

The market prefers full imputation credits. The fact you don't is completely irrelevant. Quite obviously, that simple fact is lost on you, so I won't bother trying to unpack it any further.

Breezy, anyone who sold in the depths of the Covid crisis got smashed. I tried at enormous length to encourage you just before the Covid crash hit to sell at over $6. All the posts are still there on the other channel in early 2020 evidencing that.

LoungeLizard · Apr 17, 2024, 04:52 PM

Quote from: Basil on Apr 17, 2024, 04:48 PMThe market prefers full imputation credits. The fact you don't is completely irrelevant. I am not going to dignify the rest of your post with a reply.

You talk about "other people" and "the market." I'm talking only about myself, which is relevant - I don't need or want more excess imputation credits. For other people - yourself obviously - then full imputation is desirable. But not for me. That's all I'm saying and it's not worth arguing any further.

Basil · Apr 17, 2024, 05:11 PM

What's relevant to you is frankly, irrelevant to the market. The level of imputation credits affects a dividend payers' attractiveness in terms of its gross yield. For a dividend type investment that affects the share price. I got a huge 24 cent divvy from HLG that was unimputed a while back, December 2022. Giving a third of that to the Govt wasn't much fun for most people.

Anyway...I give up...I thought these basics were understood by everyone...