HLG - Hallenstein Glassons Holdings

[lorraina]

I think James's time would be more profitable/productive concentrating on Glassons' Australian growth.
That's where the growth is.
NZ is a retail dead duck currently.
Old saying ;"add to you winners,cut your losses".

[Basil]

I think James's time would be more profitable/productive concentrating on Glassons' Australian growth

On reflection I agree 100%.  Do they even need a group CEO ?
Just have the CEO of N.Z. operations and James Glasson.

[Fiordland Moose]

Not concerned by his departure, and not surprised either. I've never thought CFO's made particularly good CEOs, and was surprised when he got appointed - CFO at KMD with all its B Corp focus and layers upon layers of middle management didn't seem to jive with HLG's MO.

HLG does chew threw its senior executives. Probably not the easiest having two ex CEO's on the Board, a heavy hitter over in OZ, and a particular way of moving fast and staying lean.  But that system clearly works for the product and shareholders so if it aint broke don't fix it.

[winner (n)]

  Chris probably got another job (maybe competitor?) So had to go

May find out soon where's he gone

[Fiordland Moose]

Chris probably got another job (maybe competitor?) So had to go

May find out soon where's he gone

aye. the last fella went to Farmers - he was pretty good I thought. Agree the business does not need a proper group CEO.

[Pierre]

Wow. Closed today at new ATH of $9.10!
What does that say about the departure of the Group CEO?

[winner (n)]

Wow. Closed today at new ATH of $9.10!
What does that say about the departure of the Group CEO?

Yep over $9 ...heading to $10 now

[Ferg]

The wording "with sincere regret" says a lot.  And the short notice.  Kind of contradictory unless there is a health issue.

[Basil]

New ATH thoroughly deserved in my opinion. in my view, the first of many to come in the years ahead.  Has been a quiet achiever over the long run and they have executed extremely well against all the challenges that Covid and the very long recession have thrown up in the last 5 years.  Historical 5 year EPS CAGR of 9%.  Forsyth Barr forecasting next 5 years EPS CAGR of 11% per annum and yet at $9.10 still trades on very modest metrics of only 12 times FY26 earnings and a gross forecast yield of 8.9%, which I expect to grow in line with EPS in the years ahead.  PEG ratio is just a fraction over 1.  I think Forsyth Barr's price target of $10.80 is quite conservative.  Holding lots, bottom drawer, would like some more, enough said.

[Basil]

Do you think its a good idea for HLG and perhaps also TRA to do a share split ?

Seaweed on the other channel raised the possibility of a share split the other day and perhaps it was a coincidence but I had been thinking exactly the same thing that day.  I'd really like everyone who is a shareholder in these two companies to express their opinion and I'll ask a friend to post this on the other channel.  If enough people share their point of view I undertake to share links to the threads on both channels and communicate with the boards of both companies.

As an accountant I have to point out it adds no value to the company per se, in fact there may be a material cost to implement a split but there is no question it would boost liquidity and I think that's a very good thing.  (It should be noted that both these companies are recent entrants to the NZX50 and there are ongoing liquidity requirements that need to be maintained to stay in the index so a split will certainly not do any harm in that respect and may be quite assistive).

Here's a link to Investopedia on share splits which takes a deep dive into the pro's and con's.  https://www.investopedia.com/terms/s/stocksplit.asp

It's mostly focused on the American market so fractional ownership is not a consideration here to any major extent, (I understand that Sharsies does offer it).
I think the sweet spot for retail interest in N.Z. in terms of pricing is in the 50 cents to $5 range.

My opinion is a 2, 3, 4 or 5 :1 split would do neither company any harm and quite possibly might generate more interest from retail investors.  My preference would be if there's going to be a split, do the job properly and go for a 5:1 split.

What do you think ?

[Fiordland Moose]

Sounds like a goer to me.

[Ferg]

Nice post Basil and worthy of discussion.

That's a no from me for both companies.

I reckon it may lead to greater price volatility and there will be a cost to the company for no discernible benefit for long term shareholders.  Given I'm not a trader I don't care about daily volatility, unless it presents a nice buying opportunity.

But I hear you about liquidity for NZ50...it may help with that.  But the other test, being free market float (or whatever it is called) won't change for HLG unless the Glassons sell some of their shares.

Votes so far:

Yes : 2 (Basil, FM)
No : 1 (Ferg)

[ValueNZ]

No point incurring the cost for no reason.

It's $10 not $1000.

Even if it were $1000, fractional shares are offered on the various platforms.

Hell even with my purchase of Subaru stock last year, the minimum amount was $2800 (100 share lot at 2400 yen).

[Dolcile]

Interesting thought Basil.  My 2 cents is... The market activity on any particular trading day represents the total $$ value of the buyers and sellers that can be matched to make a trade. I'm not sure increasing the number of shares being transacted - just at a lower unit price - makes a difference to the overall liquidity? 

It really is a concern for the NZX that we've got HLG and Turners - both well managed companies - that can only attract <$100k of trading each per day.

[Umpah]

I think it's all psychological, the more shares you own the more of the company you think you own