HLG - Hallenstein Glassons Holdings

[winner (n)]

Hey FM - that was an inspired punt on UNI when the share price got beaten up eh.  Interesting company. Well done and probably head back over 8 bucks again.

Their current success (growth) is based on 'peacocking' eh - although they use terms like 'embrace the re-emergence of festivals and large gatherings' and 'ongoing ramp-up social occasions'

I reckon the HLG ASM presos will have the same tone as the recent UNI ones - and as the UNI share price heads to 8 bucks the HLG share price will be headng to 10 bucks

Good that the UNI acquisitions seem to be working .... hope F24 doesn't stuff them up

[Basil]

I'm now primarily investing for retirement income FM.  I have no interest in an Australian retailer paying an unimputed dividend of only 4% which I note is on a PE of 17 and a fairly new company with not a lot of dividend history.

5 Years ago before Glassons Au growth shifted into high gear HLG had a 16 year average annual dividends of 31 cps.  Last year in what was surely a new baseline they paid 42 cps, (had been higher before a really tough FY22).  I think we're looking at forming a new annual average dividend payout range in the very high forties which is a huge improvement on where the business was 5 years ago, (48 / 31 = 55% increase in income) driven by online sales quintupling over the last 5 years and Glassons Au sales tripling.

I don't pretend to have the special insights you appear to tout around your alleged ability to forecast FY24 and FY25 already but yes I do expect that growth in the next 5 years will not be in a straight line. I remain very confident that 5 years from now, (and uniquely for a growth company we're being paid a 10+% yield while we wait to enjoy that growth) we will be talking about a company paying substantially more than annual dividends in the late 40 cent range, possibly increasing by another 55% to somewhere in the mid 70 cents per annum average annual dividends.   I have no present idea how I will spend all that extra income, but I am sure I will think of something.  That's my focus now, growing retirement income.

I did okay on WHS with a ~ 35% gain calling the bottom and selling my stake to Nick at the top, (and very clearly calling the top) and a dividend or two along the way as well. 

[BlackPeter]

I'm now primarily investing for retirement income FM.  I have no interest in an Australian retailer paying an unimputed dividend of only 4% which I note is on a PE of 17 and a fairly new company with not a lot of dividend history.

5 Years ago before Glassons Au growth shifted into high gear HLG had a 16 year average annual dividends of 31 cps.  Last year in what was surely a new baseline they paid 42 cps, (had been higher before a really tough FY22).  I think we're looking at forming a new annual average dividend payout range in the very high forties which is a huge improvement on where the business was 5 years ago, (48 / 31 = 55% increase in income) driven by online sales quintupling over the last 5 years and Glassons Au sales tripling.

I don't pretend to have the special insights you appear to tout around your alleged ability to forecast FY24 and FY25 already but yes I do expect that growth in the next 5 years will not be in a straight line. I remain very confident that 5 years from now, (and uniquely for a growth company we're being paid a 10+% yield while we wait to enjoy that growth) we will be talking about a company paying substantially more than annual dividends in the late 40 cent range, possibly increasing by another 55% to somewhere in the mod 70 cents per annum average annual dividends.   I have no present idea how I will spend all that extra income, but I am sure I will think of something.  That's my focus, growing retirement income.

I did okay on WHS with a ~ 35% gain calling the bottom and selling my stake to Nick at the top, (and very clearly calling the top) and a dividend or two along the way as well. 

I am fascinated by the idea of a market being always right and at the same time getting it so wrong.

Clearly - if this stock sustainably delivers the 10% yield you are talking about plus guaranteed capital appreciation and never ending growth, than the market got it wrong.

Just wondering - are there potentially as well substantial risks which the market might price in and you don't?

[Basil]

Market pricing in a bad recession in CY2023 based on a range of factors including to mention a few, higher interest rates, falling housing market and sustained inflation.  My core thesis is that with a very strong labour market young people, (HLG's demographic), will keep spending on social experiences and will want to look good doing it.  Let's see what the HLG team have to say on Thursday. 

The best guide we have to the future is the recent past so we'll know more later this week.  The second best guide to the future is their track record over the last 5 years and there's a lot to like in there.  I am not suggesting that anything is guaranteed, there are always risks but there are also some potentially very lucrative rewards and on the balance of probabilities this looks like a very attractive entry point to me.    If you want "guaranteed" Government guaranteed Kiwibonds are now paying 4.25%.

Share price is determined by supply and demand as we all know.  I do note that the 18th largest holder disclosed on page 67 of the annual report is a deceased estate so while this is speculative, it's quite possible that estate could have been selling down as there seems to be a steady supply of 10,000 share blocks coming onto the market in recent weeks.  Has this been temporarily suppressing the share price?  I don't know, it's merely an observation.

There could be a new top 20 shareholder in next years annual report 😉

[LoungeLizard]

Surprised to see SP close at $5.25 - down 15c. Buy opportunity or is the market worried about what may be in the wind for Thursday?

[Basil]

Maybe buyers are simply waiting for more detail on how this year's sales are tracking, I am.
VWAP today of just over $5.30 wasn't much different to last Friday and the market overall was down 0.8%.
$9.5m net after tax gets paid to shareholders this Friday.
I am wondering if we get a good solid sales update on Thursday how much of that makes its way back into buying more HLG shares ?

[850man]

Surprised to see SP close at $5.25 - down 15c. Buy opportunity or is the market worried about what may be in the wind for Thursday?

Very light trading as usual for HLG

[winner (n)]

Aussie consumers still spending ...more than expected

From Westpac IQ:

The Westpac Card Tracker Index lifted strongly over the two weeks to Dec 3, jumping 10pts to 146.8.

And

The category breakdown, which is not seasonally adjusted, shows very big gains for discretionary goods, led by small-ticket consumer durables, i.e. clothing, department store items, electrical appliances, sports and toys.


Jeez, all good for HLG. That X in x% more than last year might be even more than I thought ...we'll know by how much on Thursday

[Basil]

...

The category breakdown, which is not seasonally adjusted, shows very big gains for discretionary goods, led by small-ticket consumer durables, i.e. clothing, department store items, electrical appliances, sports and toys....Jeez, all good for HLG. That X in x% more than last year might be even more than I thought ...we'll know by how much on Thursday

Economists have predicted 9 of the last 2 recessions lol.  Even if it does happen, young people don't care about rising interest rates, inflation and falling house prices leading to a recession.  They just want to have fun and look cool doing it.  Probably more than happy seeing house prices come down as it gives them a more realistic chance of owning one at some stage.

[Waltzing]

Exactly they are protected here in the south pacific and australia... they only know whats on TT and they are busy having fun or some are stuck studying wok subjects... who knows ...

did not the romans complain about the young generation...

 

[BlackPeter]

...

The best guide we have to the future is the recent past

...

You like to state this phrase. Not sure, though whether it is right.

The best guide we have to the future is assuming that established patterns might continue, as long as the macro environment does not change. If it does (and it normally does), we are all on high sea without guide ...


Say we find out that customers don't like this years selection (I don't or some competitor offers something better ...- and your best guess goes already down the drain.

Say food prices keep rising and young people find out that they can't eat clothes ...

Say young people want to use the lowered house prices to buy their first home and the banker frowns at the credit card statement featuring this huge HLG bill ...

But even if you are right and the recent past might be in this case our best guide into the future ... HLG share price dropped in the last 12 months by 34%. Just lets hope this trend does not continue, shall we?

Look, I have no idea what will happen over the next year with HLG (and neither have you ), but just wondering whether it might make sense to point as well to the risks and uncertainties ... buying into HLG might go well, but it is just another gamble with significant risks attached - at least is this what the market assumes.

[Waltzing]

Glassons is a teen shopping sensation says a women clothes designer from NZ who has lived overseas for the last decade.

Glassons auss the shops that will drive this share price and it is often on parents money..

have been making enquiries for several weeks with her and she see no drop off in AUS in her sales of women under wear.

[LoungeLizard]

I get what you are saying BP regarding how macro-risks and wild-card events can throw all predictions out the window. I think we all know the inherent risks in investing which is why most of us spread the risk over different sectors and classes of assets, including holding a reasonable dollop of cash. I'm holding 50% in term deposits now, as I still think there's a significant risk, particularly in the US, of increasing yields provoking a further move away from equities.

It's good though that many of the experienced investors are willing to share their analysis and give their reasons why they prefer one stock over the other. And at the end of the day though, we all have to - or should -do our own homework and make our own decisions.

[winner (n)]

One thing we should remember - this century in total (nominal basis) on an annual basis retail sales in NZ have never gone backwards (negative growth)

[winner (n)]

One thing we should remember - this century in total (nominal basis) on an annual basis retail sales in NZ have never gone backwards (negative growth)

And going back to 1982 retail sales in Australia have never gone backwards/declined either (on an annual basis)

Doesn't mean that HLG sales won't go backwards but things do look pretty rosy for them at the moment .... and probably doing better than overall retail

That's a good sign