HLG - Hallenstein Glassons Holdings

[LoungeLizard]

Glassons Australia could be the exception that proves the rule around recessionary economics, so its possible  they may continue to do well in the short term. But even the best run company is not immune over time to economic forces that drive consumer demand down. Nor is it immune to share market corrections, which there's also strong evidence to suggest is overdue, particularly in the US. Some exposure to retail is probably ok, and HLG is as good as any, but I just wouldn't have too many eggs in that basket right at this moment.

[lorraina]

Be there well before 10 am.
More like 9.25 as they have the morning tea before the meeting.

A note I sent to a couple of my mates...

Subject: My shout for morning tea.

Would you like to join me for morning tea next Wednesday.?
A bit earlier,but 9.30 am at Rydges Latimer.

[winner (n)]

Don't worry about me mate.  I fully cognisant that really good companies do well no matter what the economic conditions.

What recession

You cannot view this attachment.

[Basil]

Glassons Australia could be the exception that proves the rule around recessionary economics, so its possible  they may continue to do well in the short term.

Glasson's Au sales have grown from $40m in 2016 to $253m in 2025.   More than 6 times the level they were 9 years ago ! That's a 22.75% CAGR over 9 years.    At last report year to date sales are up 12.9%.    I'm not sure how much more evidence anyone with both eyes open could possibly need lol 
There is none so blind as those that will not see.

[Pierre]

Glasson's Au sales have grown from $40m in 2016 to $253m in 2025.   More than 6 times the level they were 9 years ago ! That's a 22.75% CAGR over 9 years.    At last report year to date sales are up 12.9%.    I'm not sure how much more evidence anyone with both eyes open could possibly need lol 
There is none so blind as those that will not see.

It's possible that LL may be suffering a bit of angst at having missed the HLG bus.

[LoungeLizard]

It's possible that LL may be suffering a bit of angst at having missed the HLG bus.

Not quite, Pierre. I bought into HLG quite some time ago and made a healthy profit in selling up when it looked to be getting ahead of itself. It has of course gone up further, but I sleep easy at night and the funds are doing well elsewhere.
The history of a company is an important indicator of future performance, but it's only an indicator. You've got to be aware of the macroeconomic environment - current and forecast - that all business's operate in. I could well be wrong and HLG may continue to expand ad infitum -  well done to holders if that is the case. I'm just sounding a note of caution not to get too carried away in extrapolating the data without taking into account the changing economic conditions.

[Basil]

Hey LL, we've heard the same warning now about 15-20 times.   We're not deaf dumb or blind so consider your concerns well and truly heard. Of course I've never been excessively dogmatic in the past to the point of driving people absolutely nuts ROFL

[LoungeLizard]

Hey LL, we've heard the same warning now about 15-20 times.   We're not deaf dumb or blind so consider your concerns well and truly heard. Of course I've never been excessively dogmatic in the past to the point of driving people absolutely nuts ROFL

Fair enough.
 But my comments are not necessarily directed at you or other experienced investors who will carry on doing what they do regardless. More I'm trying to provide an alternative perspective for newbies that may read the predominantly one-sided view on HLG and think it's a sure fire bet. Which, of course, it isn't. Those who bought in a while ago have done well regardless of what happens from here. I'm more worried at those buying it at $10+ with the expectation that $15 is just around the corner. Which, of course, it isn't.

[Basil]

3 years hence, (nobody ever suggested it was just around the corner), I reckon $15 is a chance.  Forbar predicting 92 cps EPS in FY28 so this time in 2028 we might be looking at a possible EPS target for FY29 of $1 per share.  Put a forward PE of 15 on that = $15 per share.

PE of 15 a fanciful dream ?  Not at all for a company growing EPS at a 5 year CAGR of 9%.  Go back 18 months to when Turners was $4.  Nobody, not even me, thought it would be ~ $8 and trading on a  forward PE of 16.

When the market wakes up to how much quality there is in a stock, very good things can happen in a surprisingly short period of time.  Market is awake to Turners now and it remains a good hold for ongoing growth.  Market is not wide awake to HLG on a forward PE of ~ 12.

[Pierre]

Not quite, Pierre. I bought into HLG quite some time ago and made a healthy profit in selling up when it looked to be getting ahead of itself. It has of course gone up further, but I sleep easy at night and the funds are doing well elsewhere.
The history of a company is an important indicator of future performance, but it's only an indicator. You've got to be aware of the macroeconomic environment - current and forecast - that all business's operate in. I could well be wrong and HLG may continue to expand ad infitum -  well done to holders if that is the case. I'm just sounding a note of caution not to get too carried away in extrapolating the data without taking into account the changing economic conditions.

If that is your concern, why then are you not issuing similar warnings to investors in many other companies? Or does your caution about the macroeconomic environment apply only to HLG?

I think it's pretty clear that HLG has a massive expansion runway ahead of it with the potential for increasing profits over the coming years - something that's not necessarily obvious with many other companies (TRA excepted).

[Basil]

I think it's pretty clear that HLG has a massive expansion runway ahead of it with the potential for increasing profits over the coming years

Crystal clear for anyone who opens both eyes. Enjoy your time at the annual meeting.  I'd really like to be there but unfortunately won't.  I'll tune in online though.

[LoungeLizard]

If that is your concern, why then are you not issuing similar warnings to investors in many other companies? Or does your caution about the macroeconomic environment apply only to HLG?

I think it's pretty clear that HLG has a massive expansion runway ahead of it with the potential for increasing profits over the coming years - something that's not necessarily obvious with many other companies (TRA excepted).

Actually, I think I've made it pretty clear that NZ equities generally may not be the best place to park one's money right now, considering the state of the global economy and the US in particular. I did state that I've cashed up all but a handful of defensive stocks (and a couple of long shots). I could post those comments on every thread but... really?

HLG though looks particularly worrisome in my view, but as mentioned, I'm not trying to persuade anyone that they are wrong - the future will determine who was wrong or right. I don't hold HLG and it makes no difference either way to me what happens, so good luck to holders. I'd actually rather be the one who is wrong and you all make a lot of money.

[Buzz]

TA is not great, it's topped on the daily, weekly and monthly. 50dma breached today, recently it's gone to the 200dma after that ($8.53 currently). But being a thinly traded stock, charts are less reliable.

[Basil]

I think there's a few things that some are missing.

1. the target market for Glassons 13-30 year old women don't care whether there's a recession in the US, whether the US market is overvalued or the NZ or the ASX either.  They have kept spending despite all the drama's of Covid and the protracted recession that followed which is what's driven the 5 year CAGR is EPS of 9% 

2  Yes a correction in markets could mean HLG shares correct a bit, but long term GARP investors investing for growth in income and dividends will be unaffected over the long run.

3. Why have young women kept spending and why will they continue ?   They think very differently to a 64 year old semi retiree like me but I have had two daughters and now granddaughters so I can reliably say their focus is on looking smart when they go out to have a good time with their girlfriends or out chasing the coolest guy they can find.  Its all about looking good and looking cool on social media and in the real world.   Very few of them could care less what the state of the economy is or the size of their retirement savings.  Its about having fun at that age and making good social connections to build on for the rest of their lives.  Glasson's specialises in affordable fashion and is generally priced at the mid point.  They've carved themselves out a decent sized niche in the Australian market and the consistent strong growth there irrespective of various economic conditions over the last 9 years has been very impressive to say the least.

4. There's a very high probability we've already seen the worst economic conditions in the last few years and things will gradually improve in the years ahead.   There is emerging green shoots and anecdotal evidence supporting this contention

5. The $10 share price level obviously scares off some people but it is irrelevant in the overall scheme of things.  All the matters is that the metrics are very attractive for a growth company.   The fact that some would feel more comfortable at $2 after a 5:1 share split is just retail investor psyche.  Professional investors know a share split makes no difference other than perhaps boosting liquidity.

That said I am still in favour (as are some others), of a share split so would someone please do us a favour and ask the board at the annual meeting if they have considered this.

[Bev]

Basil.
I think no.3 is a good point.  Girls that age would starve themselves to look good..

I had been thinking about the items I recently bought online for my husband.  By the way the knitwear was good quality and reasonably priced.