HLG - Hallenstein Glassons Holdings

[Basil]

I think we agreed a while back their very long term average PE is 12.5.
I have them on a current year eps of ~ 60 cps (35 cps first half and 25 cps second half) so 12.5 x 60 cps = $7.50.  Then there's something else to think about and that's in regard to the fact that in the last 6-7 years the growth with Glassons Au has transformed the company into something that's more akin to a growth company so we need to consider whether the long-term historical average PE ratio is still correct going forward.

Not a stretch at all in my opinion to say the correct PE in the current circumstances with Glassons Au now a proven growth engine shouldn't be in the mid teens.  Maybe 60 cps x 15 = $9.  Myabe if HLG does get included in the NZX50 it will drive some value for index tracking funds in this particular case ? 

[Basil]

Glassons AU doubled their share last 4 years so expect them to double share again in say 3 years ... to 1.5%

That's about $400m of sales .... just from Glassons AU

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Lets remember this post when considering their growth potential in Australia.

[Basil]

basil .... since 2006 HLG average PE has been 12.5

So I charted actual share price v what it would be at a PE of 12.5 ..... never very away eh ...and shows the time to buy eh (as you have sussed out a few times already)

Note - the at 12.5 PE line is based on July year EPS applied to the full year (like July 20 EPS applied Jan20 to Dec 20) so a mix of past and forward looking if you get the gist

So 10 bucks not outrageous at EPS of 80 cents

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And this one.  We're not going to make 80 cps this year but as I said above, your graph tracks the 12.5 PE back a very long way to before Glassons Au started growing so it's a very fair question with the growth there now proven in recent years and the huge runway for growth in the years ahead considering their very low retail footprint penetration there so far, is 12.5 the right PE going forward or should we be thinking mid teens ?

[BlackPeter]

Index funds assuming HLg into NZX50 and getting in early methinks

I don't think index funds are allowed to act on hunches ... (otherwise they would be speculation funds ...). They better wait until this info is official - one way or the other

[Teitei]

I don't think index funds are allowed to act on hunches ... (otherwise they would be speculation funds ...). They better wait until this info is official - one way or the other

Most index fund providers have non index funds which can be used to 'warehouse' stocks which are destined for the index.

[Onemootpoint]

Gosh. I glanced at the report this morning.
Thought it looked great.
Quickly came here to see no reaction (at the time).
Thought - shows what I know/ think.
Turned my back to attend to other business for a few hours.
Checked in to market related stuff 30 minutes ago.
But couldn't find HLG anywhere.
Looked up to the sky to see the rocket ship carrying the HLG share price upwards at breakneck speed.
Come back here to learn that may only be stage 1.
    

[Teitei]

Beagle is THE MAN!

[Pierre]

Very glad I sold all my WHS and half my OCA and invested the proceeds in HLG.

More excitement to come I'm sure.

[BlackPeter]

Most index fund providers have non index funds which can be used to 'warehouse' stocks which are destined for the index.

Sounds pretty sleezy - so, you are saying they use the money from non index fund investors to buy index fund investors cheaper new entries into the index fund?

If that's true, the Fund managers doing this belong behind bars.

More likely, though, you are wrong.

[winner (n)]

Sounds pretty sleezy - so, you are saying they use the money from non index fund investors to buy index fund investors cheaper new entries into the index fund?

If that's true, the Fund managers doing this belong behind bars.

More likely, though, you are wrong.

Think it through ...might make more sense

[Teitei]

Sounds pretty sleezy - so, you are saying they use the money from non index fund investors to buy index fund investors cheaper new entries into the index fund?

If that's true, the Fund managers doing this belong behind bars.

More likely, though, you are wrong.

Where do you think the big crossings on the day of indexing come from?

Used to be a mad scramble for stock in the old days but it's all very orderly these days.

[winner (n)]

This guy says the index funds will need to buy 1.4 million shares

Media market close -



Paul Robertshawe, chief investment officer with Octagon Asset Management, said passive investment funds would need to buy Hallenstein Glasson shares to match its index weighting. "That represents about 1.4m shares. Hallenstein is not a highly liquid stock and the funds will have to buy at any price. Maybe some of them have moved early on the strong suspicion that it will be included in the top 50," he said.

[Basil]

Full article Winner is referring too.  WOW, if that's correct and it does get included its going to be a lot of fun seeing the index tracking funds scrambling to acquire 1.4 million shares.  By my calculations that's 102 days normal demand volume in HLG compressed into a very short period of time.  I like this bit especially. "Hallenstein is not a highly liquid stock and the funds will have to buy at any price", emphasis added.
https://www.goodreturns.co.nz/article/976521652/nz-sharemarket-lifts-after-positive-news-from-the-us.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+28+Apr+2023

Thanks for your kind words Teitei.    Bit early to accept any pats on the back yet.  Let's wait for confirmation of index inclusion, hopefully next week.

[Waltzing]

will be a great thing...long awaited.

https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf

[Clearasmud]

Y

Very glad I sold all my WHS and half my OCA and invested the proceeds in HLG.

More excitement to come I'm sure.
[/quote must have done similar, sold all my whs and oca but bought HLG and STu.
Stu has been a dog however