HGH - Heartland Group Holdings

[Buzz]

I think the thing is, that some people massively ramp their investments when they get in, and massively deride them when they get out. The contrast and hyperbole is quite profound. And that cycle is repeated, year after year. I think it's wasted here, the audience is so small it has no effect whatsoever. Maybe elsewhere but not here, yet.

No TA would buy this now, it's way too early to have any confidence in a momentum trade, that the stock will rebound. Nothing on the chart says it's the right time to take a punt, and HGH unfortunately has consistently demonstrated that, for many years it is imo nothing more than a cyclical for momentum traders who want a punt and happen to enjoy a dividend while they're in.

The FA doesn't look compelling either, to take the punt right now (timing again), except that it might be oversold on cap value, but that's straying into TA again. The detractors are just saying that there is more FA and TA risk here and now, than they themselves are prepared to entertain.

I agree with that, too early to call the next cycle upwards. When it happens it will be obvious, the chart will tell us. Meantime, it's not worth the capital risk or opportunity cost, imo, to move early.

[Left Field]

I think the thing is, that some people massively ramp their investments when they get in, and massively deride them when they get out. The contrast and hyperbole is quite profound. And that cycle is repeated, year after year. I think it's wasted here, the audience is so small it has no effect whatsoever. Maybe elsewhere but not here, yet.

No TA would buy this now, it's way too early to have any confidence in a momentum trade, that the stock will rebound. Nothing on the chart says it's the right time to take a punt, and HGH unfortunately has consistently demonstrated that, for many years it is imo nothing more than a cyclical for momentum traders who want a punt and happen to enjoy a dividend while they're in.

The FA doesn't look compelling either, to take the punt right now (timing again), except that it might be oversold on cap value, but that's straying into TA again. The detractors are just saying that there is more FA and TA risk here and now, than they themselves are prepared to entertain.

I agree with that, too early to call the next cycle upwards. When it happens it will be obvious, the chart will tell us. Meantime, it's not worth the capital risk or opportunity cost, imo, to move early.

Well said Buzz.

[Teitei]

I think the thing is, that some people massively ramp their investments when they get in, and massively deride them when they get out. The contrast and hyperbole is quite profound. And that cycle is repeated, year after year. I think it's wasted here, the audience is so small it has no effect whatsoever. Maybe elsewhere but not here, yet.

No TA would buy this now, it's way too early to have any confidence in a momentum trade, that the stock will rebound. Nothing on the chart says it's the right time to take a punt, and HGH unfortunately has consistently demonstrated that, for many years it is imo nothing more than a cyclical for momentum traders who want a punt and happen to enjoy a dividend while they're in.

The FA doesn't look compelling either, to take the punt right now (timing again), except that it might be oversold on cap value, but that's straying into TA again. The detractors are just saying that there is more FA and TA risk here and now, than they themselves are prepared to entertain.

I agree with that, too early to call the next cycle upwards. When it happens it will be obvious, the chart will tell us. Meantime, it's not worth the capital risk or opportunity cost, imo, to move early.

Would be very surprising if anyone buys a stock without feeling positive about it going up and sells a stock without feeling it is going to go down.  As long as their rationale and reasons for buying or selling are shared. Up to each of us to decide whether or not to accept the rationale/reasons.

And as you very rightly pointed out, we are but little minnows here in the market to have real impact on the direction of a stock like HGH. The big biys are well and truly in charge.

I have been closely following HGH since I sold out at $1.78 (took a marginal 3c hit on the way out) and have just started buying back. 

Have a look at the chart below of the banking stocks (WBC, ANZ, NAB, CBA and HGH) and one can observe that they move in unison overall, reflecting the dynamics at play (economic, interest rates and profitability) in the Australasian banking industry.

HGH was following the pattern until late 2023/early 2024 when it became clear to the market that the Challenger Bank acquisition was going ahead and HGH was going to have to do another CR ($200m was raised in 2022) to fund the acquisition. One can see that while the other banks' share prices started recovering, HGH's sp continued to drop.

Hardly surprising as two $200m CRs ($400m) within 18 months are beyond the appetite of shareholders to absorb.

So we are now in the post CR and post Challenger Bank acquisition trading period. There are the flippers who took up the rights and underwrote the CR at $1.00 who are selling out for a quick trade (good on them) or cutting their loss.

I do not expect the selling to continue for much longer (another week perhaps) as it makes little sense to sell out at under $1.00 although the underwriters' break-even price is more like 97c (3% underwriting fee).

I am calling 96c the bottom and expect HGH's sp to track back towards what the other banks are trading at in the next 12 months. I would be disappointed (and wrong) if the sp does not hit $1.25 by end of 2024.

Now fire away your arrows and throw your rocks. Just remember though that I sold at $1.78 and am buying back at $1.00 +/-.

https://nz.finance.yahoo.com/chart/HGH.NZ#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-

[Basil]

Nicely said Teitei.  Blind Freddy can see the major divergence in recent months. Like you, I feel the underwriters selling is nearly done.  Added more this week at 96 cents and not done yet by any means.

Buzz on May 17, 2024, 08:27 PM
The FA doesn't look compelling either,

That statement is laughable. The share price needs to go up 84% just to trade in line with the FY25 metrics of its peer group it has closely tracked for more than a decade. 

[Buzz]

Have a look at the chart below of the banking stocks (WBC, ANZ, NAB, CBA and HGH) and one can observe that they move in unison overall, reflecting the dynamics at play (economic, interest rates and profitability) in the Australasian banking industry.

HGH was following the pattern until late 2023/early 2024 when it became clear to the market that the Challenger Bank acquisition was going ahead and HGH was going to have to do another CR ($200m was raised in 2022) to fund the acquisition. One can see that while the other banks' share prices started recovering, HGH's sp continued to drop.

That chart is just another reason why it's too early, for some (most?) to take a punt on a momentum trade, right now. It's in free fall since Nov'23 with no TA signs indicating an acceptable risk entry price. I disagree though with another poster that this is Heartlands "peer group", that's a long bow to draw, these are the largest banks in Australia, and Heartland is no where near comparable, even with Challenger.

Anyway, as distasteful as it might be to have some objectors to the notion that buying HGH now is a good thing, you've already moved on it, so genuinely wish you all the best. I'm happy to watch for a bit longer and when my TA says move, I will, even though it will certainly leave a few cents on the table from wherever it bottoms.

[snapiti]

I have been following various share chat sites for over a decade now, don't think I have ever seen ballance (tei tei)  and beagle (basil) agree on a SP buy in point.....wow wow wow.
Been a few stocks , justifiably, beaten up this year, this one is well over done IMO.
Happy to buy more if the market over reacts to a modest decline in the numbers at next report

[Basil]

I've followed the alignment between HGH and the peer group I use for more than a decade and used that as one tool to successfully execute on a number of transactions at high and low points before.  Frankly, it's been a very lucrative strategy.

I think Balance is quite correct...the stock has been simply unable to absorb two major capital raises within 2 years without a significant effect on its share price.  Hopefully the board have taken some learnings from this.  In terms of the rampant supply from the overhang the underwriters took, I feel that is quite close to being over and done with.

While I've already talked about consensus broker forecasts for FY26 (16 cps), I understand the full benefits in terms of NIM expansion from switching from wholesale to retail funding in Australia will not flow through for 2 years so it's really FY27 when they start to hit top gear with their Australian operations.
Looking forward to seeing the earnings growth in future years.

[winner (n)]

Still on track for $200m profit FY28

[Teitei]

Still on track for $200m profit FY28

So could be a $2 billion to $2.8 billion stock then, depending on market multiples for banks. 

4 years to double your money as well as receive a handsome dividend of 8%+ each year on the way there. 

Good enough for me so here's hoping HGH's Australian operations do not grow so fast they need another capital raising in 2 years' time! Ouch!

[Teitei]

I think Balance is quite correct...the stock has been simply unable to absorb two major capital raises within 2 years without a significant effect on its share price.  Hopefully the board have taken some learnings from this.  In terms of the rampant supply from the overhang the underwriters took, I feel that is quite close to being over and done with.

As they say in the old days, the pig is moving through the python!

[Left Field]

As they say in the old days, the pig is moving through the python!

It's just that some of us are a tab concerned about indigestion and reflux!

(ps Balance I appreciate you posts here.)

[Waltzing]

With inflated house prices likely to stay in NZ for the future one would think perhaps the Reverse M would become a popular product....

Mortgage free houses with a million added to them and cash strapped seniors might say why not sell a quater early cheaper whats the maths on a RV DMF..

[LoungeLizard]

So could be a $2 billion to $2.8 billion stock then, depending on market multiples for banks. 

4 years to double your money as well as receive a handsome dividend of 8%+ each year on the way there. 

Good enough for me so here's hoping HGH's Australian operations do not grow so fast they need another capital raising in 2 years' time! Ouch!

Or they don't grow and need to meet capital requirements via another shareholder handout. Grow or not grow HGH have only ever been able to sustain their business and pay a dividend by doing periodic cap raises. That isn't going to change in my opinion as HGH's are an increasingly capital hungry business.

It's kind of amusing in a way, how the same bunch of people at each of the last two cap raises said exactly the same thing as they are now. All that has changed are the amounts. $1.76 was a great buy and $2 was just around the corner. 18 months later they are saying $1 is a great buy and....$2 is just around the corner. And at the next cap raise in 2 years time it will be 80c, what a great buy etc etc. Maybe HGH stands for Hopeful Ground Hog?

[Syd]

Wow Man, Lizard , give it a rest you like a broken record and no skin in the game either ................endless negativity
there's a lot of holders including myself took a bath with this stock and they don't need reminding every 5 minutes .
Its onwards and upwards from here .




Disc : Holding & buying.    






 

[Basil]

Welcome to the forum Syd, great first post.
Average of professional analysts is for eps in FY24 of 11.7 cps, FY25 13.2 cps and FY26 16.05 cps.
There's a good saying, you either get bitter, or you get better.  Well done on choosing the latter path.
https://hashimashi.com/bitter-or-better/