HGH - Heartland Group Holdings

[Basil]

The Dogs of the Dow is an investment strategy that identifies the highest-yielding, yet underperforming, stocks in the Dow Jones Industrial Average in an attempt to achieve share-price gains faster than peers with lower yields. ....theory being the share price might increase to reduce yields to more realistic levels.

So what are the highest yielding stocks on the NZX ... they're the Dogs ofvthe NZX

Suppose HLG and TRA would be included?

I'm really liking the dogs of the Dow theory now lol

[KW]

The Dogs of the Dow is an investment strategy that identifies the highest-yielding, yet underperforming, stocks in the Dow Jones Industrial Average in an attempt to achieve share-price gains faster than peers with lower yields. ....theory being the share price might increase to reduce yields to more realistic levels.

So what are the highest yielding stocks on the NZX ... they're the Dogs ofvthe NZX

Suppose HLG and TRA would be included?

People who try to apply the Dogs of the Dow theory to other stock markets all seem to focus on the first bit (the DOGS) and completely lose sight of the second bit (the DOW).  The 30 companies in the Dow are the cornerstone companies of the American economy (and in many cases, the global economy).  They are strong companies, that still have good cashflows (and therefore can still pay dividends) but that are going through a temporary or cyclical bad period from which they are fully expected to recover.  

This is not the same as picking the worst companies on the NZX and thinking they will bounce back for no other reason than the "Dogs of the Dow" theory.  There are very few "Dow quality" companies on the NZX.  

[lorraina]

Here are a few Small cap,[under $60mil] NZ companies which are paying a dividend.I have not included any smart shares.
Code....share price....Market cap.........NTA...........EPS.........PE..............Gross yield..Note
2CC.........80 cents.......$36.444mil........43cps........10.4..........7.663...........11.181
GEN.......23.5cents......$21.360mil.......28.3 cps.......033.......7.121.............3.321%..........1
MFB........22 cents........$53.497mil..... -0.082cps.......0.027.....8.209.............7.429%
RAD...... 20.5cents.......$58.412mil.........19cps.......-0.028....-7.374.............9.817%
SDL.........67cents.........$9.862mil...........52.7cps.....19.2 ........3.499............19.992%  .......2 
TAH.......$2.34...............$23.294..........-.076.cps.........20.........11.706...........7.952%
 
Notes
1...GEN have only started paying a dividend.I expect their yield will double.
2.SDL have lost their very large major client,and their business is down sizing

[Stockgathering]

Here are a few Small cap,[under $60mil] NZ companies which are paying a dividend.I have not included any smart shares.
Code....share price....Market cap.........NTA...........EPS.........PE..............Gross yield..Note
2CC.........80 cents.......$36.444mil........43cps........10.4..........7.663...........11.181
GEN.......23.5cents......$21.360mil.......28.3 cps.......033.......7.121.............3.321%..........1
MFB........22 cents........$53.497mil..... -0.082cps.......0.027.....8.209.............7.429%
RAD...... 20.5cents.......$58.412mil.........19cps.......-0.028....-7.374.............9.817%
SDL.........67cents.........$9.862mil...........52.7cps.....19.2 ........3.499............19.992%  .......2 
TAH.......$2.34...............$23.294..........-.076.cps.........20.........11.706...........7.952%
 
Notes
1...GEN have only started paying a dividend.I expect their yield will double.
2.SDL have lost their very large major client,and their business is down sizing

Great Post nice to look at some smaller companies.
As you noted, SDL is downsizing their business. However they might not have lost their mayor client completely. As I understand it SDL was the supplier of all services to this client in SDL's field, this contract was not renewed but not given to anybody else either. I understand that the client is planning to split this large contract up and companies included SDL can quote for parts. ( See part of SDL's announcement 27 Nov 24)

Update on RFP Decision      27 November 2024 Solution Dynamics (SDL) is providing this update to keep investors and the market informed with the latest information regarding the recent Request for Proposal (RFP) announcement on 25 November 2024.  As noted in that announcement, SDL had previously advised that its largest customer was undertaking an RFP process that covered customer communications services provided by SDL as part of a major review and tendering of key projects.  During this past weekend, SDL was advised that it had not been successful in this specific tendering process; however, a number of issues remained unclear, particularly whether this decision applies to all or part of SDL services to the customer.  Furthermore, SDL received no information about the timing of the hand over process.  However, as a result of a debriefing call with the customer's procurement team overnight on Monday night (NZ time), SDL can now provide a status update that the customer has advised that it undertook the tender with aim of qualifying another vendor's capabilities, and has done so.  As a result of the debriefing call, SDL understands that the customer now expects to tender its communications programme services (software/professional services and print/logistics) on a project by project basis.  And that the RFP decision was based on commercial factors not on performance.  SDL has been advised that it will remain a vendor to the customer although it is understood this will be subject to an ongoing per-project contestable basis.

[lorraina]

Major cost restructure commenced
11/12/2024, 08:30 NZDT, MKTUPDTE
SDL confirms that following its announcement on 27 November around the result of the Request for Proposal (RFP) outcome for its major customer, it has now commenced a significant restructure process to right size the business.

The restructure proposal is broad-based, affecting both New Zealand and international operations, and aims to remove a material amount of costs. The Company will incur an impairment provision in its first half results, although the final quantum will depend on the consultation results of the restructuring proposal now underway. From 1 January 2025, the Directors will reduce Board fees back to the level prior to the last fee increase in 2022 and the Chair will reduce fees entirely.

With the Company's largest customer having moved to a multi-vendor model, it will take some time until the range of decline in revenue and margin becomes clear.

The inclusion of restructuring costs, and additional clarity required around end of first half timing around contracts makes providing guidance more uncertain than usual, however, the first half earnings result now seems more likely to be in the range of $1.9 million to $2.5 million.

[winner (n)]

Heartland neat top of NZX leaderboard today

A new year ....And good news on way?

[Basil]

You can't be serious.  "Blind Freddy" can tell you that the first half result to be announced next month is going to be an absolute shocker.

[Greekwatchdog]

You can't be serious.  "Blind Freddy" can tell you that the first half result to be announced next month is going to be an absolute shocker.

And yet Blind Freddy was telling you before the Full Year was going to be a shocker and here you were pumping the stock up implying you had $300k to spend.

Maybe some are seeing value and looking forward expecting a turn around from 2nd half.

[LaserEyeKiwi]

You can't be serious.  "Blind Freddy" can tell you that the first half result to be announced next month is going to be an absolute shocker.

Arguably expected bad results are priced in. At current valuation ($950m), the market already does not put any weight to management getting anywhere near stated medium term (2028) growth goals of $200m underlying NPAT.

[Shareguy]

Hi all,

Happy new year. Well I did get a reply which unfortunately was not happy with. Also with Basil's concerns top of mind I decided to bail.

Disc/ I'm out.

[Basil]

Hi all,

Happy new year. Well I did get a reply which unfortunately was not happy with. Also with Basil's concerns top of mind I decided to bail.

Disc/ I'm out.

You've been a long term investor so it goes without saying you mulled that decision over very carefully and didn't take that decision lightly.  The saddest thing is the legacy of loose lending policies that I articulated my concerns about at post #1790, along with other posts around that time, means this company, much like Greg Tomlinson's other one, OCA, has destroyed a lot of value for long term shareholders.   Only those who have taken a very agile approach to trading the cycles of these pure cyclical companies have done well. At least with HGH you've got good dividends along the way so that's something. but speaking of dividends If they make something like $75m reported profit this year, on circa 950m shares and they're only paying out 55% now, gosh that's only 4.4cps so you've probably got out before a big dividend disappointment.

That said, I expect they will try and mask that dividend cut by basing their 55% payout on so called normalized profit so maybe 2 cps interim and 3 cps final is on the cards but my goodness that's less than half of the 11.5 cps they paid at the peak.

[Shareguy]

You've been a long term investor so it goes without saying you mulled that decision over very carefully and didn't take that decision lightly.  The saddest thing is the legacy of loose lending policies that I articulated my concerns about at post #1790, along with other posts around that time, means this company, much like Greg Tomlinson's other one, OCA, has destroyed a lot of value for long term shareholders.  Only those who have taken a very agile approach to trading the cycles of these pure cyclical companies have done well. At least with HGH you've got good dividends along the way so that's something. but speaking of dividends If they make something like $75m reported profit this year, on circa 950m shares and they're only paying out 55% now, gosh that's only 4.4cps so you've probably got out before a big dividend disappointment.

That said, I expect they will try and mask that dividend cut by basing their 55% payout on so called normalized profit so maybe 2 cps interim and 3 cps final is on the cards but my goodness that's less than half of the 11.5 cps they paid at the peak.

Yes it was a hard decision. Feel the share price is priced for bad news to some degree. Had a low average cost and when I include dividends have done well, which made the decision harder. At the end of the day I see other opportunities so it came down to risk versus reward and agree that if there are massive write downs as you suggest are coming then this could go even lower. Sometimes it's better to wait and see on the sidelines....

[winner (n)]

Hi all,

Happy new year. Well I did get a reply which unfortunately was not happy with. Also with Basil's concerns top of mind I decided to bail.

Disc/ I'm out.

You got a response to Nicola as well

Probably raved on without getting the point ... that's what she did to me

Doesn't give any confidence in what they say

[LaserEyeKiwi]

Serious question for those of you that are bearish on the stock: realistically how much stock price impact do you expect under your pessimistic scenarios where they take an upfront large bad debts write down?

A large one off non-recurring loss now, what do you think the market would look at? The one off loss that tanks earnings this year, or the clean earnings forecasts that creates heading forward in 2025/2026 and beyond?

[Basil]

Your question is purely hypothetical as they've made it quite clear they are in no rush to address issues with the $218m of so called non-strategic assets.
I expect there will be substantial write downs of those so-called NSA's and further significant provisioning over FY26 and FY27 and possibly some effect on FY28 as well.