HGH - Heartland Group Holdings

[Basil]

Suppose a lot depends on which set of numbers you use for HGH, normalized profit with all the things Jeff is busy stuffing below the bottom line as so called one off extraordinary items or statutory profit before so called normalization. 

Got to be careful with average sector comparatives too. Quick look on Jarden's website has PE's for 2023 of ANZ, WBC and BEN all at 11.  Barramundi hold ANZ, Macquarie and WBC and I have a lot of BRM so no need for me to replicate direct ownership of Au banks

Rather buy more TRA than HGH, on similar metrics with their much superior eps growth track record and have been doing so. Lost confidence in Jeff and the woke board and management at HGH 

My gut says HGH to report disappointing numbers next month.  Might be interested at 9 times statutory profit for a trade...that's a fair bit lower SP than here

[winner (n)]

Craigs latest says

Current trading multiples
At the current price HGH is trading on:
A price-to-book multiple of 1.0x (vs. Aus sector average of 1.4x)
A rolling forwards P/E of 10.0x (vs Aust sector average of 13.9x, with the 4 major banks averaging 14.8x).
A forward cash dividend yield of 7.0% based on 75% payout (vs Aust sector average of 5.7% with an average payout of 77%).

Outperform

Disc Have been buying

Think there's a danger in comparing multiple of NZ companies v Oz ones (even if dual listed) and concluding it must make them 'cheap'

Doesn't always take into account relative company size, the impact of a much largerASX than NZX, home bias etc etc

FBU great example ....for decades has generally traded at lower multiples than BLD and JXH ....and as such brokers always say they are cheap.

And  the averages used by Craig's re Oz banks would be a bit lower if they left CBA out .....they trade on really high multiples

[winner (n)]

FWIW current Price/Book numbers for Oz banks ranked high to low

CBA 2.6
NAB 1.6
ANZ 1.1
WBC 1.1
HGH 1.0
BEN 0.8
BOQ 0.6

Note CBA the big outlier

Taking into account the factors (size, home bias etc) mentioned above I reckon HGH is priced about right ...maybe a little on high side

No doubt other punters will see it different

[Basil]

Taking into account the factors (size, home bias etc) mentioned above I reckon HGH is priced about right ...maybe a little on high side

Agree 100% but don't overlook the "woke discount" as well, as they continue to shoot themselves in the foot with their endless pursuit of all things woke. (Probably knocks about another 10 cps off fair value in my opinion).   

[winner (n)]

Agree 100% but don't overlook the "woke discount" as well, as they continue to shoot themselves in the foot with their endless pursuit of all things woke. (Probably knocks about another 10 cps off fair value in my opinion).   

I'm under the impression that 'wokeness' is a good thing and punters put a premium on good companies

[notmaurice]

I'M just pleased that they aren't sponsoring that Rugby v Cricket game.

[Left Field]

Woke up this morning and for some reason the saying of "go woke, go broke' came to mind in regard to HGH.
..   

Agree 100% but don't overlook the "woke discount" as well, as they continue to shoot themselves in the foot with their endless pursuit of all things woke. (Probably knocks about another 10 cps off fair value in my opinion).   

Trying to understand why the woke word has found its way to the HGH thread?

https://en.wikipedia.org/wiki/Woke

Woke is an adjective derived from African-American Vernacular English (AAVE) meaning "alert to racial prejudice and discrimination".[1][2] Beginning in the 2010s, it came to encompass a broader awareness of social inequalities such as racial injustice, sexism, and denial of LGBT rights. Woke has also been used as shorthand for some ideas of the American Left involving identity politics and social justice, such as white privilege and reparations for slavery in the United States.[3][4][5]

I'm still wondering......

[winner (n)]

Leftie ....... Besides the ESG stuff Heartlaand been doing for a while 'wokeness' came to a head with this paragraph at last announcement ....social responsibility and all that - being nice to customers at expense of shareholders -

Rising interest rates in New Zealand and Australia have created a more challenging environment in which to manage margins. Heartland intentionally delayed passing the full impact of these increases onto some borrower customers, specifically in the case of New Zealand Reverse Mortgages and Australian Livestock Finance. While this did not maximise potential NIM, it was considered the socially responsible and more sustainable approach."

[Ricky Bobby]

Devils advocate here winner... but don't you need to be mindful of these things when growing a business?... it's competing with some established players and need these points of difference to stand out and get market share. Also for clarity I'm totally not into all this feel good stuff, but unfortunately it's part of the game now...

[BlackPeter]

Devils advocate here winner... but don't you need to be mindful of these things when growing a business?... it's competing with some established players and need these points of difference to stand out and get market share. Also for clarity I'm totally not into all this feel good stuff, but unfortunately it's part of the game now...

Plenty of studies showing that in the long run companies who care about their customers are much more successful than companies seeing to rip them off.

I like successful companies and want them to stay long term successful. If treating customers with respect is called woke, than I do like woke companies.

[Left Field]

Leftie ....... Besides the ESG stuff Heartlaand been doing for a while 'wokeness' came to a head with this paragraph at last announcement ....social responsibility and all that - being nice to customers at expense of shareholders -

.... While this did not maximise potential NIM, it was considered the socially responsible and more sustainable approach."

I appreciate recent  comments and I understand terms such as "socially responsible" etc..... trouble is that 'woke' means different things to different people and different things in terms of the context in which it is said.

While I have been critical of HGH from the time of its last badly managed cap raise (around the $1.80 mark if I recall rightly) ...... I wouldn't be calling HGH 'woke.'

[Ferg]

While I have been critical of HGH from the time of its last badly managed cap raise (around the $1.80 mark if I recall rightly) ...... I certainly wouldn't be calling HGH 'woke.'

It may have something do with them no longer financing vehicles that use diesel - apparently to assist saving the planet.  Notwithstanding such vehicles could be employed to help with said task....

[LoungeLizard]

The decline and fall of HGH continues. Trading at $1.39 currently - a 23% haircut for those railroaded into the cap raise only 18 months ago. The TA still looks terrible - I see $1.35 or even $1.30 on the horizon. If the divy is cut, or another cap raise is required, then all bets are off as to where the SP goes from there.
 
I also don't like the look of things in the Aussie agricultural sector where HGH has really gone all in. Climate change is going to make things pretty tough for HGH's number one customer - farmers. The big picture doesn't look good at all in my opinion. 

[lorraina]

With a lot of rain farmers on East Coast of Australia  ,farmers will be trying to build up stock numbers.Ideal for StockCo.
HGH's largest sector is Reverse Equity lending which is continuing its strong performance.

[winner (n)]

The decline and fall of HGH continues. Trading at $1.39 currently - a 23% haircut for those railroaded into the cap raise only 18 months ago. The TA still looks terrible - I see $1.35 or even $1.30 on the horizon. If the divy is cut, or another cap raise is required, then all bets are off as to where the SP goes from there.
 
I also don't like the look of things in the Aussie agricultural sector where HGH has really gone all in. Climate change is going to make things pretty tough for HGH's number one customer - farmers. The big picture doesn't look good at all in my opinion. 

Hey ll .."it's 40% haircut from $2.30 just prior to that cap raise

Ouch