HGH - Heartland Group Holdings

[BlackPeter]

I think the evidence for Global warming is compelling.

Absolutely ... all the scars I got from the deluded climate change deniers on the other channel are evidence for that ;

So, yes we agree - climate change is happening, and no doubt it will impact farmers all around the globe, which happens to include as well Australia.

My point was - no matter how difficult farming will become, people still need food ... i.e. at the end it will be the consumer paying for all of the additional costs, not the producer. I see agriculture longterm as a profitable business and financing it will be as well.

[Breezy]

Absolutely ... all the scars I got from the deluded climate change deniers on the other channel are evidence for that ;

So, yes we agree - climate change is happening, and no doubt it will impact farmers all around the globe, which happens to include as well Australia.

My point was - no matter how difficult farming will become, people still need food ... i.e. at the end it will be the consumer paying for all of the additional costs, not the producer. I see agriculture longterm as a profitable business and financing it will be as well.

No not absolutely because Global warming is the wrong wording and meaning, its climate change.I don't think many people deny climate change is happening its more the influence of the man made side of things that is where the debate comes in.

[snapiti]

jeez this is getting sold down.....market somewhat weary of upcoming results.....totally justified IMO
Results will not be great, hard to see any real believable positive spin attached as well.
Long term a good stock to have in your divi portfolio if you get in at the right price
$1.30 the right price for snaps hopefully with a divi attached

[mike2023]

Will $1.30 be a good price for Snaps if the divi is no longer attached?

While we are discussing climate change, did anyone here know there was once a rainforest in Otago? Technically we are still in an ice age I believe.

[BlackPeter]

HGH share price 2 years hit $2.59

Nearly half that now

50% OFF SALE ....BARGAIN ....BUY BUY BUY

Quite right - some people buy stuff when its cheap, and others wait to buy the same stuff when its expensive. Makes them feel better - they don't like to buy cheap. Each to their own.

Just looked at the 10 years performance of HGH. 10yr P/E (based on SP=$1.38) is 11.1; You could say, that's not cheap, but wait - this comes with a Earnings CAGR of 8.3; Looks pretty reasonable priced to me

And for whoever trusts analysts forecasts: 3yr forward P/E is 8.2 (this is cheap) and 3 year forward earnings CAGR is still 4.7;

So, yes - analysts expect earnings growth rates to drop (makes sense, it is difficult to keep the growthrate when the numbers get larger), but still - 4.7 CAGR in combination with a 8.2 PE looks still quite sensible priced to me.

Could it get cheaper? Sure, it can. Its just - not everybody can be the first to enter the train when it is already leaving the station ...

[snapiti]

Will $1.30 be a good price for Snaps if the divi is no longer attached?

While we are discussing climate change, did anyone here know there was once a rainforest in Otago? Technically we are still in an ice age I believe.

yep me thinks long term buying @ 1.30 will have it rewards, however many of heartlands finance sectors are going to be facing headwinds for at least another 12 months so SP could be under selling pressure for a while, I am happy to bank a chunk @ $1.30 in the belief there might be some short term pain at this price but long term it's offers good value IMO
Traditionally it is not unusual to see finance/2nd tier lenders to trade at 9 x earning so agree with Beagle that $1.25 to 1.30 is about where this thing sits.
Always thought HGH traded at to higher multiples so pleased I have waited

[winner (n)]

10 year performance.  Is it better than the NZX50 Mos?
Some time back from memory with release of FY23 results they boasted that total shareholder return had beaten the NzX50 over the last 5 years from memory by a modest amount but that was when the share price was about $2.

I'm pretty sure it's now a fair bit worse than the NZX50 over the last 5 years. NZX50 itself, a very weak performer and is still well under where it was 3 years ago.

I still therefore maintain the only way to get a decent return from HGH is to trade it.

Spot on Basil .....HGH is a traders dream, Esp if you want decent returns over time avoid the disappointment of the share price regularly falling significantly.

Currently one can see the impact of what happens when they piss the market off and sentiment sours.

Not long ago HGH was valued at 1.9x Book Value when Jeff 'put a word in here' the numbers that got punters excited and it was gung-ho ho

A surprise heavily discounted capital raise and attempts to smooth profits ending in profit warnings its now trading at less than Book Value ....market really pissed off with Jeff and his team.

Whilst loyal shareholders still happy with their yield they are 'less rich' then a while ago ...but no worries still a good yield.

Looking forward no worries either ......that P/B will go up again and share price will again go well over $2

See what I mean in chart

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[winner (n)]

If Heartland was trading today at 1.8x Book (less than a while ago) it's market cap would be $1.88

Current market cap $0.98b

Surely the impact of that discounted cap raise and profit downgrades hasn't 'cost' shareholders nearly a billion bucks ...one could say that

[Basil]

Thanks for the chart mate. Briscoes having a half price store-wide sale. Is that a sign that it's time to buy HGH lol

[BlackPeter]

Thanks for the chart mate. Briscoes having a half price store-wide sale. Is that a sign that it's time to buy HGH lol

Do they ever remove these sale signs at Briscoes? While I am not a frequent customer of them, everytime I go into one of their shops the stuff I am looking for appears to be on sale.

If that's the time to buy HGH, than it is always a good time to buy HGH ... but maybe this is true ... particularly when the SP of this cyclical is in the lower quartils, which is like - NOW!

[Basil]

No doubt about it BP, that's Briscoes M.O., always quite a lot of things on sale eh, but a store-wide 50% off sale is a little bit uncommon for them.  Probably most of the stuff is still cheaper at K Mart though

I think Winners chart is very useful in that it shows just how annoyed the market is with HGH.  Only other time in recent years it's been below that yellow normal zone is with the huge Covid dip, but most companies got smashed temporarily in March 2020 so I think we can ignore that dip and attribute that to the exogenous shock of the onset of Covid...and in doing that we need to go back a full decade to 2013-4 when the last time HGH were well under book value.

So on book value and PE HGH does look cheapish, maybe go a bit lower yet but maybe we are somewhere close to the bottom ?

My memory is fading as I get older...what was going on a decade ago that caused HGH to be cheap then ?

[winner (n)]

Do they ever remove these sale signs at Briscoes? While I am not a frequent customer of them, everytime I go into one of their shops the stuff I am looking for appears to be on sale.

If that's the time to buy HGH, than it is always a good time to buy HGH ... but maybe this is true ... particularly when the SP of this cyclical is in the lower quartils, which is like - NOW!

Great buying when cyclicals in the lower quadrants ...can't go wrong

[BlackPeter]

No doubt about it BP, that's Briscoes M.O., always quite a lot of things on sale eh, but a store-wide 50% off sale is a little bit uncommon for them.  Probably most of the stuff is still cheaper at K Mart though

Fair enough ...

I think Winners chart is very useful in that it shows just how annoyed the market is with HGH.  Only other time in recent years it's been below that yellow normal zone is with the huge Covid dip, but most companies got smashed temporarily in March 2020 so I think we can ignore that dip and attribute that to the exogenous shock of the onset of Covid...and in doing that we need to go back a full decade to 2013-4 when the last time HGH were well under book value.

So on book value and PE HGH does look cheapish, maybe go a bit lower yet but maybe we are somewhere close to the bottom ?

Absolutely - and I did not intend to question the usefulness of winners chart in any way shape or form. 

My memory is fading as I get older...what was going on a decade ago that caused HGH to be cheap then ?

Don't think there was any special reason - it was just Heartland was just created from the ashes of the old building society - and people had to get used to this finance company turning into a real bank - well, at least on paper ;

Great buying at that stage for 50 or 60 cents a  share ... and I remember percy doing a dance every time the EPS increased ... and yes, they made a habit out of that. Good old times, that.

As winner would say - Sp goes with EPS, and the rest is history.

[LoungeLizard]

Well, having trashed HGH, I would have to agree with the general consensus - if you can get in around $1.30 (and not before) then you probably are going to do alright. Strange though that HGH has gone from a steady-as you-go long term investment to a bit of an opportunistic, traders stock.

One caveat is that imo the next report will be a bit of a stinker. NP and EPS will take a hit and dividends could be cut. There's also the prospect of a capital raise that will go down like a lead ballon with investors along with the SP.
That's why I won't be buying back into HGH just yet- there's more bad news to come I'm thinking.

[Basil]

Have to agree LL, and the chart doesn't give any encouragement
To buy straight away. I have this "silly" thing about not buying in a downtrend. Saved me coming to grief many times before.