HGH - Heartland Group Holdings

[Basil]

Nothing wrong with 5.1% CAGR in eps and that's not inconsistent with its peer group.
I think they can do about that going forward too so using my deep value filter (Ben Graham no growth PE of 8.5, (adjusted for 10 year risk free rate at 4.8% instead of 4% gives about 7.8 for a no growth company + 1 PE of every % of CAGR gives a fair PE of 7.8 + 5.1 = 12.9 which is about the midpoint of their average multiple over the years.  Interestingly, HGH's peer group is currently trading on that sort of metric.
BEN 11,7
BOQ 11.7 (Not a typo they are the same)
WBC 14.4
ANZ 12.9
NAB 15.1
HGH 6.75
Average of peer group 13.16

That suggests to me HGH is fairly priced when at the midpoint of their PE range which is normally 9-18 but the extremes of negativity and positivity with this one are really quite pronounced and in my view are definitely actionable events.

[winner (n)]

Nothing wrong with 5.1% CAGR in eps and that's not inconsistent with its peer group.
I think they can do about that going forward too so using my deep value filter (Ben Graham no growth PE of 8.5, (adjusted for 10 year risk free rate at 4.8% instead of 4% gives about 7.8 for a no growth company + 1 PE of every % of CAGR gives a fair PE of 7.8 + 5.1 = 12.9 which is about the midpoint of their average multiple over the years.  Interestingly, HGH's peer group is currently trading on that sort of metric.
BEN 11,7
BOQ 11.7 (Not a typo they are the same)
WBC 14.4
ANZ 12.9
NAB 15.1
HGH 6.75
Average of peer group 13.16

That suggests to me HGH is fairly priced when at the midpoint of their PE range which is normally 9-18 but the extremes of negativity and positivity with this one are really quite pronounced and in my view are definitely actionable events.

Yep sure is definitely actionable at the moment ...hope many take the opportunity

[Basil]

HGH's share price sure is inextricably tied in with the state of the economy.  I'm surprised more people can't see that 2023/2024 is probably the bottom of the economic cycle.  Markets always thinking 6-12 months ahead so even a faint glimmer the worst is over here could be a trigger point to get HGH moving north.
Inflation tracking a lot lower in Australia so they will ease interest rates sooner. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/latest-release

Yep sure is definitely actionable at the moment ...hope many take the opportunity.

You can lead a horse to water, but you can't make it drink.

[Stockgathering]

Winner, as you mentioned in an earlier post the BV per share has increased about 4% over your chosen period.
As you also mentioned some of this increase is because of capital raises.
I just wondered if people realise the magnitude of the Aug 22 capital raise.
By my calculations because the capital raise was materially above BV per share the capital raise approximately raised the BV by 5%.
Capital raise was at $1.80, BV at the time was closer to $1.40

[winner (n)]

There were a lot doubters and nay sayers around when Heartland started doing reverse mortgages in Australia buying Seniors Australia

Why go to Australia and heck buying off private equity as well got a few saying a bad move.

Seems to have worked out well

As Basil says dominant share of reverse mortgages market and doing well in other segments ......and Oz businesses make up decent share of overall Group profits

Challenger will turn out just fine

[LoungeLizard]

Even the Heartland web site seems to be crying out BUY BUY at $1.22

You cannot view this attachment.

No-ones mentioning the TA. I wonder why? Don't buy in a downtrend, don't try and catch a falling knife - all those wise sayings have fallen on deaf ears in seems.

IF the TA worm starts to turn, IF key indicators in the next report (NP, EPS, NIM, FCF) start looking positive, IF Challenger gets bank approval and legacy issues don't eventuate, then and ONLY then, would I be interested again in HGH. I don't care if I miss the first 20c of growth but if I've removed the risk of losing capital by buying too soon -  in a downtrend, with a bad mid-term report - then I'd much rather do that.
If Jeffs dreams come true, then missing out on early gains will be a pittance compared to the long term ones.

You snooze you lose? I prefer to think of it as sleeping easy rather than face the waking nightmare that recent HGH investors have found themselves in.

[snapiti]

No-ones mentioning the TA. I wonder why? Don't buy in a downtrend, don't try and catch a falling knife - all those wise sayings have fallen on deaf ears in seems.

IF the TA worm starts to turn, IF key indicators in the next report (NP, EPS, NIM, FCF) start looking positive, IF Challenger gets bank approval and legacy issues don't eventuate, then and ONLY then, would I be interested again in HGH. I don't care if I miss the first 20c of growth but if I've removed the risk of losing capital by buying too soon -  in a downtrend, with a bad mid-term report - then I'd much rather do that.
If Jeffs dreams come true, then missing out on early gains will be a pittance compared to the long term ones.

You snooze you lose? I prefer to think of it as sleeping easy rather than face the waking nightmare that recent HGH investors have found themselves in.

very interesting you say that....Beagle is on here saying  he would not buy until up trend was confirmed.....in saying that I change my mind about investments

[lorraina]

Brokers recent research.
Craigs.Overweight...Target Price [12mths].$1.76
Forbar.Neutral......Target Price..........$1.37
Jarden.Overweight...Target Price [12mths].$1.92
Current share price $1.22

[winner (n)]

Brokers recent research.
Craigs.Overweight...Target Price [12mths].$1.76
Forbar.Neutral......Target Price..........$1.37
Jarden.Overweight...Target Price [12mths].$1.92
Current share price $1.22

As Mr Graham said "In the short run, the market is a voting machine but in the long run it is a weighing machine."

Market voting for $1.22 but the brokers seem to have different models of weighing machines

At least they give us some comfort

[Basil]

very interesting you say that....Beagle is on here saying  he would not buy until up trend was confirmed.....in saying that I change my mind about investments

I'm only prepared to buy in a downtrend in truly exceptional circumstances.  Has to be extreme value, extreme negative sentiment and my Beagle nose for a feed all telling me to act. 

Brokers recent research.
Craigs.Overweight...Target Price [12mths].$1.76
Forbar.Neutral......Target Price..........$1.37
Jarden.Overweight...Target Price [12mths].$1.92
Current share price $1.22

Thanks for sharing.  Removing any bias average 12 month target price is $1.683 and presently trades at a net $1.18, ($1.22 last time I looked less the 4 cents you get back almost immediately with the interim fully imputed dividend).  $1.683 / $1.18 gives 42.7% potential upside in the next year.

I don't care if I miss the first 20c of growth but if I've removed the risk of losing capital by buying too soon -  in a downtrend, with a bad mid-term report - then I'd much rather do that.

Fair enough mate, I get where you are coming from.

[Left Field]

No-ones mentioning the TA. I wonder why? Don't buy in a downtrend, don't try and catch a falling knife - all those wise sayings have fallen on deaf ears in seems.

Interesting to see Basil and Winner ramping HGH together..... seems HGH has powerful friends making lots of noise.

However, I'm with you LL...... The TA is not great.... not even a golden cross in sight.

Then there is Basil's much stated view that "bad news always comes in three's." and perhaps many of us have lost count since the dark $1.80 cap raise days....!?

Nice to watch this one play out from the sidelines. GLH.

[snapiti]

Interesting to see Basil and Winner ramping HGH together..... seems HGH has powerful friends making lots of noise.

However, I'm with you LL...... The TA is not great.... not even a golden cross in sight.

Then there is Basil's much stated view that "bad news always comes in three's." and perhaps many of us have lost count since the dark $1.80 cap raise days....!?

Nice to watch this one play out from the sidelines. GLH.

Not very often Beagle is wrong about his punt....W69 very shrewed as well

[Basil]

Thanks for your kind words Snapper.  Last time I backed up the truck properly on HGH was @ $1.30-$1.35 in Nov 2020...that turned out to be a very lucrative experience.  The forward metrics and share price are even more attractive this time.  This time I have taken a more measured approach, knowing its likely there's a capital raise coming in due course.

[snapiti]

Thanks for your kind words Snapper.  Last time I backed up the truck properly on HGH was @ $1.30-$1.35 in Nov 2020...that turned out to be a very rewarding experience.  Forward metrics and share price even more attractive this time.

The compliment is well earned Basil not forgetting to mention many would have also saved themselves a heap of capital from your prudent warnings about other stocks

[LoungeLizard]

Interesting to see Basil and Winner ramping HGH together..... seems HGH has powerful friends making lots of noise.

However, I'm with you LL...... The TA is not great.... not even a golden cross in sight.

Then there is Basil's much stated view that "bad news always comes in three's." and perhaps many of us have lost count since the dark $1.80 cap raise days....!

Nice to watch this one play out from the sidelines. GLH.

Yep, I'm with you there LF. The sideline is the safest place to be for the moment. That may change of course and if/when it does I will be the first to look at buying. At the moment there's a yawning chasm between the SP and the 200MA line and every time a resistance level looks to have formed it's smashed on the downside.

I'm not an accountant (does it show?) - my degree was in economics - and I'm very doubtful about the assertion that our AND the Australian economies are truly in recovery mode. OZ growth has more or less flatlined with cost of living pressures, high inflation and interest rates. Livestock agriculture - HGH's target sector - is particularly under pressure and, if anyone has noticed, OZ are going through sustained drought conditions which are predicted to get worse. I'm unconvinced about the future of livestock farming in Australia in the coming years.

As far HGH is concerned, the next 6 months will be telling. A good end of term report will calm nerves but a bad one - and a further cut to dividends - will drive the SP down further. Given that investors got badly burnt with the last cap raise HGH might have to deeply discount the next one. In those circumstances $1 share could become a reality - back to where it was 4 years ago.