Nobody has ever explained to me why the outrageously above average NIM results in a below average ROE
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Nobody has ever explained to me why the outrageously above average NIM results in a below average ROE
Been there, answered that, last year, when you said the same thing.
"Those metrics are for the licensed subsidiary operations only. IE, ANZ new zealand not the the consolidated group operations. Heartland does have superior consolidated group returns on equity than almost all the australasian banks (bar CBA) for FY22 forecast. This implies that the far larger australian operations of the big banks are substantially less profitable than in NZ, and the sheer weight of the aussie operations drag down the reported group ROEs. So while HGH as a consolidated group might generate superior ROEs than the consolidated operations of the big aussie banks, and be rewarded by trading at higher price to books as a result, the aussie subsidiaries actually operate more efficiently than heartland bank NZ itself."
So for the consolidated group - you know, the thing you buy a share in a pays you a dividend, HGH has above average ROEs.
I'm just a noob but the way I see it is the book value per share grows about 4.2% per year. Sometimes it trades 1x book value and sometimes 1.5x. On average about 1.25x book value....
If you wanted a long term strategy you could accumulate shares as close to book value as possible and maybe even trim when it gets up around 1.5x book value...
On your journey of buying and building a position your capital should increase on average 4.2% per year and you will collect a nice reliable dividend. Currently that is over 9%!
I am a retired bookseller. Yes the sharemarket has been my hobbie for over 50 years.
I rely on my own research.
I only share my thoughts here..Never try to offer any advice.
I expect people reading my thoughts to make their own minds up,after doing their own research.
I have made ever mistake there is possible to make.Still make a few,but usually wake up to them pretty quickly.
HGH I have been a holder since day one.
Currently I am impressed by HGH's moves to strengthen and grow their Australian operations.Makes good sense to me.
Percy, this is one of the things I love about you. You never profess to be anything other than who you are, you are down to earth and humble, and you are one of the wisest people I know.
This seems like an ideal moment to publicly thank you for your contributions to these forums, but more importantly, for your friendship and the unfailing, infinitely patient, encouragement and support you give me behind the scenes.
Some here could benefit from taking a leaf out of your book (pun intended ;))
I whole heartedly agree. One of the most decent honest posters on here, he has unselfishly shared his opinion with us on here and with some of us behind the scenes. He is a breath of fresh air and I am immensely grateful I have gotten to know him. One of life’s treasures :)
Great story but let's not gild the tale above its station. You mean held it since day one except for that little wobble around the time Covid struck? However, to your great credit you realised your mistake and bought back in, once the resilience of Jeff and his team came to light.
SNOOPY