Looks to me as though you are "well positioned."
No need to trade HNZ or SUM.
Printable View
The financial statistics as published in the daily papers make their calculations for earnings per share (eps) and price earnings ratios (pe's) based on net profit after tax. For the last tax year as we know, HNZ wrote off some $18m. Because of this the financials show eps as 1.78c giving a current pe of some 47. For the general public who do not follow the company or who rely only on this information only, this does not look good. For those of us who follow the company this is not a problem as we understand that the earning before the writedown were some $24m. We are looking ahead to next year when without further writedowns and increased earnings, the published statistics will look very attractive to the general public.
In the meantime I see this as a buying opportunity.
That's right Scotty. When we record our full year 9-10 cps earnings for the current year, the statistics will indeed look very different. HNZ is without a doubt in my mind, a very cheap stock where we can expect both good dividends and good capital gain in the near/medium future.
Discl: accumulating
The problem with this comparison is that the amount of lending a bank can do is related to their tier one capital of which shareholders equity is one component. In the case of Heartland they only have shareholders equity (be it subscribed or retained earnings). ANZ and WBC have other sources of tier 1 capital such as bank issued bonds with long maturity dates locked in.
If you compared 'Return on tier 1 capital' you will probably find that ANZ and WBC do not compare as favourably with Heartland as a bare 'ROE' comparison might suggest.
SNOOPY
That why roe bad metric for banks .....leverage clouds the issue
But bank execs love it when their huge bonuses tied to roe .....just go out and borrow more and do some risky lending and hey presto roe shoots up ....and bonuses as well