Ha ha
But does it always work out better for shareholders who think they have a bigger slice of the cake?
Printable View
Noodles - Thanks for expressing your view.
My view is based on
1. Interest margins at HNZ are nearly double the sector average.
2. HNZ are known to be looking at parts of the GE book
3. HNZ are in acquisition mode
4. Very low interest rates are here for the foreseeable future which is assistive to some continued margin expansion
5. Lower fuel prices are assistive to consumers in terms of lowering delinquency rates AND boosting credit demand, (people feel better about their financial situation...want a better car e.t.c.)
6. $11m Q1 result when spending a lot on advertising for the HER re-boot
7. Average analyst forecast is 9.95 cents EPS - 11.3 2015 PE is very cheap for a bank, especially one growing EPS
8. Low interest rates have allowed considerable market PE expansion so 11.3 is both very cheap relative to its peers, (Australian regional banks), most of whom are trading on about 15 and relative to the market average
9. Gross dividend yield estimated at 8.6% , based on my estimate of dividends of 7 cps this year fully imputed (7 / .72) 9.72 cents gross
10. PE's are really stretched in N.Z. with the vast majority of stocks looking either over-priced or fully priced. HNZ isn't one of them.
Risks
1, Some exposure to the dairy sector
2. Escrow period for vendor of HER business ends in April and they are known to want to sell their stake.
I think these two factors are presently holding the stock back a bit.
I see from the Annual Meeting, 31 October 2014 notes, on page 22 they state NPAT forecast 2015 is $42-45M and on p23 this forecast is based on 'business as usual' and does not include new initiatives and acquisitions. ANZ tells me the total issue is 467M shares.
$45M / 467M shares = 9.64CPS (using $45M as the Q1 report suggests things are looking ok so use higher guidance).
9.64CPS / 113 shareprice = 8.5% return if business is as usual. Not too bad given this is only 'usual' and there's potential upside through acquisitions and new initiatives.
Taking Motor vehicle finance as an acquisition example, from http://www.mtf.co.nz/pdf/investors/2...ual_report.pdf their profit is roughly $6M from equity of approx $80M giving a 7.5% return. How would they work this takeover? In terms price paid, funding it and making sure it added to the ROE (return on equity). Any ideas?
Also, has anyone heard of any 'new initiatives?' Have they given anything away at AGM's etc? Any ideas?
NBT
nextbigthing.
MTF equity.I think you are including $40mil of perpetual bonds as equity?
There are 23,073,229 MTF shares on issue.They have been trading on sharemart for approx. 95cents.
They can only be owned by "originators" ie MTF franchise holders or car dealers who discount their finance deals via MTF.
I am sure institutional investors would be happy to snap em' up
:lol: We might need a small loan to assist with this from....let me see...I know, HNZ :D
NBT, but seriously I don't see this size parcel as an issue...most likely they'll do an institutional placement by book-build while the shares go into a trading halt.
I think this overhang is already factored into the price. Once its removed and there's more institutional support and we have the !H results in the ledger and a profit upgrade even Vladimir Putin won't be able to save you from paying north of the current price :)