Well with the share price finishing at 94 cents today,the market certainly thinks it is going to be put to "better progress."
Printable View
The $1000 question now is: to sell and rebuy, or to hold?!
You have to decided for yourself.However this is how I see it.
Fundamentals.
1] My valuation is over $1.20.
2] S&P have upgrade HNZ's credit rating.
3]HNZ have made excellent progress on realising the Non-core property book.
4]Sentinel [reverse mortgage] appears to be surprising on the upside.
TA.
1] Share price is above this year's previous high of 92 cents.
2] The share price is ahead of both the 50 day and 200 day moving average.
3]The MACD looks positive.
General.
1] Any major sell down could put Cool Bear's evening of free beer at risk.[SP must reach $1 on or before 8th July].
Your withholding of information due to my state of Kerrfusion is forgiven PT.
To rephrase the information you provided on the non-core property
Date Gross Receivable Value Impairment Estimated Recoverable Value 31-12-2013 $99.2m $12.1m $87.1m 30-05-2014 $52.7m $9.7m $43.0m
That means over five months:
$87.1m - $43.0m = $44.1m of non core property loans have been repaid and
$12.1m - $9.7m = $2.4m of pre-provided for impairment has been written off (as expected).
The impairment to value ratio of loans repaid was $2.4m/ $44.1m = 5.4%
The impairment to value ratio of loans outstanding is $9.7m/ $43.0m = 22.6%
That tells me that:
1/ Although HNZ has done a good job of getting rid of around half their non-core loan book in less than six months,
2/ there is very little chance that they will clear their non-core property completely within another six months. UNLESS
3/ they take further impairment provisions, as they drop the price on what is left.
Does this matter? At some point the non-core property portfolio will be so small it is trivial in the big picture. But while that portfolio remains larger than a full year projected profit, I say it still matters. Especially as the most difficult disposal work is still to do. The fact that the overall loan book is still on a shrinking trajectory is unhelpful in calculating the percentage of non-core to total loans.
SNOOPY
What Heartland said about the Sentinal acquisition went like this:
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Heartland’s acquisition of the New Zealand and Australian Home Equity Release (“HER”) mortgage businesses of Seniors Money International Limited was completed on 1 April 2014. The loan book, which historically repays at around 10% pa, has been declining since 2012. To date, Heartland has integrated the businesses and is conducting a marketing campaign in New Zealand for the HER product, including TV advertising that started in May 2014. This has produced higher numbers in the sales pipeline than anticipated. The New Zealand book is expected to turn around and grow in July or August 2014, ahead of expectations.
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'Surprising on the upside' in this instance was mentioned in accordance with reversing a two year decline in business. As of now the reverse mortgage business remains on a shrinking course that began in 2012. Good on Heartland for seeing 'green shoots'. But this acquisition has not turned the corner yet. The advertising campaign only started in May, so what Heartland are trumpeting is what they are seeinng in a very short business period of less than a month. One month does not a trend make. The reality of Heartland as 'the incredible shrinking bank' remains intact.
SNOOPY
Given house price appreciation in Auckland and Christchurch, I'd be surprised if there weren't lots of folk looking at what the house down the road sold for and are feeling fairly wealthy right now. There must be a good number of people wanting to tap that asset before they turn toes up to the daisies right?
(Please note: I am well aware this may not be the case in the rest of the country!)