Originally Posted by
Roger
At $1.30 cum the 3 cent fully imputed dividend due shortly people are really selling for a net consideration of $1.27 before brokerage costs.
It seems more than likely the company will easily achieve its 2015 official forecast profit of circa $47m after positing a strong gain of 41% in the first half to earn half that annual profit already.
So lets turn our attention to the prospects for 2016.
We know that momentum in the loan book regarding Harmoney has been very strong and other area's of lending apart from HER have also been strong.
First N.Z. capital have 2016 EPS at 11.2 cps and Craigs are at 12.0 cps.
Given that the company is not shy on issuing its full year forecast very early in any given year by the time of the ASM circa late October we'll know more but in the meantime if we lay aside personal thinking and just take the mid point of those analyst forecasts we're looking at 11.6 cps.
Now applying a reasonable multiple that the company has traded on in the past and that's well supported by its slower growing competitor's in Australia, (by my reckoning a fair and reasonable PE is 13), then 13 x 11.6 cents means that by late 2015 we should be seeing a SP of $1.51. In that time we'll also have received 4.0 - 4.5 cents final divvy so shareholders buying now at $1.30 are looking at fully imputed divvy's of about 7.5cps plus a theoretical SP gain or circa 20 cents, total shareholder return of approx. 27.5 cents on a $1.30 investment, ( 21% return). This from a business that's well capitalised with ongoing growth in future years.
Opportunity knocks for those looking to increase their portfolio allocation ?