$1.30 closing price yesterday plus 3c dividend ex 17th March = $1.33
That equates to a 0.75% return in 2.5 months or 3.6%pa. The price may still be in the doldrums but that is still better than an after-tax return on a bank deposit.
Printable View
What happened today then
Stagnating share prices frustrate me ..... Hope Forbar get told something by Jeff on the quiet to get punters excited. a win for everybody, including Forbar if they generate enough interest.
Maybe get Edison to publish a report. They would see all the good things and come up with a valuation in excess of $2 .....maybe $3 knowing Edison.
Patience grasshopper...Rome wasn't built in a day !
Bjauck - interesting logic 3c divvy but you are under water if you paid $1.40!
I actually paid 49c (for some HNZ shares) less than 3 years ago. I was calculating the return from Roger's post in which he referred to it being fairly valued at $1.32 on 1 February. On todays closing price of $1.29 plus the 3c divi, he would be quits or flat-lining.
Of course your period start and end dates are arbitrary. The most meaningful are your purchase dates and sale dates as the calculated return over that period would be actual realised. I don't intend to sell at this stage, but I still like to know how the actual return (cash divi) and unrealised return (Divi reinvestment and SP change) to date are faring.
My average price is well under $1.00...(most bought just after they got the credit rating upgrade at around 85 cents, but congrats for getting some so cheap.
My comments were intended to highlight that the quarter since the ASM from 31 October 2014 to 31 January 2015 saw a period of considerable market outperformance, up 32% from $1.00 to $1.32. Lot's of patience will be required for the next 32% in my opinion but I'm happy to hold long term. Flat quarter doesn't worry me in the long term scheme of things.
Yes, fantastic, and only a 1 in 30 chance (approx.)of HNZ defaulting over 5 years http://www.rbnz.govt.nz/regulation_a...ks/3498179.pdf
Still exchanged my GNE dividend for HNZ shares today but just like to keep it real.
1/30 isn't that low to be honest, I naturally assumed it would be lower... =\
Indeed it would and additionally one could ponder the the likelihood of some of the blue chip stocks (trading on extremely elevated PE's of circa 30), defaulting on their high consistent EPS growth rates at some stage over the next five years supporting those lofty multiples... Anyway back to HNZ, what chance of another credit rating upgrade in the foreseeable future...far, far better than 1 in 30 I would suggest.
Another week almost over and HNZ share price hardly moved
This is getting depressing.
If Heartland are making more today then yesterday than they should be telling Forbar et al and arranging an upgrade
Slack Investor Relations
But may Jeff don't really care about shareholders .....should be earning his close to $2m rem
^ Ha, beat me to it
Next we could have Maori tribes bidding up the SP because they're so impressed with the interim report, would that be good thing Winner69 ?
Where is the snoop dog, haven't seen any activity from his acutely sensitive snout sniffing out problems lately ? That must mean that we're all hunky dory for setting sail northwards for $1.60 by year end then :)
Only up 4 cents today................not very good, really!!
Will have another look at HNZ at some point. The real problem I had with HNZ was the capital ratio requirements, since eased, by the Reserve Bank. So no need to watch the HNZ ball so closely at the moment. Have thrown my own NZ finance hand in with TNR (was DPC). Nothing wrong with HNZ now. Nevertheless I think from here on in, TNR will prove a better investment than HNZ, particularly for TNR bondholders. But I didn't want to upset the HNZ faithful by saying so - oh heck, I just did!
SNOOPY
The on going Credit Ratings up grades for Heartland, and The Reserve Bank lowering Heartland's capital ratios, are just further proof of how wrong your Heartland posts were.
I would however agree with you that TNR's is a fine company,and an investment with a great future under Paul Bynres's very capable guidance .
I hold both HNZ and TNR.
A cloud on the Golden horizon?? Maybe.........maybe Not??
http://www.stuff.co.nz/business/mone...erse-mortgages
I think it is a positive if the RB takes interest in this form of lending and applies appropriate controls on it early. NZ does not want any cowboys to enter this market. It is and will be a very controversial method of lending and many families in line for inheritance from their parents will not like it.
I think it is a great way to allow asset rich cash poor older people to enjoy their sunset years using their hard earned assets. It will only ever be used by a fairly small proportion of older people that prefer to stay in their homes rather than go to retirement homes.
Thank you for the link.
Just love The Reserve Bank moving to "PROTECT" ASB's and HNZ's position.
I think SBS also offer REL loans.[and TSB?]
From what I have read, Heartland, rather than being caught with houses where the owner has no equity left, have been finding the loans are being repaid a lot earlier than forecast.This has led to a smaller loan book and slower growth than expected.
Government agencies around the world are encouraging old people to remain in their home,by offering more home help services.It is felt people are happier,and stay in better health in their own home.I therefore see this as a growth sector.With the likes of solid banks offering RELs,I think we will see RELs a suitable product for asset rich,cash poor,property loving NZders.
That is a revisionist view on history you have on Heartland Percy.
The BBB- credit rating was because of the acknowledged risk of the Heartland loan portfolio by the credit rating agencies. The high capital requirement set for Heartland by the Reserve Bank was because the loan portfolio was so risky. A strong property market subsequently allowed Heartland to ease their way out of their dodgy Central Otago property lending. That in turn allowed the reserve bank to ease their requirements on capital held by Heartland and allowed the credit rating agencies to upgrade Heartland's credit rating to BBB. But, and here is the point, that recovery in the property market was never a given. If it hadn't happened, then Heartland would very likely have required a substantial capital injection from shareholders to keep it afloat.
The fact that a large capital injection was not required does not mean that my warnings that Heartland were at risk in the event of a the property market downturn should have been ignored.
SNOOPY
Histories are always written from a particular view-point usually to prove that particular view-point.
For the future:
There is ALWAYS Risk.
Much of it can be understood and quantified.
But there is always a possibility of a flock of Black Swans flying by and pooping on you.
Best Wishes
Paper Tiger
Disc: Still like the Risk/Reward ratio for HNZ - but that is just one view-point.
A few years ago my Mum at 80 years of age faced a long and very debilitating 18 month wait for a hip replacement through the public health system. She is of scotch ancestry, (where I get my tight arsed accountant habits from lol), so asked me what I thought of her spending the five figure sum to go private. I told her don't be so silly as to seek my approval, just go ahead and get it done. She's 85 now and leads quite an active life.
Older folks can go downhill very, very fast if they're ostensibly confined to a wheelchair for a significant period of time. This type of situation is where I see home equity release loans as absolute GOLD !! Mum has a few quid set aside so doesn't need one but I reckon HNZ providing this facility to older folks who do need it are really providing a very worthwhile facility.
I read Against the Gods : The Remarkable Story of Risk by Peter Bernstein every now and again
Great book about risk in general ....from every day living to financial markets.
http://www.amazon.com/Against-Gods-R...9419948&sr=1-1
Not claiming to be a banking guru myself PT, never have done. I am surprised you dismiss the credit rating skills of the likes of Fitch and the risk capital requirement assessments of the Reserve Bank so curtly though. If you believe that the BBB- risk assessment of Heartland when it was set up was too harsh (it may have been) I would love to know why.
SNOOPY
Seeing as we currently in a historical thoughful mood my guess is the primary motivation for the merger was the need to hide the MARAC mess beneath the skirts of the CBS Canterbury balance sheet.
And the update of this; They got away with it.
Boop boop de do
Marilyn
The out come of the mergers and the recapitalization has provided all shareholders with a Bank to be proud of.
Nothing was ever hidden.Shareholders were told what was needed,and where the directors saw the company's future as a bank was.
Those who put the merger together had great foresight.
Capable people with vision.
https://www.youtube.com/watch?v=zKhEw7nD9C4
Best Wishes
Paper Tiger
Thanks Paper Tiger. I enjoyed that a lot.
However I am struggling to reconcile the blackknight portrayed.....with the definition in investopedia...and HNZ.
Somewhat confused !
http://www.investopedia.com/terms/b/blackknight.asp
Enjoy your afternoon.
Cheers
RTM
Black Knight licorice is very nice, yummy
Heartland made $11.0m in Q1 (September) and $12.5m Q2 (december)
So it looks like $14.0m plus in Q3 just gone and as things kick into gear $16.0m in Q4
Heck that's $53.5m for the full year
And Jeff wants us to believe that $46.0m is the answer .....what a (you can make up a word here)
He's playing games with the market / shareholders methinks. Otherwise he's not letting on that things aren't going to plan and the rhetoric in the half year announcement was jus PT that.
Under promise,over deliver;way to go............I hope
Getting ahead of oneself would be suggesting results are already out which over performs the guidance, which they're not. If someone took their own advice, they would have sold the re-entry to the price channel, because they don't hold companies whose stocks are not appreciating and not be fretting about the current price going sideways or whether the CEO has a penchant for managing investors expectations.
Baabaa, thank you very much for the telling off, it made my day
I'm OK. Still no need to sell, just yet. Redoing the channel lines to incorporate all the price points (esp the $1.41 one which was 1 std) current price activity is still contained in the channel.
An ATR trailing stop is $1.32 but I seez nothing as Schultz says
Other problem I have is that volumes are so low these days not always easy to find a keen buyer .... brokers are not always on the sides of mugs like you and me.
So hopefully 132 today .... then up top 140 and beyond
Now back to stirring up Jeff and his team
Well they're nicely in the channel so are a screaming BUY for astute value investors.
Yeah and stuff micro managing a stock I'm confident in and doing most things right in a glass three quarters full way.:scared:
What about the reverse mortgages ehhh are they getting ahead.
Going off the extremely positive tone in the half year report I think its clear they are being very, very conservative with their forward guidance for the full year.
One suspects when they actually announce the profit result in due course, (as well as issuing forward guidance for the 2016 year, HNZ are really good with forward earnings visibility like that), we'll see the price move materially higher.
Patience is an essential ingredient to any carefully crafted investment plan :)
Well, it definitely looks as though a change is due.
Going by the under promising I think its likely a zig is following the zag.
Still wonder why they have this high rate (maybe buying new business?) but then we forget that they aren't really a bank (in the traditional sense) but more of a finance company where paying high rates for money is the norm.Quote:
Percy (on another thread) Wonder when the Germans will wake up to Heartland Bank's 4.5% on call a/c.?
On their own admission (at least that of the head finance man at the time) becoming a Bank was just a marketing ploy which brought a bit more credibility in the eyes of punters. Better to say you are a Bank than having to get the likes of Dougal Stevenson or Colin Meads to say you are a good place to invest.
Maybe deep down they still have this finance company mentality?
Might try out Chelsea's Romesco recipe that appears in the latest Heartlander
Top companies with women on boards perform better, research finds
http://www.smh.com.au/federal-politi...22-1mqsm2.html
Heartland NZ Limited 1 out of 7
Heartland Bank 1 out of 8
Saw that ad on TV last night aimed at the oldies
Heart wrenching story until the For Sale sign is taken down and a happy ending. Well done Heartland Marketing team. Love the music that goes with it.
Wonder if it is getting the oldies interested? Hope so
They said HER stuff should get some momentum in H2, maybe this media is the trigger
Yes.... upon reflection although on first viewing I found the advertisement elongated and wondered about the cost efficiency, I can see how this sort of "emotional approach" if that's the right term for it, might have considerable appeal to the target market. Overall management at HNZ impress me, a company that does what it says it will and continues to build a highly credible track record of growth.
so the HER portion of the business could be years away from recieving any money let alone make a profit...to me it just doesnt add up....throw in the peer to peer lending platform that will be slow to gain traction and heartlands profit may become a bit stagnant......i think they should stick to the consumer finance business,,,,....
Taking Stock 23 April 2015 - Chris Lee
THE Heartland Bank executive Andrew Ford is no greenhorn, having had at least a decade in executive positions at Heartland and its predecessor, Marac Finance.
At Marac he was one of several senior executives who was let down by the company’s weak leader Brian Jolliffe and by what proved to be a two-tier board of directors, with one tier proving to be inept as well as weak.
Ford was part of the transition team that converted Marac into a successful focused small bank, well led by Jeff Greenslade, and today Ford has some responsibility for Heartland’s move into Home Equity Release Loans, or reverse mortgages as these loans used to be called.
Ford was quoted at the weekend as having been moved by the heartfelt correspondence Heartland has received from senior citizens who have taken out these loans to enable them to maintain their living standards, and stay in their houses, rather than be short of cash and forced to move.
It is easy to believe that the borrowers would record their gratitude for the spending money they have accessed at a time when housing price rises are leading to higher-valued estates but also leading to higher rates and insurances for the home-owners.
One of the Sunday papers sought last week to emphasise the interest rate cost of these home equity loans, now more than 8%, and expressed concern that a borrower might end up ‘’eating his house’’.
Indeed if Heartland lent $100,000 to a 60-year-old taking a mortgage over an $800,000 house, when the owner was 84 years old the house would be fully mortgaged, if the interest rate averaged 9% and the house price rise over the 24 years was nil.
Quite rightly the Reserve Bank would be frightened for Heartland’s future if it made such a loan, and would force Heartland to provide more capital to recognise a higher risk-weighting of these loans.
Of course the example and assumptions quoted – 60 year olds borrowing $100,000 for 24 years, no house price rises, interest rate 9% - are all chosen to produce a ridiculous outcome.
Home equity release loans are currently priced nearer 8%, borrowers begin their loans at ages nearer 75 than 60, the maximum amount to be lent is calculated with common sense, and lenders have discovered the average term of such a loan is eight years not 24.
The newspaper item was prepared on false assumptions, presumably to achieve a ‘’newsworthy’’ angle.
Andrew Ford will have been exactly right when he noted how much these loans have helped some people.
The loans are not intended to meet the needs of everyone.
Many retired people enjoy moving to smaller homes with smaller gardens, some enjoy moving to retirement villages, some have sufficient money to stay put and employ a gardener and a few choose to enter into home equity release loans. The equity in one’s home is available to be used as the owner sees fit.
My guess is that over the next 20 years, people will live longer and have better health, and dare I say it, governments will struggle to finance an ageing population’s expectations of living standards and healthcare.
In this environment, home equity release loans may become much better understood, and more regularly used.
One hopes that Sunday papers will eventually discover that banks and retired people rarely enter into stupid arrangements.
Hey Percy - that a brilliant piece you wrote for Taking Stock this week. Congratulations
You sorted the buggers out eh mate .....stupid media.
I reckon that ad on TV will do wonders and there will be really strong growth starting to come through this year ......might need to readjust my forecast UP
Baabaa - have a look at the Scales thread ...... Chris Lee and Percy rumoured to be one and the same
Well Winner, I wondered if that was what you were saying, but better that you said it, than me, so thanks for that insight. Not sure how I would know really, whether a kindly well travelled bookseller generously sharing his views might be THE Mr Lee author of Taking Stock, or perhaps his equally insightful sidekicks, all of which I enjoy reading, as many do I suspect. The reports do seem insightful though and uncannily in tune with opinion, much of which is often shared here first.
Hells Bells ,I think I have read too many of Chris Lee's articles!!! I am starting to think like him.!!! lol.
I do appreciate he has a better way of expressing himself than I do,The Heartland REL article was very well written,and gave a very good rounded view of RELs.
Roger thank you for posting it.
It looks as though HNZ could be starting its march upward (hope I havn't jinxed it) broken upward on the daily and weekly charts through the down channels. Just bought back in so lets see.
Wish I knew how to post both those charts.
Top lawyer calls for more Asians on boards
http://www.stuff.co.nz/business/6804...ians-on-boards
Heartland Bank / Limited ............another fail
I fear the middle aged white male board with the notional female is just part of the Heartland culture
Nonetheless some interesting insights from Mai n that article. Like "It will be a challenge to work in a sector which is subject to so much disruption and fast-paced change. The challenge of demographic disruption is as important as technological disruption, especially in a super-diverse market like Auckland.
Mai Chen is a very smart women there's no question about that but directors should be appointed solely based on merit and nothing else (including her call for more ethnic diversity).
I completely agree about selecting people based solely on merit, but in her defence, she is specifying skills that asians can bring and reasons why they would be good for the business (e.g. "cultural intelligence and language skills", "businesses generally needed to have the ability to transcend borders because of growing urbanisation and globalisation").
So unlike in some cases where diversity is called for for the sake of diversity, here she's saying why it's good for business.
What's this? a few days have passed us by without a single post! Quickly, someone post some stats!
" ....interest income rose 6 percent to $832 million as the local lender grew its mortgage loan book 5 percent to $40.7 billion and business lending expanded 5 percent to $24 billion. Impairment charges on bad debts rose to $31 million from $4 million a year earlier, when the bank benefitted from provision recoveries."
From a report on Westpac. Food for some thought with respect to "Impairment charges on bad debt....etc".
Will be interesting to see if they give some detail as to the change from 31mil to 4mil, Have not looked as yet.
I wouldn't read too much into the Westpac situation. The previous $4m charge was abnormally low as a result of some hefty provision recoveries in that period. The assessed quality of the book has been maintained with +90 day mortgage arrears slightly improved. Just don't mention the run away property
prices in Auckland and what effect a significant correction there would have!
I wouldn't read too much into the Westpac situation. The previous $4m charge was abnormally low as a result of some hefty provision recoveries in that period. The assessed quality of the book has been maintained with +90 day mortgage arrears slightly improved. Just don't mention the run away property
prices in Auckland and what effect a significant correction there would have!
HNZ's specific bad debt and general provisioning jumped considerably in the recent half year result. Despite that profit also jumped substantially.
Liked this bit from Westpac story
The New Zealand unit widened its net interest margin to 2.29 percent in the period from 2.28 percent a year earlier, as cheaper wholesale funding costs and improved deposit spreads offset competitive pressure in the mortgage market.
Hope Heartland does a bit better when they widen their margin