Yes this was a strange one. It did update automatically in the Portfolio but not on the Watchlist. So after deleting HNZ from Watchlist and entering HBL, all is honky dory
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Heartland says "Key drivers of growth for Heartland are GDP and employment"
Great news then
@ANZ_cambagrie: Bumper December Truckometer (Heavy Traffic Index +2.6%) suggests NZ Q4 GDP may be well north of 1% q/q. https://t.co/n896N2egcY
Heartland share price bit slack of late
If Jeff right about what drives heartland profit they should be rolling in it.
C'mon boys - get things firing on all cylinders
I have been trying to see whether it is worth increasing my holding before the share buy back or after. At the SHM it was shown that the value of shares would not change, just the number that one would hold. There is quite a bit of information not given that will require some assumptions, but I have done a quick analysis to see what might happen to the share price after the buy back.
The asumptions I have made are:
The tier 2 capital raising will achieve the full oversubscription of $75M
The interest payable will be 5% and that interest will be tax deductible for NPAT calcs
Issued shares will increase prior to buyback in line with the DRP on a similar ratio to the previous year.
NTA (per share) for 2016 will increase due to the retained earnings from 2015
Without the Tier 2 capital the 2016 NPAT would have been close to $53M
The results I obtained are
2015 2016Buyback Shares issued 473646830 437308000 Tier 2 $75M Reduce NPAT by $2.8M NPAT 48 50 NTA 0.895 0.923 EPS 0.103 0.114 Div 0.075 0.085
This suggests that the share price is likely to increase from my assumed $1.30 to $1.47 by the end of FY 2016
In theory you are correct - based on your assumption that the PE ratio stays the same. (Higher eps at same PE = higher share price)
But also in theory the PE should reduce because of the new capital (bonds) from an shareholders perspective their investment is more risky.
In practice the answer will likely be somewhere in between .....but we'll never know what the answer is because other things (maybe a profit upgrade) will always happen.
If you are convinced of your workings shouldn't you buy before the buy-back because the price might 'adjust' quickly .....but then again the impact of the buyback might already be factored into today's price (as per one of Rogers post shortly after the buy back was announced)
The value will be the same before and after because the market will have/has factored it in. If there was an arbitrage, as you are trying to work out, someone with more time and money on their hands would have already figured it out, traded it and removed the arbitrage (assumes fully efficient markets which isn't the case).
Just my opinion, but I don't think it could be fully factored in until after the interim dividend is announced.
Even if you are correct, and it has already been fully factored in then it would still be better to buy before rather than after in order to get the full impact of the interim dividend and the tax free buy back.
Heartland says "Key drivers of growth for Heartland are GDP and employment"
Great news then -
New Zealand workers became more optimistic about their job prospects in the December quarter, with employees feeling more secure and expecting future pay rises.
Should ave led to more consumer borrowing
I be very disappointed if Heartland doesn't raise the F16 guidance when H1 announced
Otherwise the guys have been taking it too easy and resting on their laurels
No they won't raise it. They are conservative and would have been able to see where the economy was headed short-medium term.
If I was them it would be far better to surprise on the upside than to try to quench your insatiable need for reassurance.
Resting on there Laurels? I don't think so.