Shouldn't have gone down in the first place
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Sort of smiled about digital technology strategy when business is done over the phone with the banker writing the problem down in his pad with a pen
Problem not fixed so must have lost his pad
Oh well another call needed ...not cool
Original problem is a Heartland guy not doing what he said he would do
$1.64, much cheaper than the start of the year when it was nearly 50 cents more expensive
Nearly cheap enough for me to consider jumping back in
Hoop would say well and truly in bear territory .....25% off its recent high and trading below 200MA. Quite a wealth destroyer of late eh
Like it or not Heartland have been tainted with the fall out from the Aussie banks fiasco and as such is going through ax rerating process. Probably about fair value at the moment but if Aussie banks continue to decline well you never know where Heartland might end up.
HBL almost as big an enigma as that great Australian finance company Flexigroup
Looking at the big chart picture I must concede it still has a head and shoulders look to it and now looks like it might break down below the right shoulder. Hoop would probably say that happens far more often than not. I reduced last week at $1.73 having successfully stripped the dividend...playing "possum stuck in the headlights" with the rest and hoping its the light at the end of the tunnel I see not a train coming to run me over lol.
Financials worldwide under pressure at present plus the Aussie bank fiasco doesn't help that's for sure.
Industry Group Risk
From AR2018 note 19c, the greatest 'business group' risk in dollar terms is agriculture, with $740.798m worth of assets. This represents a decrease of $16.206m over the previous year.
$740.798m/ $4,390.423m = 17% of all loans
This decrease is possibly due to Heartland declaring that they are moving away from 'larger relationship managed lending' (code for 'lending on farms') to strengthening the livestock lending proposition.
Regional Risk
From AR2018 note 19b, the greatest regional area of credit risk in dollar terms is 'Rest of the North Island' , with $1,121.983m worth of assets. This represents:
$1,121.983.m/ $4,390.423m = 25.6% of all loans
The 'Rest of North Island' loans (which excludes Auckland and Wellington) have risen 8.1% in numerical terms over the year, behind the growth of the previous largest region Auckland which grew by 13.6% in gross loan amounts (Auckland still covers 24.4% of all loans). The increase in regional lending in the NI is an interesting and surprising contrast given the consummate decrease in rural lending.
The multi-year picture is shown below:
2012 2013 2014 2015 2016 2017 2018 Largest Regional Market Auckland (30%) Auckland (30%) Auckland (25%) Auckland (26%) Rest of NI (25%) Rest of NI (26%) Rest of NI (26%) Largest Industry Group Market Agriculture (24%) Agriculture (21%) Agriculture (16%) Agriculture (17%) Agriculture (18%) Agriculture (19%) Agriculture (17%)
Overall Heartland looks less risky than at any time in its history (bar 2014) from a 'Customer Concentration Test' perspective.
SNOOPY
LOL you ruffled my feathers, (opps sorry fur) last time you posted that mate for which I am in your debt because you scared me out of quite a bit of my holding at $1.73 ex divvy. Financials are vulnerable in a big market correction so maybe $1.40 is possible with a full blown overseas correction of circa 10- 15%.
It’s Peat’s chart. I just added the pendant (from Lovisa)
Hard to believe that such a great company with growing profits and steady dividends can see its share price fall by 24% in 9 months. Suppose that’s what happens when a stock goes from being outrageously overvalued to something closer to a reasonable value
And as often happens things often overshoot ....thats when you get your $1.40
LOL thanks Peat, such a memorable pendant...looks like something KW would wear :) Yes mate as you suggest things do overshoot in both directions but I suspect if it does get down to $1.40 there will be plenty of other things to worry about as well so that's not something I want to see.
If Snowy had a chart that illustrated his high horse and rude comments, it'd be alot easier than deciphering the cryptic atonements you're supposed to make.
Poor Beagle reckons 10-15% is a serious ("full blown") correction. Been a tough week for some shares, but also a long time since the pooh really hit the fan, which it hasn't, we all tend to forget the pain, especially after 10 years of sustained upside.
I reckon today is a decent illustration of what the market thinks, any sign of the bull, they get a sniff of the futures and behold, it's all good despite another few hundred points down on the open market and pile into their darlings like there's no tomorrow.
Still, there's a few who don't give a toss about capital value. As long as they're growing EPS it's all good.
With all the recent market upheavals, shareholders might like to know just how conservatively geared HBL is in an historical context.
Updating this number for the full year FY2018. The equity ratio is an assessment of the balance sheet risk of the total company, with all finance receivables and the supporting borrowings (whether they be from debenture holders or parent supporting banks) included.
Equity Ratio = (Total Equity)/(Total Assets)
Using numbers from the Heartland AR2018
= $664.160m/ $4,495.926m = 14.8%
The customer loan base (finance receivables) growth year on year (+12.4%) has in relative terms reversed and is now growing more slowly that the company equity (+16.6%). This means the balance sheet has been made 'less stressed' over the year.
The significant increase in share capital over the year was therefore from (reference "Statement of Changes in Equity")
1/ Retained Earnings: $71.221m - $47.895m = $23.326m 2/ Dividend Reinvestment Plan: $12.745m 3/ Share Based Payments to staff: $0.666m 4/ Issue of Share Capital: $59.225m - $0.910m = $58.315m Total $95.052m
This is a significant increase on the 'new capital generated' within the existing Heartland over FY2017 ($71.254m), with most of that increase accounted for in an even bigger capital raising undertaken over FY2018.
The historical picture of this ratio is tabulated below.
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Target Equity Ratio 16.0% 14.6% 15.0% 14.3% 14.1% 14.1% 14.8% -
So Heartland is more conservatively geared than at any time in the last four years.
SNOOPY