Originally Posted by
Snoopy
Don't let the bad loans or potential bad loans overcloud your view of Heartland, Roger. Go back to 2012, and the fall back position for some of those expensive property development sections in the 'non-core' property portfolio was to put a couple of sheep on them. As Heartland themselves have joked, dairy cows can at least be slaughtered. And the price of beef in the supermarkets seems to be holding up.
The 'Snoopy Adjusted Underlying Profit' assumes a non-core property type hit every five years. This means whatever the headline figure for FY2016, and it might be bad, the SAUP I still estimate at $52.683m. I think you need to look through the big hits like the dairy downturn, to determine fair investment value.
The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.
SNOOPY