-
30-07-2015, 12:24 PM
#5791
Yes it does give one more confidence .And as a holder atp its a relief after what were some pretty relentless negative views by Roger . Chartwise HNZ needs to rise further to increase my conviction.
-
30-07-2015, 01:32 PM
#5792
![Quote](images/misc/quote_icon.png) Originally Posted by Franko
Biggest issue is whether HNZ is successful in buying FP Finance. Needs a strong share price to undertake a $100m plus capital raising.
Yesterday's The Australian speculated under arm bowling outfit Flexi Group was in the hunt for
F & P Finance.
Bop boop de do
Marilyn
-
30-07-2015, 05:05 PM
#5793
Reality Check
Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?
There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.
7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.
One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?
The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.
At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?
Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?
The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.
It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.
Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.
I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.
Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.
I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.
The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.
It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.
Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.
What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.
P.S. In my view when robust debate is excessively moderated everyone is the loser.
Last edited by Beagle; 30-07-2015 at 05:29 PM.
-
30-07-2015, 05:13 PM
#5794
Third highest volume of shares of the year traded today re 1.6 million shares; a strong day for HNZ, phew .
-
30-07-2015, 05:37 PM
#5795
![Quote](images/misc/quote_icon.png) Originally Posted by Roger
Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?
There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.
7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.
One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?
The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.
At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?
Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?
The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.
It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.
Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.
I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.
Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.
I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.
The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.
It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.
Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.
What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.
P.S. In my view when robust debate is excessively moderated everyone is the loser.
Fantastic in depth post Roger.
I was thinking much the same but have been making scones all day, might make comment later
”When investors are euphoric, they are incapable of recognising euphoria itself “
-
30-07-2015, 05:45 PM
#5796
Welcome back Roger
61% LVR not too bad for Finance Company lending Roger? (I know they say Bank but..)
Better than a whole lot of HP deals on cars / laptops.
Not sure every sharemilker will fall over next three years, averages will be okay?
-
30-07-2015, 06:04 PM
#5797
![Quote](images/misc/quote_icon.png) Originally Posted by Roger
Surely I am not the only one surprised their average loan to dairy farmers has a 61% LVR ?
There's been several respected economists in the business media in the last couple of months basically saying that dairy farms with meaningful debt cannot make money and are unviable with dairy prices where they are now.
I took meaningful debt to be 30-40% of farmers asset values, I have no idea how an average dairy farmer with an average debt of 61% of their asset value has any possibility of making money unless there's a dramatic turnaround in the dairy price and the odds on that look increasingly unlikely given the amount of new supply coming onto the market world-wide.
7.6% of approx. $3b is circa $228m yet HNZ claims this is a small exposure ? Small relative to what ? Certainly not compared to the relative exposure of the Australian owned banks as a percentage of their lending.
One also needs to look beyond what they said to what they didn't say. How much of their lending is secured by first registered mortgage over land and buildings and how much over just herd values ?
The longer HNZ supports these unviable operations the higher their LVR goes, both through the increased financial support they provide and through missed payments and compounding interest.
At what point does HNZ say enough is enough if dairy stays low and becomes N.Z.'s iron ore problem ? One year, two year, three years ?
Anyone tried selling dairy cows to any party other than the works lately and seen how much you can get ? $700-$1,000 at the works. How does that compare to lending 61% when dairy cows were at their peak of over $3,000 a head ? Lending could represent over $2,000 a head in some circumstances which begs the question of how well many of their loans are secured, surely ?
The other aspect to this reality check is I would have thought people would have valued objective, vigorous debate both regarding any stocks attributes and its challenges.
It seems I was wrong and one poster in particular feels victimised, (grow a thicker shin for goodness sake), and some others fell I've been too dogmatic.
Its a brave man that gets on a forum and plays devil's advocate and debates the challenges in a forthright and open way as its usually not a popular position to take especially with people mainly holding the stock.
I think its a shame there's not more brave people in this world...they're the ones that get things done...you know, like SUM having to change their directors inside buying policies, and such posters often flush out companies in terms of getting them to disclose information they perhaps wouldn't otherwise have.
Those of us that have experience working in the finance industry know the differentiation of loans between what's bad, doubtful, overdue, impeded and otherwise classified is far from an exact science.
I suspect institutions and prudent forward thinking investors will be wondering exactly how many of HNZ's dairy client's are running fundamentally unviable operations at current dairy prices and might even ponder how HNZ directors could possibly reliably estimate the delinquent loans that will need to be written off in the year ended 30 June 2016 so far out most especially seeing as nobody really knows or has an idea when or if there might be some light at the end of the tunnel.
The lack of support for my position regarding this has been noted but it should also be noted that I picked this as fully valued at $1.32 way back on 1 February and posted same and also correctly picked the significant collapse in VIL's share price. Better to spend my time on profitable things eh...especially seeing as despite what many people might suspect, I never short stocks.
It seems to me people only really want to hear good news and the virtual hug from a long time supporter of this company.
Asking questions whether this company is really making and administering loans in a prudent, careful and appropriate way sure isn't a popular position, that much is obvious.
What have we learned from the dozens of finance company fiasco's of the GFC ?..it would appear, very, very little. Good luck folks.
P.S. In my view when robust debate is excessively moderated everyone is the loser.
welcome you back Roger, do like read depth analysis on both side, do like listen different voice on this forum.
-
30-07-2015, 06:43 PM
#5798
I am pleased you are back Roger. Your contribution, knowledge and amount of time you obviously can and do spend on research and share with us is very much valued. A robust debate of contrary views is healthy for all of us. But in my view we have seen in recent months too much personal bickering on many threads, that does not add much value to the debate. I hope all posters can refrain from that and stick to the issues of real interest and importance.
-
30-07-2015, 06:56 PM
#5799
![Quote](images/misc/quote_icon.png) Originally Posted by winner69
Fantastic in depth post Roger.
I was thinking much the same but have been making scones all day, might make comment later
Your arms must be getting tired by now winner from all that stirring, bet the scones tasted good.
-
30-07-2015, 07:03 PM
#5800
![Quote](images/misc/quote_icon.png) Originally Posted by couta1
Your arms must be getting tired by now winner from all that stirring, bet the scones tasted good.
Might try making apple turnovers tomorrow, seeing Scales is the flavour of the week
”When investors are euphoric, they are incapable of recognising euphoria itself “
Tags for this Thread
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks