H&t Share Discussion Threads

[aleman] 19/1/2018 20:58

Year Ending Revenue
(£m) Pre-tax
(£m) EPS P/E PEG EPS Growth Div Yield
2017-12-31 100.87 12.76 28.55p 12.4 0.3 36% 10.50p 3.0%
2018-12-31 107.20 14.74 32.24p 11.0 0.9 13% 11.50p 3.2%
2019-12-31 112.20 16.50 35.70p 9.9 0.9 11% 13.00p 3.7%

[sphere25] 19/1/2018 11:42

All the lemmings giving their stock away cheap today. Blind leading the blind.

This is going significantly higher - abit of patience required.

Buying any weakness.

[2breakout] 16/1/2018 11:30

Good update yesterday in the IC - couple of bits from the article

The same is true of pawnbroker H&T (HAT:360p), which has issued two earnings upgrades in the past couple of months, making it four in the past year.

Trading on 11.6 times N+1 Singer’s 2018 EPS estimate of 31p, and offering a 3.2 per cent prospective dividend yield based on a 2018 payout of 11.5p a share, I have upgraded my target price to 400p. Buy.

[interceptor2] 12/1/2018 15:44

Agree cfro, RFT hitting new highs today I wonder if sentiment has changed in this sector?

Felt that I needed to hold a decent amount of HAT also, so have also increased my holding today.

[cfro] 12/1/2018 13:48

Added to my holding today. Gold is up and going well which will translate into even more higher profits.

[spob] 11/1/2018 10:35

It is sad but true that homelessness rates are soaring. Therefore the number of those who are not homeless but who find themselves in financial difficulties must also be soaring.

[spob] 11/1/2018 10:30

I guess changes to government policy (rightly or wrongly) is pushing more and more people into financial difficulties. Changes such as the new universal credit.

[aleman] 11/1/2018 09:45

B of E reports credit conditions continue to deteriorate - mainly unsecured. Unsecured credit supply decreased again as defaults rose again. I'll bet subprime borrowers are beating a path to HAT's door. I just hope they are careful with the vetting. Usually, pawnbrokers adjust quickly since they do lots of short term loans and pick up on changes in trend more quickly. They will raise rates within days or weeks of seeing higher defaults. It's longer term lending that is slower to adjust and tends to create bigger losses. Hopefully, HAT's experience of previous recessions will stand them in good stead and it is newer lenders, expanding into their first recession that will be taking the brunt of the defaults. Numerous banks have been cutting back on subprime lending.




While unsecured consumer defaults have been rising for two years, the rise in SMEs defaulting is a change of trend.

[thorpematt] 11/1/2018 08:28

slaccs, yes 2108 is a long way off !

cfro, yes price would tend to resist that and then move north.

Aleman, thanks for those, my 32p used for calculation puposes is slightly exceeded in that case. Can't see why in this market with this outlook you would want to apply modest forward PERs to this stock. High street presence it may have but it's no MOSB, deserves to be viewed as a dynamic growth company.

As far as the divi goes, net cash on balance sheet can either be used to expand or send back, in many respects I'd prefer the former sinc eit tends to compound!

[aleman] 10/1/2018 17:48

Numis have upgraded - higher earnings but dividend same. One does wonder if they will divert cash to expanding the loan book rather than push the dividend. They can increase the dividend later if and when the loan book demand eases.

2017 2018
Broker Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Consensus 13.10 28.71 10.45 14.73 32.24 11.45

FinnCap 06/11/17 BUY 12.50 26.90 11.00 15.00 32.30 12.00
Numis Securities Ltd 08/01/18 ADD 13.60 30.20 10.00 14.50 32.20 11.00

[slaccs] 10/1/2018 15:55

Thorpematt - re 612. I hope there is an upgrade before 2108!!

[cfro] 10/1/2018 11:44

Thanks for the charts Thorpematt. Just the small resistance at 360p then.

[thorpematt] 09/1/2018 19:57

So I thought I'd look at the technicals here...and then I realised I had done so back in August too. What's intersting is that both my chart comments and fundamental comments from August both proved to be accurate I think. (You will see that post if you trawl back but to save you the bother I have copied it here - below).

Beneath that, I have posted the recent chart which rather indicates a continuation of trend IMO. Again my perception is that there is no reason to be anything but confident in such continuations for the forseeable future. I am always mindful of Mr Graham's (Ben that is) teachings who always reminded us that past performance should not be considered to necessarily match future, but in respect of this particular business I am as sure as can be that it is likely to at least deliver on expectations and therefore I believe the share price (and therefore the chart) will probably reflect this.


-----------------------------

from August:
............as i was saying: "Nicely through that previous ceiling on the chart - seems to have taken forever to get there. Could well fly a little now..."

I have drawn a chart. As we can see (now we're through the red line) there is not much resistance north until 360p. (if you ignore that minor obstacle of 317p...but who in their right minds would be selling at that particular juncture!

As discussed by others HAT has began to complete a tidy transition from its traditional business model to one more aligned with the needs of its modern customer. To this end it is in prime position to benefit with increased returns.

The chart neatly tells this story as we see the fall in share price driven by the uncertainty akin to making such investments and changes. We saw a slow recovery as the company continued to trade succesfully and now we begin to see a more significant re-rating as the market turns from slighty uncertain to positive with regard to HATs prospects.







-------------------------------------------------------------------

NOW:-


In brief, my analysis here is pretty simple, that red line represent another fairly significant poin of resistance, once breached the next level of resistance would be about £4.17

[topvest] 08/1/2018 19:16

Definitely a tailwind for business in this sector at present. Can see the share price going quite a bit higher and happy to hold.

[thorpematt] 08/1/2018 14:10

Yes good summary from Graham, I think forward PER is a little less than 11. I also think an upgrade in 2108 estimates is likely.

The yield here is still above 3.5% remember and given the re-positioning and EPS growth, this indicates the excellent cash production possibilities here.

It's hard to believe that a valuation of less than £3.85 is at all warranted. It's equally possible to argue that £4.85 would be more realistic. In any event a bit an obvious mis-price presently and surely overdue a re-rating?

[martinthebrave] 08/1/2018 11:21

Graham Neary report from Stockopedia. He seems happy enough!

H & T (LON:HAT)
•Share price: 338p (+3.5%)
•No. of shares: 37.4 million
•Market cap: £126 million

Trading Update

Another positive update from this pawnbroking group which I have held in my portfolio since 2013.

Profit before tax for the full year will be ahead of current market expectations.

The Group has delivered another good performance in its lending operations. The pledge book increased 11.6% to £46.1m (31 December 2016: £41.3m) as a result of the higher gold price, the concession format and an increase in loans on quality watches. The Personal Loans book has increased by 94.7% to £18.3m (31 December 2016: £9.4m) as a result of the expansion in our longer term, lower interest rate loan product.

Like its smaller rival Ramsdens Holdings (LON:RFX), H&T realised that there major opportunities in products related to pawnbroking. As you can see, its personal loans offering has taken off very well. I'm hoping to see it keep growing in size and maybe even start to rival the pawnbroking pledge book in the years to come.

Jewellery retailing is reportedly also going well, including through the development of click-and-collect online sales.

Finally, the outlook statement is confident. CEO comment: "Demand for our products remains strong and we look forward to the future with confidence."

The updated EPS forecast now is likely to be pushing 30p, based on increasing another 7-8% from here.

Checking some gold/GBP charts, the average price of gold in 2017 was indeed materially stronger compared to 2016.

H&T has a lot more going for it, though, than just the price of gold.

The personal loan product (see here) is very competitive for that segment of the market which has been shut out by the banks. Although daily bank overdraft fees can also have a huge implied APR, something which is easily overlooked!

Increased lending on quality watches is also worth a mention. When a customer presents an item to pawn, H&T has a facility which lets it send high-definition images of the item from the stores to central office, where jewellery experts determine its value. Expertise in watches is an important part of the company's overall offering.

Funnily enough, I agree that Quality is not especially strong for H&T. It's essentially a financial firm, and it's never going to compound in value to generate exponentially larger returns, like some rare stocks can do.

But it is the undisputed leader in its sector, its management is highly competent as demonstrated by how they have navigated through both benign and difficult macro conditions, and it has discovered some exciting growth opportunities, particularly in personal lending.
On top of all that, thanks to the improved performance, the stock remains quite cheap on conventional valuation metrics, trading at a PE ratio of just 11x.

What else can I say, except that I'm a happy holder.

[cfro] 08/1/2018 11:15

I have also been a buyer this morning with my first initial purchase.

I am keen on RFX which is my largest pf holding currently and also keen on this sector in general.

By my reckoning the PE is around ten which looks too low imo.

[spob] 08/1/2018 11:04

surprised this has not advanced more on the back of that statement

so i've doubled my holding

[spob] 08/1/2018 11:00

As of the last final results


current assets minus total liabilities = +73m

relative to a market cap of 127m


means this stock is a lot cheaper than it looks in terms of the standard forward PE ratio


very strong balance sheet

[spob] 08/1/2018 10:57

yeah and a very stupid one

LOL

[mathewawood] 08/1/2018 10:37

Bizarrely after 2 good upgrades (3rd Nov and 8th Jan) EPS estimates for 2017 gone from 22.5p to 31p+. The share price remains at 340p as it was on the 1st Nov.
Definitely a big seller out there.

[pnetol] 08/1/2018 10:08

There appears to be a decent supply available at 340, I don't know how long it will be there, I've just picked up another 4,000 shares in 2 lots. On L2 it only shows a few shares so I would recommend setting a limit of 340 to see if the bid gets reloaded and you get filled. I did on both of my purchases. While the supply is there it's an opportunity to top up on the cheap IMO. GLA

[fruitninja84] 08/1/2018 09:46

Took a small position today. Already hold RFX and am slightly surprised this is not up more on positive news. So i took advantage of the "weakness" and hopefully will get £4 in time. Gla.

[spooky] 08/1/2018 08:58

I agree but there has been a seller around for a while, he's still there and he's not small. Surprised an institution hasn't taken him out.