Share Investor's Total Returns: Hallenstein Glasson Holdings Ltd

I have written about returns for stocks on a general basis in the Long Term View series of posts and the Long VS Short series but in this series, Share Investor's Total Returns, I will be giving my actual returns for stocks in the Share Investor Portfolio for as long as I have held them.

The return calculation will include dividends earned along with qualifying tax credits and of course any capital increase in the share price. It will be a total return over the length of holding of the share expressed in overall dollar figures with an individual value per share of what the stock currently is held at.

The eleventh stock in this particular series is a long term star of the portfolio and one that I have held for 3 years, Hallenstein Glasson Holdings Ltd [HLG.NZX]

The current holding of 1000 was kicked off by an initial purchase in July 2008.

The stock cost a total of $2530.00. It has returned net dividends of $743.72 and total tax credits of $366.30, with $30.00 in brokerage.

I am eligible for the full tax credit so if the gross dividend (net dividend plus tax credits)is added and brokerage taken off my full return from dividends and tax credits over the total holding period of 3 years is $1080.32

The current capital value of the company in the Share Investor Portfolio as at 3 June 2011 is $3720. The capital gain therefore is $1160.00. This gives a total return on this share of $2240.32 when dividends and tax credits are included. This is a 89% return over 3 years or a 29.66% gain per annum.

I hold HLG therefore at a total cost of $289.68 or 28c per share.


Disc: I own HLG shares in the Share Investor Portfolio


Share Investor's Total Returns Series

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Fisher & Paykel Healthcare Ltd
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Hallenstein Glasson @ Share Investor

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c Share Investor 2011

I'm Buying: Fisher & Paykel Healthcare Ltd

This is a post made to answer a reader who phoned me the other day in relation to Fisher & Paykel Healthcare Ltd [FPH.NZX] and to explain to readers what I am looking at using the dividends provided to me from the Share Investor Portfolio over the last 3 reporting periods.

It just so happens that the readers phone call came at the same time I was considering buying FPH for the portfolio. I already have 5000 shares but would like to buy perhaps 10000 more for a long-term investment. My reader wanted to know if he should buy at its current price for a shorter term profit.

The case for buying shares in the company has been made many times by me (see links below)and perhaps the best indication of how good the company is as an investment can be found at the post Long Term View: Fisher & Paykel Healthcare which maps out what returns investors have had in the past and what they could expect in the future.

FPH is a well managed company with a good history of increasing profits and revenue based on their manufacture and sale of high end, well sought after medical products that have high margins and a reputation for cutting edge technology which more often than not beats its competition.

The only problem, if there is one, is that much of their business is done in US dollars and due to a weak US buck profits repatriated back to head office in New Zealand have been mostly static over the last 2 years.

This is where my readers request to ask if he might buy shares in the company and my perusing the company and its annual reports over the last 6 months has collided.

I have been watching the share price since I last bought shares in this company in June 2009 at $2.35 (see 3 year chart above) and have been a patient church mouse ever since for an opportunity to get back in.

The share price has taken a bit of a hit over the last 2 months (see 2 month chart below)due to the weak US dollar and over the last two weeks weakened further when their 2011 FY profit showed impacts from the dollar dragging on the bottomline.



Revenue and profits have grown over the years and their new products, especially their sleep apnea range has a good foot in the door in an ever increasing American market with overweight patients knocking on their doctors doors for help. This will clearly increase revenues in the future.

The currency affect will always be there so investors just have to deal with this. The company have forward hedging in place and next year expect a currency gain to the bottomline of NZ$14 million.

Now is a good opportunity to start looking at buying. The share is currently being buoyed by a 7c dividend which investors are eligible for until June 24, so one might be wise to wait until after that date to see what happens.

For investors like my phone caller wanting to take the dividend here and sell the stock if the share price stays level of rises just beware that because of that aforementioned currency negativity in the market this may not be wise.

For long term investors anything under 3 bucks is a good buy but I am going to keep waiting because I see an opportunity to get in at a far lower price. I will let you know what that is after I make my move.

For short term investors my advice is the same, be patient you can get this share for less.


Disc I own FPH in the Share Investor Portfolio


Fisher & Paykel Healthcare @ Share Investor

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c Share Investor 2011

TV3 60 Minutes Interview with Paul Henry - 5 June 2011

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c Darren Rickard 2011

Guest Post: Wall Street Journal's Brett Arends - Why Housing is in a Depression

My interest was in this topic piqued by a story on late night TV last night when a story broadcast by the ABC Network mentioned that in the United States around one quarter of home owners had negative equity in their homes.

This led me to doing a little googling this morning where I found the following story on Marketwatch about the sorry state of housing in the US.

I have to state I had no idea that this many people had negative equity, I thought it was just under 10%.

Shame on me.

Now I know little about real estate but what I do know is that this is a very serious situation, for the US and the rest of the world, in terms of the economic fallout, given the sheer number of people in negative equity.

Remember it is what tipped us up in 2008 in the first place and it will continue to drag on the global economy no matter how much printed money the Fed throws at us.

Read on dear readers:

June 1, 2011, 12:01 a.m. EDT

BOSTON (MarketWatch) — It’s official. The house price collapse is now worse than it was during the Great Depression.

That astonishing piece of information comes from the researchers at the think tank Capital Economics.

It follows Tuesday’s news from Case-Shiller that house prices fell again in March, as the double dip gets worse.

Writes Capital Economics’ senior economist Paul Dales, “On the Case-Shiller measure, prices are now 33% below the 2006 peak and are back at a level last seen in the third quarter of 2002. This means that prices have now fallen by more than the 31% decline endured during the Great Depression.”

Hmmm. Recovery? What recovery?

It’s yet more proof that the nationwide financial bust is far worse than Wall Street is pretending, and it may be getting worse instead of better.

But try telling that to the Dow Jones Industrial Average DJIA -0.74% , high as a kite — in more ways than one — above 12,000. What is Wall Street smoking?

Capital Economics says the latest double-dip in housing should come as no surprise. It’s very much following a pattern seen in the early 30s, when a brief recovery also petered out. The same has also happened in other big housing busts around the world, the think-tank says. It believes prices are going to fall even further before we hit rock bottom, maybe sometime next year.

The double-dip in housing, which has left nearly 30% of homeowners in negative equity, increases the chances that the Fed may resort to Quantitative Easing III — although they will probably call it something else, if only to save their blushes.

In some ways, the collapse in house prices is even deeper than Case-Shiller is telling you.

After all, the official data take no account of inflation. During the Depression we had deflation — so while your home was worth fewer dollars, each dollar was more valuable.

Today we have (modest) inflation. If Fed chairman Ben Bernanke gets his way, we’ll get a lot more. We probably need it. Compared to wages, housing is now back to levels last seen in the late 1990s (see chart).

And the Case-Shiller data masks huge variations in housing markets. Prices have collapsed many suburbs, exurbs, rural areas, and in well-known disaster sites like Miami, Las Vegas and Phoenix. Meanwhile the declines have been much milder in places like Manhattan or Boston. Some high-end real estate is actually selling well. The buyers have money.

Is there a silver lining to this? Well, maybe.

If you can get the financing, housing is now cheap. Really cheap. Capital Economics reckons housing is now 24% undervalued, and is the cheapest it’s been in thirty-five years.

With mortgages rates on the floor, and inflation surely brewing down the road, housing in many parts of the country looks like a good deal. But you’ll have to be patient to see the biggest rewards. Capital Economics says, back in the Depression, it took 19 years for house prices to recover to their previous peaks.


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c Share Investor 2011