RHG - RHG Limited

[McLovin]

OK, thanks. Being a newbie, despite reading the reports, I can't say I know what to predict, but I imagine the S/P will drop more than the div on the ex div date, and maybe stay down....

Appreciate you're a newbie and I'm not trying to be rude but even if you glance at the NPAT numbers for the last few years you'd at least get an inkling that something is up and you could have investigated further.

NPAT from 2008-2012

Net Profit 124.80, 120.00. 94.00, 74.00, 40.70

And then from page 4 of the interim report...

The Group’s mortgage book is closed and in run-off. The Group will continue to manage and service its mortgage book. It is important to note that the revenue of the business will reduce over time in line with the rundown of the Group’s mortgage book.The directors expect the profit for future years to be materially lower.

If you read the reports then you wouldn't need to predict anything. It's all in plain English.

 

[princeplanet]

Sure, I get that it is not a wise long term buy, but was mainly interested in the short term, say 45 days from just prior to going ex div. Barchart.com have all 13 analytics giving it a 100% buy for short and even mid term. Could they know something that the rest of us don't?

 

[McLovin]

Sure, I get that it is not a wise long term buy, but was mainly interested in the short term, say 45 days from just prior to going ex div. Barchart.com have all 13 analytics giving it a 100% buy for short and even mid term. Could they know something that the rest of us don't?

If you're taking cues from a free website based in the US, then expect results commensurate with that.

 

[princeplanet]

If you're taking cues from a free website based in the US, then expect results commensurate with that.

Fair point! Hmmm, ok, so I can't be asking advice on these kinds of forums without the inevitable "DYOR" response, but if I'm honest I have to say I'm not confident that I can decode company reports well enough to know what I'm doing. To this you will say "Then get the hell out of the stock market kid!" But I'm not a kid, I probably come across like one because I have been a musician most of my life (hence blithely ignorant of all things financial). I got bad financial advice in 2007 and lost over half of my life savings, I now see that the markets are offering a once in 10 years bull run and like many others, I'm sensing this may be a last chance (for a while?) to drag back some of those losses. Yup, I'm ignorant and desperate, a fatal combination , but damned if I'm gonna sit this bull run out on the sidelines and patiently learn to be a finance wizard only to finally enter the market as it turns downward....

Could you suggest a paid local website that is worth investing in?

 

[So_Cynical]

I now see that the markets are offering a once in 10 years bull run and like many others, I'm sensing this may be a last chance (for a while?) to drag back some of those losses. Yup, I'm ignorant and desperate, a fatal combination , but damned if I'm gonna sit this bull run out on the sidelines and patiently learn to be a finance wizard only to finally enter the market as it turns downward....

Once in 10 years bull run hey....well at least your sure of something.

 

[princeplanet]

Once in 10 years bull run hey....well at least your sure of something.

Hehe, was hoping someone would pull me up on that, only with historical charts back to 1910 proving there's actually a bull run on average every 5.7 years, or somethin'.....

But if this run lasts a little longer, and then the world goes bearish for a few more years (kinda plausible, yeah?), you could say that between 2008 and 2018 there was only one bull run, the one we're having now.... ?

Maybe I should just stick to the newbie forum, at least they're a little less smarmy there!

 

[Country Lad]

...........ok, so I can't be asking advice on these kinds of forums without the inevitable "DYOR" response, but if I'm honest I have to say I'm not confident that I can decode company reports well enough to know what I'm doing.

pp, I was the first to respond by saying you should do your own research first and not expect us to do it for you. My reason for this was that had you even just glanced through the announcement of 14 February….

Directors wish to remind shareholders that the mortgage book is a closed book, and in line with expected paydown, future profits are expected to be materially lower.

…..common sense would tell you that future dividend payments are at risk. In fact the directors are clearly saying that….

The business continues to operate in an uncertain environment and therefore future cashflows of the business may be needed to support the business and various warehouse facilities. Therefore the size and timing of any future dividends are uncertain.

….and

Directors wish to remind shareholders that the mortgage book is a closed book, and in line with expected paydown, future profits are expected to be materially lower.

There may be some thinking that a takeover may hold the price up and this is possibly why it has not fallen further. However, from the same announcement even that seems uncertain:

We note ongoing speculation about a confidential proposal being considered by the Board in relation to the possible acquisition of the assets of the company. We reiterate that the proposal remains incomplete and subject to resolution of a range of commercial and technical issues, including value. However, the Board currently has no expectation that, if the current asset-level proposal is finalised, it would involve an offer that reflects a value to shareholders at or above the trading price of RHG shares, even after taking into account any franking credits that may be generated.

Had you read that announcement which doesn't need rocket science background to reach a conclusion it could very well be a high risk dud, you would have no reasons to ask the question you did.........

No one's talking about this stock, but has div yield coming up of 35.5% ! What's the catch?

.....and that would be the reason for the comments in response to your rather superfluous question. That is why I commented on your apparent lack of doing the research first.

To this you will say "Then get the hell out of the stock market kid!"

Yes, well if you could not assess the risk inherent in the 14 Feb announcement then your lack of understanding of the market will make further loss of your capital assured. Expecting others to advise you on what to buy is fraught with danger.

This is not your normal bull market where the rising tide is lifting all boats. It is still a stock picking market and you need to understand the stock you are picking.

Cheers
Country Lad

 

[burglar]

... Maybe I should just stick to the newbie forum, ...

Seems you've got the best opinions in the forum.
Agree with CountryLad, but I can see where you are coming from.

If you buy and lose, you'll learn.
If you research, you'll learn.

You said earlier that 10 anal ysts had it at buy. What's the catch?
They want to sell to you!

 

[princeplanet]

Many thanks all! I am indeed humbled and can see now that I needed a good kicking. As plain as that warning now seems in the report, I obviously took it as much less threatening which goes to show I'm not any good at understanding the language, nor the implications set out in these reports. I acknowledge I will need to pay others for advice, but obviously can't trust professional FA's. If anyone would care to recommend a reasonably priced web based advisory, It'd be much appreciated.

 

[skc]

Many thanks all! I am indeed humbled and can see now that I needed a good kicking. As plain as that warning now seems in the report, I obviously took it as much less threatening which goes to show I'm not any good at understanding the language, nor the implications set out in these reports. I acknowledge I will need to pay others for advice, but obviously can't trust professional FA's. If anyone would care to recommend a reasonably priced web based advisory, It'd be much appreciated.

The Chartist has a decent reputation as a technical analysis trading / alert service and quite reasonably priced. Depending on market condition you may or may not make a lot of money, but you will learn and be guided through what makes you a disciplined trader and good risk manager.

P.S. One thing to note about RHG is that when it sold its business to ANZ (I think) it had a 5 year standstill non-compete agreement. That agreement is due to expire soon so in theory RHG can start originating new loans soon. They have however sold the RAMS brand as well as the distribution branches, so if they go back into the mortgage market they pretty much have to start from scratch... so it's questionable whether the business has any value beyond the loan book run-off.

 

[Gringotts Bank]

pavillion will be all over this. He loves this type of chart set up.

 

[McLovin]

Many thanks all! I am indeed humbled and can see now that I needed a good kicking. As plain as that warning now seems in the report, I obviously took it as much less threatening which goes to show I'm not any good at understanding the language, nor the implications set out in these reports. I acknowledge I will need to pay others for advice, but obviously can't trust professional FA's. If anyone would care to recommend a reasonably priced web based advisory, It'd be much appreciated.

If you can read and write music, I'll wager it wouldn't take you too long to get some understanding of how to read reports.

I never got past playing the recorder, but I do a great version of Mary had a Little Lamb.

The problem I've had with those web based subscription services is that they have to give you something for your money and "nothing looks good this week" is not considered acceptable by most subscribers. So the fundamental ones I have seen, tend to end up having an opinion about every stock on the market. Even after you are subscribed you still need to exercise some judgement.

That agreement is due to expire soon so in theory RHG can start originating new loans soon.

I could be wrong but wasn't that idea shot down by shareholders when the board raised it?

 

[So_Cynical]

But if this run lasts a little longer, and then the world goes bearish for a few more years (kinda plausible, yeah?), you could say that between 2008 and 2018 there was only one bull run, the one we're having now.... ?

Plausible...who knows really, i don't.

I do know that i have been expecting a big leg up for the last 2 years now...and bingo here it is, also know i got caught buying into the 2010 top and got stuck in a heap of positions that took 2 years + (last month) to come good.

2 years is a long time.

 

[lclfze]

Anybody know what is happening with the RHG takeover?

I am looking at the announcements but it seems like I'll need to read about a year's worth to figure it out.

 

[System]

On January 13th, 2014, RHG Limited (RHG) was removed from the ASX's official list following the implementation of Scheme of Arrangement with Australian Mortgage Acquisition Company Pty Limited, backed by Resimac Limited.