Home » VectorVest » Buy H&T Group #HAT says VectorVest. Resilient business with an attractive risk profile compared to rival offerings.

Buy H&T Group #HAT says VectorVest. Resilient business with an attractive risk profile compared to rival offerings.

Founded in 1897, Sutton-based H&T Group (HAT.L), through its subsidiaries, primarily provides pawnbroking services from 108 stores across the UK. The company also offers various services, including sale of new and second-hand jewellery; sale of gold scrap; third party cheque cashing; and payday advances, which are short term cash loans repayable on the customer’s next pay date. Other services include unsecured loans; cashplus, a prepaid debit card; foreign exchange currency service; and LogBook Loan product, which includes referring a customer to third party, providing loans secured on personal vehicles.

Examine this trading opportunity and a host of other similar stocks. A single payment of £5.95 gives access to the VectorVest Risk Free 30-day trial. More here

On January 8th 2018, HAT published a trading update for Y/E 31st Dec 2017. The company said a strong Q4 performance for pawnbroking and retail has led to expectations for full year PBT to come in above current market expectations. The pledge book increased 11.6% to £46.1m as a result of the higher gold price, the concession format and an increase in loans on quality watches. Personal Loans increased by 94.7% to £18.3m as a result of expansion in the group’s longer term, lower interest rate loan product. CEO John Nichols said demand for products “remains strong and we look to the future with confidence.”

Although HAT enjoyed an excellent year, it was the brief November dip in the share price that triggered value alerts across VectorVest metrics during Q4 2017. The dip showed as a consequential increase in the GRT (forecasted Earnings Growth Rate) chart, and despite increases since then, HAT still logs a GRT of 19.00%, which VectorVest considers to be very good. GRT reflects a company’s one to three year forecasted earnings growth rate in percent per year. Added to this the stock scores highly across RT (Relative Timing) and RV (Relative Value) metrics, plus the DY (Dividend Yield) of 2.7 % is above the current average of 2.63% for all the stocks in the VectorVest database. Although a fair RS (Relative Safety) rating of 0.99 (scale of 0.00 to 2.00) means that the opportunity is only for those traders who can manage risk proactively, in terms of value HAT is rated at 467p per share, so is undervalued at today’s price of 355p per share.

The chart of HAT.L is shown above using my normal format. Earnings per share EPS is shown as the blue line study in the window below the price. EPS has grown strongly and smoothly over the last year. The share is undervalued by VectorVest and is on a Buy recommendation. Former resistance has become support as shown by the horizontal line on the chart. This is positive for the share. Technicians will have noticed the gap up on the 8th January which normally precedes a strong upward move.

Summary: As can be seen previously, specialist lending companies feature regularly among top VectorVest growth company picks. HAT certainly occupies a unique space in this regard: the company is 120 years old, and is the go-to pawnbroker for those needing to raise cash against personal valuables. The other services and loan offerings provided by HAT gives it greater resilience and an attractive risk profile compared to rival offerings, something VectorVest believes will help to close the current valuation gap in the run up to FY results mid March. Buy.

Dr David Paul

January 9 2018

Readers can examine trading opportunities on HAT and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 30-day trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

VectorVest Unisearch

On VectorVest a simple search using the Unisearch tool will quickly find shares that are undervalued with good fundamentals that have just issued a Buy recommendation. This will give the active trader a short list of many high probability trading opportunities each week. Traders now have the opportunity to spend five weeks discovering VectorVest’s unique simplicity, automation and independent guidance. Just £5.95 buys a 5 week trial to enable deep exploration, or how the system can assist in smarter trading in as little as 10 minutes a day. Powerful tools. Proven strategies. Unique Perspectives.

Link here for more info and to set up a trial. 

European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.comFREE! For free VectorVest analysis on any stock, go to this link here

Leave a comment

I would like to receive Brand Communications updates and news...
Free Stock Updates & News
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.