Humm Valuation - What is Sensible, page-67

I was listening to an A U S B I Z segment (don’t know why I do this to myself) from June. Hum was featured as a listener’s question and both analysts put a sell on it. They were actually quite reputable analysts not two of the fly by night ones you get some of the time.

What really struck me is that they both rabbited on about it being consumer based, reliant on big stores like Harvey Norman, BNPL and regulation. Seemed to have NFI of the Commercial side.

So until the analysts manage to work out that half Hum’s profit is coming from Commercial and stop pegging it as a BNPL reliant on consumers there is no hope of a revaluation!

This reminds me of when I first started investing in shares in 1986. I had been diligently reading BRW and it seemed to me that Western Mining was a good buy based on its investment in gold mines. I made an appointment with a broker and went in to talk to him. He was terribly nice, spent ages with me, explained that Western Mining was a Nickel stock so I didn’t buy any. He also gently explained that you didn’t come and see brokers, you just phoned them and placed an order.

Anyway less than 6 months later the market discovered Western Mining was a gold stock and its price went up hugely. Big lesson for me