(03-09-2019, 07:44 PM)valueinvestor Wrote: [ -> ]https://links.sgx.com/1.0.0/corporate-an...89416ad719
Bought again another 200k @1.93 . They should know what price to buy back than outsiders.
Insiders, with access to all information, should have a better idea of where their company is heading, and hence whether their share price is fair/over/under valued.
But looking at its investment portfolio, SPH has not proven itself to be a very wise allocator of capital.
Their investment track record notwithstanding, an undervalued share price may not be why SPH is buying back its shares.
It is not inconceivable that management may be trying to prevent the decay of their corporate image, by shoring up the share price. I could be embarrassed if I were a corporate executive working for a company whose share price is rapidly falling, especially if I'm speaking to other executives whose company's share price is bubbling.
Many companies, particularly those with a large number of (institutional) investors, bought back shares when their prices started falling. Sometimes, the move inspires market confidence, and the falling stops. Sometimes, it doesn't, but the company doesn't continue to buy back. Because, well, cash has to be conserved for the operating business. And companies with rapidly falling share price usually have operating businesses which deteriorate at the same speed.
SPH spends a few hundred thousand each time to buy back shares. Given its many many millions, this can be considered a small 'marketing expense' if the move succeeds in stopping the price fall.
I should add, though, that a privatisation of SPH is not beyond the realm of possibility. After all, its public utility of distributing dividends, as a listed company, may have been mostly spent. Such a move would also allow management to focus on their (investment portfolio and media management) jobs, without being heckled by retail/institutional investors about falling dividends/share price.