(19-06-2021, 02:31 PM)dydx Wrote: [ -> ]Last year's share buy back at low, low prices have helped in raising EPS and NAV/share.
This year's share buy back so far at record high prices will help raise future EPS, but may have a small short-term dampening impact on NAV/share.
In general, share buy back will also reduce free-float shares and the number of minority shareholders, especially when carried out at record high prices.
The number of shares purchased to date is about 2M. With 700M shares outstanding, the impact to EPS or NAV would be very very negligible.
What would be more interesting is what is the Board/Family's motivation to conduct the share buybacks:
- To raise EPS, NAV and share price? Perhaps, maybe? But for so many years, the company has never placed too much interest in promoting its share price;
- Or at current price level, it just looks like a good investment? If going forward the company is going to pay 6cts dividends per year, at $1.40, its a return of 4.3%. Rather than keeping $10M in fixed deposits earning 1%, why not let the company 'earn' 4.3% by using $10M to do share buybacks at $1.40?
- $10M in FD (at 1%), the company earns S$100,000.- $10M in buybacks (at $1.40), the company avoids paying $400,000
(20-06-2021, 10:25 AM)Choon Wrote: [ -> ]What would be more interesting is what is the Board/Family's motivation to conduct the share buybacks:
- To raise EPS, NAV and share price? Perhaps, maybe? But for so many years, the company has never placed too much interest in promoting its share price;
- Or at current price level, it just looks like a good investment? If going forward the company is going to pay 6cts dividends per year, at $1.40, its a return of 4.3%. Rather than keeping $10M in fixed deposits earning 1%, why not let the company 'earn' 4.3% by using $10M to do share buybacks at $1.40?
- $10M in FD (at 1%), the company earns S$100,000.- $10M in buybacks (at $1.40), the company avoids paying $400,000
I guess sometimes strategic considerations in business or corporate actions cannot be easily understood or described in words and numbers beforehand..
What good does it do for the company if the share prices are going up due to company share buy-backs?
1. To invest in themselves?
2. Theoretically buybacks tend to improve valuations of companies
3. Company can signal that the stock is undervalued
4. It can help the promoters to consolidate their stake in the company
What will fidelity funds (9.5%) do is also an important point to consider,
21 Jun 2021 - Share buyback continues. Tabulation attached.
23 Jun 2021 - After one day break on 22Jun, share buyback continues. Tabulation attached.
AGS @ 146
published on 7th June 2021, only available in Mandarin.
Enjoy:
Stay home and stay safe, everyone.
25 June - Buyback continues.
The price at which the company is buying back shares has increased significantly from when it first started this year ($1.50 vs $1.33).
Even so, the company is not slowing down on its share buyback.
[attachment=1785]
Share Buy Back Mandate for The Hour Glass is around 70 million shares, so, I guess there will be a long way to go for them to come close to exhausting or fulfilling that mandate.