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Share Buybacks
JohnM
Posted: 02 May 2017 11:41:03(UTC)
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Joined: 24/09/2013(UTC)
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Does anyone know of a source for details of current (announced) share buybacks?
Dian
Posted: 02 September 2017 01:39:19(UTC)
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Cash rich companies can do many things. One is they can buyback their own shares. Currently, I am looking for cash rich undervalued low debt companies given the current market situation. If I am right, Walt Disney (DIS), HSBC, Allianz and NESTLE reduced their number of outstanding shares in the market by buying back their own shares.

I heard Sylvania Platinum is going to do the same.

https://uk.reuters.com/a...lan-filing-idUKE6N1HI01P
jeffian
Posted: 02 September 2017 22:13:02(UTC)
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I hate share buybacks. I absolutely understand the principle - that less shares in issue = greater NAV and earnings per share, therefore 'value' is returned to shareholders but that isn't the reality. If a company decides to 'return' £Xm to shareholders by buying shares, then all that £Xm goes to the shareholders who sell (and are therefore no longer shareholders) and the remaining shareholders get 'value' only if the market marks up the remaining shares accordingly (which it often fails to do). The classic example in my experience is Enterprise Inns who spent £1Bn(!) buying back their own shares at up to £8/share only to see them fall to 26p. If you want to return surplus cash to shareholders, give 'em a Special Divi or a Return of Capital, then everyone gets equal value.

Of course, the artificial increase in NAV/EPS often boosts the criteria used to establish Directors' bonuses or incentive schemes, but it might be regarded as cynical to say so.
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