I sent a message to the CFO today asking if there was a strategy to the buyback program There doesn't seem to be Enhancing share holder value through a share buyback program only works if the price moves up |
Yesterday close was £12 approx at 1.7x usual daily vol for last 3M.
Most transactions were new money as buyback was muted.
Date of purchase: 8 February 2022
Aggregate number of shares purchased: 5,765
Lowest price paid per share: 1145.00
Highest price paid per share: 1181.00
Average price paid per share: 1162.50 |
Yes I do sorry |
I think he means 2000p |
I think 200p is fair value till it proves it can generate cash with out dropping the ballThree more contract renewals and a few new contracts will do the trick |
Happy to hold, problems are known here so in the open and more than priced in imho.
I see £15 as reasonable. Often wrong so dyor etc. |
looks like trend reversal in full swing here. Caught a load of short sellers out me thinks! |
Ch1ck, and sharehoders want what is good for shareholders so go with what shareholders want. You can bet a special divi was discussed, or similar, or a tender offer perhaps, and all kicked into touch vs buyback. |
I have to a agree with Pinky on this. The board did say it was after consulting share holders the share buyback program was implemented.I'm just happy good news is out we should see a break out |
some good news here on contracts and not a peep from anyone..must be a room full of shorters....shows that we may have hit the bottom on prices. |
We have to disagree on that. When the company believes (or its major shareholders do) the best use if capital is to buyback their own undervalued stock then they should do so.
The big boys want it, the big boys get it.
28th Jan - "As separately announced today, following consultation with our shareholders, we are launching a share buy back of........"
Worth reading up on Shareholder Yield by Meb Faber, the analysis is useful. |
It may make sense to buy back shares at less than NAV (£6.70-odd) but "value" is entirely subjective, and that's my point. It's whatever Mr. Market says it is and there are many, many examples (e.g. my WTB one above) where he doesn't play the game and mark up shares in proportion to the reduction of shares in issue as they are bought in and cancelled.
Directors need to understand that they can't 'manage' the share price, and it is not their job to do so other than by the time-honoured methods of increasing revenues, profit margins, profits and dividends and let the market do the rest. When Aviva used to be called Norwich Union, it wasn't as highly rated as its peers and the Directors took umbrage that their 6% dividend yield was nearly twice that of other insurers. Accordingly, they announced that they would be "rebasing" the dividend in line with the others and halved it. The market promptly halved the share price to leave the yield untouched. |
Shareholder yield is a key metric and here it makes semse to buy back at discount to value.
This should be closer to £15 than £11 imho and anyone not happy can sell to the company rather than be trapped or drive the price lower still, selling when there is reduced demand. |
"Weak holders" can get off the register any time they want! Let's just hope the remaining "strong holders" actually see some benefit. The theory (reduced shares in issue = higher EPS and NAV therefore higher value) is all very well but time and again I have seen vast sums of cash disappear in a puff of smoke to no obvious benefit to remaining shareholders.
When Whitbread sold Costa Coffee, they "returned" £2bn(!) to shareholders via a share buyback. At that time the shares were around £45-£50 and had the cash been distributed to all shareholders equally, it was worth around £12.50/share. Shareholders who didn't sell now have shares worth £30 (having been down to around £26). I wonder how much "value" they feel they have had "returned" to them? |
The biggest shareholders will have had a chat. Buyback can be more tax efficient.
Big boys usually want total shareholder yield increase and as tax efficient as possible.
Buyback can be future enhancing too as price closes the valuation gap so bigger overall return to company. Getting debt down makes sense unless the cash allocated can get a better return than the interest rate. Buyback makes sense here imho as return should be good over time. Also gets weak holders off the register. |
The board seemed confident in product sales and company growth. I just don't see it as a great way to boost the priceYou are better off halting the debt and being cash strong and a special dividend |
I'm presuming the board knows more than we do and that buying at this price is cheap in the long term. There is a small dividend due in 3 days as well. |
Avon is wasting cash by buying shares above current priceThey are being fleeced |
Email
paul.mcdonald@avon-rubber.com |
I have emailed him directly FYI
No response |
You should have asked him yourself if you feel so strongly about it.I'll I'm doing is reporting back so people are better informedThe share price is improving which is what I expected and what I reported would happen.If you believe buy if not sell and leave the forum |
ch1ck did you not ask the CEO why he has not added to his stake even though shares are down 70% from the peak? Also his 50K shares were 'awarded' to him, he did not spend a single penny.
Reward for being a total failure. |
I waited till today to see how the share opened and how much Avon bought on Friday.They did not buy many but the share price rose 5%I bought more today |
Talking of selling the company.In essence this is an American company with a British HQ.One manufacturing plant in the UK suppling some components for the US companies of which there re seven.These components could easily be made in the US.The buying power of the US government is way more substantial than the UK's but the NATO frame work is quite big. So at the moment it works.Avon is small fry for some of these big companies and would be a good fit Watch this space |
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