Vectura Share Discussion Threads

[diesel] 26/8/2020 14:53

Thanks for taking the time Polaris, good post. How do you read the lack of expected Trading Statement, could be an omission or a change in process from new management, but I’ve an inkling that it would have been robust and so contrary to the value of the buyback.

[srpactive] 26/8/2020 14:08

Not sure if it has been mentioned as I have not read al the posts, we
have the $200m court case money win to come in next year hopefully too.

[polaris] 26/8/2020 13:56

15th September for interims.

The impact of any buyback is a function of the normal volume and free float. VEC signalled a very long time ago that they would spend up to £20 M in buybacks. Eventually, this was split into 2 x £10 M tranches, the first running from October 2019 to mid March 2020 and the second started on the 1st June 2020 and about 75 % complete.

In an totally balanced market, where you still need to make the assumption that the cash on the balance sheet does not 100 % reflect in the share price on any given day, then the number of shares bought back will increase the EPS and, for a fixed P/E, will increase the share price by that difference in EPS x P/E. The market isn't quite so simple and so the actual share price change will reflect any number of contributory factors during the period of the buyback. These can be operational, wider market, influence of new investor entrants, exit of existing investors, news or just the trading range...etc...

If the cash on the balance sheet is fully taken into account in the price then a buyback has a net zero effect. What you find is that cash is discounted to some level cf. a company with a nominal zero cash pile and identical EPS. It's just one of the quirks of the market.

Companies with large cash piles cf. market cap tend to trade at a P/E discount to their peers...odd but true...despite them having much more flexibility as a result of having a cash pile. This is best described as the difference between EV and market cap, the former takes into account debt and cash, whereas the latter does not.

What can move the share price during a buyback is that a larger trader can piggyback, whether long or short, to take advantage of the underlying rules that govern the buyback. That's a bit complicated to explain here but it is related to effective volume and effective market demand arising from the coupling of the buyback to a market player. The upshot is that SPs can move more than expected in a buyback period cf. a balanced market scenario. We just have to live with it.

VEC are not directly involved with the buyback. They mandate and fire-and-forget until the mandate is complete, within the guidelines/rules agreed with the external mandatee. VEC have to do it this way, otherwise they are unable to announce price sensitive news. It is similar to a director buying shares in the open market. They can only do it at certain times as they are carrying out a managerial role in the company and taking advantage of undisclosed news is the very definition of insider trading. By mandating an outside player to perform the buyback then VEC can continue to operate normally. Any collusion is also insider trading.

VEC published their rules for the buybacks and i have posted the link here in the past. The wider market players can read this document and trade with that in mind...a certain advantage, albeit small, for the algos.

In many cases, when the mandated buyback ends the share price falls back. Why? That is how the demand aspect of a market works. It matches the buyer and seller pressure. If a buying pressure dries up and the selling pressure remains the same then the share price falls until balance is regained. So, to some level a buyback can provide a level of support, although the absolute impact will be a combination of the average daily volume to average daily buyback ratio. In a totally liquid market, a buyback has no effect as the increase in trading volume is insignificant.

That is not to say that companies do not use nefarious methods to pump SPs via this route. The classic is to borrow to make buybacks, which boost the EPS and the SP, despite being net zero on EV! As many director share awards are based on share price and/or EPS then certain thresholds can be reached to get a larger award. The more you understand a balance sheet the less likely you are to get involved with companies that do this.

VEC is not one of these, IMO. They have a large cash pile that is not adequately reflected in the share price They used a combination of a special dividend and buyback to return this cash to shareholders over the last 12-18 months. If they win the GSK appeal then there will be another wad of cash that will likely be returned over next 12 months in a similar way. Sure the management will make a little on their performance related bonuses, depending on exactly how they are worded, but there is no such thing as a perfect world! ;-)

[volvo] 26/8/2020 11:51

...final top up at 110p ready for results, which should be in the next few weeks.

[kiwi2007] 26/8/2020 10:31

Around 1% of the company bought back since June and over a 20% rise in the share price. Nice work and not totally unrelated..

[diesel] 26/8/2020 10:13

BCIR...that’s a Trumpism, to post a statement, then say “some people might think...”
You could argue that buying back shares lessons the chance, as the shares are cancelled and the multiple, No of shares x sp, reduces mcap.

[blackcrossinresidence] 26/8/2020 10:04

'As for buying their own shares in order to get into the 250'
Some people might think the two are linked. Though I'm sure they are not - I'm confident that the board had absolutely no idea that they were close to getting into the 250 when they decided to fund the buy-back.

[blackcrossinresidence] 26/8/2020 09:58

Which facts are those diesel? That Edinburgh IT sold out of VEC when Majedie took over the running of the fund?

[polaris] 26/8/2020 09:42

A share buyback is a mandate to an outside party to buy back shares to a given value over a period of time at the prevailing market price, within a set of well documented rules. The rules cover all issues related to support/suppression of the share price and a link can be found in this thread if you are willing to look for it.

Anyone who believes anything else really needs to get a proper life, spend some time actually learning how the stock market works and stop mouth flapping (in this case finger flapping equivalent).

[diesel] 26/8/2020 08:15

I think we need a fact checker on this thread,

[blackcrossinresidence] 26/8/2020 01:57

I'm not generally a fan of buy-backs but this one at least was done with cash and not debt and it did allow one of my holdings (Edinburgh IT) to sell up and exit without upsetting the VEC share price.

As for buying their own shares in order to get into the 250 - is that actually legal?

[diesel] 25/8/2020 14:44

Do you really believe all that tosh?

[a1ord53] 25/8/2020 14:15

Justice, dark forces already starting to knock down share price - from 119 to current - dripping down and GSK also put a cap on share price plus buy back people Numis being keeping share price lower in order to buy more back.
Somebody persistently uploading a lot off stock showing big sizes offers every day( visible in L3). So momentum not now on uptrend.
So all this plus competition , which also trying to enter into 350 and also “helping”; Vec share price to go down.
Management looks like the previous one - just thinking about their options and not buying stock ....

[justiceforthemany] 25/8/2020 12:19

Vec is well within the cut off currently ranked 310/350.
If somehow they don't make it then dark forces are definitely at play..

[rolo7] 25/8/2020 10:44

I thought vec was a sure thing for fste250 but now see cmcx,pfd,indv with bigger market caps plus these if they qualify: dgoc, rsg may come back?

[justiceforthemany] 25/8/2020 10:23

Just a week to go before FTSE 250 entry should be confirmed.

Surprised volume is not higher.
Tracker funds are also obligated to buy and en masse at that.

[cockneytrader] 23/8/2020 12:41

I have always found the law profession somewhat odd. They are expected to work 25 hours a day.

[a1ord53] 23/8/2020 11:42

NOTICE OF TELEPHONIC ORAL ARGUMENT. Panel: 2010D. Case scheduled October 5, 2020. Response to Notice of Oral Argument due: 09/15/2020. The Clerk's Office will provide additional instructions to counsel at least one week ahead of argument. Please review the attached Notice. The response to notice of oral argument form can be found here. The Oral Argument Guide can be found here. Service as of this date by the Clerk of Court. [716553] [JAB] [Entered: 08/21/2020 01:20 PM]

[a1ord53] 23/8/2020 11:39

Case: 20-1054 Document: 43 Page: 2 Filed: 08/20/2020
Under Federal Circuit Rule 47.3(c)(5), attorney Christa J. Laser respectfully requestspermissiontowithdrawfromrepresentingDefendants-Appellants GlaxoSmithKline LLC and Glaxo Group Limited (“Appellants”) in this matter. After August 21, 2020, Ms. Laser will no longer be associated with Wilmer Cutler PickeringHaleandDorrLLP,whichrepresentsAppellants. Allothercounselwho have entered appearances for Appellants will remain as counsel of record. Appellee Vectura Limited does not oppose this motion and will not file a response.
Respectfully submitted,
/s/ Christa J. Laser
CHRISTA J. LASER
WILMER CUTLER PICKERING
HALE AND DORR LLP
1875 Pennsylvania Avenue, N.W. Washington,DC 20006
[phone]
Counsel for Defendants-Appellants GlaxoSmithKline LLC and Glaxo

[justiceforthemany] 22/8/2020 17:00

GSK re-trial verdict must be due very soon now...

As must be potential approval for generic Advair.

[dp1umb] 21/8/2020 16:21

Lets hope Vectura finishes above 112p.
Iam getting a bit concerned about the valuations on wall st! Let’s hope we don’t get dragged down when there pack of cards comes tumbling down.

[polaris] 20/8/2020 18:31

Information content? Almost zero now. It's a corporate slideshow, flashy BS website now. Sadly.

[justiceforthemany] 20/8/2020 18:29

New website design - looks better