Dividends in 2021, page-17

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blackeyed

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19/04/21

13:55

Post #: 52566160
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Originally posted by Baa_Baa: ↑

Read your reply back to yourself, it doesn't really make much sense, well not to me anyway. Maybe it's just that you are grumpy and want a clearer plan for the cash mountain?:

- Buy-back at optimum price? A2M is only about 60 cents above it's 52-week low, roughly 7%. That's still a terrific low buy price if the company saw the opportunity to invest in themselves which is very good for shareholders (opposite of dilution).

- Aren't investing it? Well yes they are, they've bought a large stake in Synlait (not that that's looking too flash at the moment) and they're buying the lions share of Mataura. What about that is not investing?

- A special dividend, just some of it? Why, what point is there to that other than compensate for some of your capital losses? It would have the same effect - to slam the company SP in the market, basically capitulating on growth. And about 30% of it goes straight to the government. Instantly turning $1 of shareholder capital into 70 cents. That'd be excruciatingly stupid imo.

- Borrow money because it's cheap? I mean that is just really weird, you'd pay out a load of cash which costs them nothing, and borrow money for an acquisition which costs them interest, that will increase over time. Why would you borrow when you have cash?

I'm clearly not seeing this through your perspective, imho it would be a massive fail giving any of the cash back to shareholders, it is not only an extremely poor use of retained shareholder funds, it would devalue shareholders capital and fundamentally change how investors view the company, for the worse.

jmho.

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I don't agree baa baa. I have spoken to a professional who invests for a professional fund, and hes says you are completely wrong about the dividend for the following reasons.
Many funds cannot invest in companies that do not provide a yield i.e. pay a dividend, and that paying a dividend puts more competition on the share register thereby making it accretive to the stock price.

A2M Price at posting: $8.19 Sentiment: Buy Disclosure: Held
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