Share Buybacks in publicly listed coys on ASX are a fraud IMHO.
They artificially inflate the share price - rather than the SP improving as a result of good management and improvements in operations.
The usual B..S given by mgt of these coys in defense of them using company cash to fund these Buybacks, is that the company cannot find a better use for that cash, other than buying back its shares!
If thats the case, why are they still there?
For a start, that cash goes to sellers of the coy's shares - it does not go to shareholders. What is tho stop the SP dropping again once the Buyback ceases.
A better use of that cash is for coy to pay a dividend, or do a capital return to existing shareholders
That way ALL shareholders get to benefit.
As for COE, it would be not in the interests of COE to do a Buyback.
Streuth - a way, way better use of cash is to use it to expand the company's business. Otway and other growth options.
Hey, repay some debt.
In any event, there is NO WAY that COE is executing sales contracts at $8-$10gj.
I think it is $12gj and more.
I recall they mentioned some of the prices they are getting on the renewed contracts.
COE is confident COE will be a cash generating business once they bed down Orbost, and they will develop Otway.
COE SP is cheap at these prices IMHO. At some point, if SP stays low, a predator will come knocking. It is just a question of time IMHO.
COE Price at posting:
22.5¢ Sentiment: None Disclosure: Held
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