I think its great for investors. normally im a divvies guy but this is the right move considering the share price. A consistent buyback is good for the share price. Look what it's done for the US coal producers in the recent past. I think this will increase the share price and cause WHC to sell at a higher multiple.
I dont know the makeup of the investors, assuming a fair % is US based so it's much better for them. Franking credits doesn't mean much to them. I also think WHC are limited in the amount of dividend they can pay back at the moment due to their agreement to only pay dividends from NSW proceeds.
I think the only better argument you could make is for using cash for an acquisitions, but Im not sure we are going to see many good deals available in the near future. Personally, given the long term outlook for coal I want WHC to lower costs, carefully do expansions on their current mines, forget about acquisitions, pay me dividends and do buybacks but only when the price is right.
WHC Price at posting:
$5.54 Sentiment: Buy Disclosure: Held
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