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01/11/18

11:27

Post #: 36348819
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Originally posted by James56 ↑

There’s been a fair bit of discussion about a share buy back to improve GXY sp, and I thought I would have a look at the effect buy backs are having on market at the moment.

Having a few QAN shares I knew they were currently carrying out a $332m buy back and checked a few numbers.

Apologies in advance if I have made any errors in my calculations or have overlooked any glaring anomalies in share choice or external factors, but it’s just for a rough comparison.

Like all shares exposed to the price of oil and international trade, QAN is expected to be moving into tougher trading conditions, but I think that is a little like lithium oversupply/pricing rumours for GXY.

From the QAN announcements on the ASX:

Date started 10 Sep 2018 share price @ close $6.20.

Yesterday 31 Oct share price @ close $5.47

QAN sp down approx 11.8%

To compare with the market over the same time frame:

ASX S&P 200 10 Sep 2018 6141.7

ASX S&P 200 31 Oct 2018 5830.3

S&P 200 down approx 5.1%

Shortman figures for QAN:

Sep 10 0.26%
Oct 25 0.24%

Maybe a buy back isn't always the best allocation of capital. I wan't GXY to stay as liquid as possible to promote growth as fast and strategically as possible.

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QAN is a poor example. We’ve got solid fundamentals back with cash and other assets.

We’re clearly undervalued, and a buyback is the best strategy not just to lift our SP but for a great ROI.

GXY Price at posting: $2.17 Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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