That is the stupidest rationale I've ever heard. That is exactly why retail holders fall on their face during the growth phase of the company lifecycle.
Do the maths, for every $1 of capital that RMS spends on the business they get $1.16156 return out of it year on year. Now compound this year on year for however many years from here. Why on earth would anyone prefer to spend that $1 on a dead money decision like buyback when RMSs ROC (Return on Capital) is that good.
The question on buybacks is never what price. It and will always be of when, the time for buybacks is when RMSs can no longer grow the business. If you want buybacks go buy FMG, S32, BSL... plenty out there that's hit their optimal size, is no longer growing (regardless of how much money they spend on the business) and can no longer deploy capital to its growth lever efficiently.
Is a buy back a silly idea?, page-55
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Last
$2.22 |
Change
0.020(0.91%) |
Mkt cap ! $2.544B | |||
| Open | High | Low | Value | Volume |
| $2.20 | $2.23 | $2.20 | $10.65M | 4.811M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 8 | 272418 | $2.20 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $2.22 | 233080 | 4 |
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| Last trade - 16.10pm 30/08/2024 (20 minute delay) ? |
| RMS (ASX) Chart |