I think the logic behind Encore Capital's tendency to buy its...

I think the logic behind Encore Capital's tendency to buy its own shares has two reasons. The first being a more tax effective way to distribute money to shareholders (the USA taxation anomaly). The second is that it is a cash-deployment option of last resort. By that I mean that in times when collections are good, but buying PDLs is not, the money can simply be used to buy shares, and cancel them. I like the idea, and I have often wondered if CCP would ever be inclined to go down that path, rather than to be continually looking for new initiatives, or sitting on piles of cash.

Intrum also buys its own stock, but if my memory serves me well, which it may not, Intrum uses the stock it buys to be able to make share-based incentive payments to executives without issuing new stock – a very laudable pattern of thinking, IMO. Nothing annoys me more than the continual dilution of shares in stocks listed on the ASX. What makes it worse is that much brouhaha is made of company performance, and executives are silent on EPS performance. Many companies that have grown NPAT over the last decade, have not grown EPS. Failing to mention that is a form of mendacity in my ethical framework – a mendacity common to at least 90% of listed companies, CCP included.

If one bottom-drawers a stock, the tendency is not to concern oneself too much about skipping in and out. I treated my CCP shares in my SMSF as a bottom-drawer investment, and CCP held in a personal portfolio as a play-pen punt, and hence I sold the lot in the playpen at $35.52. This compartmentalisation is illogical, but that is what I did.