A buyback creates value when the cost of buying the share back for the company is far less than the fair estimate of its value when you look at a company’s future dividend or earnings streams . Whc definitely falls in this category as it’s trading on a P/E ratio of probably under 2-3 times forward earnings at present , which is insane , so the market is not valuing it correctly in short . The whole green lunacy that infects most of the world today is at play here . This share on fundamentals alone should already be at 10 dollars plus , it’s not because of the said green politics at play infecting and biasing peoples valuations of many larger institutions . The boundaries of rational thought and analysis stop once you start talking coal stocks .
So if the marginal seller in the market is willing to give up their shares for well under fair value , then really what happens in the long run with a buyback is the denominator of shares issued goes down via the buying back , which actually drives up the value of each remaining share more , so if executed properly it becomes a wealth transfer from the impatient to the patient ………. Where have I heard that before , that’s right a mr Buffett has said this many times when discussing investing .
This is why I hope they will continue buying back shares , not because I have any intention of selling and realising a 50% cgt saving . Rather I am more interested in the value of each slice in the company going up which is what a buyback does and then over time that also means a higher dividend per share as your net profit has less shares to be spread over , for those who remain for the long term too .
As long as the market continues to be idiotic and fundamentally mis price the shares , and also provided we don’t need the funds for capex , which we don’t at present I say keeping buying back , the price will only go one way if these profits persist and that is up .
- Forums
- ASX - By Stock
- Projected FY 2021-22 and Final dividends
A buyback creates value when the cost of buying the share back...
- There are more pages in this discussion • 264 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add WHC (ASX) to my watchlist
(20min delay)
|
|||||
Last
$7.70 |
Change
0.000(0.00%) |
Mkt cap ! $6.441B |
Open | High | Low | Value | Volume |
$7.72 | $7.79 | $7.66 | $18.32M | 2.378M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
5 | 30034 | $7.70 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$7.71 | 32743 | 7 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 10000 | 7.700 |
2 | 13240 | 7.680 |
1 | 10000 | 7.670 |
5 | 80706 | 7.660 |
6 | 47161 | 7.650 |
Price($) | Vol. | No. |
---|---|---|
7.710 | 26456 | 6 |
7.720 | 16848 | 2 |
7.730 | 15876 | 4 |
7.740 | 11848 | 1 |
7.750 | 4125 | 1 |
Last trade - 16.10pm 14/06/2024 (20 minute delay) ? |
|
|||||
Last
$7.69 |
  |
Change
0.000 ( 0.33 %) |
|||
Open | High | Low | Volume | ||
$7.72 | $7.78 | $7.66 | 438624 | ||
Last updated 15.59pm 14/06/2024 ? |
Featured News
WHC (ASX) Chart |