I know the buy back is occuring at very intelligent prices (ie intrinsic value significantly above share price), so buy back is theoretically good for long term shareholders. BUT, SWM really needs to start issuing dividends.
Mr Market knows that in the long term, SWM will be totally acquired by Seven Group. And here is the problem, Seven Group holdings is effectively increasing its ownership at cheap prices. Minority shareholders will eventually be taken out. Seven Group is slowly acquiring the company without having to pay dividends and without having to pay 'take over' prices.
Hence the massive disparity between share price and intrinsic value.
SWM Price at posting:
35.5¢ Sentiment: None Disclosure: Held
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