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Better still could you please provide your in depth analysis as to your reasoning Porsche regarding the UK markets you continue to knock. Your response will no doubt be very amusing.
If you want to exit as a shareholder once and for all, sell your shares!
Ftse same price as 30th Dec 1999, pathetic, S&P has 3xd in that time, Aviva has lost half its value in ten years and the problem with the index is that it’s stuffed full of dross like this, gsk, rubbish banks and hopeless energy stocks. Having said that, tories and brexit an epic fail for U.K. plc, only hope now is that it all gets sold off to foreign buyers asap so we shareholders can exit it once and for all.
You think aviva is strong sell you must think there a big market crash and therefore the whole market is a strong sell because the fundamentals of aviva of never been this good for years
not this morning lower before we go higher
wait
Barclays raises Price Target , 467 to 505, OVERWEIGHT.
adeg1
Some good analysis there my friend.
If that turns out to be accurate the NAV per share will increase by more than the buy backs.
Requires some trust and skill by the managers.
History has not been kind to buybacks by UK financial stocks.
Directors have been buying which is a good sign.
Certainly there is a lot of hope.
Personally I would rather take cold hard cash and reinvest myself if I consider the stock to be cheap.
I am fortunate that 95% of everything I own is held within a SIPP or ISA wrapper (have maxed them for years and my wife's allowance too). This means I don't have to worry about dividend tax etc. I can however see how it is definitely a consideration if you have your holdings outside. Why add to income when you don't need to and incur more income tax.
Nuri. Only time will tell whether holding or selling up would have been the better option. I'm certainly hanging in and will continue to do so unless fundamental reasons arise to do otherwise.
Redceo - its an excellent company and a safe investment but investors have long shunned it... apart from Cevian looking for a quick buck and then exit
Nuri. I see no problem with anyone selling high (421+) before dividend. Do the current (401+) not pique your interest in buying back? Nothing to stop you opting out of any future plan to return shareholder cash.
Sold my £65k holding weeks ago. I wasnt waiting for a special dividend as it would have cost me dearly in terms of dividend tax - pushed me firmly into 37.5% rate.... see nothing happening with this share of interest.
The current market cap is £15.884 Billion but the Net Assets Book Value of the business at December 20 was £20.560 billion. So by buying back shares they are buying them at a discount to the net book value. In this scenario they are paying 77p for something valued at a £1.
In theory, taken to the extreme, if they cashed everything in and bought all the shares back at the current market value the last single shareholder would be left with £4.676 Billion.
However I also like to take off the intangible assets from the NBV as they would be worth nothing in a firesale, which in this case is £4.233 Billion. Even with this they are still buying shares under an adjusted NBV so I am happy with that.
Redceo
It is a myth that they are giving cash to anyone.
The purpose of a share buyback is to pump up the price as many comments already mentioned by increasing earnings per share.
It will all come down to exactly how the £4 billion is returned to shareholders, many would like to see a special dividend of £0.80, but I think an increase of dividends over the next 3 years and perhaps more share buybacks are more likely
However, when it comes to the full year dividend, if the BOD choose to only recommend an increase of 5% on top of last years as they did for the interim, then the change in the actual cash spend would be negligible due to the lower shares in issue. To actually increase cash returned to shareholders they would need to be suggesting a10% increase on top of the 2020 final dividend.
With the current buy back programme being for approx 5% of the company, I would expect the buyback alone to impact the price by approx 5% based on the maths, however....the news that Aviva is buying back 5% of shares with a lot more £££ still to "return" to shareholders will be the driving force behind price rises IMHO
Topped up this morning 408p of course it continued to drop. I will just sit back now and at some stage be thankful that I picked more up.
The only chance of an imminent £5 sp is on news of a takeover. IMO.
If they spent the full 4 billion on share buy backs that would be 25% of the shares cancelled as aviva is valued at around 16 billion. Dividing the profit by the new number of shares would increase earnings per share alot.
I think buy backs are good. At other companies they do not seem to make a difference as they have been such a small percentage.
Even the 750 million that aviva is starting with is over 4.5% of shares. This will make a difference to the earnings per share and should increase the share price to over 5 quid in my opinion.
"The key reasons for a company choosing to undertake a share buyback may include: To return surplus cash to shareholders. A company may have surplus cash as a result of outstanding profitability, the sale of a business or having cash in readiness of a potential acquisition or planned expansion that has fallen through"
Like to know you views, I see it as management pumping up the share price to pad their own returns rather than returning cash.
Many companies buy back their own shares when times are good = higher share prices and have rights issues when times are bad = lower share prices.
It is not what i like to see from the managers but most companies are doing it these days.
Cheers casual investor. If that's how it pans out with a slight increase in dividends then it's worth it. Never seems to be reflected in share price though
As the shares are cencelled then the earning per share increases ever so slightly, when it comes to dividend time these will be slight higher as a result of fewer shares in the market.