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Thoughts, ev/ebitda of 3.2, but TIFS, which is UK listed & has similar ev debt ratio of 50% is on ev/ebitda of 3.9. I expect MAGA inc., with ev/ebitda of 5.2 and a much larger corporation could arguably afford to acquire the company....
Otherwise, I would expect the board, having come from Melrose, to continue their strategy of cutting costs and sticking to their forecast business plan of long term bank debt to ebitda of 1.5X and cautiously growing business towards ev & bhev.
Just a quick comment in 2 parts. First look at BP who spend billions in buybacks. Any use to SHs? None that I've ever noticed but the lacklustre BOD do very nicely thank you. Secondly, back to DWL, surely we are entering takeover territory at such a low market cap. Any thoughts?
Just a quick comment in 2 p
If the board of companies embarking on buyback programs were really confident of future performance they would hold the shares in treasury and then sell them back into the market as and when 'mr market' re-rates them.
I agree with buffa that most buybacks simply increase eps which quite often then enables directors to claim their LTIP awards.
£50m spent 'down here' and sold back into the market for £100m would be better than simply cancelling them. After all, we have 1.39bn shares in issue and they'll probably buyback no more than 75m shares for our £50m.
It's like piddling in a swimming pool
aimo
I suggest we await to see what happens. I work on probability an whether I trust 'manifestos' from any source. Overall I believe that Companies who run out of constructive ideas resort to buybacks. I could 'run' a Company on that basis and so could most others. Management skill imo shows itself in ways to improve and develop the Company seen through many other parameters such as ROCE etc.
I suggest you read the AGM buffa; Pages 104, to 117 I think. Bonuses are mostly for growing operating profit, cashflow, esg 'targets', shareholder retuns and growing multiples against peers. There was also a bonus for compound eps growth of 5-15% but it has to be over 3 years..... They seem pretty aligned to me, although the most recent 'vested' bonus may mean their future bonuses are in cash now they have the mandated 3X salary in shares. I think the buyback was something the company decided was a better choice long term than repaying some debt. Had hoped they would be spending more down here though.
If only. In theory share buybacks should be good for SH. What they do, in fact, is increase EOS for Companies who are not growing revenue so that same revenue over fewer shares higher EPS. My experience shows that many director bonuses are paid out of increasing EPS. Thus directors profit at the expense of shareholders. BP is a prime example of this and reason SH constantly complain of low SP and dividends whilst buying back enormous volumes of shares year in year out.
Does anyone think that, with such a bombed out share price, Dowlais might be a takeover target in the near future ?
I thought I lost my opportunity last week when dropped to 68ish, I just bought more. Money are made on weakness, happy to sit this one out until all jitters are over.
60p would let them wipe out a lot of shares during the buybacks and I’d be adding to my new holding to at that price even though, admittedly, the year share price chart of decline looks horrendous.
60p? Could do. Over £180M of shares traded, since capital & regional management reduced to 5% so I think a lot of that must be retail churn as there aren't any major shareholders left. At 60p, being a business which last year managed to invest an extra 70M£ in restructuring for margin growth and still have £100M left over in adjusted free cashflow which has basically gone to shareholder returns, that is some disconnect to other businesses out there & a forward pe of 3 for 2026 according to analyst estimates. Don't listen to me though, i'm a lemming.
Well, it was good while it lasted…next stop 60p
Well that was a well timed buy, or is it, let’s see what happens tomorrow 😆
Public companies use share buybacks to return profits to their investors. When a company buys back its own stock, it's reducing the number of shares outstanding and increasing the value of the remaining shares, which can be a good thing for shareholders.
Sure sign it will go even lower now that I have 😆
I guess with buybacks ongoing a depressed share price is a good thing.
I’m in at just over 68 pence.
Look at the share register, it's been mostly retail buying since IPO, 'they' were probably hunting for stops as most of the drop was on low volume. Not saying it's going up but look, I tried catching a turn after results & took a 1% drop today trying to reduce my average & may as well have not bothered. Will try again tomorrow but could just be paying stamp duty & broker fees for my troubles as I'll have a tight stop.
Just noticed approx 10 million bought & 1 sold today.
& SP down 2% now.
Can anyone explain how this might have come about ?
If more bought than sold, I would have expected SP to go up.
I think the weakness in e-powertrain is due to Chinese ev's taking market share from European competitors as well as a shift to bhev's. https://www.acea.auto/pc-registrations/new-car-registrations-13-7-in-april-2024-battery-electric-11-9-market-share/As you can see in the link.
I attended the AGM this morning. Management was more upbeat than I had expected. Yes, there is a slowdown on ePowertrainbut as they said the other parts which are the majority is doing well. Sales down, margins up; that could still lead to maintained or even increased eps for the full year. Don't expect a sparking set of H24 results but I got the impression that the story is still intact. Quizzed the CFO and cash conversion is still coming through nicely and may well be even better in the second half. I bought a few more when I got back home.
First purchase made today having done OK on Melrose for a while before the split and not doing so well on GKN before that!
In my opinion, it will take a while but with divi and buyback in play, this won't be kept down for too longer period. The 140 listing did seem like the Melrose board did a rather good job.
A bumpy road indeed, but not really unexpected in terms of exposure to the BEV market. However, I think it's a sound business which will prosper again as economies regain confidence and the benefit of lower interest rates.
Doesn’t read well, does it? 🤔 below 70 looks attractive for a top up though, I’ll wait till EOB for a proper shake up before chipping in
O K, just thought I'd share this with any holders; Price may look weak and there is a q1 update coming in the near future which may have people worried. I think Dana sales were basically flat, with margin expansion & inflation pass through driving growth, linemar also hinted at some pass through effects in their earnings update and Cummins -1% in their light vehicles segment. Reads to me that you should expect an inline update with the sector already passed fundamental lows. Operating cash flows here are 1/3 of market cap w/ divvy + buyback approaching a 10% annualised return. This is where the large share blocks are traded, below 80, so while share turnover is high with large holders looking to exit I don't think it's for fundamental reasons and while it may take some time for shares to accumulate towards long term holders I believe the medium term outlook remains positive and also believe the debt should get cheaper with a decline in the $ if the US economy starts to slow. Just thought I'd throw that out there.
Melrose? They sell aircraft bits, what a clown. You should be tracking vehicle sales and Dana in the US, which is their nearest competitor eejit.
Double trouble - broker price downgrade to 100 and read across to Melrose where revenue stalled due to lower demand for components. IMO already factored in ...