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Seven times in the last week and all written off. :-)
Transaction in Own Shares
Last recorded 27th December
MAQ3 - See the RNS 07/02/20 - SLA to commence a share repurchase programme to run from 10/02/20 to 30/09/20 at a max cost of £400m - shares purchased to be cancelled. SP responding well.
A stray "Transaction in Own Shares" RNS. Haven't had one of those for a while.
:+)
Standard Life Aberdeen (LON:SLA) Price Target Raised to GBX 335 at Credit Suisse Group
Price check................
Standard Life Aberdeen (LON:SLA) had its target price lifted by investment analysts at Barclays from GBX 300 ($3.95) to GBX 310
Good morning. Just joined today afer sitting on the sidelines. Ive enjoyed reading your posts over the past few months Here's to a long an successful future
Welcome scampthedog. I and many other Posters on this Board are the exact opposite of "new on here". I have been in since Day 1 of de-mutualisation all those years ago and like others have witnessed a roller coaster of financial emotions so far as SLA is concerned. I wish I shared your optimism about its position in 2020 post Brexit. We may well see the occasional spike but so far as 450 is concerned, my Jury is out! I have said many times before that SLA is a Plodder but a very reliable Plodder to have in your Portfolio, certainly so far as the Dividends are concerned.
One of the fundamental problems of share buy backs is that it swaps the certainty of a capital distribution (special dividend or return of capital) for a vague idea of the increased value of the share which is entirely controlled (or not controlled) by the market place. As Jatw says there's profit in it for the 'boys' ... and the EPS goes up (on paper, real earnings stay the same of course). But for us smaller players there's nothing guaranteed to replace the missing/stolen money.
Mike
I don’t like share buy backs.....it seems to be an open invitation to Hedge funds to ramp the shares up and sell them back to the company with little risk....
Once the buy back is done the shares drift down to where they started.....
And the winners are the traders who played the company, the broker getting commissioned for the buy back and those with eps bonus targets.
The argument that companies indulge in buy backs to reduce the dividend commitment is both fallacious and incredulous.
If a company is strapped for cash to meet the dividend it cuts the dividend - period. Anything else just doesn't make sense and the numbers don't add up. With SLA we're talking about spending £3+ to save 20p (in round figures). Put bluntly they could cover the dividend for the next fifteen years on that share that they've just spent £3 on ... yes I know the dividend should go up year on year ... but you get what I'm saying and a 15 year payback just doesn't make any sense of the transaction.
If a company has surplus money and no suitable project in which to invest it (ie put it to work on behalf of the shareholders) then it should either a) retain the money as reserve, or b) distribute it to the shareholders. And a buy back is not a distribution.
So dodgy is this practice that there is a whole chapter in the Companies Act devoted to it (ch 18) and it's forbidden (sect. 701) without the specific passing of a resolution by the share holders in its favour at the annual meeting (many will have seen these resolutions routinely planted in the notices for such meetings and they are routinely passed 'on the nod' without a second thought).
Has anyone looked at the terms of the executive bonus scheme?
What I think was dumb on SLA part was the capital distribution about 18 months ago.
It was expensive to do and I would have far rather they had reduced the share capital by £1.5 billion
I am not sure you are entirely correct on this.
If a share is deemed to be undervalued then it makes perfect sense for a company to buy back its shares.
It takes the pressure off having to generate so much profit to pay such a large dividend in the future.
It is a better use of money to buy back shares when valuations are deemed to be low.
SLA:
It needs to generate 500 million appox to pay the 21p divi.
If it can reduce the share capital at bargain prices it has the potential to lead to an increase in the divi.
Ah the old chestnuts ... it's amazing how folk fall for the share buy back scam.
Firstly the equation ... Market cap / number of shares => share price ... is something that you might find in an accounting textbook ... and that's where it should stay.
The reality is that it's the other way around ... share price * number of shares => Market Cap. It's share price that drives the market capitalisation, not the other way around.
The buy back swaps the certainty of a cash in the bank dividend which the share holder can choose to spend or reinvest at their discretion ... for the vague hope that the share price will/may possibly increase at some point in some way in the future, which the share holder has to sell before gaining access to.
So why are they so popular? Who do they benefit, what's the real purpose for this slieght of hand? ... Interesting question that ... call me cynical but seems to me that the only 'guaranteed' result of a share buy back is, Earnings / number of shares => EPS goes up ... of course that couldn't have anything to do with making the Board of Directors look good could it? ... and I'm sure it's got nothing at all to do with executive bonuses ... nah, that would be just too cynical ... or would it?
Mike
Market cap / number of shares = share price. Less shares > share price basically.
SLA seems to have been buying back their shares for months now. So what advantage will the shareholder have? Script issue? Special div?
A scrip issue, also known as capitalisation issue or bonus issue, is a form of secondary issue where a company's cash reserves are converted into new shares and given to existing shareholders,[1] or an issue of additional shares to shareholders in proportion to the shares already held. In the United Kingdom, public limited companies, those listed on the London Stock Exchange, have a number of ways to create new shares. A scrip issue is the process of creating new shares which are given free of charge to existing shareholders. To the individual investor, this is known as a scrip dividend. This would normally be done in place of paying a dividend.
The issue would be calculated relative to existing holdings. This means that, for example, one new 'scrip' share may be issued for every ten shares currently owned. The company issuing the scrip shares has now expanded the number of shares in existence but not increased the value of the company. This means that the relative value of each pre-existing share has been reduced slightly.
The investor has the right to sell the new scrip shares in the market. However, the investor must still report the cash value of the scrip dividend on his tax return like a normal cash dividend. This differs from a stock dividend in the United States, where the investor does not pay any tax on receipt of the shares and then only capital gains taxes on the stock dividend until the shares are sold.
Just to help clarify the situation ... shares that are held in Treasury do not count in terms of the market capitalisation of a company, and also do not count for the purposes of calculating the percentage holdings etc for reporting by large investors.
Once a share has been bought in the market and transferred into Treasury it does, for all practical purposes, cease to exist. There is a further stage of 'cancelling' the share but this is largely academic. Some companies keep a stock of shares in Treasury for employee bonus schemes and scrip dividends thus avoiding the need to create them again at a later date.
I'm no fan of buy backs ... much preferring the certainty of dividends or capital returns than the vagaries of market movements which may or may not lead to a capital gain at some point in time -- if you're lucky.
Mike
I know.
The Company holds no ordinary shares in treasury...................
https://www.investegate.co.uk/standard-life-aberdn--sla-/rns/total-voting-rights/202001021044475546Y/
Correct. Market cap / number of shares = share price. Less shares > share price (unless the shares they buy back are held in Treasury and not cancelled).