RE: Share buy back26 May 2022 23:21
Misterh, I have considered this question too. I can only conclude that Zvi is stingy with the company money, which it appears he considers to be solely his. The last dividend was laughable, and even then it incurred something like 16% tax from the Israelis on it. The size of the buy back that he announced will take a long time, so he really should have started it by now. I think it is unacceptable to allow the share price to collapse like this, so he can buy the shares back at a cheaper price - if he ever starts. I was very bullish on BVC last year and at the beginning of this year, but I sold all of mine in the 50's no regrets so far. There has been little news from the company this year, which also is raising suspicion now, even with buy backs, will it help in the long term? Look at Zytronic, they have just bought 10% of their shares and cancelled them, but in their interims the earnings were so so, and the price sagged back anyway. Buy backs make a lot of sense for some companies, but in several cases it has not helped the share price: EKF, HIK, HAS, DLG, I had bought for buy backs but not gone anywhere - luckily I sold them quickly too (just seen HIK has lost nearly 25% since I sold). At the end of the day, we all invest in these companies for capital appreciation, and I cant see how it will come from BVC, more so now that Zvi has gone back on his word. Its a growth stock at best, you are investing in what might be in the future. Its not chucking off loads of cash like an energy or resource company, or even pharmaceuticals or insurance. Its a mish mash of a few ideas, some which cancel others out. In that case it probably still is expensive, but without much news flow who knows. Even with news, the affairs of Zvi seem pretty complicated, how do you know as a shareholder you will benefit from any growth in one of his holding companies? BVC probably became a new share to many people in 2020 off the back of Covid, but look at the long term chart its never really gone anywhere. When I sold mine I thought I would buy them back at 40p but not now, im looking for growth stocks with at least 50% upside. Everything these guys do, you can find in other stocks, all of which are then focused and solely exposed to that sector.
If you like buy backs I can recommend IOF Iofina. An Iodine producer, who are are about to start buy backs, of 15M shares about 7.5% of the company. Very few free shares, so should re rate off it. Do some research over on that board lots to be excited about. I'm also bullish on HTG, I3E, EDR, JSE - all of these companies are generating a lot of cash relative to their mcap. But with BVC, we have no idea, maybe Zvi still thinks the shares are expensive?