Member Info for PUTUP

"How 'good' is your good, PUTUP?"

****eye, I can now answer your question: that good.

Remember chaps, dividends (and buybacks) don't create value except and only to the extent they help create/maintain an efficient capital structure. They distribute it. Expect more capital distributions in both forms.

Operating wins create value. Steady as she goes. JP is still riding on his predecessor's coattails but blocking and tackling just fine so far.

"Morgan Stanley controlled nominees hold over 8 figure holding here."

What's your point?

Morgan Stanley doesn't own MSCI.

From Wikipedia: In mid-2007, parent company Morgan Stanley decided to divest MSCI.[14] This was followed by an initial public offering of a minority of stock in November 2007.[15] The divestment was completed in 2009.

Inclusion in an MSCI index doesn't many any sort of vetting by Morgan Stanley at all. The hurdles for inclusion are, as Kaaran pointed out, largely formulaic. And what matters most is not the inclusion in a particular index but rather how much money tracks or is benchmarked against that index. Some of the 'minor' MSCI indices aren't used a lot.

Examine closely the list of the top 10 shareholder groups which own 62% of the company. No other shareholder owns more than 3% of the company. Who do you think the largest institutional shareholder is?

"This means that fund managers WORLDWIDE can see that MORGAN STANLEY have rubber stamped the stock and included it in their investment basket.
.
Of course as everyone can see many many international funds hold large lumps of this stock"

LOL! Best to remain quiet than shout your ignorance.

Petrochina and BP have been working together on the field for years but of course SS would have you believe it's a new "MASSIVE CHINESE JOINT VENTURE".

All they've done is placed their interests in a vehicle that can raise finance on its own rather than placing repetitive calls on BP's b/s.

Part of BP's exit. Frees up capital and means the venture now has to fund itself on a stand-alone basis.

"When a company does a buyback it is not only returning capital but also betting on a re-rating (even if the BoD aren't conscious of this at the time)."

Nope. They no longer have the cash and the bought back shares will no longer exist. They have what they had before less the cash. That's it. Just like a dividend. They haven't invested in anything that can generate a return to the company. (On the contrary they have less to play with.)

"the shareholders shares go up AND shareholders benefit from the re-rating of the shares that were cancelled,"

At the individual shareholder level - because those shareholders that didn't sell ended up owning more of the company (their share count stayed the same while the total shares o/s decreased). Of course if I own more of a company and it rerates higher I do well while if it rerates lower I do worse than if I hadn't increased my ownership %. Same thing if I reinvested my dividends to own more of the company while others sold to me.

Regardless of statements - confused or otherwise - made when a buyback is announced, the company is merely returning capital. Some key shareholders with influence over management may believe (rightly or wrongly) that the company is undervalued and some of that rhetoric may creep into announcements. But make no mistake, the company is merely returning excess capital.

"A company that trades on a forward PE of 20 buys in its shares because it thinks it thinks the market will soon price it shares on a PE of 30."

There's the mistake. A company doesn't buy its shares because they think the stock will be rerated. Some shareholders might want the company to use excess liquidity to buy back its shares and, by not selling into such buyback, increase their ownership in the stock which they perceive as undervalued and expect will be rerated. But the company doesn't gain from such except in so far as it might improve its capital structure and cost of capital.

And of course a buyback can't withstand a fundamental rerating of the company's prospects 'n value. That ought to be obvious to anyone.

GKP has gross excess liquidity. The cash on its books is earning nothing. It gains not from its bonds outstanding - they don't leverage equity returns when the same amount or more of cash is sitting on its books. (Quite the opposite, the interest bill is for nought.) Management may be tempted to hold onto this excess liquidity because they foresee several years into the future the need for a major investment program with challenging returns. They might fear that raising the capital at the time it is needed will be extremely challenging and hence be tempted to hoard the excess liquidity today, even at the expense of running a grossly inefficient capital structure and suppressing returns to equity. But that 'policy' needs to be challenged strongly. If the future major investment program is capable of standing on its own merit capital will be available when it is needed. If it doesn't, the investment should not be undertaken. Equity investors should not bear the cost of a grossly inefficient capital structure today.

So if we agree (you might not) that the company ought not to run such an inefficient capital structure today then we can likely agree they need to pay out the excess capital. They can do this by paying out dividends (as they've done) or buybacks (as they've done) or both. In either case, for the company all that happens is the cash leaves the business. In one case the share count stays the same and the share price corrects for the loss of cash. In the other, the share count falls and, ceteris paribas, the share price stays the same. For both, the equity value of the company falls by the cash distributed. Which option is preferred by each shareholder depends on their own individual view on the value of the company's shares (undervalued or overvalued).

[PS The last buyback was extremely value accretive to those that decided to sell

"Time will tell."

My fear is the Fed pulls the rug out from under us between now and Sep 2. Global equities are due a very chunky correction. GKP might well be a safe haven...

"which is quite different from having it to bet on making value-accretive purchases"

Nobull still thinks the company trades in its own shares

" yet the SP has dropped 8p since."

Share price hasn't moved since I posted that.

I called the fall to 140p and the rebound since. The stock has now popped out of its trading channel for those who place value in technical analysis.

I expect the move to 55k production sooner than later with an update on the next well on Sep 2. And I will be disappointed if buybacks aren't announced. (Closed period currently.) Maybe I'm wrong on both. Or maybe I'm not. Time will tell.

September 2 should provide good news. Operational progress and more return of capital announced.

Nah. Value of stock purchased = cash out the door. Net zero. But as I think the company is cheap I'd rather they returned cash via buybacks than dividends. With luck it will reduce the huge number of weak holders and help at the margin. Happy to grow my ownership % at these levels. (It will be interesting to see if key holders reinvested or pocketed the cash for deployment elsewhere.)

"Exactly! It is just as good as buying the dips but without spending a penny. The company does it for you!"

Buybacks don't create value. They distribute it. Just like dividends. But it would be nice to see a solid bid mopping up some of the weak retail. If only they'd all been properly cleaned out in 2016.

Which dip did you buy and in what volume? LOL

140p achieved. Hopefully we can now move to the top of the channel circa 153p. Production uplift should see the stock then break higher if all the no-hope retail stop bottling.

Opu on the bid! We're all going to be just fine. LOL.

Oops: my maths was off in my first sentence - although the impact of dividends is still a significant contributor which needs to be accounted for as is the decline in oil

"it is 25% down from a few weeks ago and nobody seems to blink"

Over half of which is due to going ex-dividend - twice. If you adjust for dividends it's down very roughly about 5%. Oil is down about 15% or so over the same period. I would not be surprised to see 140p per share in the near term. But I also expect the next well on-stream sooner rather than later.

GKP died in 2016. A new company was born from the ashes. Unfortunately it was named the same and led many to not bereave appropriately.

S&A I think you might well get a chance at those levels very soon, if not a bit lower. But it will take longer to change the Chairman. Good news will come before that change happens...

Honestly, do you actually think he penned that? LOL Perhaps he reviewed and provided comments on the text but I very much doubt he wrote it from scratch (ever).