RE: Buybacks12 Jul 2023 15:28
“ I cannot think of a single instance (there may be some) where a company buying its own equity has "stimulated" the market price of its shares‘
PLUS500 (epic PLUS).
I rode it from a tad over 500p the 2020 scheme after the profit warning to 1800. Not much liquidity there though but divi has kept going and it provided an exit opportunity.
DEC as many and myself have explained a BB is not the best use of cash. It’s a reaction to the ‘cheap’ SP that has afforded a generous yield. In effect providing an instant 16% ROI for the BB.
The markets do not reward anything in the Sp for folk holding. LSE and the market makers get paid on spread and transaction volumes (amongst other things). Hence a small % of a stock traded results in an often disproportionate change in Sp. They need volatility to drive volume. Atm sentiment has dictated a sp drop for some stocks but it’s hardly been a sell off here. It’s just been a drip on low volumes.
I also agree that so far DEC’s efforts via Stifel have been a token gesture. They are likely playing the FX and technicals before reluctantly buying.
WRT hedging. If investors don’t like it they simply shouldn’t be here. It’s not exactly a secret. It’s in the business plan and every ppt since IPO. I have increased my position significantly here as one of the main attractions is hedging to cover amortisation of debt that provides a good, and as I see it, a secure yield.
Since GLO, I haven’t found a better quarterly return on London. I don’t like ETF’s, closed or open ended funds and prefer an evenly quarterly payer or 50/50 biannual divi to the 1/3 2/3 payers.
Hence DEC, SEPL and PHNX are my favs. Others I sold to add here at these ‘silly prices’.
Good luck with your investments
Usual caveats
Trek
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