Warren Buffett is someone who likes companies which buy back their shares if the conditions are right. In his 1984 Letter to Shareholders, he opined:
“When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases.”
Let’s look at three companies picked at random that have repurchased their shares during the week.
1. Q & M Dental Group (Singapore) Limited (SGX: QC7)
Established in the humble Bukit Batok area of Singapore in 1996, Q & M Dental Group has grown to be the largest private dental healthcare group here. It currently has a pool of more than 200 experienced dentists serving more than 600,000 patients island-wide. The firm has since expanded overseas and is building up its presence in China and Malaysia.
On 25 and 27 July, the firm repurchased a total of 899,200 shares ranging from S$0.64858 to S$0.64914 per share, translating to a total cost of S$585,293.
The dental outfit is currently going at a price of S$0.645. It has a historical price-to-earnings ratio (P/E) of 18 and a dividend yield of 1.7%.
2. Cordlife Group Ltd (SGX: P8A)
Cordlife is one of the leading players for private cord blood banking services. It operates in markets such as Singapore, Hong Kong, Malaysia, India, Indonesia and the Philippines. Its processing facilities are in Singapore and Hong Kong and they currently have an excess of 40,000 cord blood units stored there. Cordlife was listed in 2012 at a price of S$0.431.
On 25 July, the firm repurchased three million shares ranging from S$0.9024 to S$0.950 apiece, translating to a total cost of around S$2.83 million.
Cordlife is currently selling at S$0.90 and has a historical P/E ratio of approximately 18.
3. Starburst Holdings Ltd (SGX: 40D)
According to its website, Starburst Holdings specialises in the “design and engineering of firearms-training facilities and the design, fabrication, installation and maintenance of anti-ricochet ballistic protection systems for firearm shooting ranges and tactical training mock-ups for law enforcement, military and security agencies as well as civil authorities in Southeast Asia and the Middle East”.
On 26 July, the firm bought back 980,000 shares at S$0.380 per share, amounting to a total cost of close to S$374,000.
Starburst is currently going at a price of S$0.380 and has a historical dividend yield of around 0.7%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.