Warren Buffett is a huge advocate of businesses buying back their shares. He believes that share buybacks can reveal a thing or two about the company’s management.
He once opined:
“What you’d like to do as an investor is hook them up to a machine and run a polygraph to see whether it’s true. Short of a polygraph the best sign of a shareholder-oriented management — assuming its stock is undervalued — is repurchases. A polygraph proxy, that’s what it is.”
On that note, let’s check out three companies picked at random that have repurchased their shares so far this week.
1. Oversea-Chinese Banking Corporation Limited (SGX: O39)
Oversea-Chinese Banking Corporation, or OCBC for short, is the longest established local bank and is the second largest financial services group in Southeast Asia by assets.
On 27, 28 and 29 November 2017, OCBC repurchased 600,000 shares at a price range of between S$12.07 and S$12.26 apiece. The total cost was around S$7.3 million.
Shares of OCBC are going at S$12.44 now, giving a price-to-book ratio of 1.4 and a dividend yield of 2.9%.
2. Sembcorp Marine Ltd (SGX: S51)
Sembcorp Marine, which is one of the largest oil rig builders in the world, also has capabilities in performing repairs and upgrades of vessels, among others.
On 27, 28, 29 and 30 November, Sembcorp Marine bought back a total of 300,000 shares at a price range of between S$1.84 and S$1.86 per share. The total cost came up to around S$555,000.
Sembcorp Marine’s shares are currently changing hands at S$1.88. This gives a trailing PE ratio of 48 and a dividend yield of 1.1%.
3. Tiong Seng Holdings Limited (SGX: BFI)
Tiong Seng, with a history dating back to 1959, is a construction and civil engineering company based in Singapore. The firm’s past construction projects include Parkroyal @ Upper Pickering Street, NTUC Fairprice Warehouse & Office and Mediacorp at Mediapolis @ One North.
On 30 November, the company repurchased 300,000 shares at a price range of between S$0.375 and S$0.39 per share. It spent around S$115,600 for the exercise.
Tiong Seng Holdings’ shares are selling at S$0.395 now. The firm is going at seven times its trailing earnings and has a dividend yield of 2%.
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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 does not own shares in any companies mentioned.