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.
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. Q & M Dental Group (Singapore) Limited (SGX: QC7)
Established in the Bukit Batok area of Singapore in 1996, Q & M Dental Group has grown to be the largest private dental healthcare group in our country. It has a pool of more than 200 experienced dentists serving more than 600,000 patients island-wide currently. The firm has since expanded overseas and is building up its presence in China and Malaysia.
On 26 and 27 December 2017, the firm repurchased a total of 193,900 shares at a price range of between S$0.61 and S$0.62 apiece. The total cost was around S$119,500.
Shares of the dental group closed at S$0.615 on Thursday. This gives a trailing price-to-earnings (PE) ratio of around 12 and a dividend yield of 2.3%.
2. AEM Holdings Ltd (SGX: AWX)
AEM Holdings is involved in designing and manufacturing equipment and precision components for the semiconductor, solar and smart card industries.
On 26, 27 and 28 December, the company repurchased 150,000 shares ranging from S$3.22 to S$3.33 per share, translating to a total cost of around S$490,300.
Shares of AEM Holdings ended Thursday at S$3.33, giving a trailing PE ratio of 10 and a dividend yield of around 2%.
3. Sembcorp Marine Ltd (SGX: S51)
Sembcorp Marine is a major global player in the offshore and marine industry. It builds oil rigs, and repairs and upgrades vessels, marine and offshore structures.
On 27 and 28 December, the firm bought back 450,000 shares at a price of between S$1.8473 and S$1.8576 per share. It spent a total of S$835,000 for the share buyback.
On Thursday, the shares closed at S$1.85. This translates to a trailing PE ratio of 47 and a dividend yield of 1.1%.
Keep up to date on the latest financial and stock market news by signing up now for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead too.
Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of AEM Holdings Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.