Warren Buffett is a huge advocate of companies buying back their shares. He believes that share buybacks can reveal a thing or two about the company?s management.
He once said:
?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 businesses picked at random that have repurchased their shares so far during the week.
Warren Buffett is a huge advocate of companies buying back their shares. He believes that share buybacks can reveal a thing or two about the company’s management.
He once said:
“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 businesses picked at random that have repurchased their shares so far during the week.
GK Goh Holdings Ltd (SGX: G41)
GK Goh Holdings is an investment holding company that invests in operating businesses and liquid assets. As part of its portfolio, it has an 87.35% stake in Singapore-listed firm, Boardroom Limited (SGX: B10).
On 22 January 2018, the firm bought back 118,700 shares at a price of S$1.09 per share. It spent around S$129,700 for the share buyback, including transaction costs.
GK Goh Holdings closed at S$1.11 yesterday. This gives a price-to-earnings (PE) ratio of close to nine and a dividend yield of 3%.
Silverlake Axis Ltd (SGX: 5CP)
Silverlake Axis is a software solutions provider servicing mainly the financial services sector.
On 23 and 24 January, the firm bought back 4.6 million shares at a price of S$0.58 apiece. The total cost came up to around S$2.7 million.
Silverlake ended Thursday at S$0.575. This translates to a PE ratio of around six and a dividend yield of 3.5%, excluding special dividends.
USP Group Ltd (SGX: BRS)
USP Group is a diversified business group with four business segments, namely, distributorships and dealerships, calibration of environmental equipment, property investments, and recycling of waste oil.
On 23, 24 and 25 January, the company clawed back 292,300 shares at a price of between S$0.194 and S$0.20 per share. The total cost of the repurchases was slightly below S$57,000.
The company ended Thursday at S$0.20, giving to a price-to-book ratio of 0.4.
Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know--and we've laid them all out in The Motley Fool Singapore's new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge--simply click here now to claim your copy.
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.