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:
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“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 thus far during the week, as of market open today.
United Overseas Bank Ltd (SGX: U11)
With more than 500 branches in 19 countries, United Overseas Bank, more commonly known as UOB, is one of the largest banks in Southeast Asia.
On 16, 17 and 18 April 2018, UOB bought back 78,436 shares ranging from S$28.11 to S$29.23 per share, translating to a total cost of around S$2.23 million.
UOB’s shares last changed hands at S$29.78 on Thursday. This gives a price-to-book (PB) ratio of 1.5 and a dividend yield of 2.7%, excluding special dividend.
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”.
On 16, 17, 18 and 19 April, the firm bought back a total of 450,000 shares ranging from S$0.415 to S$0.425 per share, amounting to a total cost of slightly below S$190,000.
Starburst closed at S$0.42 per share on Thursday. The firm is trading at more than 700 times its trailing earnings and has a dividend yield of 0.6%.
Perennial Real Estate Holdings Limited (SGX: 40S)
Perennial is an integrated real estate and healthcare company headquartered in Singapore. Other than Singapore, it has a presence in China, Malaysia and Ghana.
On 16, 17, 18 and 19 April, Perennial repurchased 642,700 shares ranging from S$0.875 to S$0.88 apiece, translating to a total cost of around S$564,700.
Shares of the company ended Thursday at S$0.875. This gives a PB ratio of 0.5 and a dividend yield of 1.1%.
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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 United Overseas Bank Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.