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 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 Straits Times Index (SGX: ^STI) companies picked at random that have repurchased their shares thus far during the week, as of market open today.
Oversea-Chinese Banking Corp 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 2, 3, 4 and 5 July 2018, the bank bought back a total of 200,000 shares at a price range of between S$11.45 and S$11.56 per share. The total cost came up to around S$2.3 million.
OCBC shares closed at S$11.50 on Thursday. This translates to a price-to-book ratio of 1.2 and a dividend yield of 3.2%.
Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)
Yangzijiang is the largest China-based company in the Singapore stock market. It is also a leading shipbuilder in China in terms of manufacturing capability and capacity.
On 3 July, Yangzijiang repurchased 2,000,000 shares at S$0.88 apiece, translating to a total cost of around S$1.8 million.
Shares in Yangzijiang closed at S$0.875 on Thursday. The firm was selling at close to six times trailing earnings and had a dividend yield of 5.1%.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies is a global technology, defence and engineering conglomerate specialising in the aerospace, electronics, land systems and marine industries.
On 5 July, the company bought back 200,000 shares at S$3.25 per share. It spent slightly less than S$651,000 for the repurchase.
Singapore Technologies shares closed at S$3.27 on Thursday, giving a price-to-earnings ratio of 19 and a dividend yield of 4.6%.
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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.