Share buybacks can be useful for companies if done for the correct reasons. And that is, if the firm’s shares are undervalued, and the reinvestment opportunities into the firm are not as attractive.
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.
Stamford Land Corporation Ltd (SGX: H07)
Stamford Land is Australasia’s largest independent owner and operator of luxury hotels. It has a portfolio of prime hotels and investment properties in Australia and New Zealand.
On 24 and 26 December 2018, the property firm repurchased a total of 1,260,100 shares at S$0.49 per share. The total cost came up to slightly below S$618,400.
For the second quarter ended 30 September 2018, Stamford Land’s revenue decreased by 47.6% to S$70.9 million, but net profit improved by 16.3% to S$11.6 million. The company saw foreign exchange gains of around S$2 million, and this helped to prop up the bottom-line.
Stamford Land shares closed at S$0.495 each on Thursday. The share price translates to a price-to-book ratio of 0.8 and a dividend yield of 2%.
Singapore Post Limited (SGX: S08)
Singapore Post, or SingPost for short, has a history stretching back to 150 years. The company currently handles e-commerce logistics, as well as provides mail and logistics solutions in Singapore and around the world.
On 26 December, the company bought back 350,000 shares at S$0.90 apiece. It spent around S$315,400 for the share buyback.
For SingPost’s second quarter ended 30 September 2018, revenue rose 2.2% to S$368.7 million due to stronger contributions from international mail and property. However, net profit declined by 12.9% to S$25.1 million mainly due to an exceptional fair value loss on warrants from an associated company. Without the one-off items, underlying net profit inched up 0.4% to S$28.1 million.
Shares in SingPost ended Thursday at S$0.90 each. At that share price, it had a price-to-earnings (PE) ratio of 21 and a dividend yield of 3.9%.
Venture Corporation Ltd (SGX: V03)
Venture is a global electronics services provider that can support design, manufacturing, and e-fulfilment for a wide range of products.
On 26 December, the firm repurchased 56,000 shares at S$13.57 each, spending slightly above S$761,800.
Unlike SingPost, Venture did not have a decent latest quarter. For its 2018 third-quarter, Venture’s revenue tumbled 27.4% to S$770.4 million while net profit fell 27.5% to S$80.8 million. The lower revenue was largely due to the impact arising from customers’ planned transition to new replacement products and merger and acquisition activities from some customers.
Venture shares ended Thursday at S$13.69 apiece. The share price gives a PE ratio of 11 and a dividend yield of 5.8%.
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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.