Share repurchases can be a good thing if done for the right reasons. That’s if the company’s shares are undervalued and the reinvestment opportunities into the firm are not as attractive. On that note, let’s look at three companies that have repurchased their shares so far during the week, as of the market open on 17 May.
Keppel REIT (SGX: K71U)
Keppel REIT is a commercial real estate investment trust (REIT) with assets in Singapore and Australia. At the end of April 2019, the REIT announced its first investment in South Korea, a freehold office building located in Seoul’s central business district. On 13 May 2019, the REIT’s manager bought back 550,000 units at a price range of between S$1.22 and S$1.23 per unit. The cost came up to slightly below S$673,800.
For its first quarter of 2019, Keppel REIT’s property income rose 0.7% year-on-year to S$40.0 million while its net property income inched up by 0.3% to S$31.3 million. However, distribution per unit tumbled 2.1% to 1.39 Singapore cents. To know more about Keppel REIT’s latest results, you can head here.
Keppel REIT’s unit price closed at S$1.23 on Thursday. At that price, it was valued at a price-to-book ratio of 0.9 and had a distribution yield of 4.5%.
Nordic Group Ltd (SGX: MR7)
Nordic provides services such as automation system integration, scaffolding, and vessel maintenance, among other things, to the oil and gas industry. On 13, 14 and 16 May, Nordic repurchased a total of 344,000 shares at a price range of between S$0.255409 and S$0.27213 apiece. The total cost came up to around S$92,600.
Nordic had a weak first quarter with revenue and net profit tumbling 14% and 40%, respectively. The revenue fall was driven by lower sales at its Project Services business segment due to lesser projects handled. The company was upbeat, though, saying that it has maintained its “profitability despite tough operating conditions in the oil and gas and offshore marine industries”.
Nordic shares last traded at S$0.29 each on Thursday. The price translates to a price-to-earnings (PE) ratio of 10 and a dividend yield of 5.7%.
Singapore Telecommunications Limited (SGX: Z74)
Singapore Telecommunications Limited (Singtel) is one of the three major telcos in Singapore. On 16 May, Singtel bought back 437,333 shares ranging from S$3.11 to S$3.12 apiece, translating to a cost of around S$1.36 million.
For the full year ended 31 March 2019, revenue rose 4% to S$17.37 billion in constant currency terms due to growth in info-communications technology (ICT), digital services, and equipment sales from mobile connections in Singapore and Australia. However, net profit tumbled 42% to S$3.10 billion, mainly on the back of a one-off gain seen last year. Excluding that, underlying net profit would have declined by 21%.
On Thursday, Singtel’s share price closed at S$3.14, giving its shares a PE ratio of 17 and a dividend yield of 5.6%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Nordic Group. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.