share buy backs

What are share buybacks?

by

Companies may find they have excess cash but see no opportunities for expansion. In this situation, they may want to participate in a buyback to use these funds which can increase their ownership. In this article we talk about what a share buyback is and why companies participate in them. What is a share buyback? Share buybacks occur when a company repurchases their own shares so they can gain back some ownership from shareholders. They do this by offering shareholders …

Read MoreWhat are share buybacks?

The dangers of share buys backs

by

Share buy backs may be seen as a positive move by the market. This is because it looks as though the company is confident of their stock price going up. But these share buy backs may indicate the company is not using their capital efficiency. Below are some hidden negatives of share buy backs. What is a share buy back? Share buybacks occur when a company repurchases their own shares so they can gain back some ownership from shareholders. They …

Read MoreThe dangers of share buys backs

Should you take up the BHP Share Buyback?

by

BHP is returning the US $5.2b (A $7.2b) proceeds from the sale of its Onshore US assets to shareholders. The balance of the sale will be returned via the special dividend which is fully franked in January 2019. The reason BHP have chosen to do this buy back off market instead of buying shares on market is that the buy back allows the company to purchase the shares at a discount of up to 14 per cent to the market …

Read MoreShould you take up the BHP Share Buyback?