Warren Buffett is a huge advocate of companies 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 businesses picked at random that have repurchased their shares so far during the week.
1. Silverlake Axis Ltd (SGX: 5CP)
Silverlake Axis is a software solutions provider servicing mainly the financial services sector.
On 11 and 12 December, the firm bought back 2.4 million shares at a price of between S$0.5998 and S$0.6036 apiece. The total cost came to around S$1.45 million.
Silverlake is now selling at S$0.60 per share, translating to a price-to-earnings (PE) ratio of close to 7 and a dividend yield of about 3%.
2. Oversea-Chinese Banking Corporation 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 11, 12 and 13 December, OCBC repurchased 600,000 shares at a price range of between S$12.49 and S$12.52 apiece. The total cost was around S$7.5 million.
OCBC’s shares are going at S$12.23 now, giving a price-to-book ratio of 1.4 and a dividend yield of 2.9%.
3. Bumitama Agri Ltd (SGX: P8Z)
Bumitama Agri is a producer of palm oil and palm kernel in Indonesia.
On 11, 12, 13 and 14 December 2017, the company bought back a total of 2,274,000 shares at a price range of between S$0.7445 and S$0.76. It spent around S$1.72 million in all.
Bumitama Agri is selling at S$0.765 per share now. It is trading at a PE ratio of 10 and has a dividend yield of around 2%.
- Singapore’s Top 5 Dividend-Paying Blue-Chip Stocks
- This Famous Stock is Undervalued by the Singapore Market Currently
- Singapore Technologies Engineering Ltd’s Stock Price Is Near A 52-Week Low: Does The Company Have A Quality Business?
- The Singapore Stock Market Today: No Signboard Holdings Ltd and Cromwell European REIT Go Public
- 3 Reasons Most People Lose Money in the Stock Market
- Is M1 Ltd A Bargain Right Now?
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.