share buyback very good ah....means the company can buyback share from market if think too cheap...maybe the co see hy share very undervalued now...hehehehe
it results with Extra - Double X Exponential effects on EPS. ..............................................................
(1) firstly the Gross profit itself does not drop proportionally...as there is breakeven crack spread threshold which it needs to surpass to realize a Gross Profit. Gross profit drops exponentially against crack spread drop instead of proportionally.
(2) secondly, there are Fixed Cost of 150 Million per qtr where the Gross Profit has to surpass (exceed) before realizing as Net Profit. This has even more exaggerating effects on EPS.
(3) lastly, the new tax realization will make EPS number reduced by 25%
If you plot a graph of crack spread versus eps on and x-y chart...it will look like you are about to jump of a cliff....to death.
the rise in oil price squeezing its margin (1) and the imminent high risk upgrade work (2), with a steep reduction in throughput (3) and a higher cost of producing a barrel refined product due to extra processing cost of Euro 4 technology (4)......
...its all pointing at the same direction....the CLIFF OF DEATH.
volitile tinggi loh kambing loh kambing loh kok kayak gitu sih..masakan gak boleh trading....tikam saja dong, tak perlu butuh apaan mau pikirin yang lain sih (tuka indon sekejap)...
Can PH win 100 parliamentary seats in West Malaysia? If the answer is no, don't ever hope for change of government. The most PH can win in East Malaysia is between 12 to 15 out of 57 seats. This is the fact.
Can PH win 100 parliamentary seats in West Malaysia? If the answer is no, don't ever hope for change of government. The most PH can win in East Malaysia is between 12 to 15 out of 57 seats. This is the fact. ============
should people stop work if they cannot know the future?
Each share of common stock represents a small stake in the ownership of the issuing company, including the right to vote on company policy and financial decisions. If a business has a managing owner and one million shareholders, it actually has 1,000,001 owners. Companies issue shares to raise equity capital to fund expansion, but if there are no potential growth opportunities in sight, holding on to all that unused equity funding means sharing ownership for no good reason.
Shareholders demand returns on their investments in the form of dividends which is a cost of equity – so the business is essentially paying for the privilege of accessing funds it isn't using. Buying back some or all of the outstanding shares can be a simple way to pay off investors and reduce the overall cost of capital. For this reason, Walt Disney (DIS) reduced its number of outstanding shares in the market by buying back 73.8 million shares valued at $7.5 billion back in 2016.
Share Repurchase Plans Can Be Easily Changed Ideally, shareholders want a steady stream of increasing dividends from the company. And one of the goals of company executives is to maximize shareholder wealth. However, company executives must balance appeasing shareholders with staying nimble if the economy dips into a recession.
One of the hardest hit banks during the Great Recession was Bank of America Corporation (BAC). The bank has recovered nicely since then, but still has some work to do in getting back to its former glory. However, as of the end of 2017 Bank of America had bought back 509 million shares over the prior 12-month period and the bank plans to return over $17 billion to shareholders through share repurchases in 2018. Although the dividend has increased over the same period, the bank's executive management has consistently allocated more cash to share repurchases rather than dividends.
Why are buybacks favored over dividends? If the economy slows or dips into recession, the bank might be forced to cut its dividend to preserve cash. The result would undoubtedly lead to a sell-off in the stock. However, if the bank decided to buy back fewer shares, achieving the same preservation of capital as a dividend cut, the stock price would likely take less of a hit. Committing to dividend payouts with steady increases will certainly drive a company's stock higher, but the dividend strategy can be a double-edged sword for a company. In the event of a recession, share buybacks can be decreased more easily than dividends with a far less negative impact on the stock price. This is why companies like Bank of America favor buybacks versus dividends when it comes to boosting shareholder wealth.
Improve Financial Ratios & Boost Confidence Buying back stock can also be an easy way to make a business look more attractive to investors. By reducing the number of outstanding shares, a company's earnings per share (EPS) ratio is automatically increased. Also, short-term investors often look to make quick money by investing in a company leading up to a scheduled buyback. The rapid influx of investors artificially inflates the stock's valuation and boosts the company's price to earnings ratio (P/E).
If a company is buying back shares, it can also be viewed by the market that management has enough confidence in the company to reinvest in itself. Investors typically see share buybacks as a positive sign that growth is likely to increase in the future. As a result, share buybacks can lead to a rush of investors buying the stock.
The Stock Is Undervalued Another major reason why businesses repurchase their own shares is to take advantage of undervaluation. Stock can be undervalued for a number of reasons, often due to investors' inability to see past a business' short-term performance or sensationalist news items. If a stock is dramatically undervalued, the issuing company can repurchase some of its shares at this reduced price and then re-issue them once the market has corrected, thereby increasing its equity capital without issuing any additional shares.
@Investor48... Why not???... If everyone of us give our full support to light blue eye... If we can govern Selangor and Penang why not the Federal government??....
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Newplayer286
2,654 posts
Posted by Newplayer286 > 2018-04-20 19:57 | Report Abuse
Anyone can give sincere advice? Is good or no good with their proposal?