Yangzijiang - Unloading Action Detected!

ethan999
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Senior Member

12 years 8 months ago - 12 years 8 months ago #6950 by ethan999

Replied by ethan999 on topic Re:Yangzijiang - Chairman bought 2 million shares

Hi Garl,
Which is better, share buyback or chairman/management buying (as insiders) on personal level?
Hard to say, good points about insider buying:
1. Chairman/directors willing to stake their own money suggests solid confidence and that they are 'walking the talk' - they believe in their enterprise.
2. Company does not have to use its own cash reserves to buy the shares since the chairman/insiders are using their own money. Therefore the company retains its cash reserves which some may argue would be better used ffor business expansion purposes.
3. When chairman/insiders buy it's usually for long term/on a permanent basis, they don't trade regularly and aren't allowed to any way. When they buy, the effect is therefore similar to a buyback in that they reduce the supply of shares trading in the open market and in a bearish market like now, thereby reduce the number of potential sellers.
Good points about share buyback:
1. Company may have to use its own cash but by reducing the number of shares, the dividends per share would likely increase since the dividends will now be split among a smaller number of shares - so share buyback may result in an increase in the dividend ratio. Earnings per share also go up, however book value goes down since the company's own cash is used for the share buyback. At the same time, the market cap also goes down (without the share price dropping) since the total number of shares are reduced, therefore the price to book ratio is not affected since both price and book value go down proportionately
Which do you prefer? Which is better?

Last edit: 12 years 8 months ago by ethan999. Reason: Clarity

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Rich
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12 years 8 months ago #7007 by Rich

Replied by Rich on topic Re:Yangzijiang - up and away

I am surprised that YZJ still hasn't done any corporate share buyback. Didn't they 'threaten' to do so if the stock went too low? Anyway, this stock has made a comeback at $1.205 now, after the fund panic selling was done.

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yeng
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12 years 7 months ago #7234 by yeng

Replied by yeng on topic Re:Yangzijiang - Can buy if it touches 70 cents?

77 cents .,..another 7 cents to go.
Can buy at 70 ?

Worth a punt?

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yeng
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12 years 7 months ago #7248 by yeng

Replied by yeng on topic Re:Yangzijiang - Unloading Action Detected!

On hindsight, 77 cents was a good entry point. Closed at 80 cents yesterday SSsssssh. Today should be firmer, 85 cents?, cos of good Dow closing overnight.

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yeng
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12 years 7 months ago #7266 by yeng

Replied by yeng on topic Re:Yangzijiang - 85. 5 cents now

4 days and, on hindsight, anyone could have made 10% on Yangzijiang by buying at 77 and selling at 85.5 cents now!

On hindsight.... sigh.... that's always pefect vision

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yeng
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12 years 7 months ago #7267 by yeng

Replied by yeng on topic Re:Yangzijiang - U-turn

up up and away....87.5 cents now! Why? Have investors suddenly felt convinced of the Held-to-Maturity investments of YZJ? I doubt it. Instead it is all about sentiment and the herd mentality. Suddenly, everybody is riding the horse of YZJ to profits. And the shortists have abandoned shorting YZJ

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