S$0.305-ARMS.SI
- Armstrong spent $87,340.70 yesterday having bought 281,000 shares in the open market at 31 cents each.
- This would be the company’s first share buy back since its last done in Jan 2008 when it last bought 667,000 shares at an average price of 34 cents each.
- Based on the maximum allowable buy back of 50,220,735 shares, 281,000 would represent 0.56%.
- And based on yesterday’s total volume of 574,000 shares traded, the share buy back represented a significant 49%.
- Armstrong had previously bought back shares from Aug 2005 - Oct 2005, Jan 2006-Aug 2006, Mar 2007-Jan 2008, having acquired a total of 24,505,000 shares ranging from a low of 14.5 cents to high of 42 cents each, but with the majority done below the 20 cents level.
- Based on its previous share buy back track record, when done over a consistent period of time it has benefitted or at least stabilized the stock price.
- The latest share buy back is done on the back of the stock price having declined a sharp 23% since it reported a disappointing 1Q 2011 performance and provided an equally disappointing 2Q 2011 outlook in mid-May 2011.
- We, together with consensus had downgraded our profit forecast for this year from $25mln to $16mln and had then advised investors to “Take Profit”.
- With the stock having dropped sharply since then coupled with the company having instituted its share buy back program (backed by its still healthy cash position of $26.4mln) and with its share price close to consensus average target price 32-33 cents, we are changing to HOLD now and would await better clarity on positive earnings catalyst before recommitting to a BUY.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment