I didn't notice this last week. The Goldman Sachs report on their meeting with senior management:
"In the report, Goldman Sachs noted, “We met with the senior management of ENSCO yesterday; key highlights of the meeting were: 1) Management is very frustrated with stock performance this year, and may be more aggressive in employing its $2bn share repurchase authorization in the near term. 2) Management remains focused on growth and will continue with its speculative newbuild strategy. 3) Management reiterated its superior financial performance, which involves industry-leading net income margins as well as its prudent corporate strategy of a methodical and ongoing fleet high-grading program. 4) ESV also stated that in 2012 and 2013 about 55% of its jackups underwent upgrade/survey, and in 2014/2015 that figure should fall to 25%, leading to improved jack-up utilization.”
Not much new here, but good to hear management is frustrated, and very good to hear they're planning on using that buyback. I'd be happy with them buying back 15% of their outstanding shares in the $55 range.
I just went back to research terms of the company's buyback that they authorized at the May 20, 2013 Annual Shareholders Meeting. ENSCO authorized the repurchase of up to 35 million shares, or 15% of the outstanding shares, and to spend not more than 2 billion dollars. The program terminates in May, 2018.
In the second quarter, ENSCO purchased a very small number of shares, 140,271, at an average cost of $60.20 on a previous share repurchase authorization. Coming in to the third quarter just ended, ENSCO still had the entire 2 billion dollar share repurchase authorization on the new program to go. Correct me if I am wrong, but my understanding is that companies just need to report the share buybacks once a quarter, so we will be getting the share repurchase information for the third quarter on the next 10Q, or perhaps earlier at the conference call.
Hopefully ENSCO has been aggressively buying at this $54-$55 value level. Many companies, especially tech companies, tend to buy high in ongoing efforts to mask shareholder dilution going to employee stock options. I will be interested to see whether ENSCO is truly interested in buying low to help add to overall shareholder value. JMO.
ANALysts clients sell when ANALysts issue buy, and their clients buy when ANALysts issue SELL or downgrade to hold which is why the stock went up 1.2% after the downgrade.
I picked up 500 more ESV this morning so when you see me buy something the odds of making money on the trade is something like 85%..................BCS came out with a sell on VALE this morning and PT of $13 so I picked up 3K shrs of VALE at $15.40. I did this with Goodyear when Merril Lynch caused GT to fall from like $14 to near $12 with some ridiculous $11 target despite rubber prices being low. Goodyear is trading at $23 today, and I guess Merril Lynch still has that $11 target on it.
as value investor I really don't care about the stock price. We by value and not price. So...we can collect more and more dividends. By the way: with this payout and the buyback on-line....the actual stock price is simply ridiculous!
ESV said they "may" be more aggressive with buyback, but I think they "will" be more aggressive with buyback.
Goldman seems to be covering all their bases with ESV. They have a $70 target on it, 25% upside from here, yet they only have a neutral rating on the stock. I suppose if the price doesn't do much near term, but there is appreciation to $70 within one year, they would say they are right. They also put a list out last month with their top 40 most undervalued stocks and ESV was number 12 on the list.