Meanwhile, share numbers have gone down, thus FUTURE earnings allocated to current shares may go up, at the expense of forgoing the earnings potentials of the money of the investors tighted up in AZO since Oct 2002.
Now, a look at the balance sheet shows that total debt has moved from 3.3B to 3.8B that is a 15% net increase. Factor in the effect of the buy back, debt per share should increase more than 20% compared to 2002/2003. Now, unlike FUTURE earnings potential, this debt must be matched with collaterals and paid back to the bond holders and commercial banks with or without increase in NET FUTURE earnings.
You can make the math work for per share data by forfaiting all past year earnings in exchange for greater future earnings. I am willing to do that as long as the share prices go up to reflect that. But the NET DEBT must not go up and the speed / frequency of buy back must not slow down, otherwise the buy back will not work for all investors, it only works for those that sell at the top, i.e. market timeres. Who can time this better than the person who calls the shots on the timing of buy back? Can you (if you do not know him/her)?
quarter over quarter the debt went down for the first time last quarter. Buybacks continued. In 2002, AZO had a P/E over 20, now it is like 12. In another 5 years if the stock does not go up the P/E will be 6. I say the stock goes up.