It's been almost 90 days since MDF announced a 10M share buy back. Since then, and thru December 31st, MDF traded approximately 8M shares. Any guesses on how many shares were bought back and and what price? I'll say 5M at 1.55.
More important, what will this do for the rest of us? I think they had about 40M cash, so I'm guessing they spent about 8M of it. From year to year I can't remember what Q4 typically looks like. I know it's the beginning of flu season, but I don't think that comes into play big until Q1.
Bud, it looks like your "key reversal" call was spot on. If we have a decent quarter, I suspect we'll be back to $2 plus soon.
MDF still has one of the strongest balance sheets you'll find anywhere. Combine this with the "cash cow" nature of this business, and just maybe we can grow up to be a $5 stock some day.
Am I missing something? In this day of tight liquidity and very low interest rates, management can't find any better "investment" than the implied return on investment to give money back to shareholders?
Don't give it to us!! Find something that will grow and buy it. Use your management expertise for something useful. I would think there would bargains all over the place as valid business face liquidity crunches of their own and that MDF cash could be used to buy in at great prices.
Just imagine the improvement in risk profile if whatever was purchased wasn't Humana dependent??? Something other than one customer that has one customer!!!
Hellow is anybody home????
My knucles may be dead, but they don't scrape the ground
I hear what you're saying, but to buy "something" just for the sake of buyng something could be a bigger mistake than doing nothing.
The experience and expertise in this company is doing exactly what they are doing. The few times they've ventured off they've failed. Once they failed to the point of extinction (online pharmacy), while their second failure (HMO)wasn't nearly as devastating.
At least for the time being I see the stock buy back as a smart move by management. I guess one could make a debate about a dividend, but I'm sure that was considered. Fortunately it appears to me that the stock buy back at 1.50 a share is a bargain for all concerned. Less than half of MDF's cash will be used for this, while the cash cow nature of this business will quickly replenish the coffers.
When and "if" the right deal comes along, MDF is still in a position to take advantage of it. That's a good thing in my book.
Rooky, I'm not sure where the push will come to get this stock to $2.
We'll get a benefit of fewer shares(share buyback) which helps with the math in determining the EPS. But still there is only limited growth.
There now are many small companies with a PE ratio of under 5. At 25 cents of earnings (which is generous) this PE is 6.4. It still isn't a compelling buy when you start comparing this company to others.