There were several well known investors and analysts on CNBC this week discussing the virtures or downside of buybacks. Nearly all agreed that the primary beneficaries are the boards because they buyback stock and follow it with dilution/stock issuance to hand themselves 100s of thousands of free or discounted shares. Cisco did this for years while handing its executives gobs of free shares. Like IBM, Cisco is a fraction of what it was during the buybacks. I'll take a dividend.
I hope you are right. I've been feasting on lower prices after earnings for years, and when it gets to $18, I'm always expecting more, but mgt finds a way to screw it up. With 11,000 shares, I'm certainly hopeful that you are right and the stock runs to $20, but I always sell calls on 30% of my holdings and have never regretted it. I was fairly disgusted when the COO sold at $16 about a week after Ferguson, then the CEO dumped at $17.91 about a wk later. So, I've gotten smarter about Taser over the years, and taken in profits or call money when things feel "exuberant". Taser has always given me a chance to buy back lower, sorry to say that. Again, let's hope for the best.
you would think that the forecast for future quarters would be good given all the orders that they are lining up. But, we don't know the profit margins and Taser's R&D investment (see what happened to Facebook stock yesterday after reporting monster earnings but forecasted high future investment). I will sell some out of the money January calls this afternoon. If the stock rises, I can always buy them back or let them expire. If it goes down, at least there is cash is in my pocket.
One way to navigate through these "sell on the news" events is to sell long calls when everyone is exuberant. A few days ago, I got $8-9$/share for mid-2015 strike prices of $82.50 and $85.00. With a few hundered or a thousand shares, that puts a lot of cash in your pocket, and you can sleep easily through the night suring these selloffs. Facebook will go back up, but in the meantime, I can keep all the call money and let it expire, or if they calls get cheap enough, buy em' back and do it again on the next runup. You make money either way.
With Ms. Mayer now "persona non grata" with the investment community, I think they should let CFO Ken Goldman make some comments. He is a wise old sage, and if he instilled some confidence regarding their use of their new found Alibaba capital, the stock would pop. I've never seen such a rapid fall from grace for a CEO. I'm not sure Mayer has done a bad job, but she does seem to have a weakness, too much admiration of "smart" people, overrewarding them i.e. Tumbler CEO, and especially Henrique De Castro walked out the door with a boatload of $$ for what?. Such a rapid loss of trust I've never seen before.
As one guy commented after the Barron's "JCP, Curb Your Enthusiasm" article, this is a classic hedge fund tag team takedown of JCP before their Analyst Day. First Goldman, then Barrons, Belus Capital, and of course, The Street's followup with "Why JCP is Falling Today"!! It's all aimed at killing any potential good news before it's out. They are flying off the rope corners right on to Mike Ullman's head before he even gets in the ring. This is why many investors think the market is a rigged casino.
It's only a $10-$20 million dollar investment in what some say is a company, Snapchat, potentially worth $10 billion. However, the media likes to fan the flames of concern over Marissa's spending by acting like Yahoo is buying Snapchat for $10 billion. These hedgies have the power of the pen, and the complicit media is always there to help.
They've already done 30 million in buybacks, 19 MM reported in June quarterly report, and probably the rest when it fell to $10.50 in July. . Is it in your wallet...all that "cash" returned to shareholders? Nope, stock falling $.50 - $1 per day and the only full wallets are in the execs pockets who shamefully sold their cheap $4 options "on the news" when it went up. Long and disgusted. Great products, lousy stock and management.
Please translate your comment. I'm long, but are you happy with this action at $15+/share? We were at $20 earlier in the year without the Ferguson opportunity.
Long Taser, but really disappointed in the stock action of late. In May, the company announced $30 million in buybacks. In the june quarterly report, they showed that $19 million were spent on buybacks. Given that the stock dropped to $10.50 about a month later, one might assume, that the last $11 million was spent there. I wrote IR about that, and we must wait til the next report to find out. Given that, I wonder where the stock would have gone without Ferguson, MO. We'll never know, but it rose to $18 (where our CEO sold over 200,000 shares, and the COO sold 20,000 at $16). Sorry to be cynical, but that always shows confidence to the market!! Given the largest wearable camera pportunity ever for the company post Ferguson, you would think these guys would be buying vs. selling, but no, it's like a candy store for them as they issue free or cheap options to each other. Once I saw the insider sales, I did sell $18 January calls and took in some cash. With the stock at only $15, that was a good decision as I can now buy them back much cheaper, but I'd rather have seen the stock go up. Disgusted and wish an activist would come in of someone take them private. I'll take $20/sh and be gone.
As I said, we own 13,000 shares of JCP, of course my wife is going to comment on what she sees when shopping at JCP. She also bought stuff in Dillards and simply didn't see the same lines. We're not imagining seeing 10 or more people in cash register lines at JCP. Go shopping yourself instead of being short behind a computer screen. Of course, shorts have never spread bad rumors or skewed their thoughts. Ever heard of an analyst Brian Sozzi, once very bearish on JCP, who went around in late 2013 posting the worst photographs of JCP interiors all over the web? Nothing biased about that is there? However, he's got religion now going from bear to bull on JCP. You can go into a Home Depot when they are doing inventory or stocking and take pictures like that too....stuff laying around, disorderly. Sometimes you gotta let go of your position and see the light. I'm up about $30,000 on JCP, how about you?
Didn't I say my wife also went into Dillards as well? I go to the same mall for mens clothes, and I shop at Macys, Dillards, and JC Penney. I hate to say it again because I can tell that your short position is keeping you from listening, but the lines are simply always longer at JC Penney. Do you want me to lie? I'm in for 13,000 shares, now at an average of $8.10/sh. I did sell Jan $13 calls on 3000 shares to take in some cash, but other than that I'm long. Has your short position made any money near that?
My wife went mall shopping in Mesa, AZ on Saturday. She commented on the lines at JCP cash registers and particularly the dresssing rooms. She also went to Dillards and business was much slower. For what ever reason people may not like JCP stock, there is one thing that is now certain. The customers, their friends, and families are back at JCP. The lines are long everytime I go as well.
Go to Instopedia and read "Do Stock Buybacks increase Share Price", and you will that there are many caveats other than simply decreasing the denominator to increase E/S. Sorry, but the market want earnings and profits to grow, and that's why it sits on Taser stock and always drives it back down. It didn't drop from $21 to $11 earlier this year because they impressed. And let me be clear, I've been in Taser since $4/sh and taken $52,000 in profits (buying and selling vs. pure holding), and still hold quite a bit. So I'm not a basher, just think this management should have done a better job in the past and through this Ferguson, MO opportunity. Many long investors own stock in companies (like Icahn, Dan Loeb, etc (I made a fortune on Yahoo following Loeb), and bring big objections to the way a company is run. Being long doesn't mean being a "pollyanna". I've let Taser management know my disappoint in them and I think they over reward themselves with too many options. Many analysts don't like their metrics. I hope this improves after Ferguson, but they always find a way to screw things up by underperforming, litigation, etc. As I said, they didn't drop from $21 to $11 earlier this year because they impressed the market with buybacks.
It's artificial. Brokers/analysts want increase earnings. I just spoke with 2 different Charles Schwab analysts who has Taser rated an F. I told them about the buybacks, referred them to Taser's site. I asked why they didn't consider that in their ratings. One guy said it's a shell game, they want real earnings increase for the E/S to increase. So I'm dumb, Charles Schwab is dumb, and you're a genius. The only reason this stock went up was Ferguson, and there is still a 25% short interest from hedge funds and brokerages. Why don't the buybacks impress anyone?
I'll take the dividend. Buybacks, like stock splits, are a "shell game" to create the illusion to dumb retail investors that they are "getting something back". Ever notice how insiders are only incentivized by being given cheap or free stock options? Why aren't they happy enough with buybacks? Because they are just for suckers like us.
a) no one cares about buybacks...it's just a shell game to reduce the shares, kinda like a stock split, doesn't really do anything to impress analysts.
b) this mgt didn't hype or defend the stock during the greatest opportunity (Ferguson) that it will ever see
Long and disappointed
I saw Ms. Mayer on the NYSE floor, and then saw CNBC interview everyone who ever worked or was associated with Yahoo. She sure bolted out the door.....had to buy that Indian company, and apparently had nothing to say, or didn't want to be asked anything.