Warren Buffett is someone who actively encourages companies to buy back their shares if the conditions are right.
He once opined:
“What you’d like to do as an investor is hook them up to a machine and run a polygraph to see whether it’s true. Short of a polygraph the best sign of a shareholder-oriented management — assuming its stock is undervalued — is repurchases. A polygraph proxy, that’s what it is.”
On that note, let’s look at three Straits Times Index (SGX: ^STI) components picked at random that have repurchased their shares during the week.
CapitaLand Limited (SGX: C31)
CapitaLand is one of Asia’s largest real estate firms with a global portfolio of assets such as integrated developments, shopping malls, and offices.
On 26, 27, 28 and 29 March 2018, the property outfit bought back a total of 6,514,000 shares at a price range of between S$3.54 and S$3.63 per share. The total cost came up to around S$23.4 million.
CapitaLand’s shares closed at S$3.57 on Thursday. This translates to a price-to-book (PB) ratio of 0.8 and a dividend yield of 3.4%.
Oversea-Chinese Banking Corporation Limited (SGX: O39)
Oversea-Chinese Banking Corporation, or OCBC for short, is the longest established local bank and is the second largest financial services group in Southeast Asia by assets.
On 26, 27, 28 and 29 March, OCBC repurchased 800,000 shares at a price range of between S$12.68 and S$12.87 apiece. The total cost was close to S$10.2 million.
Shares of OCBC ended at $12.82 on Thursday, giving a PB ratio of 1.4 and a dividend yield of 2.9%.
SATS Ltd (SGX: S58)
According to its website, SATS is “the leading provider of gateway services and food solutions in the region”. Some of the services it provides include airline catering, baggage and ramp handling, passenger services, aviation security and cruise handling.
On 28 March, the firm bought back 40,000 shares at a price range of between S$5.04 to S$5.05. It spent around S$202,000 for the repurchase.
SATS shares last changed hands at S$5.13 on Thursday. The price translates to a trailing price-to-earnings ratio of 22 and a dividend yield of 3.3%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of SATS Ltd. Motley Fool Singapore contributor Sudhan P owns shares in SATS Ltd.