Contact Energy - CEN Chart

**Harvey Specter** · 01-05-2016, 02:23 PM

Originally Posted by macduffy

I think the point of the article was that share buybacks can have a downside and that they don't all benefit all shareholders. A bit of a "caveat emptor" from one with a wealth of investment experience and still involved in the industry.

Yes. But at least CEN was very clear when they announced theres that they were generating excess cash and there were no suitable investments in the near term. I assume they have used all IC's so this is the most efficent.

On that basis, I think most would agree it was a reasonable course of action, if not the best. If they were increasing borrowing to do so, or forgoing investment opportunities, the situation would be different.

**Fisherking** · 01-05-2016, 06:39 PM

Originally Posted by percy

In a perfect world we would see companies like Ebos, growing from acquisition after acquisition,making sure each acquisition is earnings accretive.
However there are too many companies such as FBU and WHS who go from one disastrous acquisition to the next.
So share buy backs are a good discipline for the undisciplined .
Instead of looking at the US, Brian Gaynor could have written a more relevant article had he quoted NZ companies.
HBY is a good example of what a company should be doing.Instead of making another poor acquisition, they would be better to do a decent share buy back,and sell off their non core businesses, and concentrate on their excellent motor/equipment divisions.The market would positively rerate them very quickly.

I believe HBY are tryingto divest their shoe business

**Fisherking** · 01-05-2016, 06:43 PM

Originally Posted by Harvey Specter

Yes. But at least CEN was very clear when they announced theres that they were generating excess cash and there were no suitable investments in the near term. I assume they have used all IC's so this is the most efficent.

On that basis, I think most would agree it was a reasonable course of action, if not the best. If they were increasing borrowing to do so, or forgoing investment opportunities, the situation would be different.

Yes, Also there's not as many opportunities for the utilities to grow their business as there is for others for example technology companies.

**Hectorplains** · 01-05-2016, 06:50 PM

Originally Posted by Fisherking

Yes, Also there's not as many opportunities for the utilities to grow their business as there is for others for example technology companies.

Really? That's debatable.

**GTM 3442** · 02-05-2016, 04:29 AM

Originally Posted by Hectorplains

The 'logic' is around share price being lower than the company feels is warranted (and it is therefore a good investment) and/ or that the cost of borrowing being so low currently that a buy back offers holders the best means of utilising free cash flows ( as opposed to un-imputed dividends etc.)

Thanks Hector.

But, as a shareholder, I still find it strange that the company should pay someone else to stop being a shareholder, rather than just paying me!

No, scratch "strange", I stand by "insane".

**NZSilver** · 09-05-2016, 12:53 PM

Cen running up quick. Glad I bought for the first time for the yield at $4.60. Now I'm getting some nice capital gains. I believe this company should be sitting around $5.80- $6. Only worry has been loss of customers but that looks to be coming right.