TWR - Tower Insurance.

[BlackCross]

Looks likely that the buy-back of their own shares has finished. Hence the 5% drop this week?

Like almost all companies they seem to have managed to buy their own shares back way above the price they were probably worth - in this case the price has constantly fallen throughout the buy-back which started right at the top of their 5 year price (First trade announcement - Average consideration per security acquired NZ$2.2628 - now NZ$1.92).

I don't know whether they've borrowed funds to use for the buy-back or not? Anyway very rare that shareholders get value for money with buy-backs (Just look at Glencore recently!).

[Baddarcy]

Looks likely that the buy-back of their own shares has finished. Hence the 5% drop this week?

Like almost all companies they seem to have managed to buy their own shares back way above the price they were probably worth - in this case the price has constantly fallen throughout the buy-back which started right at the top of their 5 year price (First trade announcement - Average consideration per security acquired NZ$2.2628 - now NZ$1.92).

I don't know whether they've borrowed funds to use for the buy-back or not? Anyway very rare that shareholders get value for money with buy-backs (Just look at Glencore recently!).

i think you might be reading a bit much into this..

The buy back is funded from cash, TWR has no debt.

By my count they have only spend 1/3 of the $34m they have set aside for the buyback.

I think the buy back has paused as TWR's year end is 30 September, it would seem to be a big coincidence that the last buyback just happened to be on the last day of their financial year ;-)

However i can't argue with your point about the buyback holding up the share price, i think you are correct the price has dropped fairly quickly with the pause in the buy back. I do expect the buyback to re-start once the result is announced towards the end of November.

[Harvey Specter]

However i can't argue with your point about the buyback holding up the share price, i think you are correct the price has dropped fairly quickly with the pause in the buy back. I do expect the buyback to re-start once the result is announced towards the end of November.

I assume they have a black out period? so cant be buying while they prepare the accounts.

[banter]

By my count they have only spend 1/3 of the $34m they have set aside for the buyback.

Agree - I make it 3.8m bought back; 13.9m to go, approx.

2016 estimated EPS is 25 cps, using post-buyback shares-on-issue of 155m.
Past 7 years mid-point PE is approx 10.2, giving a share value of around 2.55
In 2014 they made and paid out 14.5cps.
This year 20.1c and next year 25c, as above, is my guess.

Given a growth factor of 12%, 2016 gross dividend yield of up to 13%, and present (apparent) depressed share price, TWR looks like a good long term bet (second best of the shares I track).

Market certainly not too excited about TWR though.

[Baddarcy]

Agree - I make it 3.8m bought back; 13.9m to go, approx.

2016 estimated EPS is 25 cps, using post-buyback shares-on-issue of 155m.
Past 7 years mid-point PE is approx 10.2, giving a share value of around 2.55
In 2014 they made and paid out 14.5cps.
This year 20.1c and next year 25c, as above, is my guess.

Given a growth factor of 12%, 2016 gross dividend yield of up to 13%, and present (apparent) depressed share price, TWR looks like a good long term bet (second best of the shares I track).

Market certainly not too excited about TWR though.

Yes agreed, the yield is starting to look attractive again, i got out a couple of months back once it became apparent the buy back was holding the price up. Buy i wasn't expecting it to head back into the $1.80s

TWR management has done a good job over the last couple of years, profit and dividends are increasing and the company looks to have a plan now as well after wandering aimlessly for a number of years when GPG were at the wheel.

The only downside i can see is the impact of the Wanganui floods, they mentioned $2m at the time i think.

On the positive there is the profit announcement + Div due end of Nov and then presumably the buyback will start up again. Longer term there is also still some additional money tied up due to the Reserve Bank requirements around the Christchurch earthquakes.

[BlackCross]

Of course you're all quite correct...I made a quick assumption based on no buying for a week :o(


According to Morningstar 'Tower continues to make progress on its share buyback announced in May. To date, 5.5 million shares of the 17.6 million program have been bought back..... Capital management remains a strong focus, and the prospect of more capital management initiatives remains. The balance sheet is strong, with no net debt and with regulatory capital well above minimum requirements. We had already accounted for a buyback, so our earnings forecasts are largely unchanged. Tower remains fairly valued, trading in line with our unchanged NZD 2.00 fair value estimate.

[Baddarcy]

Of course you're all quite correct...I made a quick assumption based on no buying for a week :o(


According to Morningstar 'Tower continues to make progress on its share buyback announced in May. To date, 5.5 million shares of the 17.6 million program have been bought back..... Capital management remains a strong focus, and the prospect of more capital management initiatives remains. The balance sheet is strong, with no net debt and with regulatory capital well above minimum requirements. We had already accounted for a buyback, so our earnings forecasts are largely unchanged. Tower remains fairly valued, trading in line with our unchanged NZD 2.00 fair value estimate.

No worries, asking questions and offering opinions is what this forum is for isn't it ! :-)

Saw this in the NZ Herald this morning, it could explain a bit of the weakness too, TWR has has a fair bit of risk in the Pacific.

http://www.nzherald.co.nz/nz/news/ar...ectid=11529239

[bull....]

back in this too now, looking forward to results

[bull....]

looking good 2 weeks to results and some nice divs

[bull....]

inverted head an shoulder pattern forming with neckline at 2.10 target 2.30 if breaks dyor