ST ENGINEERING has brought out its firepower (ie, cash and will power) to buy back a massive 12.297 million of its shares from the open market in six weeks.
That amounts to about S$41 million since 16 Dec 2014. And it's the first time that ST Engineering has bought back its shares.
It can easily afford the purchases given its $1.6 billion in cash and cash equivalents including funds under management as at end-3Q2014.
The share purchases came in the wake of a decline in the stock price (see chart).
ST Engg ($3.36) has a trailing PE of 18.7, trailing dividend yield of 4.8%, and a market cap of $10.4 billion. Its 52-week trading range is $3.14-$4.00.
Chart: Morningstar.com
Aside from ST Engineering's share buyback, fund manager Aberdeen Asset Management bought 1.5 million shares on 15 October 2014 at $3.60 each, raising its deemed stake to 280.969 million shares or a 9.01% stake.
Other purchases by Aberdeen:
» 2 July 2014: Bought 200,000 shares at $3.82.
» 29 May 2014: Bought 630,000 shares at $3.83.
Another substantial shareholder, Temasek Holdings, through its wholly-owned Vestal Investments, bought 3.4 million shares at about $3.46 on 14 Nov 2014.
Temasek now holds a 51% deemed interest in ST Engineering.
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Recent story: 5 Reasons Why ST ENGINEERING Looks Like A Good Buy
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